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Airtel Africa plc
Annual Report and
Accounts 2023
Transforming
lives
Finding what you need
Strategic report
1 Airtel Africa overview
2
Transforming lives
10 At a glance
12 Chair’s statement
14 Chief executive officer’s review
16 Our investment proposition
17 Our key performance indicators
20 Our market environment
22
Legal and regulatory framework
24 Our business model
26 Our strategy
38 Our sustainability strategy
56
62
Task Force on Climate-related Financial Disclosures (TCFD)
Business review
64 Mobile services
66 Nigeria – mobile services
68
70
East Africa – mobile services
Francophone Africa – mobile services
72 Mobile money
74
Airtel Business
75 Digital Labs
76 Our stakeholders
84 CFO’s introduction to the financial review
86
Financial review
90 Managing our risk
93
Principal risks and mitigation
98 Our long-term viability statement
Governance report
102 Our Board of directors
106 Our Executive Committee
Financial statements
108 Chair’s statement
110 Our leadership
116 Board evaluation
117 Audit and Risk Committee report
128 Nominations Committee report
134 Our compliance with the UK Corporate Governance Code
139 Directors’ report
144 Directors’ responsibilities statement
145 Directors’ remuneration report
166
Independent auditor’s report
174 Consolidated statement of comprehensive income
175 Consolidated statement of financial position
176 Consolidated statement of changes in equity
177 Consolidated statement of cash flows
178 Notes to consolidated financial statements
236 Company statement of financial position
237 Company statements of changes in equity
238 Notes to company only financial statements
View our online
annual report
summary
Other information
246 Forward-looking statements
247 Glossary
251 General shareholders’ information
252 Auditor’s ESEF Assurance statement
A
STRATEGIC REPORT
Airtel Africa overview
Connecting the
unconnected.
Including the
financially excluded.
Bridging the
digital divide.
By providing essential services to customers
and societies across our continent, Airtel Africa
is unlocking the potential for people, businesses
and economies to grow.
140m
Total customers
14
54.6m
Data customers
31.5m
Sub-Saharan countries
Airtel Money customers
Airtel Africa plc Annual Report and Accounts 2023
01
STRATEGIC REPORT
Transforming lives
We’re
transforming
lives in
Africa
Reaching more
people, with more
services, in more
places than ever.
79.45%
Population coverage at the
Group level – bringing mobile
banking, data and telecoms
to communities across sub-
Saharan Africa and helping
to unlock the potential of
people and societies
42.9%
of our sites are in rural areas
as we provide a vital first
step towards digital inclusion
For more information about financial inclusion, see page 49
02
Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023
03
STRATEGIC REPORT
Transforming lives continued
Operating
in markets full
of opportunity
Meeting untapped
demand for telecoms
services and mobile
money in markets
where there’s still
huge room to grow.
22.5%
of our customers are using
Airtel Money and we’re
expanding our mobile
money portfolio through
additional services, including
merchant payments
39%
data customer penetration
as we expand our 4G
network, combined with
36.3% smartphone
penetration in our
14 markets
For more information about mobile services and mobile money, see pages 62-73
04
Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023
05
STRATEGIC REPORT
Transforming lives continued
Delivering on
our strategy
through
excellent
execution
Expanding our
networks, optimising
our distribution,
and investing in the
future through fibre
and 5G.
70,500+ km
of total connecting fibre across
our 14 markets, with 6,000+km
added in 2022/23 as we continue to
improve our fibre provision in metro,
intercity and international networks
304,000+
customer activating outlets, a
growth of 21% in 2022/23, which
reflects our investment in sales and
distribution infrastructure
For more information on our ‘Win with’ strategy, see pages 26-37
06
Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023
07
STRATEGIC REPORT
Transforming lives continued
...and
keeping our
sustainability
promises.
Championing access
to education, fostering
digital inclusion,
creating inclusive and
dynamic workplaces,
and minimising
our environmental
impacts.
1 million
children to access quality
education through our
programmes by 2027
$57m
financial and in-kind
contribution to UNICEF
over five years to accelerate
digital learning
For more information about our sustainability progress, see pages 38-55
08
Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023
09
STRATEGIC REPORT
At a glance
We operate in 14 dynamic,
underpenetrated markets
where strong demand
drives our continued
profitable growth.
An underpenetrated telecoms market,
a young population and rising smartphone
affordability, along with low data penetration,
give us growth opportunities in both voice
and data. The telecoms market in sub-
Saharan Africa is projected to grow by 4.5%
CAGR over the next five years. At the same
time, low penetration of traditional banking
services provides us with the opportunity
to meet the needs of unbanked customers
through our dedicated mobile money
platform, Airtel Money.
Source for population figures: World Bank data
2022 estimate
CAGR source: GSMA sub-Saharan report 2022
Revenue
$5,255m
Reported currency +11.5%
Constant currency +17.6%
Underlying EBITDA
$2,575m
Reported currency +11.4%
Constant currency +17.3%
Operating profit
$1,757m
Reported currency +14.5%
Constant currency +20.1%
Capex
$748m
% change +14.0%
Basic earnings per share
17.7 cents
% change +5.2%
* Breakdown of revenue as stated in above table will
not add up to total revenue, since it also includes
inter-segment elimination of $163m (2022: $145m)
All financial numbers are in reported currency
14
markets in our
diversified portfolio
2.7%
projected compound annual
population growth in our region
by 2027
1st or 2nd
17.6%
largest operator by customer
market share in 13 markets
revenue growth in constant
currency, 11.5% in reported
currency in 2022/23
Niger
Pop: 26m
Chad
Pop: 18m
Nigeria
East Africa
Francophone
Africa
Nigeria
Pop: 219m
Gabon
Pop: 2m
Republic
of the Congo
Pop: 6m
Uganda
Pop: 47m
Rwanda
Pop: 14m
Kenya
Pop: 54m
Democratic
Republic of
the Congo
Pop: 99m
Zambia
Pop: 20m
Tanzania
Pop: 65m
The
Seychelles
Pop: 0.1m
Malawi
Pop: 20m
Madagascar
Pop: 30m
Revenue contribution
by segment
Nigeria – mobile services
East Africa – mobile services
Francophone Africa – mobile services
Mobile money services
Total*
Year ended
March 2023
$m
2,128
1,508
1,090
692
5,255
Year ended
March 2022
$m
1,878
1,395
1,033
553
4,714
Reported
currency
change %
Constant
currency
change %
13.3% 20.3%
8.1% 13.4%
5.5% 11.9%
25.1% 29.6%
11.5% 17.6%
Owing to significant growth in the Group’s mobile money business and a corresponding change in the
organisation’s structure combined with changes in information provided to the chief operating decision-
maker (CODM) for the allocation of resources and the assessment of performance, with effect from
April 2022 the Group has identified mobile money as a new operating and reportable segment.
Thus, the segments for the Group are:
Nigeria mobile services – comprising mobile service operations in Nigeria
East Africa mobile services – comprising mobile service operations in Kenya, Uganda, Rwanda, Tanzania,
Malawi and Zambia
Francophone Africa mobile services – comprising mobile service operations in Niger, Gabon, Chad,
Republic of the Congo, the DRC, Madagascar and the Seychelles
Mobile money – comprising mobile money services across the Group, including recently launched
payment service bank in Nigeria
10
Airtel Africa plc Annual Report and Accounts 2023
Our voice, data and mobile
money services are
reaching more people than
ever, and transforming
customers’ lives.
By extending our distribution network in both
rural and semi-urban areas and providing
resilient, far-reaching coverage, we’ve enabled
millions of people to access telecoms and
banking services. By leading the way in the
rollout of 4G networks and enabling people to
progress from 2G to 3G to 4G, we’ve helped
drive digitalisation. Our expanding footprint
of retailers, agents and exclusive franchises,
supplemented by our unique operations, have
helped deliver services across our markets.
And we’re helping build a new financial
ecosystem that’s full of opportunity. Our focus
on increasing the number of mobile money
use cases through international partnerships
and product innovation has helped drive
the take up of our mobile money services,
boosting financial inclusion.
31,500+
infrastructure sites
2.6+ million
retail touchpoints
(agents and distributors)
in our network
70,500+ km
of connecting fibre
90%
sites providing 4G coverage
4G
services available
in all 14 markets
Voice
We offer pre- and post-paid
wireless voice services,
international roaming and
fixed-line telephony services.
Data
We offer a suite of data
communications services,
including 2G, 3G and 4G.
We provide 4G services in
all 14 of our markets.
Airtel Money
We offer mobile money services,
including digital wallet payments
systems, microloans, savings and
international money transfers.
140m
total customers
54.6m
data customers
31.5m
Airtel Money
customers
Revenue contribution by service
Voice
Data
Airtel Money
Other^
Total*
Year ended
March 2023
$m
2,491
1,787
692
437
5,255
Year ended
March 2022
$m
2,358
1,525
553
407
4,714
Reported
currency
change %
5.6%
17.2%
25.1%
7.5%
11.5%
Constant
currency
change %
11.8%
23.8%
29.6%
13.2%
17.6%
$437m
$692m
Total*
$5,255m
$2,491m
$1,787m
^ Other revenue includes messaging, value added services, tower sharing and enterprise
* Breakdown of revenue as stated in above table will not add up to total revenue, since it also includes
inter-segment elimination of $152m (2022: $129m)
Airtel Africa plc Annual Report and Accounts 2023
11
STRATEGIC REPORT
Chair’s statement
Transforming lives
Providing essential services, and delivering
on our purpose of transforming lives.
Delivering sustainable growth, and
demonstrating our resilience
This year has seen considerable volatility in the global economy, with
recessionary pressures that have been keenly felt by people across
the markets we serve. With prices of basic commodities on the
increase, and instances of severe climate disruptions, reliable,
affordable telecoms services that connect people to each other and
to the wider economy are more vital than ever. Everyone at Airtel
Africa is proud that we have been able to maintain and expand our
services to our customers and communities throughout the year.
The fact that we have also been able to deliver a strong financial
performance in this economic context is testament to the scale
of the untapped demand in sub-Saharan Africa, and to the resilience
of our business model. Powerful underlying macroeconomic and
demographic trends continue to drive demand and adoption
of voice, data and mobile money services, and our ‘Win with’
strategy continues to deliver growth: our customer base grew
to 140 million people this year, and our revenues grew by 11.5%
in reported currency.
This is not growth for its own sake. It is only by pursuing sustainable
growth that we are able to fulfil our purpose of transforming lives:
playing our part in addressing the challenges faced by millions
of people who still lack access to data and financial services,
and the wider transformation of economies that will drive
sustainable development.
The fact that we have also been able to
deliver a strong financial performance
in this economic context is testament
to the scale of the untapped demand
in sub-Saharan Africa, and to the
resilience of our business model.
Playing our part in sustainable
development
Publishing our first Sustainability Report in October 2022 was a
seminal moment for Airtel Africa, furthering our commitment to
corporate governance. It provides stakeholders with a transparent
account of our progress in delivering the sustainability ambitions that
underpin our business strategy, and our commitment to developing
the infrastructure and services that will drive digital and financial
inclusion for people across Africa while contributing to six of the
United Nations’ Sustainable Development Goals (UN SDGs). The
Board closely oversees this strategy as part of our role in considering
environmental, social and governance criteria in our decision-making.
Business has a crucial part to play in Africa’s development. This year,
as Chair of the newly launched B20 India Action Council on African
Economic Integration: An Agenda for Global Business, I have seen
positive signs of businesses coming together to work towards
common goals and priorities.
Airtel Africa plays a significant role in supporting education, which
has long been a priority for me and for everyone in the Group.
We have set ourselves the goal of transforming the lives of over
one million children on the continent through education by 2027,
including through our landmark five-year partnership with UNICEF
– which this year rolled out programmes in 6 of the 13 countries
where the partnership is in place.
Investing to create long-term value for all
Our underlying strategy remains unchanged in its fundamentals.
We maintain a continuous focus on serving customers’ needs so
we can deliver sustainable, profitable growth, while mitigating our
risks and maintaining our longstanding focus on strengthening our
balance sheet. This year, for instance, we continued to localise our
debt into our country-level OpCos while reducing HoldCo debt,
helping to mitigate the risk of foreign exchange volatility. Our gross
OpCo debt of $3,676m (including lease liabilities) is now higher
than our remaining HoldCo debt of $550m.
12
Airtel Africa plc Annual Report and Accounts 2023
Pursuing sustainable growth
enables us to fulfil our purpose
of transforming lives: playing
our part in addressing the
challenges faced by millions of
people who still lack access to
connectivity, data and financial
services. We are committed to
contributing towards the wider
transformation of economies
to drive sustainable growth
and development.
Sunil Bharti Mittal
Chair
Leverage was at 1.4x in March 2023, broadly flat from the previous
year. This was achieved alongside substantial investments: we
invested $748m in capex (excluding spectrum), and $500m in
spectrum (including 5G) in key markets – ensuring we are ready to
meet the continuing opportunity in data. Almost 87% of our capex
investment in 2022/23 was directed to growth initiatives that help
ensure a sustainably strong and reliable network.
We continue to strengthen the business in other ways. We have
made compelling strides in building the standalone capabilities of our
Airtel Money business across all markets and begun acting on the
opportunity presented by the granting of our super-agent licence and
Payment Service Bank (PSB) licence in Nigeria in April 2022. We have
also established new holding and subsidiary company structures for
our data and fibre businesses.
The Board of directors has recommended a final dividend of
3.27 cents per share, making the total dividend for 2022/23
5.45 cents per share, which is an increase of 9% in line with our
progressive dividend policy.
Stakeholders at the heart of
transforming lives
Everything the business has achieved in this turbulent year is thanks
to the support of all our stakeholders. In particular, our people have
continued to show great dedication to ensuring the delivery of services
and to serving our customers and the communities in which we live
and work. On behalf of the Board, I would like to thank them for their
continuing commitment to transforming lives.
Sunil Bharti Mittal
Chair
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
13
STRATEGIC REPORT
Chief executive officer’s review
CEO Q&A
Chief executive officer Olusegun Ogunsanya reflects
on a year in which our robust business performance
has helped drive our sustainability agenda – and on
our opportunity to transform lives in Africa.
Q. How will you look back at this year?
A. The joy of running this business – and the thing that I see
motivating our people – is that we are part of the solution to the
challenges around us.
There’s no doubt this has been a difficult year for many in our
communities. While sub-Saharan Africa is very resilient, it is not
immune to global economic shocks. Sharp commodity and fuel
inflation really hurts in communities where many people spend 40%
of their income on food. Climate change has a disproportionate
impact on Africans. Currency disruptions create serious challenges
for businesses and individuals.
But as Airtel Africa people, we are part of our communities – we share
their pain as well as their joy. And we can see the difference we’re
making. Every day, we’re connecting customers to each other, to
the digital future, and to economic opportunity. The more we serve,
the more we succeed. By delivering our strategy and growing our
business, we’re part of the process of sustainable development.
That’s what we mean by transforming lives.
Q. What were the highlights of your
financial performance?
A. We’ve really demonstrated the resilience of our strategy and
business model. The economic environment has generated
considerable headwinds this year, but we have delivered significant
growth in all our key metrics. Our revenues grew by 11.5% and
operating profit by 14.5% in reported currency.
We have grown revenues in data by 23.8%, in voice services by
11.8% and in mobile money by 29.6% in constant currency.
We’ve continued to provide essential services in all our markets
throughout the year, and to serve more customers than ever before,
reaching 140 million in total. Underlying EBITDA grew by 17.3% in
constant currency at a stable EBITDA margin of 49.0% despite all
the turbulences.
We know how important affordability is to customers in a cost-of-
living crisis – and our philosophy has always been to drive usage,
rather than price. Not only are we reaching more customers, but
our customers are getting more for their money.
This performance has made us one of the fastest-growing telecoms
company in sub-Saharan Africa. And it has come alongside important
investment in our future – and in the future of our communities.
We invested $748m in expanding and strengthening our network,
so we can reach and include more people. We invested in our fibre
infrastructure and data centres, where we see opportunities to form
mutually beneficial partnerships with other businesses.
14
Airtel Africa plc Annual Report and Accounts 2023
And as of 31 March 2023, we invested $500m in spectrum (which
includes 5G), so we can meet the demand for data now, and be
ready for an even more digital future. The macroeconomic outlook
remains volatile, but we are well positioned to deliver against the
growth opportunities these markets offer, with a continued focus
on margin resilience.
Q. How has your ‘Win with’ strategy
created competitive advantage?
A. Our ‘Win with’ strategy has six pillars – ‘technology’, ‘distribution’,
‘data’, ‘mobile money’, ‘cost’ and ‘people’ – all underpinned by our
sustainability strategy.
It is the execution of the strategy that really counts – and I believe we
can be proud of the execution of every pillar. I’ve already mentioned
the expansion of our network, and how the talent and determination
of our people has driven our success. The 46.3% increase in data
usage demonstrates how that pillar is thriving – and the 36% increase
in home broadband revenues shows what an opportunity there is in
that segment.
‘Win with cost’ has been important this year, as we’ve had great
success maintaining margins despite unprecedented inflation – our
underlying EBITDA margin was 49.0%. We’ve also localised much
of our debt as mitigation against foreign exchange risk, maintaining
Group debt at 1.4x of underlying EBITDA while investing significantly
in the future.
But some of the strongest examples of us executing the strategy
and winning in the market have been in ‘Win with distribution’ and
‘Win with mobile money’. Our distribution network gets us closer to
our customers so they can access our services – and this year we
increased the number of our customer activating outlets by 21%
bringing the total number of 304,000+ outlets across our 14 markets.
Airtel Money, meanwhile, has gone from strength to strength, with
20.4% more mobile money customers, and transaction value
increasing by 41.3% in constant currency.
Q. Why is the mobile money opportunity
so important?
A. Mobile money is a clear example of an opportunity to benefit
communities while driving business growth. Sub-Saharan Africa
remains underserved by banks and financial services, excluding
millions of people from the financial system, and disproportionately
excluding women.
Our strategy for growth
in action
46.3%
increase in data usage
41.3%
increase in transaction value for
Airtel Money in constant currency
The more we serve, the more we succeed.
By delivering our strategy and growing
our business, we’re part of the process
of sustainable development. That’s what
we mean by transforming lives.
Watch the full
interview online
Olusegun Ogunsanya
Chief executive officer
It is a competitive sector, where we need to keep building our ecosystem
to stay ahead of new fintech offers, engage with Central Banks to meet
growing regulatory requirements, and make sure we have the right IT
capabilities. But we’ve made significant strides through Airtel Money
this year, launching mobile money services in Nigeria through our new
Payment Services Bank (PSB) licence granted in April 2022, rolling out
micro merchant propositions in Uganda, Tanzania and Zambia, and
introducing loan products in Tanzania, Uganda, Kenya and Zambia.
And as our mobile money business has grown, we’ve invested in
growing Airtel Money’s organisational capabilities, skills and technology.
This work is underpinned by our sustainability strategy, which sets
targets for building our mobile money ecosystem and includes a
specific target to reach 20 million women customers by 2025.
Q. You published your first sustainability report
in October 2022 – what were the highlights?
A. Airtel Africa has supported communities in areas including education,
health and wellbeing, and disaster relief for decades – but we achieved a
real step change in our approach to environment, social and governance
(ESG) through our sustainability strategy, launched in 2021. This year
we achieved another milestone with our Sustainability Report, which
demonstrated progress against all our targets – but also highlighted how
much there is still to do in order to achieve the sustainable development
goals that we support.
One of the biggest elements of our work this year has been developing
our pathway to net zero as we strive to limit the impact of our operations
on the environment. Our detailed analysis across 14 OpCos has
highlighted significant decarbonisation strategies we can implement to
reduce our carbon emissions. We have set a target to reduce our scope
1 and 2 emissions intensity by more than 60% within ten years of our
baseline and achieve net zero by 2050.
Our investment in network expansion, particularly in rural and semi-rural
areas, is giving millions of people access to reliable and high-quality
digital and financial services, often for the first time. We’re making
progress on building a diverse and inclusive workforce, where all our
people can develop their careers and reach their full potential. And we
continued to work on our landmark partnership with UNICEF, providing
educational resources, free of charge, to more than 250,000 children this
year on our way to reaching one million children by 2027.
Our partnership with UNICEF, for me, stands as a beacon for what our
business is all about. Education is a vital engine for social mobility, social
equality, and the elimination of poverty – alongside the services we
provide, it will unlock opportunity in Africa, and transform lives.
Olusegun Ogunsanya
Chief executive officer
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
15
STRATEGIC REPORT
Our investment proposition
Our operations in 14 sub-Saharan
African countries offer substantial
market potential across voice, data
and mobile money services.
The countries we operate in have some of the youngest populations in the
world, and are projected to grow fast, contributing to sustainable growth in
our customer base. Combined with relatively low numbers of unique mobile
customers, low minutes of usage, low data consumption and limited traditional
banking services, this creates a huge opportunity for the continued growth of
Airtel Africa.
See overview of our market environment on pages 20-21
Voice
Data
Mobile
Money
We have the diversity and scale to deliver
affordable telecoms and mobile money
services to our customers. Our accelerated
investment into our asset base, strong
brand recognition and effective
distribution channels (both direct and
indirect) give us sustainable differentiation
in the market. We continue to deliver a
strong track record of growth and
improved operational performance. Our
lean and simplified operating model,
combined with our effective management
team, has delivered double-digit revenue
growth, strong profitability and cash flow
despite inflationary pressures across
many of our markets. Strong country level
management teams with deep knowledge
of their markets are supported by
subject matter experts at Group level.
Our performance reflects the strength of
our risk management framework, which
ensures compliance with regulatory
policies across our markets. We also
benefit from the strength and support
of our shareholder Bharti Airtel, one of
the world’s largest telecoms operators.
Led by our purpose of transforming lives,
with a customer-centric vision of enriching
the lives of our customers, we deliver
sustainable, profitable and market-leading
growth through our six-pillar strategy:
‘Win with’… technology, distribution,
data, mobile money, cost and people.
We are reducing the digital divide and
enhancing financial inclusion, including
through partnerships with governments
in the countries where we operate.
Our business strategy is underpinned by
our sustainability strategy, which ensures
environmental, social and governance
(ESG) considerations shape all the actions
we take to deliver on our ambitions.
We’re focused on digitising our own
processes and services as well as how
our customers use our products. We also
continue to leverage our substantial
infrastructure across the continent to
seek out new, profitable revenue streams
by enhancing our service offerings to
enterprises, including fibre and data
centres.
Our strong balance sheet and conservative
capital structure allow us to fully execute
our growth strategy and create value for all
our stakeholders: customers, communities,
regulators and governments, partners and
suppliers, our people and our shareholders.
16
Airtel Africa plc Annual Report and Accounts 2023
Our key performance indicators
Our KPIs give our Board and
management a clear sense
of where we are and where
we need to improve.
Measuring the success of our strategy
We monitor the success of our strategy through operational, financial
and non-financial key performance indicators (KPIs). These KPIs give
us a crucial insight into our business performance and the progress
being made towards our strategic intent.
Our selected KPIs help us to communicate the Group’s strategy across
all levels of the organisation, and form part of our governance and
performance management process.
Further, our non-financial performance KPIs linked to our sustainability
strategy are scope 1, 2 and 3 GHG emissions, energy consumption,
population covered and gender diversity.
We review our operational, financial and non-financial KPIs regularly to
ensure that they are aligned with our strategy and organisational goals.
For more information about our sustainability KPIs, see page 38
See definition and reconciliation of our alternative performance measures
on pages 87-88
Ensuring our KPIs are meaningful
and responsive
We monitor our strategic progress through primary operational KPIs
which include sites, data capacity, customer base, net additions,
average revenue per user (ARPU), usage per customer and Airtel
Money transactions.
Our key financial KPIs are revenue, underlying EBITDA, operating profit,
profit after tax, operating free cash flow, net cash generated from
operating activities, leverage, basic earnings per share, and return on
capital employed.
Linkage with remuneration
We review our remuneration-linked KPIs every year to ensure these are
relevant to our business strategy. Our remuneration targets are linked
with selected financial and non-financial KPIs. As part of our long-term
incentive scheme, we also benchmark our total shareholder return
performance with a peer group of companies.
See our directors’ remuneration report (DRR) on pages 145-163
GAAP KPIs
FY’23
FY’22
APM KPIs
FY’23
Financial KPIs
Revenue
$5,255m
Reported currency +11.5%
Constant currency +17.6%
$4,714m
Constant
currency
+23.3%
Underlying
EBITDA and
margin
Operating
profit*
$1,757m
+14.5%
$1,535m
+37.2%
Operating free
cash flow*
$2,575m
Reported currency +11.4%
Constant currency +17.3%
Margin 49.0%
$1,827m
+10.4%
Profit
after tax*
$750m
(0.6%)
$755m
+82.0%
Leverage
1.4x
Net cash
generated
from operating
activities*
$2,208m
+9.8%
$2,011m
+20.7%
Return on
capital
employed**
23.3%
FY’22
$2,311m
Constant
currency
+31.2%
Margin 49.0%
$1,655m
+40.5%
1.3x
22.3%
Basic earnings
per share
17.7 cents
+5.2%
16.8 cents
+86.5%
* Growth percentage is in reported currency
** Return on capital employed (ROCE): The Group has revised the computation of
ROCE by grossing up the ‘equity attributable to owners of the Company’ for put
option provided to minority shareholders. The previous period ROCE has also
been restated for this change. See definition and reconciliation of our alternative
performance measures on pages 87-88
Airtel Africa plc Annual Report and Accounts 2023
17
STRATEGIC REPORT
Our key performance indicators continued
Total sites number
Total data capacity tb/day
Operational KPIs – mobile services (consolidated)
Total sites and data
capacity
Total sites number
Total data capacity TB/day
Customer base and
customer net additions
Customer base m
Customer net additions m
Voice traffic and usage
per customer
Voice traffic bn mins
Usage per customer mins
Voice underlying revenue*
and voice ARPU
Voice underlying revenue* $m
Voice ARPU $
Revenue growth %
Data customers, 4G data
customers and penetration
Data customer m
2G/3G/4G data customer m
Data customer penetration %
Data usage, 4G data
usage and data usage
per customer
Data usage bn MB
2G/3G/4G data usage bn MB
Data usager per customer MB
Data revenue and data
ARPU
Data revenue $m
Data ARPU $
Revenue growth %
16,949
23,931
12,070
25,368
28,797
31,546
Customer base m
Customer net adds m
FY’21
FY’22
FY’23
10.2
128.4
140.0
7.6
118.2
Voice traffic bn mins
Usage per customer mins
FY’21
FY’22
257
234
323
379
FY’23
272
439
Voice revenue $m
Voice ARPU $
FY’21
FY’22
FY’23
1.5
11.0%
2,083
1.6
15.4%
11.8%
2,358
2,491
Data customer m
4G data customer m
Data customer penetration %
FY’21
FY’22
FY’23
34.3%
40.6
14.8
36.4%
46.7
19.9
39.0%
54.6
26.5
26.8
25.8
Data usage megabytes bn
4G data usage megabytes bn
Data usage per customer MB
FY’21
FY’22
3,520
28.1
FY’23
4,546
2,704
2,686
1,848
2,015
1,242
708
1,232
534
616
Data revenue $m
FY’21
Data ARPU $
FY’22
689
FY’23
3.0
23.8%
2.9
34.6%
1,787
1,525
2.5
31.2%
1,157
FY’21
FY’22
FY’23
Note: Growth percentages in KPIs are in constant currency unless specified
18
Airtel Africa plc Annual Report and Accounts 2023
Performance
During the year, we have deployed
more than 2,700 sites, reaching
31,500+ sites in total as of 31 March
2023. We have added 3,200+ sites on
4G and now 90% of our total sites are
on 4G. Furthermore, we have added
6,000+ km of fibre (reaching 70,500+
km of fibre as of 31 March 2023).
Network data capacity was increased
by 41.2% to 23,900+ terabytes (TB)
per day, with peak hour data utilisation
at 47.4%.
Performance
Our overall customer base grew by
9.0% to 140.0 million as of 31 March
2023. We continue investing in network
to expand our reach along with the
expansion of distribution infrastructure
to drive customer base growth in both
urban and rural markets. Our enhanced
distribution channel ensures availability
of SIM cards and recharge across
our footprint.
Customer base grew across all three
regions: Nigeria by 9.0%, East Africa by
9.7%, and Francophone Africa by 7.8%.
Performance
Our voice traffic grew by 16.0% to
439 billion minutes during the year,
driven by customer base growth of
9.0% and an increase in voice
usage per customer by 5.9% to
272 minutes per customer per month.
Our continued investment in sales and
distribution infrastructure and network
Performance
Voice revenue of $2,491m grew by
11.8% in constant currency (5.6%
in reported currency), led by both
customer base growth of 9.0% and
voice ARPU growth of 2.1%. The voice
ARPU growth was led by an increase
in voice usage per customer by 5.9%
Performance
Our data customer base increased by
16.9% to 54.6 million as of 31 March
2023 and now comprises 39.0%
of our total customer base. Data
customer base growth was driven
by expansion of our data network,
increase in network data capacity
and smartphones in our network.
Performance
Total data usage increased by 46.3% to
2,704 billion MBs led by both customer
base growth of 16.9% and increase in
data usage per customer by 29.1%.
During the period, 4G data usage
contributed to 74.5% of total data
usage. Data usage per customer
increased to 4.4 GB per month (up from
3.4 GB per customer per month) while
Performance
Data revenue was $1,787m, a growth
of 23.8% in constant currency (17.2%
in reported currency), led by both
customer base growth of 16.9% and
data ARPU growth of 9.3%.
Data ARPU increased to $3.0 per
customer per month. The data ARPU
growth was driven by an increase in
coverage helped us to grow voice
traffic. The growth of voice usage
per customer was mainly contributed
by East Africa region.
(increased to 272 minutes per
customer per month). Voice ARPU
was $1.5 per customer per month.
Our 4G customer base reached
26.5 million, a growth of 33%. Currently,
4G customer penetration stands at
48.5% (4G as percentage of our total
data customer base). Smartphone
penetration increased to 36.3% (from
34.2%), of which 65.4% are 4G enabled
smartphones (compared with 59% in
prior period).
4G data usage per customer increased
to 7.3 GB per month (from 5.5 GB
per month). The increase in data usage
per customer was led by an increase in
smartphone penetration, the increased
density of our 4G network and higher
adoption of data bundles (up by 3.5%
to 94.7%).
data usage per customer per month
mainly due to our higher 4G customer
base and expansion of our 4G network.
11.61.5 Mobile services revenue $m
Mobile services ARPU $
Operational KPIs – mobile services (consolidated) continued
Mobile services underlying
revenue and ARPU
Mobile services revenue $m
Mobile services ARPU $
Revenue growth %
2.9
22.0%
2.9
16.2%
4,294
4,721
2.6
17.6%
3,592
FY’21
FY’22
FY’23
Performance
Mobile services revenue increased to
$4,721m, up by 16.2% in constant
currency. Revenue growth was
recorded across all regions and key
services: Nigeria up by 20.3%, East
Africa by 13.4% and Francophone
Africa by 11.9%.
Mobile services revenue growth was
driven by both voice and data services:
voice revenue growth of 11.8%
and data revenue growth of 23.8%.
Mobile services ARPU was at $2.9
per customer per month, up by 6.2%.
Mobile money base m
Mobile money customer penetration %
Operational KPIs – mobile money (consolidated)
Airtel Money customer
base and penetration
Mobile money base m
Mobile money customer
penetration %
Airtel Money transaction
value and transaction
value per customer
Transaction value per customer $
Mobile money transaction
value $bn
Airtel Money revenue
and ARPU
Mobile money revenue $m
Mobile money ARPU $
Revenue growth %
18.3%
20.4%
22.5%
26.2
31.5
21.7
Transaction value per customer $
Mobile money transaction value $bn
FY’21
FY’22
FY’23
89
64
223
252
46
191
Mobile money revenue $m
FY’21
FY’22
Mobile money ARPU $
FY’23
2.0
29.6%
692
1.9
34.9%
553
1.7
35.5%
401
FY’21
FY’22
FY’23
Performance
Our Airtel Money customer base grew
by 20.4% to 31.5 million as of 31 March
2023, representing 22.5% of our total
customer base. This growth was
largely driven by expansion of our
mobile money agents and merchant
ecosystems and continued investment
in our exclusive franchise channel of
kiosks and branches. Our enhanced
distribution channel ensures availability
Performance
Our mobile money transaction value
grew by 41.3% and Q4’23 annualised
transaction value crossed $102bn in
constant currency.
Transaction value per customer
reached $252 per month, an increase
of 16.4% in constant currency.
Performance
Mobile money revenue was $692m, an
increase of 29.6% in constant currency
(25.1% in reported currency) driven by
32.6% growth in East Africa and 20.3%
in Francophone Africa, respectively.
The growth in transaction value per
customer by 16.4% resulted in mobile
money ARPU growth of 6.8%.
of mobile money float across our
footprint.
In Nigeria, mobile money services
(SmartCash) were launched in June
2022. Our initial focus has been to invest
in the platform technology, as well as
the business systems and processes
to ensure confidence and reliability in
the platform.
The increase in transaction value
was contributed to by higher cash
transactions, merchant payments
and mobile service recharges through
Airtel Money.
Mobile money revenue now accounts
for 13.1% of total Group revenue in
Q4’23.
Operational KPIs – mobile services and mobile money (consolidated)
Group revenue $m
ARPU $
Total Group underlying
revenue* and ARPU
Group underlying revenue $m
Group ARPU $
Revenue growth %
3.2
23.3%
3.3
17.6%
4,714
5,255
2.8
19.4%
3,888
FY’21
FY’22
FY’23
Performance
Total revenue was $5,255m, an
increase of 17.6% in constant
currency, driven by both customer base
growth of 9.0% and ARPU growth of
7.4%. There was double-digit growth
across all reporting segments: mobile
services revenue in Nigeria grew by
20.3%, in East Africa by 13.4% and in
Francophone Africa by 11.9% (and
across the Group by 16.2%, with voice
revenue growth of 11.8% and data
revenue up 23.8%). Mobile money
revenue grew by 29.6%, driven by
32.6% growth in East Africa and 20.3%
in Francophone Africa. ARPU growth
of 7.4% was driven by all our key
services: with data contributing 4.2%,
voice contributing 1.1%, mobile money
contributing 2.2%, respectively.
* Underlying revenue excludes one-time exceptional revenue of $20m relating to a settlement in Niger in the year ended 2020/21
Note: Growth percentages in KPIs are in constant currency unless specified
Airtel Africa plc Annual Report and Accounts 2023
19
STRATEGIC REPORT
Our market environment
High demand across
sub-Saharan Africa
There is a clear runway for growth in
sub-Saharan Africa, where a young
and growing population demand
data, mobile voice, and mobile money
services to connect with each other,
do business, and unlock economic
opportunity.
People across our markets are ‘mobile first’, with mobile services the
first and often only way they have to access telecoms, internet and
banking services. And among a population of more than 1 billion
people in sub-Saharan Africa, half of whom will be under 25 years old
by 2050*, there is huge scope to increase the reach and penetration of
effective voice, data and mobile money services, and to include more
people in the digital economy. The need for accessible, affordable
services has never been greater – as demand continued to rise in
2022 despite economic turbulence and inflationary shocks across
the region.
Mobile services: often the only way
to connect
Millions of people in our markets lack access to landline infrastructure,
and broadband penetration levels are far lower than in much of the
world. Mobile networks continue to be the primary source of voice and
data services for the vast majority of sub-Saharan Africans – which
means that our focus on expanding our networks and extending rural
coverage plays a vital role in including people in the mobile and digital
economy. In 2022/23, we invested $700m in capital expenditure,
predominantly in our networks, and there is a great opportunity to
expand coverage further. Mobile connectivity in our markets is still low
relative to other regions – though people’s appetite for connection
means it is growing fast. By the end of 2021, 515 million people
subscribed to mobile services in sub-Saharan Africa, representing
46% of the population – almost 20 million more than in 2020. It is
projected that there will be nearly 100 million new subscribers by
2025, taking the total number of subscribers to 613 million (50% of
the region’s population)(i).
Accessibility will continue to underpin this growth: we added 2,700+
sites to our network in the past year and grew our customer base
by 9.0%.
Harnessing digitalisation as the engine
of growth
Africa’s future economic growth will be driven by digitalisation – which
places it high on the agenda of many governments in our markets.
Businesses and service providers need reliable, competitively priced
data in order to flourish and generate economic value. Mobile
technology enables digital solutions and supports the growing use
20
Airtel Africa plc Annual Report and Accounts 2023
of online channels by consumers, while effective broadband can help
businesses thrive.
The GSMA estimated that in 2022, 40% of the adult population in
sub-Saharan Africa was connected to mobile internet services – a
rapid increase since 2001, when the figure was 1%, but there is clear
evidence that expansion still has far to go. The same report showed
there is also a usage gap: 44% of adults live in areas covered by mobile
broadband networks but do not yet use mobile internet services.
Smartphone adoption in our markets remains relatively low, at around
36.3%, although it improved by 2.1% in 2022/23. 4G coverage is
also expanding – our own 4G network now reaches 65.9% of the
population in our footprint, an annual increase of 3.3%. And in the
future, there will be a clear role for 5G – which is why we continued to
invest in 5G spectrum this year.
Our strategic focus on winning with data, supported by our expanding
digital products and content, Airtel TV, and our focus on supporting
enterprises, places us at the forefront of this digital opportunity –
which will transform lives while driving business growth.
For more information about Airtel Business, see page 74
Mobile money – driving financial inclusion
More people than ever now enjoy access to formal financial services,
thanks to the growth of digital financial services in sub-Saharan Africa.
Africa as a whole, which has historically been underserved by formal
banking, is now home to almost half of digital financial services users
worldwide. And financial services are critical to wider economic
development and opportunity: financial inclusion is an enabler for
seven of the 17 UN Sustainable Development Goals (UN SDGs).
Africa’s domestic e-payments market is expected to see revenues
grow by approximately 20% per year, reaching around $40 billion by
2025, according to a 2022 McKinsey Report**.
Airtel Money is well-placed to be part of this opportunity. We continue
to build the mobile money ecosystems that help customers join
the digital economy, and to win new customers through services,
including interoperability, payments, micro-loans and international
money transfers.
For more information about our Airtel Money business, see
pages 72-73
Affordability critical amidst
cost-of-living pressures
Global economic turbulence has had an impact on many of our
markets over the past year, with prices for food and fuel rising rapidly,
exacerbated in some markets by supply chain disruptions and foreign
exchange fluctuations. Consumers have felt these inflationary
pressures keenly – and while demand for telecoms services continues
to rise, affordability remains very important. We offer pricing plans that
are simple and transparent, based on the principle of ‘more for more’
– meaning that the cost of connecting has fallen in real terms.
The competitive landscape continues to be dominated by a few large
competitors, with some smaller regional companies in some markets.
So alongside price, we compete for customers through our range of
services, our advertising and brand image, the quality and reliability
of our service, and our wide coverage. Our focus on distribution is
designed to give us competitive advantage in recruiting and winning
new customers.
The overall economic picture in our markets is of subdued current
growth – but huge potential for the future. Real GDP in sub-Saharan
Africa is estimated to have grown by 3.6% in 2022, reflecting a
slowdown from 4.7% in 2021, and is forecast to remain at around
3.7% in 2023.(iI) Over the next three decades, however, the population
is set to nearly double, to around 2 billion, with 32.2% of the population
in our markets between the ages of 10 and 24 years, and GDP is
expected to grow at around 7%.
For more information about our ‘Win with’ strategy, see
pages 26-37
Managing risk, and contributing
to sustainable development
As in any business sector, telecoms in sub-Saharan Africa operates
against a background of risks and challenges, as well as opportunities.
Among these risks, currency devaluation and, in some cases this year,
shortages of foreign currency in local markets need to be carefully
managed and mitigated – this is addressed as a principal risk in our risk
management framework, which covers a range of strategic, financial,
operational, governance and compliance risks.
Africa is also disproportionately affected by climate change, which
presents a real risk to economies and communities. Our sustainability
strategy is designed to ensure we make a meaningful contribution to
the societies and economies where we live and work. We have been
working closely with The Carbon Trust over the last six months, to
develop a detailed pathway for the reduction of our greenhouse gas
(GHG) emissions. We have completed a detailed audit of our assets
and have identified specific programmes and initiatives to significantly
reduce our scope 1 and 2 emissions. These initiatives have been
analysed across our footprint by a cross-functional taskforce which
has been established to oversee the project. This taskforce updates
the Sustainability Committee regularly.
For more information, see how we manage our risk on pages 90-97
For information about our sustainability strategy, see pages 38-55
Operating in a highly regulated sector
All telecommunication operators must work within the frameworks
created by governments and regulatory authorities, covering telecoms
regulations, banking regulations and licences. Alongside strict
compliance with regulations, we aim to work collaboratively with
governments to make sure we integrate our services into their key
initiatives and play our part in strengthening economies and
transforming lives.
In many markets, Know Your Customer (KYC) regulations apply –
these require customers to register their identity to access mobile
services. Providing easy access to a fast and compliant registration
process is a key part of our ‘Win with’ distribution approach. Data
security is another concern for regulators and consumers – and as
part of our sustainability strategy, we operate under the ‘Information
Security Management System’ (ISO 27001) certification and the
‘Business Continuity Management System’ (ISO 22301) certification,
which cover all mobile communication and mobile money operations.
For details, see our legal and regulatory framework on pages 22-23
(i) GSMA Mobile Economy Report 2022
(ii) Regional Economic Outlook for Sub-Saharan Africa, October 2022 (imf.org)
* According to the World Bank at www.worldbank.org/en/region/afr/overview
** https://www.mckinsey.com/industries/financial-services/our-insights/the-future-
of-payments-in-africa
Our top six markets
Nigeria
Population
GDP
Mobile customers
Unique mobile penetration
DRC
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money customers
Tanzania
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money customers
Kenya
Population
GDP
Mobile customers
Unique mobile penetration
Mobile money customers
Uganda
Population
GDP
Mobile customers*
Unique mobile penetration
Mobile money customers*
Zambia
Population
GDP
Mobile customers
Unique mobile penetration
2022
219m
$477bn
222m
48%
2021
213m
$441bn
195m
47%
2022
99m
$63bn
50m
44%
14m
2022
65m
$77bn
60m
54%
41m
2021
96m
$57bn
47m
43%
9m
2021
64m
$70bn
54m
54%
35m
2022
2021
54m
$116bn
66m
64%
39m
53m
$110bn
65m
61%
35m
2022
47m
$49bn
32m
45%
24m
2022
20m
$29bn
20m
57%
2021
46m
$43bn
30m
43%
23m
2021
19m
$22bn
20m
58%
* Uganda mobile customers and mobile money customers as of September 2022
Data sources:
• Population and GDP from the International Monetary Fund (IMF)
• Mobile customers and mobile money customers from respective telecoms
regulatory authorities’ published data
• Unique mobile penetration report from Omdia market analysts
Airtel Africa plc Annual Report and Accounts 2023
21
STRATEGIC REPORT
Legal and regulatory frameworks
We operate within the laws and regulatory
frameworks of governments and regulatory
agencies to bridge the digital divide and expand
financial inclusion in our markets – and we always
work to ensure that our operations meet local legal
and regulatory requirements.
We engage with governments and
regulatory authorities to promote a
stable business environment that
supports governments’ goals for
the sector alongside the long-term
viability of our business.
The legal and regulatory frameworks we work within fall into
three categories: telecoms services, mobile financial services
and broadcasting services. In some of our markets, there are
also competition laws.
We keep the regulatory framework under continuous review,
and publish significant developments on our corporate website,
under ‘Regulatory news’. Here we describe the most significant
developments in our largest markets this year.
22
Airtel Africa plc Annual Report and Accounts 2023
Tax developments
In 2022/23 several governments reviewed their tax
arrangements:
Democratic Republic of the Congo – tax on
telecommunication services
In March 2022, the DRC government introduced a new telecoms
tax on usage. In October 2022, the provisions of the telecoms
tax were suspended and the government agreed to introduce a
fixed tax based on each operator’s market share. This resulted in
reduced cost for operators.
Gabon – Finance Act 2023
In February 2023, the Finance Act 2023 introduced a tax on
mobile money at the rate of 0.5% of the revenues collected by
mobile operators.
Kenya – tax on handsets and imported SIM cards
In July 2022, the new Finance Act re-introduced 10% excise
duty on importation of handsets and a KES 50 duty per unit on
imported ready-to-use SIM cards. This will impact the cost of
handset devices and the cost of services.
Niger – Finance Law 2022
In December 2022, the Government of Niger introduced a stamp
duty of 2% of the value of the invoice of each contract that mobile
operators enter with suppliers. This tax increases the overall cost
of doing business in Niger. The finance law also abolished the
tax on incoming international traffic, thus lowering the cost of
incoming calls.
Tanzania – Finance Act 2022
The Finance Act 2022 introduced amendments that resulted in
reduction of levies on electronic mobile money transfers and
withdrawals. This reduction has benefited customers and resulted
in increased uptake of the services.
Zambia – Finance Act 2023
In January 2023, the Finance Act 2023 abolished the two-tier
taxation system that existed in Zambia where corporations in the
telecommunication sector paid corporate tax at the rate of 40%,
with all other corporations paying 35%. This law harmonised
corporate tax across all sectors of the economy at the rate of
35%. The Act also reduced customs duty to 0% and 5% from
15% and 25%, respectively, for a period of three years, on
selected information and communications technology (ICT)
and telecommunications equipment to encourage uptake.
Financial services licences
Republic of the Congo – electronic money issuer licence
On 19 December 2022, Airtel Mobile Commerce Congo S.A. was
issued with the final licence to operate as an electronic money issuer
in the Republic of the Congo.
Gabon – electronic money issuer licence
On 17 October 2022, Airtel Money S.A. (Gabon) was issued with the
final licence to operate as an electronic money issuer in Gabon.
Niger – electronic money issuer licence
In July 2022 BCEAO (Central Bank of West African States) licensed
Airtel Money Niger SA. to operate as an electronic money issuer
in Niger.
Nigeria – Payment Service Bank (PSB) Licence
On 27 April 2022, the Central Bank of Nigeria issued SmartCash
PSB Limited with final approval to operate as a Payment Service
Bank (PSB) in Nigeria.
Spectrum acquisitions
Democratic Republic of the Congo
In May 2022, Airtel DRC S.A. acquired 58 MHz of additional
spectrum spread across 900, 1800, 2100 and 2600 MHz bands, for
a gross consideration of $42m from Yozma, through a process that
involved the surrender of the licences by Yozma to the government,
and the direct acquisition of the spectrum by Airtel DRC S.A. which
was confirmed by the modification of the Airtel licences by the
State to incorporate the new spectrum. The licence for 10 MHz of
paired spectrum in the 2100 MHz band will come up for renewal in
September 2032. All the other licences will continue until July 2036.
Kenya
In July 2022, Airtel Networks Kenya Limited acquired 60 MHz in the
2600 MHz spectrum band for a period of 15 years upon payment
of $40m.
Nigeria
On 6 December 2022, the regulator confirmed that Airtel Networks
Nigeria Limited (Airtel Nigeria) had emerged as the sole bidder in the
3.5 GHz spectrum auction. Airtel Nigeria was awarded one lot in the
3.5 GHz spectrum auction at a price of $285m for a period of ten
years from 1 March 2023.
On 8 December 2022, the regulator awarded Airtel Nigeria two slots
of 5 MHz each in the 2.6 GHz band for a period of ten years at a
price of $32m.
On 13 March 2023, the Nigeria Communications Commission
(NCC) offered Airtel Nigeria the opportunity to renew its 2100 MHz
spectrum licence at a price of N58,659,955,200.00 (equivalent
of $150m) for a period of 15 years. Airtel Nigeria has accepted
the offer.
Tanzania
In October 2022, Airtel Tanzania was awarded 80 MHz in the
3500 MHz band and two blocks of 15 MHz in the 2600 MHz
band at the price of $21m and $39m, respectively. The spectrum
was issued for a period of 15 years from the date of award.
Zambia
800 MHz and 2600 MHz band: on 14 July 2022, the regulator
awarded Airtel Zambia two blocks of 10 MHz in the 800 MHz band
at the price of $17m and one block of 50 MHz in the 2600 MHz
band at the price of $12m.
2.6 GHz spectrum: on 15 November 2022, Airtel Zambia was
awarded a further 40 MHz in the 2600 MHz band at the price of
$12m. The spectrum assigned to Airtel Zambia is renewable
annually at no additional cost for the duration of operating licences
until 2028.
Licence modification in Rwanda
In 2022 the Government of Rwanda released their revised
broadband policy. This required the full liberalisation of the
telecommunications sector and proposed to move away from
technology-specific (2G, 3G, 4G) licences and services to
technology-neutral licences and services. It also removed the
restriction that previously existed in respect of access to spectrum,
which is typically used for 4G, 5G and future technologies. It also
involved the removal of the restriction in respect of direct provision
of services that fall within these categories of technology.
In January 2023, the regulator commenced the process of
modifying existing telecommunication licences to conform the
telecom licences to the requirements of the revised broadband
policy. Under the modified licence, Airtel Rwanda will be able to
access spectrum for 4G, 5G and future technologies and offer
4G services using existing spectrum without restriction.
Submarine cable licences
Republic of the Congo
In June 2022, the regulator issued Airtel Congo S.A. with a
submarine cable licence for a period of ten years in preparation
of the landing of the 2Africa submarine cable in the Republic of
the Congo.
Tanzania
In August 2022, the regulator issued Airtel Tanzania plc with an
addendum to its national and international network facilities and
network services licences to extend their scope to allow for the
landing and operating of the 2Africa submarine cable systems
in Tanzania.
Uganda listing
Under Airtel Uganda’s National Telecom Operator (NTO) licence,
Airtel Uganda Limited (Airtel Uganda) is obliged to comply with the
sector policy, regulations and guidelines requiring the listing of part
of its shares on the Uganda Stock Exchange (USE). The current
Uganda Communications (Fees and Fines) (Amendment)
Regulations 2020, creates a public listing obligation for all NTO
licensees, and specifies that 20% of the shares of the operator
must be listed within two years of the effective date of the licence.
This imposed a listing requirement by 15 December 2022 on
Airtel Uganda.
On 17 June 2022, the Uganda Communications Commission
issued Airtel Uganda an extension of the listing obligation from
15 December 2022 to 16 December 2023 on condition that
the prospectus is submitted to the capital markets authority
for approval before 30 June 2023. Airtel Uganda is working
towards the listing with advisors and is confident it will meet the
required deadline.
Airtel Africa plc Annual Report and Accounts 2023
23
STRATEGIC REPORT
Our business model
Creating value for our stakeholders
Our dynamic business model is underpinned
by our sustainability strategy and delivers value
to stakeholders while transforming lives through
digitalisation and financial inclusion.
Our vision
Our vision is to enrich the
lives of our customers.
Our values
Alive
We act with passion and
a can-do attitude. Innovation
and an entrepreneurial spirit
drive us.
Inclusive
We champion diversity.
We’re at the heart of our
communities, and anticipate,
adapt and deliver solutions
that enrich the lives of the
people we serve.
Respectful
We act with humility and are
always open and honest.
We deliver on our promises
to customers, stakeholders
and each other.
How we create value
An efficient network and business structure
in 14 markets across sub-Saharan Africa,
which we continually improve through
innovation
Delivering outstanding
services and products,
always aiming for
best-in-class
Through a unique
distribution network that
is close to our customers
Spectrum assets in every
country, with multiple layers of
data capacity, including new
5G technology in six markets
• Mobile network partnerships
that outsource the
management and operation
of our network infrastructure
Voice
A modernised network
offering 2G, 3G, 4G and 5G,
largely on efficient single
RAN technology
31,500+ network towers
and data capacity of 23,900+
terabytes per day
70,500+ km of fibre across
our markets
4,000 employees
Other key inputs
and enablers:
• Compliance with regulatory
frameworks in all markets
• A sound capital allocation
strategy and financial
management that targets
revenue growth ahead of
the market and underlying
EBITDA margin improvement
• A strong management
structure with operating
companies in each market
that can leverage Group
expertise
• Our sustainability strategy
which underpins everything
we do. It is aligned with the UN
SDGs and supported by goals
and active policies to respect
human rights, drive positive
social impacts, protect the
natural environment and
conserve resources
• Sound and transparent
governance
• A network of over 2,600
partners, including mobile
brands, IT companies and
telecoms infrastructure
providers
Data
Airtel Money
Other services, including
fixed-line telephony, home
broadband and data centres
A wide network of more than
2.6 million retail touchpoints
supported by a digitalised
approach, including:
More than 79,500+ exclusive
retail touchpoints, including
minishops, kiosks and Airtel
Money branches
More than 304,000+ activating
outlets
Strategic collaborations
with regional and international
partners to offer financial
and money transfer services
Other key inputs
and enablers:
• Efficient Know Your
Customer (KYC) processes
• Easier onboarding processes,
self-service through our
self-care MyAirtel app,
available in all markets
24
Airtel Africa plc Annual Report and Accounts 2023
99.2%
of our customers use
pre-paid services
2.6+ million
people financially empowered
through direct employment,
business partnerships and
our distribution network
Our purpose of transforming lives is supported by our sustainability
strategy, described on pages 38-55
Our strategy is supported by a robust framework for monitoring and
managing risk, described on pages 90-97
What makes us different
There are many aspects of our
strategy and business model
that are unique to us. If we had
to choose three important ways
in which we stand apart from
the competition, they would be:
Rapidly expanding
coverage that’s
reliable and high quality
We have an extensive, resilient
and reliable 4G network that’s
meeting the growing demand
for data, we’re investing in 5G
capability, and our network
expansion programmes are
connecting the unconnected
in rural and urban areas.
99%
of customer requests
processed digitally
5G spectrum
acquired in six markets, including
Massive MIMO technology
Simple, transparent
pricing and service
A unique distribution
network
Our straightforward pricing
models, simple ‘more for more’
offers and intuitive customer
journeys are helping us to win
and keep customers.
By building exclusive channels
and developing effective,
digitised onboarding processes,
we’ve been able to grow our
customer base faster than
the market.
Offering simple,
digitalised customer
journeys and
competitive pricing
Simple, convenient and
intuitive customer journeys
Straightforward pricing
plans based on the principle
of ‘more for more’
A tailored pricing strategy
that varies depending on
market position
Other key inputs
and enablers:
• Marketing and brand-building
to increase consumer
awareness and build
customer loyalty
To reach:
Creating value for:
140 million
total customers
54.6 million
data customers
31.5 million
Airtel Money customers
Our customers
Convenient and competitive
services that enable people to
connect, live and work
Our people
Direct employment
in a growing business offering
competitive pay and training
Financial inclusion
and opportunity through
connections to local and global
economies
Our economies
Accelerated sustainable
development through
financial inclusion and
‘banking the unbanked’
Direct and indirect
contributions of $2.1bn
in 2022/23 (vs $1.5bn in
2021/22)
2.6 million people earning
through working with Airtel
Africa as entrepreneurs and
in our distribution networks
Our communities
Programmes to support
education, health and wellbeing,
and disaster relief
Our shareholders
Constant currency revenue
growth of 17.6%
in 2022/23
Underlying EBITDA margin
of 49.0%
Total dividend of 5.45 cents
(interim and final as
recommended by the Board)
Airtel Africa plc Annual Report and Accounts 2023
25
STRATEGIC REPORT
Our strategy
Our
‘Win with’
strategy
Our ‘Win with’ strategy is
designed to deliver long-term
value for all our stakeholders,
and is underpinned by the
detailed framework of
environmental, social and
governance (ESG) objectives
in our sustainability strategy.
26
Airtel Africa plc Annual Report and Accounts 2023
We’re transforming lives across sub-Saharan Africa through
products, services and programmes that foster financial
inclusion, drive digitalisation and empower our 140 million
customers and their communities. We have a clear business
objective: to grow market share profitably and create superior
enterprise value while delivering our sustainability strategy,
so we can continue to serve our vision of enriching the lives
of our customers.
Our ‘Win with’ strategy has six strategic pillars through which
we aim to deliver sustainable, profitable growth. Underpinning
all these pillars are two constant themes: digitalisation, and
our commitment to contributing to sustainable development
through our sustainability strategy.
We aim to act as a responsible business at all times – and
to deliver on our promises. That means doing business
transparently and with a sound governance structure. It also
means being a good partner and an active contributor to
society, by creating jobs, paying taxes and respecting
the environment.
We work with the governments and institutions of the countries
in which we operate to develop and deliver our strategy – which
helps them realise their goals for sustainable development while
ensuring our strict and continued compliance with local laws
and regulations.
e d b y o u r commitment to digitalisatio
n
t
e l e r a
A c c
Win with
technology
Win with
people
Win with
distribution
Transforming
lives
Win with
cost
Win with
data
Win with
mobile
money
U
n
derpinned by our sust a i n a b i
g y
a t e
t r
y s
t
l i
Airtel Africa plc Annual Report and Accounts 2023
27
STRATEGIC REPORT
STRATEGIC REPORT
Our strategy continued
Win with technology
We aim to create a leading, modernised network that provides
the data capacity to meet rapidly growing demand and
supports connectivity and digitalisation in our markets.
That means improving basic network uptime, quality and
resilience as well as expanding our network footprint and
our 4G capabilities, while developing our 5G capacity in
readiness for predicted 5G demand. To reflect the importance
of IT capabilities and technology in reaching our customers,
we renamed this pillar from ‘Win with network’ to ‘Win with
technology’ this year.
Our priorities
Expanding the reach of 4G coverage and building
capacity through our 2G>3G>4G approach
Investing in 5G spectrum to make our network
future-ready
Focusing on rural coverage expansion through new
site rollouts, recognising that access to a reliable
service is the critical first step for reaching previously
underserved communities
Focusing on our network resilience and service
continuity, and adding capacity through aggregation
Building and modernising our network through
optimal end-to-end design, including spectrum
additions
Our progress
We continue to focus on delivering best-in-class service
and 4G networks in our markets, while ensuring our
network is ready for future 5G demand by investing in 5G
spectrum and technological capabilities in key markets.
Our goal is to be the market leader everywhere we
operate, while continuing to include more people in our
network, particularly in underserved rural areas. This
year we made significant investments in our network,
technology and spectrum, while maintaining our services
in the face of challenges that included fuel price inflation
and fuel shortages – we also made progress in initiatives
with our suppliers to increase the use of renewable
energy and reduce fuel dependency.
As part of ensuring we are ready for 5G demand, in
addition to purchasing spectrum we grew our fibre
infrastructure and tested our 5G capabilities. We
invested in data centres while exploring their potential
for additional revenue streams from third-party users.
We continued to improve our fibre provision in metro,
intercity, and international networks, including through
cost-effective partnerships and co-investment
programmes.
We increased data speeds as well as coverage. In
addition to our KPIs, below, we track our progress by
measures which include data consumption, which
increased from 1.8 million terabytes to 2.6 million
terabytes and the number of new sites in rural areas,
a target that supports our sustainability strategy: this
year we added 1,100 new sites in rural areas.
How we measure progress
We measure progress through several KPIs, described
on pages 18-19, including:
Total sites and data capacity: we deployed more than
2,700 additional sites, reaching 31,546 sites in total as
of 31 March 2023. During the year, we added 3,200+
more sites to 4G (90% of sites now on 4G) and added
an incremental 6,000+ km of fibre (70,500+ km of fibre
as of March 2023). Data capacity increased by 41.2%
to 23,900+ terabytes (TB) per day, with peak hour data
utilisation at 47.4%. In addition, 42.9% of our sites are in
rural locations and our network availability is 99.61% as
of 31 March 2023.
For more information about our principal risks, see
pages 90-97
For more information about our sustainability progress,
see pages 38-55
28
28
Airtel Africa plc Annual Report and Accounts 2023
Win with distribution
We aim to build on our unique distribution network to
increase our ability to reach and serve customers in all our
markets by making our services visible and accessible.
Our distribution network empowers our business by
extending our brand and ability to offer inter-linked services,
as well as through customer recruitment and retention.
Our priorities
Strengthening our distribution infrastructure to win
more quality customers by increasing our depth and
width, with a particular focus on rural areas
Enhancing the customer’s experience through
simplified digital customer onboarding processes,
including the Know Your Customer (KYC) process
Cross-selling new digital services to our existing
customer base
Broadening our offer to enhance usage and ARPU,
while further granulating our approach to distribution
so we can focus faster and more responsively
on the needs and issues of customers in smaller
geographies, increasing our net customer reach.
Our progress
compliant with local Know Your Customer (KYC)
requirements while being as efficient as possible,
including by recording biometric information where this
is a requirement. Through digital registration, most
onboarding processes are achieved in five minutes
or less.
We tackled a number of challenges over the year. We
addressed shortages of SIM cards in some markets
by integrating SIM sales with onboarding and have
enhanced our offer for e-SIM-capable smartphones.
The increasing uptake of the MyAirtel app has helped
mitigate currency shortages in some markets.
As smartphone penetration increases and our 4G
network expands, we expect further migration from voice
to data services, and we look for further opportunities to
recruit data customers, such as our partnership with New
World TV in 2022, which enabled Airtel TV subscribers
in the Democratic Republic of the Congo (DRC), Republic
of the Congo, Gabon, Chad, Niger, Madagascar and the
Seychelles to enjoy exclusive, live access to all FIFA World
Cup 2022™ matches.
We have continued to expand our distribution network
to get closer to customers and increase our visibility,
developing our infrastructure and achieving net additions
as reflected in the KPIs.
Our physical distribution network remains key to our
success, and we expanded our ecosystem of customer
activation outlets from 251,000+ to 304,000+ this year,
while consolidating the services we can offer at a single
outlet. At the same time, we’re enhancing our digital
distribution capability to stay ahead of the penetration of
smartphones, and we remain focused on MyAirtel app
and other self-serve functionality. Fast, effective digital
onboarding is also a continuing priority, bringing new
customers to our service in ways that are 100%
How we measure progress
We measure distribution through several KPIs, described
on pages 18-19, including:
Customer base and net adds: our customer base grew
by 9.0% to 140 million as of 31 March 2023. Customer
activating outlets grew by 21.0% to 304,000+. The
overall growth reflects our investment in sales and
distribution infrastructure, including our exclusive Airtel
Money distribution channel of kiosks and branches.
Our enhanced distribution channel ensures availability
of SIM cards, recharge cards and money float.
For more information about our principal risks, see
pages 90-97
Airtel Africa plc Annual Report and Accounts 2023
29
STRATEGIC REPORT
Our strategy continued
Our ‘Win with distribution’ strategy in action
Zambia: delivering excellent
execution to reach more
customers
Excellent execution is key to winning with
distribution. Everywhere we operate we aim
to increase our productivity, accelerate our
subscriber growth and improve our market
share. Across the Group, we focus on
aligning our distribution and marketing
campaigns, and continue to identify
opportunities for productivity improvements
in areas that are typically underserviced
– what we call ‘hyper-growth’ opportunities,
which can be rural or urban depending on
local circumstances.
This year, Airtel Zambia was a high-
performing market, delivering on distribution
by getting closer to customers – as of
31 March 2023, we had 189,000+
distribution touchpoints (recharge selling
outlets and Airtel money agents) across
the country, an increase of 39.5% year-on-
year, and 117,000 Airtel Money agents,
an increase of 47.5%.
Those distribution touchpoints are nurtured
– we want people to want to work with us, so
we’ve built our employer brand and reward
structure for the people who work for us
directly, and people who earn through
working with Airtel Zambia. Our team
supervises the network carefully, visiting
sites to check they have sufficient float, and
helping our agents understand the business
case for each Airtel Africa offering, so they
can more effectively serve customers.
Our ecosystem of distribution touchpoints is
also carefully targeted: our cluster planning
makes our distribution more efficient, and
we aim to ensure customers can access SIM
cards, recharge and mobile money at every
site. Our My Airtel app is also playing a vital
role in Zambia, as described on page 47.
As a result, our revenue in Zambia grew by
32.4% in 2022/23, driving revenue growth
for both data and mobile money services.
Our customer base in Zambia grew by 15.1%
to 8 million customers.
For more information about our East Africa
business, see pages 68-69
39.5%
increase in distribution touchpoints
37,000+
increase in Airtel Money agents
Ifwe ba Airtel,
twalipalamina mu
kutangata abekala
calo.
The proximity of
Airtel touchpoints is
convenient as ever.
Evans Mulenga Lusaka, Zambia
30
Airtel Africa plc Annual Report and Accounts 2023
Our ‘Win with data’ strategy in action
The Democratic Republic of the
Congo: demand for data resilient,
even in challenging times
Across our markets, demand for data
continues to grow fast – even in a year in
which many customers felt the pressure of
fuel shortages and food price inflation. It
shows that if we can stay ahead through
the strength of our technology and
distribution networks, there is clear
potential for future growth.
In the DRC, for example, we were able to
grow our 4G data customer base by 37.5%
to 1.9 million and increase 4G customer
penetration as a percentage of our total data
customer base to 47.5% – this means that
alsmost half of our data customers are using
4G technology in the DRC. This growth in
customers came at a time of significant
data demand. To support this expansion,
we reinforced our 4G network, which added
280+ sites in the DRC over the year, while
strengthening our ability to get close to
customers through our distribution system.
Boosting our smartphone offer through
competitive pricing has also played an
important role in the DRC, alongside the
reliability of our network – and we took steps
to widen our supplier base and increase the
frequency of supplies.
These investments have paid off: our total
data usage in the DRC increased by 63% to
183.2 million GB.
For more information about our Francophone
Africa business, see pages 70-71
37.5%
growth of our 4G customer base
63%
increase in data usage
Rapide, de bonne
qualité et abordable.
Speedy, good quality
and affordable.
Sarah Kabwende Kinshasa, DRC
Airtel Africa plc Annual Report and Accounts 2023
31
31
STRATEGIC REPORT
STRATEGIC REPORT
Our strategy continued
Win with data
We aim to maximise the value of data-based services and
increase data penetration in all our markets. That means
encouraging smartphone ownership and increasing
data usage at scale, while increasing access to the digital
economy for customers in all our markets.
Our priorities
Leveraging our 4G network for data ARPU and
revenue growth and using our technology to win
and/or maintain market leadership
Investing in 5G capabilities to be ready for future
demand
Smartphone offerings for all new handsets through
well-priced, transparent bundles
Further developing our wireless home broadband
business
Developing innovative products and data solutions
for corporate and SME customers through Airtel
Business
Continuing to focus on data security for our
customers in line with our sustainability strategy
Our progress
Driving success in our ‘Win with data’ pillar is closely
linked to our ability to extend and maintain fast, reliable
networks, and to being close to our customers through
our distribution organisation. This year we saw the
number of data customers rise to 54.6 million alongside
the expansion of our 4G network and the continued
increase in broadband customers. Our data capacity
grew rapidly to 23,900+ TB per day, and we added
3,200+ 4G sites to our network, which means we’re
including more people than ever, as well as offering higher
speeds and capacity. Our investment in 5G spectrum and
capabilities in Kenya, Nigeria and Zambia ensures we will
be ready to meet 5G demand. The strong presence of
our outlets and our marketing investment support this
network advantage. To keep customers’ data secure,
we now hold certification in ‘Information Security
Management System’ (ISO 27001), and ‘Business
Continuity Management System’ (ISO 22301), which
cover all mobile communication and mobile money
operations in all our markets.
While the rate of smartphone penetration growth slowed
this year in many markets as consumers faced cost-of-
living pressures, we continued to recruit smartphone
users, driven by innovative products and partnerships
with smartphone sellers. A range of offers and products
drove increased usage, including Airtel TV. Overall, data
usage grew by 46.3%, demonstrating the strength
of demand.
How we measure progress
We measure data through several KPIs, described on
pages 18-19, including:
Data customers, 4G data customers and penetration.
Our data customer base increased by 16.9% to
54.6 million as of 31 March 2023, and now constitutes
39.0% of our total customer base. Our total data
usage increased by 46.3% to 2.6 million TB. Data
usage per customer per month reached 4.4 GB, an
increase of 29.1%. 4G data usage contributed 74.5%
to total data usage.
Data revenue grew by 23.8% and data ARPU was $3.0,
up by 9.3% in constant currency.
For more information about our principal risks, see
pages 90-97
For more information about our sustainability progress,
see pages 38-55
3232
Airtel Africa plc Annual Report and Accounts 2023
Win with mobile money
We aim to accelerate the digital ecosystem by rapidly
enabling Airtel Money services in all our markets,
harnessing the ability of a profitable mobile money
business to enhance financial inclusion in some of the
most ‘unbanked’ populations in the world.
Our priorities
Further strengthening our distribution channel
of kiosks, mini shops and dedicated Airtel Money
branches, so customers can access assured float
and cash
Build and scale Airtel Money across all our markets
Continuing to recruit customers from our mobile
services base using recharge as an enabler
Make Airtel Money the currency of choice by
expanding our mobile money portfolio through
additional mobile money services, including
merchant payments
Enterprise and digital payments, including
commercial payments, benefit transfers, loans
and savings
Developing our fintech services as we move towards
providing platform services (loans and international
money transfers)
Focusing on technology as an enabler and
competitive advantage
Our progress
We have widened our customer base and driven
increased revenues while substantially increasing the
reach and depth of our mobile money offer. We continue
to focus on our distribution network and float availability
through our Airtel Money branches, which expanded
by 11.5% in 2022/23, and kiosks, which increased by
10.8%. We also increased the number of multi-brand
agents in our network by 44%. This has resulted in the
growth of our customer base to 31.5 million and we
encourage female customers who are historically
underserved by financial services in many of our markets
to use our financial products and services. We continue
to use recharges as an enabler for recruiting customers
from our mobile services base.
We have invested in our technology and our people to
ensure we have the capabilities and skills we need to
increase Airtel Money’s acceptance as the currency of
choice across the financial ecosystem. Among other
metrics, this has seen the value of international money
transfers increase by 33.7%.
At the same time, we began to gear up our offering in
Nigeria following the granting of our Payment Service
Bank (PSB) licence by the Central Bank of Nigeria in
April 2022.
How we measure progress
We measure mobile money progress through several
KPIs, described on pages 18-19, including:
Airtel Money customer base and penetration: our Airtel
Money customer base grew by 20.4% to 31.5 million.
Airtel Money transaction value and transaction value
per customer: our transaction value grew by 41.3%
to $88.6bn in constant currency. Transaction value
per customer grew by 16.4% in constant currency.
Airtel Money revenue grew by 29.6% and Airtel Money
ARPU was $2.0, up by 6.8% in constant currency.
For more information about our principal risks, see
pages 90-97
For more information about our sustainability progress,
see pages 38-55
Airtel Africa plc Annual Report and Accounts 2023
33
STRATEGIC REPORT
Our strategy continued
Our ‘Win with mobile money’ strategy in action
Making wallet payments easier:
‘quick loans’ in Uganda
Improving customer experience is an
essential part of accelerating the digital
ecosystem – so we’re focused on making
mobile money services as seamless and
trouble-free as possible. Our ‘quick loan’
product is designed to do just that – helping
customers make payments when and where
they want to, reducing the number of failed
transactions, and smoothing the mobile
money experience.
We introduced quick loans after spotting
the number of failed transactions that
resulted from customers having insufficient
funds in their mobile wallets to cover the
transaction value or their fees. We offer a
one-time instant loan to cover the fee or
value, up to their credit limit. The loan
attracts a low fee, and is available for buying
goods and services, paying bills, buying
airtime, or money transfers – whatever the
customer needs.
The product has rapidly become very
popular in markets such as Uganda, which
was among the first to pilot it. Demand in
Uganda had reached $7.9m per month by
March 2023 – often driven by customers
such as micro-traders who choose to buy
their stock in the morning and repay their
loan in the evening after trading. The
866,000+ quick loans taken up by 254,000+
customers in Uganda have opened up new
financial inclusion opportunities for young
enterepreneurs like Ivan Baguma who runs
his health supplements business in Kampala.
It has also helped to drive 20.5% Airtel
Money revenue growth in Uganda in
2022/23.
For more information about our East Africa
business, see pages 68-69
20.5%
Airtel Money revenue growth
$7.9m
monthly disbursement of instant
loans in Uganda
Okwewola kwesimu
kunyambye nyo mu
bisinesi yange.
Quick loans help me
grow my business.
Ivan Baguma Kampala, Uganda
34
Airtel Africa plc Annual Report and Accounts 2023
Our ‘Win with people’ strategy in action
Building opportunity for the careers
of the future
The digital opportunity is full of
transformative potential – for our customers
and communities, and for our employees.
In October 2022 we launched our ‘Women
in Tech’ programme to help ensure that our
most promising female talent – those who
scored high performance marks in several
consecutive years – contribute their skills
and expertise to key projects.
The 12-month programme focuses on
business challenges in the digital and tech
space – with participants working together
to identify and design complete business
solutions that address some of our biggest
opportunities. The 58 women taking part in
our first programme are being mentored by
senior leaders and female Board members
and will present their proposals and business
plans to our executive team at the end of
their training.
‘Paying it forward’: inspiring the
female talent of tomorrow
This programme is open to any high-
performing woman working in areas with
a strong technical focus and aims to
accelerate participants’ career potential
through training in design thinking, problem
identification and problem solving, and
presentation skills.
It reflects our commitment to providing
opportunities and support to female
employees as part of building gender
equality in our workforce. It is also an
example of our ‘pay it forward’ philosophy,
because the participants in the course are
already inspiring and mentoring other
talented women in our business, including
through a global seminar on International
Women’s Day in March 2023.
58
participants in ‘Women in Tech’
42%
internal promotions
We place the right
people in the right jobs,
with the right skills.
Rogany Ramiah
Chief human resources officer
Airtel Africa plc Annual Report and Accounts 2023
35
35
STRATEGIC REPORT
STRATEGIC REPORT
Our strategy continued
Win with cost
We aim to achieve an efficient operational model, leading
to an effective cost structure and improved margins.
This enables us to build large incremental capacity at low
marginal cost.
Our priorities
Our progress
Our cost-efficiency initiatives, which seek to optimise
site operational and maintenance expenses, and
bandwidth cost
A detailed analysis of expenses with the aim of improving
operating margins in individual markets
Ensuring fail-safe network design with optimal cost
structures, for example through multiple fibre routes
and high-capacity indefeasible right of usage (IRUs)
Increasing availability of digital recharges and
self-care services
The aim of our cost model is to ensure that we can
provide substantial additional capacity to serve our
customers in all our markets, at marginal additional cost.
We do this through optimising our network design, a
constant focus on value in our inputs and our contracts,
and volume optimisation.
This year, rapid increases in the cost of the fuel we need
to run our sites placed significant pressure on our cost
base, while devaluations and currency shortages in
some markets also created headwinds. SIM card price
increases added to costs. However, we were able to
maintain underlying EBITDA margins at broadly similar
levels to 2021/22 thanks to a range of cost initiatives,
including close collaboration with suppliers.
We continue to look for areas where we can share costs
and increase our operational resilience while improving
our offer to customers – for example, by exploring options
for partnerships on fibre or data centre resources.
How we measure progress
Underlying EBITDA for 2022/23 was $2,575m, up by
17.3% in constant currency. Underlying EBITDA margin
was 49.0%.
For more information about our principal risks, see
pages 90-97
For more information about our sustainability progress,
see pages 38-55
36
36
Airtel Africa plc Annual Report and Accounts 2023
Win with people
We aim to be the employer of choice with a diverse and
inclusive work environment that continues to foster
a culture of high performance, employee wellbeing,
skills enhancement and coaching. We have a long-term
commitment to our people and our employer brand.
Our priorities
Ensuring we have the right people in the right jobs, with
the right skills and at the right cost
Accelerating our diverse pipeline of talent to meet current
and future business needs
Improving leadership and functional skills through
coaching, our digital learning platform, functional learning
programmes and cognitive assessments
Digitising our people processes to improve the overall
employee experience and make Airtel Africa an even
more engaging place to work
Continually improving our processes and procedures and
evolving our work environment to ensure we remain an
attractive employer that recruits and retains the best
Our progress
Our business depends on having the right people in the
right jobs, with the right skills. We have continued to focus
on talent, capability and technology to bring the best out
of our people and deliver the best results for the business,
and our Group’s overall results in the face of global and
local headwinds this year demonstrate that we are on the
right track. In 2022/23 we continued to apply a ‘build or
buy’ succession strategy, and our internal development
programmes resulted in a 42% internal promotions
into new or existing roles, while we also reduced our
‘time-to-hire’ time significantly. Our Airtel Africa mobility
programme, designed to support talent development and
skills transfer across the Group, enabled high-potential
employees to deepen their skills and enhance experience
through cross-functional, cross-border roles.
Our gender diversity stands at 26% women in our
workforce, and we launched our ‘Women in Tech’
programme to further develop our pipeline of
female talent.
As our ways of working are underpinned by a strong
governance framework, we also built our people’s
understanding of the Code of Conduct through a
mandatory refresher training course available in English
and French, and ensured all new hires were trained in our
global Code of Conduct.
Digitalisation is an important part of our approach, and
we continued to develop our digital learning platforms
and expand the ways in which we engage with
employees. Our employee engagement survey continues
to provide us with regular insight and feedback from
our people.
Further details of our engagement and programmes,
including our employee assistance programme, are on
pages 44 and 45 in the stakeholder section.
How we measure progress
We measure our progress on people through a number
of KPIs, including:
• Diversity – by gender (26% women in our workforce,
29% women in ExCo at the OpCo level) and nationality
(employees from 39 nationalities).
• Skills development – we delivered key functional and
leadership training through accelerated on-demand
learning programmes, which in return improved
productivity and overall performance.
• Employee engagement – our bi-annual employee
engagement survey achieved a 91% response rate
in 2022/23, a 4% improvement from 2020/21
engagement level, with an overall engagement score of
81% which is a 2% increase from the previous score.
• Voluntarily attrition rate is 13%.
For information on how we manage our risk, see
pages 90-97
For more information about our sustainability progress
and commitments to our people, see pages 38-55
Airtel Africa plc Annual Report and Accounts 2023
37
STRATEGIC REPORT
Our sustainability strategy
Transforming
lives
Our sustainability strategy
framework and long-term
goals underpin our business
strategy and ensure that
our corporate purpose of
transforming lives is at the
heart of everything we do.
Sustainability KPIs
Scope 1 and 2 emissions*
114,842 (tCO,e)
Total energy consumption*
192,097,364 (kWh)
Population covered by mobile network**
79.45%
Gender diversity**
26%
* GHG emissions and energy consumption calculated as of
31 March 2023
** as of 31 March 2023
38
Airtel Africa plc Annual Report and Accounts 2023
We published our sustainability strategy in October 2021 – a
blueprint for the future of our business, the people we employ
and the communities we serve. A year later, in October 2022,
we published our inaugural Sustainability Report. It is aligned
to the requirements of the Global Reporting Initiative (GRI)
and the Task Force on Climate-related Financial Disclosures
(TCFD) reporting standards. It also provides full data and
detailed updates on our progress against our goals and
targets, including specific information on our sustainability
governance and partnerships. In both our sustainability
strategy and the Sustainability Report 2022, we committed
to full transparency in our reporting and to regular and timely
updates on our progress.
Ahead of the publication of our next Sustainability Report
in 2024, we’re taking this opportunity to provide our
stakeholders with a summary of our sustainability-related
work over the last six months.
Our sustainability strategy
framework
A clear framework is essential to ensure that we remain
focused on the delivery of every aspect of our strategy and
to provide clarity in our reporting.
Our materiality assessment identified a broad range of
topics relevant to our entire business – these are vital, and
addressing the challenges will support our company’s
purpose to transform lives for people, families, communities
and businesses across the African continent.
Our framework also provides a structured approach for the
programmes which are implemented in our 14 markets.
Pillar 1
Our business
Our ambition is to increase
digital inclusion in Africa
through the expansion and
increased reliability of our
network. This will provide the
connectivity to contribute
to the economic growth
of individuals, families,
communities and nations
across the continent.
We describe progress on
our business pillar on
pages 40-43
Goals
Data security
Service quality
Supply chain
SDG alignment
Pillar 2
Our people
Our ongoing commitment is
to provide rewarding
employment opportunities
and to achieve genuine
diversity and inclusion at all
levels across the business.
This goes to the core of who
we are.
Commitments
Diverse and inclusive
workforce
Training and
development
Healthy and safe work
environment
Employee engagement
We decribe progress on our
people commitments on
pages 44-45
SDG alignment
Pillar 3
Our community
Pillar 4
Our environment
Our ambition is to drive
digital and financial inclusion
and access to education for
people and communities
across Africa through the
provision of data and mobile
services underpinned by
our network expansion.
This is vital to the positive
transformation of lives
across Africa.
We describe progress on
our community pillar on
pages 46-52
Goals
Digital inclusion
Financial inclusion
Access to
education
SDG alignment
Our ambition is to address
and minimise the impact
of our operations on the
environment. This is critical
for the world in which we live.
Goals
Reduction of
GHG emissions
Environmental
stewardship
We describe progress on
our environment pillar on
pages 52-55
SDG alignment
Airtel Africa plc Annual Report and Accounts 2023
3939
STRATEGIC REPORT
Our sustainability strategy continued
Pillar 1
Our business
This pillar of our sustainability strategy underpins
our commitment to transform lives across Africa
through the provision of safe, reliable and resilient
connectivity to drive economic growth and
development. Our ambition is to increase digital
inclusion across the continent through the
expansion and increased reliability of our network,
to keep our customers’ data safe and protected
at all times, and to ensure our entire value chain
adheres to our ESG principles.
Our data security goal
Our commitment is to guarantee that our data
privacy and security controls are among the best
in the world. It is our highest priority material topic.
Our goal is to establish industry-leading data
security for our customers. We will achieve this
through investment in technology and expertise,
updated processes, and consumer awareness,
delivered through programmes with clear targets
and timelines.
MATERIAL TOPIC: DATA SECURITY
We aim to establish an internal control framework that
aligns with industry standards and create internal
capability to reduce our dependency on partners.
We recognise our responsibility to provide customers with best-in-class
protection for their personal and financial information.
Our focus areas:
• Confidentiality – protecting information from being exposed to
unauthorised parties and keeping sensitive information private.
• Integrity – ensuring the constant reliability of our data, networks
and systems.
• Availability – ensuring authorised users have access to the
systems, networks and data they need, and resolving hardware
and software conflicts to build design resilience.
Certification has been a key focus for us in the last six months. In
addition to preparing for the second annual audit of our ISO 27001
ISMS and ISO 22301 BCMS certification, in November 2022 we
started working towards ISO certification for SmartCash PSB
(Payment Service Bank) Nigeria. These standards are vital in helping
us establish a robust management framework and ensuring business
and operational continuity. We have also introduced an industry-
leading ‘email gateway solution’ which will manage and filter all
inbound and outbound email traffic to protect our organisation from
email-borne threats and data leaks. We anticipate this will be fully rolled
out by the end of 2023.
To help our people and partners keep their information secure, in
December 2022 we conducted a phishing simulation and have made
training available to all employees and suppliers to reduce the risk of an
40
Airtel Africa plc Annual Report and Accounts 2023
attack. We have also published comprehensive online safety
information on all our consumer-facing websites to help customers
protect their digital identities and personal information.
To complement a redesign of our vulnerability management
programme, in February 2023 we appointed an independent partner
to test for weaknesses in our external facing assets. We have also
upgraded our privilege access management solution which ensures
no unauthorised access to data. This work has been completed in
January 2023.
We have put Group-wide cybersecurity insurance in place to reduce
our exposure to the impact of any unsolicited and unwanted
cybersecurity events. In addition, as part of our security incident
management implementation, we enhanced our process to provide
a robust response in case of any security attack. Our dedicated 24/7
security team is responsible for continuously monitoring ‘attack
surface’ to stop breaches by minimising risk from exposed assets
and involve relevant stakeholders, as necessary. We also engaged
an external security organisation, which monitors for cyber attacks
and can respond to incidents when needed. For more information
on our principal risks, see pages 90-97.
We updated our ransomware protection policy
Ransomware is when malicious attackers encrypt an organisation’s
data and demand payment to restore access. In February 2023 we
updated our ransomware protection policy to guard against this
growing cyberthreat.
This policy is designed to minimise and manage the risks associated
with ransomware attacks on Airtel Africa. The updated policy sets out
the mechanisms we have in place to identify our risk of a ransomware
attack, and the controls around people, process and technology we will
implement if a risk is detected.
84
external security tests
1,475
people trained during
‘phishing’ simulation
16%
increase in number of
security applications and
platforms
Our data security in action
Information security week – raising
awareness among employees
Information security is a key focus area for us and our
stakeholders – and we know it needs to be a shared
responsibility for everyone at Airtel Africa. In February 2023,
we launched our internal information security awareness week
in three of our markets, helping our employees understand
best security practices so they can help us reduce the
possibility of service outages due to security incidents, data
breaches, potential financial losses and reputational damage.
During the week, interactive events and activities in Tanzania,
Uganda and Zambia focused on awareness activities and
information security training, with online quizzes and contests
to bring security messages to life, and ‘cyber-mascots’ who
toured our offices to deliver spot quizzes.
We’ve seen a rapid increase in awareness in the markets
where the awareness week was launched – and will extend
the scheme to other markets in 2023/24.
Our service quality goal
Our goal is to provide underserved communities
with access to reliable network and connectivity
across our 14 markets.
Providing network accessibility to rural areas is
key to building digital inclusion. We will achieve it
through the rollout of new infrastructure sites and
technology, improved fibre connectivity and capacity
delivered through programmes with clear targets
and timelines.
MATERIAL TOPIC: SERVICE QUALITY
We aim to create a leading, modernised network that
can provide data capacity to meet rapidly growing
demand and enhance connectivity and digitalisation
in our markets.
By expanding our network, we’re helping to build digital inclusion for
communities across Africa.
Our focus areas:
• Accessibility – increasing the percentage of the population in each
of our markets – including in rural areas – who have access to our
services.
• Delivery – increasing the availability of our latest technology service
offerings and products to all our customers.
• Reliability – ensuring our customers have access to reliable
connectivity and high bandwidth capacity.
Over the last six months, we have expanded rural coverage through
new site rollouts and site modernisations to ensure uninterrupted
network resilience and service continuity. We continued to deploy
optimal end-to-end design, including spectrum additions in several
markets, latest RAN (radio access network) technology and fibre
rollout, and best-in-class voice service quality.
At the close of our financial year, over 79.45% of the population in our
markets had access to our network and over 65.88% of the population
was covered by 4G. This is in line with the rollout timeline we had set.
We’re also readying the business for 5G demand. Alongside acquiring
5G spectrum, we had made preparations for 5G launch in Nigeria,
Kenya, Zambia and Tanzania by 31 March 2023. Work is underway
to prepare for the launch of 5G in another two markets in 2023/24.
Expansion of coverage
Total sites
Sites with 3G
Sites with 4G
31,546
30,866
28,476
Not only does 5G provide optimal service to our customers, it was also
designed – from its inception – to be highly energy efficient. Moving
data over 5G uses 90% less energy than LTE (long-term evolution)*
and 5G workloads can be uploaded to the cloud where any associated
emissions become the shared responsibility of the entire value chain.
As part of our sustainability strategy, we have set a commitment to
achieve net zero greenhouse gas emissions by 2050. Energy efficiency
– and the contribution of 5G – is a critical consideration in this.
We have soft launched VoLTE (voice over long-term evolution) in
Kenya, Nigeria, Uganda and Zambia and will begin trials in the DRC
and Tanzania in 2023/24. We have also launched several campaigns
to promote attractive voice bundles to our customers.
Our uninterrupted mobile service reliability – or quality of experience
(QoE) – has also improved. Our network availability is now the highest
ever for the business pan-Africa combined RNA (radio network
availability) with a value of 99.61% as of 31 March 2023. At 91.07%,
our voice quality index is also at an all-time high, as is our DQI (data
quality index) of 87.86% as of 31 March 2023. This level of network
availability and quality index builds customers’ confidence in their
quality of experience while making a voice call, streaming a home
broadband video or connecting to family and friends, especially
during high demand.
* GSMA’s Mobile Net Zero – State of the Industry on Climate Action 2023 Report
79.45%
total population covered,
with 4G coverage of 65.9%
31,500+
total sites as of
31 March 2023
19.11%
rate of fibre network rollout
across all sites
75.31%
rate of fibre network rollout
across data centres
For more information about our ‘Win with technology’ strategy, see
page 28
Airtel Seychelles awarded top certificate for data
centre design
In October 2022, following a robust assessment, Airtel
Seychelles’ data centre was awarded EPI Conformance’s
T3 Certificate for its architecture, telecom, electrical and
mechanical facilities.
Airtel Tanzania completes its passive marine cable
landing station
In October 2022, we completed our second passive marine
cable landing station (MCLS) in Dar-es-Salam, Tanzania. This is
a significant addition to our existing MCLS in Mombasa, Kenya.
Airtel Africa scores top position in FBNI competition
In the three months to December 2022, Facebook Networks
ranked Airtel Africa as having the best user experience (based
on 3G and 4G weighted average download speeds) in 13 of
our 14 markets. This ranking is updated on a quarterly basis by
our network insight partner, Meta portal. This means that our
customers enjoy the fastest download and streaming speeds
in those markets.
Airtel Zambia receives TechTrend Zambia Awards
2022: #TTZAwards22
In March 2023, Airtel Zambia received the TechTrend Zambia
award under the category ‘Best Mobile Service (calls and
SMS)’. This award recognises Airtel Zambia’s achievement in
offering best calling and messaging services with a particular
focus on quality and reliability of our network coverage, fast
data speeds, affordability and excellent customer service.
Airtel Africa plc Annual Report and Accounts 2023
41
STRATEGIC REPORT
Our sustainability strategy continued
Our service quality in action
Providing better services for more
customers in Kenya
During the reporting period in Kenya we focused on ensuring
our 4G network is ready to sustain our customers with 5G
technology tomorrow – to do so, in July 2022 we acquired
60 MHz in the 2600 MHz spectrum band for a period of
15 years. And we have already made 56 sites 5G-ready as
of 31 March 2023.
To further increase our capability, we deployed 350 additional
infrastructure sites reaching the total number of 3,163 sites as
of 31 March 2023. We also laid out 900+ km of fibre reaching a
total of 8,900+ km in 2022/23.
As a result, data capacity increased by 82.7% to
3,047 terabytes (TB) per day, with peak hour data utilisation
at 43%. Overall, in Kenya we cover 85% of rural population
and approximately 46% of our sites are in remote areas.
For more information about our ‘Win with technology’strategy,
see page 28
We are committed to providing best-
in-class services while listening to our
customers and constantly delivering
innovative technology across the
telecom landscape in Africa.
Razvan Ungureanu
Chief technology and information officer
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Airtel Africa plc Annual Report and Accounts 2023
Our supply chain
management goal
Our goal is to ensure all our suppliers are aligned
with our ESG principles.
Our stakeholders hold us accountable for this and
we expect our suppliers to uphold high standards
in human and labour rights, environmental
performance as well as business ethics. We maintain
that there is no place for the abuse of employee
rights, violations of legislation, regulation or
governance standards, or environmental negligence
in our supply chain.
MATERIAL TOPIC: SUPPLY CHAIN
As a responsible organisation, we look further than our
own business and we aim to drive change and positive
improvement through our entire value chain.
Our goal is to ensure all our suppliers are aligned with our ESG criteria,
upholding high standards in human rights, labour rights, environmental
performance and business ethics.
Our focus areas are:
• Enhanced due diligence – increasing the pre-contract disclosures
we expect of potential vendors and suppliers.
• Ongoing ESG compliance – reviewing the ESG standards, policies
and controls of existing vendors and suppliers.
In the six months from October 2022, our main priority was to maintain
an ongoing supply of equipment, fuel and services despite the
geopolitical turbulence and shortages caused by the residual impact
of the Covid-19 pandemic. Over that period, we continued to increase
our supplier base with contracts awarded to new suppliers or vendors
while improving onboarding process. Work has started on the
development of ESG disclosure requirements for new suppliers and we
anticipate that this will be incorporated into our onboarding process by
Q4’24.
We also focused on existing suppliers and undertook a detailed
analysis of the results from an ESG self-assessment questionnaire
(ESG SAQ) which was sent to our top 100 suppliers and vendors (by
procurement spend) in September 2022 to gather information on
their ESG standards, processes and policies. With the response rate of
79%, we were in a good position to carry out detailed analysis of the
feedback we received. With this analysis in place, we’re now developing
a robust self-certification process for suppliers and vendors which we
will introduce in 2023/24.
For more information about our ‘Win with cost’ strategy, see page 36
0
breaches identified through
whistleblowing mechanism
79%
ESG survey response rate
from the top 100 suppliers
Engagement with our top tier partners
Engaging our partners, vendors and suppliers in the delivery of our
sustainability goals is critical. Scope 3 emissions account for over
80% of our total GHG emissions, and it is vital we work in partnership
to develop robust decarbonisation programmes and initiatives
across our value chain. In March 2023, we completed ‘deep dive’
consultations with our top tier partners, who account for 78%
of our scope 3 emissions. Our aim was to communicate our
sustainability strategy goals with a particular focus on the reduction
of GHG emissions.
The consultation revealed that while our top tier partners are at very
different stages of developing their decarbonisation plans – from
those that have set net zero targets to those who are just starting to
address emissions – they are deploying significant resources to their
decarbonisation ambitions. We’re pleased that our partners have
committed to enhancing disclosure of their GHG emissions data to
help us accurately monitor and report our scope 3 emissions.
We’re pleased to work in true partnership
with our suppliers and vendors to drive
improved environmental and social
performance throughout the entire
industry.
Ramakrishna Lella
Chief supply chain officer
Membership of the Joint Audit Corporation (JAC)
Airtel Africa is a member of the Joint Audit Corporation (JAC)
which represents telecoms service providers, most of whom
have vendors and suppliers in common. JAC will undertake
on-site audits of five of our suppliers each year. In the six
months from October 2022, we identified the suppliers and
sites to be audited under the JAC guidance. These audits will
take place by the end of 2023/24. JAC verifies and assesses
implementation of ESG-related programmes across the
leading suppliers to the ICT industry. Furthermore, JAC
members collaborate to ensure best practice in the shared
value chain, and we support corrective programmes that JAC
encourage to improve ESG standards.
This membership will allow us to implement and enhance a
periodic audit process for vendors and suppliers to monitor
their compliance with our ESG criteria.
What we learnt from our suppliers:
key findings from our ESG SAQ
General sustainability
commitments and policies
Environmental
96%
of suppliers who
responded to our ESG
SAQ have established
a code of conduct
92%
have a grievance
mechanism in place
80%
have an ESG
framework or policy
64%
have publicly committed
to sustainability through
their policies or
sustainability reporting
80%
have recycling schemes and
waste reduction initiatives
53%
track energy consumption and
conduct on-site energy audits
34%
measure scope 1, 2 and/or 3
greenhouse gas emissions
32%
have GHG emission
reduction goals
and targets
Social
94%
Governance
96%
define their approach
to labour and health
and safety standards
have anti-corruption
and anti-bribery policies
and procedures
91%
have policies that prohibit
child or forced labour
94%
have data
security systems
96%
95%
have policies that prohibit
workplace harassment
undertake regular
stakeholder engagement
100%
49%
provide health and safety
training to employees
monitor ESG
performance of suppliers
86%
35%
conduct annual health
and safety audits
require suppliers to
publicly disclose ESG data
73%
invest in community
development projects
Airtel Africa plc Annual Report and Accounts 2023
43
STRATEGIC REPORT
Our sustainability strategy continued
Pillar 2
Our people
Our commitment to people in action
Our commitment to creating a
diverse and inclusive workforce
We continue to draw upon our broad range of
policies, programmes and engagement initiatives
to help us achieve this goal.
We are committed to delivering equality in our
workforce. We will achieve this through recruitment
and programmes to provide training and
advancement for everyone regardless of gender,
nationality or disability.
MATERIAL TOPIC: DIVERSITY AND INCLUSION
Our people are critical to the delivery of our business and
sustainability strategy.
Without our dedicated and talented workforce, we would not be able
to achieve our growth objectives or deliver on our corporate purpose
of transforming lives. Our commitment is to provide rewarding
employment opportunities and a workplace where everyone can
thrive and develop. This goes to the heart of who we are.
Our commitment to creating a diverse and inclusive
workforce
Increasing female representation throughout the organisation is a key
focus for us. Over the past six months, we have appointed several
women into senior level roles, including the finance director of Airtel
Niger and the Group head of digital, both of whom were recruited
externally. Providing opportunities for our own people is important,
and we’re delighted that a female employee has been promoted into
the role of Group head of tax. In addition, we have worked with our
recruitment consultancies across all 14 markets to ensure more
female candidates are put forward for interviews.
81%
employee engagement
survey scores
29%
gender diversity of our
leadership in 14 OpCos
31%
gender diversity of our
Board of directors
39
nationalities in our
workforce
27.5%
female representation
across 14 OpCos
$1.1m
total investment into
training and development
programmes in 2022/23
229,660
total learning hours
in 2022/23
0%
total recordable injury
frequency rate (TRIFR)
44
Airtel Africa plc Annual Report and Accounts 2023
Mentoring and creativity helping Kenya win
with people
Winning with people is vital in all our markets – because
bringing the best out of our workforce lets our people fulfil their
talent while driving our business success.
In markets where there’s strong competition for talented
people, we have to be particularly creative to win. This year, our
annual ‘Win with people’ prize was awarded to Airtel Kenya,
a highly competitive market where our teams have delivered
a range of training and initiatives designed to improve
retention in our workforce, keep our brand visible, and
engage employees.
Developing high-potential employees through e-learning
courses, leadership training and job-shadowing helps keep
our talent pipeline flowing. In addition, Airtel Kenya’s internship
programme welcomed 20 interns to undertake projects
across the business. Detailed mapping of the talent pool and
well-executed onboarding programmes helped Airtel Kenya
recruit 200 sales executives in two months.
Airtel Kenya is also delivering on our gender diversity
ambitions. The OpCo’s workforce is 40% female as of
31 March 2023, and 50% of the leadership team are women.
Airtel Kenya is always looking for new ways to develop female
talent: this year the mentorship programme run in partnership
with ‘Girls for girls’ saw 12 female employees mentored
and three mentors trained over a six-month course, with
participants reporting positive changes in their confidence
outlook and understanding of the opportunities they have to
contribute to Airtel Africa.
Empowering all our employees is essential
to winning with people – and we’ve
focused on recruiting and developing
high-potential employees to help nurture
our high-performance culture.
Ashish Malhotra
Managing director, Airtel Kenya
Provision of best practice training and development
Over the past six months, we have continued to build opportunities
for our people to develop their careers through a range of online and
in-person training and development programmes. These programmes
focus on leadership and functional training and are designed to
improve career mobility.
We have also updated Percipio, our online learning platform, to offer a
personalised, immersive learning experience, including virtual workshops
and access to relevant professional certifications. Since October 2022,
more than 300 leaders have completed our ‘Agile culture’ course, and
more than 5,300 employees and contractors have taken functional
courses on Percipio, Xelerate and other online learning platforms.
Developing the next generation of women leaders in technology is
vital for us. We currently have 58 women on our ‘Women in Tech’
programme, all of whom are being mentored by senior executives.
We anticipate this programme will accelerate in 2023/24.
For more information about this programme, see our strategic pillar
‘Win with people’ on page 37
Our commitment to maintaining a healthy and safe
work environment
Our human resources and facilities teams work together to maintain
a healthy and safe work environment for every one of our employees.
This is reviewed monthly by the Sustainability Committee. Our human
resources teams also work closely with internal audit and assurance to
guarantee a continuous focus on health and safety in the workplace
in line with our recently updated health, safety and security policy. In
addition, we continue to focus on the individual health and safety of
our employees through a partnership with our health insurer. This
includes wellness check-ups, 24/7 access to medical advice and
support for mental wellness.
Engaging with our employees
In March 2023, we held the Group leadership conclave in Dubai which
was attended by senior executives from 14 OpCos. An important
focus of the session was our ‘Win with people’ strategy: we addressed
the Board mandate for building on our work to increase diversity
and inclusion, and how to embed our unique ways of working and
commitment to our people. This year’s leadership conclave was
attended by around 250 leaders, a significant increase from previous
years: we broadened the participation and included more manager-
level participants. The three-day session allowed us to discuss our
annual operations planning (AOP) and also enabled our Chair and
leadership to interact with managers and employees from 14 OpCos
and HQ.
In addition, chairpersons from our OpCo Boards attended and took the
opportunity to engage with teams across the organisation and share
insights into our culture and values. A plenary session was dedicated
to our sustainability strategy and vision. The conclave was highly
immersive, and all teams had an opportunity to engage with the
senior leadership of the organisation as well as the Chair in person.
Furthermore, we took time to award and recognise top-performing
teams and individuals at the gala event. In addition, we organised
several ‘open mic’ sessions, including a session with the Chair and
the CEO during the closing remarks.
For more information about our ‘Win with people’ strategy,
see page 37
Our commitment to people in action
Celebrating International Women’s Day
across Africa
We celebrated International Women’s Day in March 2023
for the third consecutive year, supporting equality, diversity
and inclusion-related initiatives and campaigns across our
14 markets. We adopted the UN Women’s theme for this year:
‘DigitALL: innovation and technology for gender equality’.
Employees took part in talks, debates and activities to
recognise our growing female workforce across the Group
and to consider some of the barriers and challenges facing
women in the workplace. We held a Group-wide town hall led
by our CEO to recognise the contribution of women at Airtel
Africa and to the wider community.
There could not have been a better
theme given today’s global reality where
technology underpins the way we live, work
and play. I look forward to working together
with Airtel Africa women to innovate and
design new ideas for a brighter future.
Olusegun Ogunsanya
Chief executive officer
Airtel Africa is creating
a culture and developing
opportunities for women
to nurture their talents
and secure their futures.
We are determined to
improve gender equality
across the continent.
Rogany Ramiah
Chief human resources officer
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STRATEGIC REPORT
Our sustainability strategy continued
Our people commitment in action
Pillar 3
Our community
Supporting communities across Africa is – and
has always been – at the heart of our organisation.
Our ambition is to drive digital and financial
inclusion and access to education for people and
communities across the continent through the
provision of data and mobile services delivered
through our network expansion. These are vital to
the positive transformation of lives across Africa.
Our digital inclusion goal
We are committed to improving the footprint of
our network, and thereby offering higher coverage
of populations across urban and rural markets.
Our goal is to significantly improve digital inclusion
across Africa. We will do this by driving penetration
of mobile telephony, smartphones and home
broadband in rural areas through the provision
of retail and support services. This will be key to
addressing the digital divide.
MATERIAL TOPIC: DIGITAL INCLUSION
The availability and affordability of our products and
services are critical to driving digital inclusion.
By expanding our network, we’re providing people with the opportunity
to use telephony and internet services, often for the very first time, and
increasing digital inclusion across Africa. But opportunity alone is not
enough: consumers also need access to the products and services
that enable them to take advantage of this opportunity.
Our focus areas:
• Rural penetration – increased penetration of mobile telephony in
rural areas is a vital first step towards digital inclusion. For people to
buy, use and understand their devices and digital services they must
have access to local retail and customer support.
• Affordability – encouraging use of our full range of digital services
through the creation of more attractive and affordable options for
home broadband and smartphone purchases.
• Payment solutions – in pre-paid markets, the availability of digital
services is dependent upon the availability of credit. We work to
expand and develop more convenient payment solutions for our
customers so that they’re able to access digital services as and
when they need to.
There has been a significant improvement in data capacity through
the expansion of our network coverage and data availability. The
continued rollout of new sites and upgrade of existing sites to 4G has
increased the number of people in Africa who can now access the
4G network, especially in rural areas. Our rural population coverage
stands at 70% as of 31 March 2023. We have also been encouraging
customer uptake with the launch of data bundle offers designed
specifically to appeal to the needs of customers in each market,
with additional add-on offers available to existing users through the
MyAirtel app – adoption of our data bundles grew by 3.5% to 94.7%.
Employee assistance programme delivers
after cyclones in Malawi
Cyclone Freddy struck Madagascar and Malawi in February
and March 2023, causing devastating loss of life and damage
to property and infrastructure. Alongside our efforts to support
customers and communities through our network, we also
supported our people – especially the 17 colleagues who lost
their homes in the cyclone. Airtel Africa funded temporary
accommodation while they awaited resettlement into new
homes, and the ‘Airtel ladies’ welfare group, which is wholly
employee-driven, organised donations of clothes, bedding,
appliances and non-perishable food items to be sent to the
employees and their families.
The cyclone was followed by an outbreak of cholera in Malawi,
and we moved fast to protect our people in the affected
southern region, suspending all but critical travel, and
keeping employees updated through health and safety
communications.
Launching Airtel Women Network in Nigeria
In March 2023, we launched a programme called ‘Airtel
Women’s Network’ to encourage women to play an active role
in technology and empower them to become global leaders.
Through this platform, we support Airtel Africa women through
mentorship and networking – to be able to pitch ideas, access
the resources and participate in key technology projects.
This initiative is aligned with our commitment to increase
gender diversity, and financial and digital inclusion in Africa.
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Airtel Africa plc Annual Report and Accounts 2023
Digital inclusion in action
Zambia: MyAirtel app boosts distribution
and accelerates digital penetration
In Zambia, the rapid uptake of MyAirtel app, the self-care
service, has been central to an overall drive on distribution that
is tailored to meet the needs of Zambian customers – and
which has seen growth of MyAirtel app active users by 186%
in the market this year.
Airtel Zambia researched why and how customers used the
app and followed up with a marketing campaign that focused
on what customers found most important – for example,
checking transactions, accuracy in sending and receiving
money or paying bills.
MyAirtel app was downloaded 1.3 million times in Zambia by
the end of the year, and our active users almost trebled from
162,000+ to 465,000+.
70%
population covered
in rural areas
36%
smartphone
penetration
69%
sites with exclusive
outlets
46%
digital recharge
contribution to overall
recharges
0.5%
home broadband
penetration
According to the International Telecommunication Union (ITU),
globally, 57% of women use the internet compared with 62% of men.
Of the estimated 2.7 billion people worldwide currently unconnected,
the majority are women and girls. We’re addressing the digital gender
divide by offering affordable and easy-to-use products, such as ‘binge
bundles’ offering high benefits at a lower price with limited validity
which allow people on lower income, typically women, to access data.
This contributes to unlocking women’s potential in the digital economy.
Since the internet has become part of everyday lives, our customers
use it to work or for entertainment, and children use it to study and
access learning platforms on their devices. In March 2023, we
launched a new home broadband unlimited product in the Seychelles,
the first of its kind, which allows customers to use wireless connectivity
by just plugging in their device and browsing at a full 4G speed.
Schoolchildren will also benefit from faster speed and ease of access
to educational content. We plan to roll out the same home broadband
proposition in other markets where we also launch 5G coverage in
2023/24.
We recognise that certain unmissable televised events can encourage
otherwise undecided consumers to take the first step to getting online.
We have partnered with FIFA to provide our customers with access to
televised global football matches. Sport might bring customers to our
services and products, but we’re confident that the wider benefits will
prove transformational to their lives and futures.
For more information about our ‘Win with data’ strategy, see page 32
Transforming lives in action
DRC: supporting digitalisation through the
National Digital Library
Supporting digitalisation is a central element of our strategy
everywhere we operate – and in many markets, we work with
government partners who also recognise the importance of
access to data for individuals and the economy as a whole.
In the DRC, the government’s Plan National du Numérique is a
country-wide vision of a new digital economy. We’re supporting
this through the provision of free WiFi to universities
harnessing the strength of our 3G and 4G networks to deliver
high-speed, quality data in partnership with the Ministry of
Higher and University Education (Ministère de l’Enseignement
Supérieur et Universitaire).
The newly created Bibliothèque Numérique Nationale
(National Digital Library) was launched in 2022 to improve the
quality of academic training. It provides students with access
to academic resources hosted in the Ministry’s data centre
located at CEDESURK library as well as other universities’
sites. With more than 160 resource providers, including the
Francophone University Agency (AUF), it’s opening the door
to a new world of digital education opportunities.
Airtel Africa plc Annual Report and Accounts 2023
47
STRATEGIC REPORT
Our sustainability strategy continued
Touching lives in action
Accelerating philanthropy in Nigeria
In 2022 Airtel Nigeria reaffirmed its commitment to empower
and support underprivileged people across communities in our
largest market at the start of the seventh edition of the flagship
philanthropy programme ‘Airtel touching lives’. In just over a
month, 100,300 requests for support were received, recorded
and processed. In line with our sustainability strategy, we
focused on causes and opportunities aimed at bridging the
digital gender divide, financial inclusion and the adoption of
schools in 2022/23. For example, we partnered with The
Whispering Hope Africa, a non-profit organisation which
supports women, children and entrepreneurs in rural
communities and provided 65 girls with fully paid tuition fees
for one year, including a donation of 12 portable computers
and a photocopier machine to enable learning.
Empowering women and girls plays an important part in our
strategy for digital and financial inclusion – which is why we
have also provided vital support to the Women’s Technology
Empowerment Centre (W.TEC), an NGO which builds IT
capabilities having worked successfully with more than
1,500 women and girls in Nigeria over the past 14 years.
In June 2022, Airtel Nigeria supported their work – which
was threatened by electricity supply shortages – by donating
solar panels and cell batteries to help keep the project running.
At the same time, we supplied laptops and other IT equipment
to foster their aim of achieving economic empowerment
through technology.
During the sixth season of our ‘Touching lives’ programme,
Airtel Nigeria has contributed N161,304,000.00 (equivalent of
$350,000) to good causes for the benefit of the communities.
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Airtel Africa plc Annual Report and Accounts 2023
Our financial inclusion goal
Financial inclusion is key to driving equality and
economic growth
Our goal is to significantly increase financial inclusion
in Africa – with particular support for women. We do
this through the development of affordable financial
products to meet the needs of the un- and under-
banked, a reliable service which builds financial
confidence and literacy.
MATERIAL TOPIC: FINANCIAL INCLUSION
Financial inclusion is key to driving equality and
economic growth.
Financial inclusion is a main driver to alleviate poverty and a critical
goal of our sustainability strategy.
Our focus areas:
• Affordability – developing products and services that meet the
needs of the un- and under-banked is crucial.
• Accessibility – ensuring our products and services are available
when and where our customers need them.
• Awareness – empowering consumers with the knowledge, tools
and confidence to use financial products responsibly.
In the past six months, our work to improve financial inclusion has
developed through several programmes which have resulted in an
increased uptake and use of digital payments. In the year to March
2023, we have seen the value of transactions per Airtel Money
subscriber increase by 16.4% as a result of the launch of a number
of new products and an increased presence in our markets.
We understand that being near our customers helps drive uptake of
our products which, in turn, positively impacts financial inclusion. Over
the last year we have increased our ‘points of presence’ – Airtel Money
locations where customers can access services – by 44%, with a 12%
increase in Airtel Money branches and an 11% increase in the number
of kiosks.
We have further supported this through investment in the technology
infrastructure behind our developer, biller and enterprise portals.
This underpins our merchant business, which extends our footprint by
enabling customers to bank and access savings, loans and insurance
products at merchant sites.
We have also expanded our international money transfer corridors,
allowing customers to send and receive money faster and to and from
more destinations.
31.5m
Airtel Money customer
base
22.5%
mobile money customer
base penetration
$2.0
average revenue per user
(ARPU)
$252
transaction value per
customer per month
The economic empowerment of women has been, and will remain, a
focus for us. Across our markets, most informal businesses are run and
managed by women who, traditionally, do not have the same access
to credit as men. We continue to offer our financial products and
services to all customers, regardless of their gender. We work hard to
encourage women to join our network and use our services, and to
learn about our products that will provide them with independence
and empowerment.
We have also focused on promoting household savings through
innovative deposit products. For example, in March 2023, Airtel
Tanzania partnered with Letshego Bank for a digital savings campaign
that will see mobile money customers win prizes, such as motorcycles,
flat-screen TVs and cash. This innovative product encourages Airtel
Money customers and the public to make savings digitally.
For more information about our ‘Win with mobile money’ strategy,
see page 33
Our financial inclusion in action
Partnerships in action
Financial Inclusion Fund (the Hustler Fund)
initiative in Kenya
Partnering with governments to help drive digital and financial
inclusion is an important part of our strategy – and one of the
ways we help transform lives.
In November 2022, we joined the Kenyan government’s
Financial Inclusion Fund initiative – the Hustler Fund – which
focuses on extending lending and savings for small- and
medium-size enterprises, many of which are run by women.
More than 19 million people have registered to access the
Hustler Fund nationally and Airtel Money had disbursed KES
500+m (equivalent of $3.67m) through the fund delivering
services to over a million transacting customers as of
31 March 2023.
Supporting women entrepreneurs through
financial inclusion in Kenya
Lucie Saulinah Omondi is the founder of LiveGreatAgriLife
in Nairobi, Kenya, a peanut butter factory and drinking water
purification shop. She uses Airtel Money services to help run
her business.
“Our business is located in Kibera, the largest informal
settlement in Nairobi, where access to clean drinking water
and quality food can be a challenge. We are committed to
providing our community with delicious and nutritious peanut
butter, peanut butter products and safe drinking water. Our
peanut butter is made from high-quality locally sourced
peanuts, and is available in a variety of sizes and tastings.
Our drinking water is purified using state-of-the-art filtration
systems, ensuring that it is safe and healthy to drink. As a
socially responsible business, we’re proud to support a
foundation that works to uplift the settlement area where
we operate.”
“In four years of learning and overcoming challenges and slow
but steady growth, I have been able to build a dedicated team
and we’re currently focusing on our online sales. I have to say
Airtel Money’s product is a huge support in collecting money
for our produce and services.”
We continue getting closer to our customers to ensure that
they can always reach us when needed. In Kenya, our Airtel
Money branches grew by 50.3%, kiosks by 66.5% and the
number of agents increased by 189.7% in 2022/23, providing
support to valued customers like Lucie Saulinah Omondi.
Our access to education goal
We are committed to transforming lives through
access to quality education.
Our goal is to transform the lives of over one million
children through education by 2027.
MATERIAL TOPIC: EDUCATION AND DIGITAL LITERACY
Providing access to quality education is central to our
corporate purpose and philosophy.
We believe education is the key to transforming lives and the futures
of young people across Africa. We have set ourselves the goal of
transforming the lives of over one million children on the continent
through education by 2027.
We will achieve this goal through three focused activity programmes.
• Partnerships – we are committed to working in collaboration to
increase access to quality education. Our landmark partnership with
UNICEF is a critical element of this.
• Connectivity for education – connecting schools to the internet
wherever our network services are available.
• School adoption – building long-term relationships with schools in
need to provide them with the support they require.
The World Bank calculated that, in 2019, 87% of African children were
unable to read by the age of 10. And Covid-19 only exacerbated that
problem. This is why our work to increase access to education across
our 14 markets is so important. By connecting schools, libraries and
youth centres to the internet, millions of children will be able to use
online learning platforms. Through our partnership with UNICEF,
we’re delivering practical and financial support. All these elements
work together to accelerate our commitment to build better futures
for the young people of Africa.
Airtel Africa plc Annual Report and Accounts 2023
49
STRATEGIC REPORT
Our sustainability strategy continued
will follow in Q1’24 equipped with 15,000 tablets and 600 routers
which have been distributed to primary and secondary schools
by the Federal Ministry of Education of Nigeria. Airtel Kenya,
meanwhile, also connected 30 schools to the internet through this
partnership and two government-approved learning platforms –
Elimika for teachers and Education Cloud for children – are now
fully accessible at no cost to users.
* We have separate programmes focusing on education and schools’
connectivity in the Seychelles
No circumstances should deny a child its right
to an education. Our collaboration with Airtel
Africa has significant potential to become a
catalyst for more inclusive digital learning
across the continent.
Lieke van de Wiel
Deputy Regional Director, UNICEF
(ESARO – GWC Field Support Team)
Our landmark partnership with UNICEF
We continue to focus on driving our partnership with UNICEF
forward by increasing collaboration between our 13 participating
OpCos* and the respective national UNICEF teams. We’re
establishing effective plans to connect schools to the internet and
provide access to government-approved education resources
and learning platforms free of charge. Every market is different,
so individual implementation plans are critical to the success of
the programme on the ground. To support this effort, we hosted a
joint Airtel Africa/UNICEF convention in Nairobi in February 2023.
This was an important event, bringing teams on both sides of the
partnership together to share ideas, address the challenges we
face in some markets with the implementation of initiatives, and
agree the rollout and advocacy plans for the second year of the
partnership at both national and regional levels.
Kenya was the first to launch its national programme with UNICEF,
and another five countries have launched their programmes by
31 March 2023: Nigeria, Madagascar, Uganda, Rwanda, and the
Republic of the Congo. We anticipate that the remaining seven
countries will be launched in the first quarter of 2023/24. As the
programmes launch, we see an immediate impact. For example,
in Nigeria, the partnership has already resulted in 20 schools being
connected to the internet for the first time. Another 600 schools
65
schools have been
connected to
the internet
7
learning platforms out of 12
zero-rated in three OpCos
250,000+
schoolchildren provided
with access to online
education
$2.4m
donated to UNICEF over a
period of two years
‘Best Company in Education Intervention’
award 2022
Airtel Nigeria was awarded the best company in education
prize at the SERAs AFRICA awards ceremony in December
2022. We’re truly honoured for this recognition and remain
committed to championing access to quality education
in Nigeria.
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Airtel Africa plc Annual Report and Accounts 2023
Adopt a school in action
Adopt a school in action
Airtel Nigeria commissions the largest
primary school in Gombe State
In March 2023, Airtel Nigeria commissioned its seventh
adopted school, Government Day Primary. The project was
inaugurated by the Emir of Gombe, alongside other notable
guests in Pantami, Gombe State. The opening ceremony
follows the renovation of 12 blocks of 37 classrooms and a
total of 17 washroom facilities which have now been upgraded
to modern facilities for the pupils and teachers. Airtel Nigeria is
the first to carry out such intervention in the school and the
whole of Gombe state. Government Day Primary School is said
to be the largest primary school in Gombe state, with a total
population of 7,119 pupils registered under the school for basic
education, and 135 teachers who cater to their educational
needs. As part of the programme ‘Adopt a school’, Airtel
Nigeria adopts schools in rural areas and rehabilitates them
at least for four years. This is in line with our commitment to
improving the standard of education in Nigeria, and since the
inception, we have remained committed to the development
of these schools.
Kenya: partnerships accelerating our
‘Adopt a school’ programme
Fair access to education should be available to the most
vulnerable in society – and in November 2022, Airtel Kenya
worked with the Kenya Directorate of Children Services (DCS)
and the United Nations Office on Drugs and Crime (UNODC)
on an initiative supporting adolescents who have transitioned
from rehabilitation schools to continue their secondary
education and reintegrate into society.
In partnership with two high schools in Eldoret, Kenya, this
‘Adopt a school’ initiative will see 21 adolescents benefit from
the programme. Airtel Kenya will cover the students’ school
fees and other education-related expenses over three years,
while also supporting one of the schools with connectivity for
its IT hub.
Education has the power to transform lives
and futures. This is why the work we’re doing
to increase access to education is such an
important element of our sustainability
strategy and helps to deliver our corporate
purpose of transforming lives.
Emeka Oparah
Vice president, corporate communications and CSR
Uganda: empowering public libraries,
transforming community learning
In Uganda the digital gap in education can disproportionately
affect students living in rural areas, away from towns and cities
where schools often already have access to the educational
opportunities provided by the internet.
We support 14 public libraries across Uganda with ICT
resources and free 4G internet so that learners of all ages can
connect with educational resources. These libraries support
primary and secondary schools and early childhood education
centres, with teachers using the internet to deliver lessons and
share study tools that many schools do not have access to.
The libraries also run courses in basic ICT training and in
2022/23, 564 students successfully completed the
programme, which equips them with skills, including Microsoft
Excel, Word, PowerPoint and internet research. The skills they
learn support their own education, and we hope they will
go on to inspire and engage others as they connect to the
opportunities of the digital economy.
Airtel Africa plc Annual Report and Accounts 2023
51
STRATEGIC REPORT
Our sustainability strategy continued
Corporate social responsibility in action
Pillar 4
Our environment
For Airtel Africa, environmental protection is non-
negotiable. Our ambition is to address and minimise
the impact of our operations on the environment.
We are committed to a net zero future and
protecting natural resources and Africa’s precious
biodiversity.
Our greenhouse gas
reduction goal
Our goal is to achieve net zero greenhouse gas
(GHG) emissions ahead of 2050
We plan to reduce our emissions through Group-
wide rollout of a robust and credible emissions
reduction strategy in both the near and longer term,
and in partnership with our vendors and suppliers.
MATERIAL TOPIC: CLIMATE CHANGE
We are dedicated to our corporate purpose of
transforming the lives of people on the African continent,
and this is underpinned by our commitment to
environmental protection.
We must ensure we do not contribute to the problem of climate
change, but instead focus on reducing emissions associated with
our operations and on protecting Africa’s natural resources.
In October 2022, we published our scope 1, 2 and 3 baseline
emissions in our inaugural Sustainability Report 2022. For scope 1
and 2, where we have control of the data, the activities and assets
contributing to these emissions were identified and categorised, and
organisational reporting boundaries were set and confirmed by The
Carbon Trust, the expert consultancy, who are supporting us in the
delivery of this goal. For scope 3, where we do not have direct control
of the source or the data, we have worked with our partners and used
published data to calculate baseline for our scope 3 carbon emissions.
We will continue to collaborate with our partners and suppliers to
refine data management and develop programmes and initiatives that
will drive emissions down for the entire value chain. We will publish
our total scope 3 emissions for 2022/23 once we have received and
validated data from all our partners.
As soon as we published our baseline emissions last October, work
started to examine a wide range of projects and initiatives that have
the potential to reduce our GHG emissions. First, we engaged with
the OpCos which have the highest level of emissions (accounting
for >80% of our total baseline) through a series of workshops to
ascertain the practical implications of decarbonisation strategies,
including investments. Secondly, we worked with the remaining
OpCos which have the lowest level of emissions to address the
most viable decarbonisation initiatives in their respective markets.
Helping support mothers and babies at
maternal health centres
We have a long track record of engaging with the community
by supporting health programmes and medical centres
through direct donations, and in April 2022 across Uganda
we helped equip 13 maternity facilities and refurbished one
maternal health centre.
In support of the Uganda Muslim Medical Bureau, we donated
delivery beds, oxygen cylinders, oxygen regulators with
humidifier bottles, and digital weighing scales for babies to
13 hospitals. In addition, 500 ‘Mama kits’ and food items
were given to expectant mothers in the health facilities.
The donation was worth UGX70m (equivalent of $18,700).
Also, as part of our Airtel Cares programme: we fully
refurbished the Kisaasi Church of Uganda (CoU) Health Center
in a project costing UGX50m (equivalent of $13,500), to boost
health service delivery in the community.
Corporate social responsibility in action
Airtel Chad makes a donation to natural
disaster victims
N’Djamena, Chad capital city, is located near the Chari River
which has recorded its worst floods since 1962. Thousands of
families were displaced, and three Airtel Chad infrastructure
sites shut down and evacuated to preserve our equipment.
Michael Foley, regional director, Francophone Africa, visited
the floods victims’ camp on 12 November 2022 in N’Djamena,
capital city of Chad, along the Chari River, which borders
Cameroon and Chad, and presided over the donation of
significant quantities of staple goods to the Ministry of Gender
and Solidarity. The event had a big impact among the affected
community and strengthened Airtel Chad’s positive image
for community support.
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Airtel Africa plc Annual Report and Accounts 2023
We established broad workstreams across the relevant functions
to assess the feasibility of our scope 1 and 2 decarbonisation plans,
and many of the potential initiatives are laid out in our Sustainability
Report 2022. This work is led jointly by network and supply chain
management who also oversee the carbon reduction initiatives
which have already been rolled out in our operations.
In 2022/23, working with The Carbon Trust, we have developed a
granular roadmap for decarbonisation across all 14 OpCos which
required a comprehensive audit of all our assets. We also developed
a proprietary framework to reflect our operational structure – this will
guide the Group-wide rollout of our emissions reduction strategy in
both the near and longer term. We’re now undertaking additional
feasibility studies for scope 1 and 2 emissions for all assets in the
relevant markets.
We estimate that the initiatives identified by our analysis across our
14 OpCos and modelled by The Carbon Trust have the potential to
reduce emissions intensity by over 60% against our baseline by 2032.
For more information about our climate-related risks, see
pages 56-61
Partnerships in action
Cutting greenhouse gases in partnership
with ATC
We continue to explore new ways to increase usage of
renewable energy in our operations. In October 2022, we
reached a new multi-year, multi-product agreement with key
supplier American Tower Corporation (ATC), who operates a
network of infrastructure sites in Kenya, Niger, Nigeria and
Uganda. Under the agreement, all new site developments,
as we expand our network, will comply with ATC’s new green
site specifications which substantially reduce reliance on fossil
fuels while shielding customers and operators from volatile fuel
and diesel pricing. In December 2022, we unveiled our first
‘green’ tower in Uganda which is powered by 46 solar panels
to reduce emissions, for the benefit of our customers and the
planet. The rollout of ‘green’ towers will continue in 2023/24.
The agreement supports the advancement of carbon
reduction plans for both Airtel Africa’s and ATC’s long-term
sustainability goals, and is helping us ensure a brighter,
greener, more sustainable future.
Highlights since the publication of our
Sustainability Report 2022
• Establishment of the taskforce for implementation of our
decarbonisation interventions
• Roadmap for scope 1 and 2 decarbonisation programme
developed
• Publication of an update on the development of our pathway
towards a net zero future
• Detailed analysis of assets in scope for the reduction of
GHG emissions in all 14 OpCos
• Engagement with our partners to understand our value
chain’s ESG commitments
Total scope 1 and 2 emissions by region in 2022/23
(tCO2e)
58.72%
Nigeria
East Africa
Francophone Africa
Nigeria
East Africa
Francophone Africa
Total
24.84%
16.44%
Total emissions
(tCO2e)
28,530
18,880
67,432
114,842
Total scope 1 and 2 emissions by activity in 2022/23
(tCO2e)
10.8%
Data centres
Owned towers
Other
44.58%
Data centres
Owned towers
Other (buildings, shops, fleet)
Total
44.62%
Total emissions
(tCO2e)
51,239
51,200
12,403
114,842
Airtel Africa plc Annual Report and Accounts 2023
53
STRATEGIC REPORT
Our sustainability strategy continued
Next steps
Growth in demand for our products, services and data will require
additional infrastructure – including towers, data and switching
centres, and retail facilities. Therefore, we’re now undertaking a
significant analysis to understand the potential impact of this
growth on our total emissions and emission intensity. This work is
critical to ensure that digital and financial inclusion for millions of
people in communities across Africa is balanced against our GHG
emissions targets.
It is also vital that we focus on reducing our scope 3 emissions. Our
scope 3 baseline numbers revealed that GHG emissions from our
suppliers and vendors account for over 80% of our GHG footprint, so
we are committed to taking a partnership approach with suppliers and
vendors to address our scope 3 emissions. The process to establish
a long-term collaboration methodology is already underway and an
initial round of consultations took place with our ten most significant
partners (by procurement expenditure) in Q4’23.
Once technical and detailed feasibility studies for scope 1 and 2 have
been completed, we will update on the outcome of this work. We will
also be formulating our scope 3 strategy – and the plans it will outline
are a vital contribution to a net zero future. We are committed to the
reduction of GHG emissions from our operations and will prioritise the
provision of accurate and verified forecasts for emissions reduction.
For more information about our journey to net zero, visit www.airtel.africa
Carbon accounting policy
In addition to the work outlined above, over the past six months
we have worked with The Carbon Trust to develop and publish a
standalone document that sets out our approach and principles of
carbon accounting. Our carbon accounting policy is based on the
Greenhouse Gas (GHG) Protocol standards and the technical models
for emission calculations. The policy details the way we approach
calculation boundaries for carbon emissions and clearly sets out the
number of assets where we have operational control, and which are
included in the GHG emissions calculations. Our reporting period for
carbon accounting is aligned with the financial year: from 1 April to
31 March. The policy commits Airtel Africa to an environmentally
extended input/output data (EEOI) approach which bases scope 3
emissions on spend-based data multiplied by emissions factors.
We will continue our work to improve data collection processes by
engaging with our partners and suppliers and shift to the lifecycle
assessment approach (LCA) to increase the accuracy of scope 3
emissions calculations.
For more information about our carbon accounting policy, visit
www.airtel.africa
Partnerships in action
Partnering with Ericsson to build a more
efficient network in Niger
Developing our 5G capabilities is critical to ensuring – ready for
future data demand – and can also help make us more energy
efficient, as 5G networks offer significant energy savings
compared to 3G and 4G.
In January 2023 we partnered with Ericsson to deploy their
state-of-the-art dual-band three-sector Radio 6626 equipment
in Niger. Tests on the Radio 6626 have demonstrated a
reduction of more than 60% in power consumption and
approx. 0.4 tons of carbon dioxide emissions per site per year,
as well as 60% less weight on the tower.
54
Airtel Africa plc Annual Report and Accounts 2023
Our environmental
stewardship goal
It is essential we reduce waste and conserve
natural resources
Our goal is to eliminate hazardous waste from
our operations, and significantly reduce our non-
hazardous waste outputs. We also aim to minimise
our water consumption.
We achieve this through the development and
implementation of programmes designed to replace
damaging materials, expand recycling schemes, and
build employees’ awareness around protection of
natural resources.
MATERIAL TOPIC: CIRCULAR ECONOMY
Creating a culture in which environmental protection is
embedded in the heart of our business and minds of
our employees.
Our focus areas:
• Elimination of hazardous waste from our operations – taking a
responsible approach to reduce and dispose of hazardous waste.
• Reducing non-hazardous waste – increasing reuse and recycling.
• Protection of natural resources – preserving water resources
through reduction in use and employee education.
In the six months since the publication of our Sustainability Report
2022, all 14 OpCos have been focused on programmes to deliver our
environmental stewardship goal. In addition, significant work has
gone into the establishment of an effective environmental and social
management system (ESMS) which will standardise our environmental
activities across the entire business.
First, we have increased the number of markets where waste is
sorted and segregated. As of 31 March 2023, eight of our 14 markets
have full waste separation in place, and we anticipate we will have
established this in every market by fourth quarter of 2023/24.
Secondly, responsible and safe disposal of e-waste is an important
consideration for us. We have contracts with specialist and fully
certified recycling organisations in place in each market to ensure
our e-waste is disposed in a sustainable manner.
Energy efficiency is a key component of ‘Project Green’, a Group-wide
initiative that we established to help achieve our environmental
stewardship goal. Over the past six months, there has been a particular
focus on our office buildings and facilities where we evaluate the best
ways to reduce energy consumption. As a result, we have replaced
incandescent lightbulbs with LED bulbs in more than 90% of our
premises which, studies have shown, use 75% less energy than
incandescent bulbs.
Our environment in action
Joining the movement to eliminate open
waste-burning from Africa
We are committed to reducing and eliminating waste and
conserving natural resources – and one of our goals is to
eliminate hazardous waste from our operations, and
significantly reduce our non-hazardous waste outputs.
Across our markets only around 11% of all waste is recycled
– and the dumping and burning of waste is a serious issue.
So in March 2023, we joined the multi-stakeholder partnership
for eliminating open waste-burning from Africa to work on
addressing the issue alongside other stakeholders, including
local authorities, private companies, community groups, civil
society and development partners. The initiative will also
promote resource-efficient circularity: using waste as a
secondary resource input for decent job creation. The initiative
aims to reduce open waste-burning by 60% by 2030, and
eliminate it from Africa by 2040, through changing public
behaviour, introducing effective policy frameworks, and
building sustainable infrastructure for waste management.
Our environment in action
Planting for the future: World Wetlands Day
Our sustainability strategy recognises the importance of
biodiversity and ecosystems to our business and to those
around us – and we aim to have a positive impact on the
natural environment. So, in February 2023 we celebrated
World Wetlands Day, to commemorate the vital wetland
ecosystems which contribute to global biodiversity and
support climate change mitigation and adaptation. As well
as raising awareness among employees and communities
across our markets, in Kenya we supported a programme to
plant 2,000 seedlings of suitable indigenous trees in Enkongu
Enkare in Narok County and helped erect fencing to protect
the area. The wetland provides water for domestic use and for
irrigating agricultural land, as well as supporting biodiversity.
Environment and Social Management System
(ESMS)
As a responsible business, we need a systematic approach
to gathering information that helps us prevent or mitigate
adverse environmental and social impacts from our operations,
while also building the resilience of Airtel Africa and its
infrastructure.
In 2022/23, we made important progress with the
development of our environmental and social management
system (ESMS), which is being rolled out across all our
markets. The ESMS provides a framework designed to protect
the wellbeing of employees and communities, and to help us
respond to changing environmental and social conditions in
the communities where we operate. It also influences the
design of our products and services, the materials we use, and
the way we interact with and audit our suppliers.
In January 2023, we engaged Kisasa ESG consultants to guide
us in the process and develop training materials aimed at
building the capacity of employees who will implement our
ESMS. We will roll out capacity training in 2023/24.
Our ESMS covers all business activities. As well as our direct
operations, it covers indirect operation by passive
infrastructure service providers (such as telecommunications
tower and fibre optic service providers), in accordance with IFC
Performance Standards (IFC PS) Good International Industry
Practice (GIIP) and applicable guidelines for telecommunication
operations, as well as ISO 14001:2015 for environmental
management systems. The ESMS includes:
• protecting the environment and society through the
prevention or mitigation of adverse environmental and
social impacts from our operations
• ensuring that as a company we comply with regulations
and other requirements related to environmental and
social performance
• influencing the way we design our products and services,
our processes, network rollout, distribution, and disposal by
using a lifecycle perspective that can prevent environmental
and social impacts from being unintentionally shifted
elsewhere within the value chain
• holding our suppliers and contractors to high standards
of observing human and labour rights, environmental
performance, and business ethics
• achieving financial and operational benefits that result
from implementing environmentally sound and socially
acceptable approaches that strengthen our organisation’s
position in the market.
In 2023/24, we’ll be rolling out training and competency
development to ensure that the ESMS policies and procedures
are embedded across the Group.
8
markets have full waste
separation
90%
of premises have LED bulbs
Airtel Africa plc Annual Report and Accounts 2023
55
STRATEGIC REPORT
TCFD disclosures
Airtel Africa is committed to
transparency in our disclosure
and reporting of all sustainability-
related and climate-related risks
and opportunities.
This is evidenced by the progress we have made this year in
complying with the TCFD recommendations and recommended
disclosures. We understand that this is a journey, and we are
committed to continue to assess, on an ongoing basis, our risk
management processes, climate actions and metrics to align
with our business, climate risk and opportunities, and the
expectations of our stakeholders.
This year, we have continued our work with The Carbon Trust on
scenario analysis testing of our climate risks and opportunities
and, relatedly, the feasibility assessment of our decarbonisation
plans in line with our plans towards net zero carbon emissions.
This follows from the gap assessment which was conducted
last year and has resulted in significant improvement in the
robustness of our climate response plans and the embedding
of climate risk assessment within our business operations, risk
management and strategic planning processes.
Governance
Disclose the organisation’s governance around climate-related
risks and opportunities.
Strategy
Disclose the actual and potential impacts of climate-related risks
and opportunities on the organisation’s businesses, strategy and
financial planning where such information is material.
Risk management
Disclose how the organisation identifies, assesses and manages
climate-related risks.
Metrics and targets
Disclose the metrics and targets used to assess and manage
relevant climate-related risks and opportunities where such
information is material.
56
Airtel Africa plc Annual Report and Accounts 2023
Our pathway to TCFD-aligned reporting
This year, the second year in our TCFD reporting journey, we have made significant progress to our
climate risk assessment and reporting process. Progress update on planned actions disclosed in last
year’s report is outlined below:
Current status and roadmap
Airtel Africa response
TCFD recommendations
Compliance to
recommendation
Planned actions as stated in
Annual Report 2021/22
Annual Report 2022/23 update
Governance
Describe the Board’s oversight of
climate-related risks and opportunities
Describe management’s role in
assessing and managing climate-
related risks and opportunities
Strategy
Describe the climate-related risks and
opportunities the organisation has
identified over the short-, medium-,
and long-term
Describe the impact of climate-related
risks and opportunities on the
organisation’s businesses, strategy,
and financial planning
Describe the resilience of the
organisation’s strategy, taking into
consideration different climate-
related scenarios, including a 2ºC
or lower scenario
Risk management
Describe the organisation’s processes
for identifying and assessing climate-
related risks
Describe the organisation’s processes
for managing climate-related risks
Describe how processes for identifying,
assessing, and managing climate-
related risks are integrated into the
organisation’s overall risk management
Metrics and targets
Disclose the metrics used by the
organisation to assess climate-related
risks and opportunities in line with its
strategy and risk management process
Disclose scope 1, 2 and, if appropriate,
scope 3 GHG emissions and the
related risks
Describe the targets used by the
organisation to manage climate-related
risks and opportunities and performance
against targets
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Set CRO review as a
recurring Board agenda
item (via Sustainability
Committee and Audit and
Risk Committee reports)
Sustainability strategy underpins our ‘Win with’ strategy
as an enabler to our strategic ambitions. One of the four
pillars within our sustainability strategy is the ‘Our
environment’ pillar which details the Group’s ambition
towards our commitment to achieving net zero
emissions by 2050 and environmental stewardship.
Through the Sustainability Committee, which meets
monthly, climate risks and associated mitigation actions
and strategic plans are reviewed on an ongoing basis.
The Audit and Risk Committee also receives and
reviews updates on the Group’s CROs as part of its
thematic risk review of the company’s risks
.
Undertake full assessment
of the CROs to prioritise
based on likelihood, time
horizon, and magnitude of
impact (including scenario
analysis in this work)
During the year, the Group engaged the services of The
Carbon Trust to help in conducting scenario analysis of
its CROs for the purpose of assessing both the impact
and the resilience of the business in relation to climate
risks. This exercise has been completed
Ensure ongoing integration
of climate-related risk
considerations into overall
risk management activities
The Group’s sustainability strategy is deeply embedded
within its strategic objectives and plans. Climate risks
are being monitored using the Group’s enterprise risk
management framework and mitigation plans are
reviewed monthly by the Sustainability Committee
Measure and disclose scope
1, 2 and 3 emissions and set
science-based reductions
targets. Develop metrics
and targets linked to
specific CROs
Our GHG emissions for scope 1 and 2 are disclosed in
this report, including the metrics used to assess our
climate risks. We are engaging with our partners and
suppliers for an accurate assessment of our scope 3
emissions for 2022/23. We will keep our stakeholders
updated on the progress of this work
Page
58
59
60
61
Airtel Africa plc Annual Report and Accounts 2023
57
STRATEGIC REPORT
TCFD disclosures continued
Governance
Describe the Board’s oversight of climate-related risks
and opportunities
The Board has overall responsibility for the management of our
climate-related risks and opportunities (CROs). Our Board maintains
this oversight through two of its committees – the Audit and Risk
Committee (ARC) and the Sustainability Committee. The Audit and
Risk Committee oversees our risk management processes, including
the assessment and mitigation of CROs (see pages 117-127 for details
of our ARC meetings and the frequency of meetings in the year).
The Sustainability Committee meets monthly and is responsible
for implementing our sustainability strategy, including the climate
response actions addressed within the environment pillar of the
strategy. The Sustainability Committee oversees the overall
implementation of the company sustainability strategy, including
strategic initiatives, budget requirements, and review the development
of performance objectives to track the achievement of both short-
and long-term goals. Our CEO currently chairs the Sustainability
Committee and attends every Audit and Risk Committee and the
Executive Risk Committee (ERC) meetings. He provides a direct link to
the management of CROs as does our Board sustainability champion,
Annika Poutiainen, who also attends Board, Audit and Risk Committee
and Sustainability Committee meetings. Annika reports to the Board
on the work of the Sustainability Committee and, together with the
CEO, supported by relevant members of the management team,
will seek approval for any actions.
Describe management’s role in assessing and managing
climate-related risks and opportunities
Through the ERC, management oversees our risk management
processes, including the assessment and development of mitigation
actions for CROs. The ERC meets on a quarterly basis. Our Executive
Committee (ExCo) ensures that climate actions are integrated into our
operational business strategy. The two components of our strategy
towards CROs are reduction of GHG emissions and environmental
stewardship. In light of this two-pronged approach, our chief
technology and information officer and chief supply chain officer
jointly lead ‘Our environment’ pillar of the sustainability strategy.
Our materiality assessment shows that energy use from the data
centres, network operating centres and infrastructure sites constitute
a large percentage of the total energy consumption within our
business. So, our chief technology and information officer oversees
the strategy to bring energy-efficient initiatives into our core
operational processes. Furthermore, a significant number (92%) of
our infrastructure sites are owned by tower companies (towercos)
and we lease space from them. Our chief supply chain officer leads
our efforts to generate climate action from the towerco partners to
achieve energy efficiency and reduce GHG emissions.
Our head of strategy and sustainability leads our climate-related
programmes and ensures a seamless integration between our
business strategy and climate response actions. The head of
strategy and sustainability reports to the CEO who chairs the
Sustainability Committee.
Airtel Africa plc Board
Overall responsibility for the management
of the Group’s climate-related risks
Board Committees
Audit and Risk Committee (ARC)
Oversees our risk management processes,
including the assessment and mitigation of
climate-related risks
Sustainability Committee
Responsible for the implementation of our
sustainability strategy, including climate response
actions within ‘Our environment’ sustainability pillar
Executive management
Executive Risk Committee (ERC)
Identifies, assesses and develops mitigation
actions for climate-related risks
Executive Committee (ExCo)
Ensures integration and implementation
of climate-related actions within functional
strategy and operating plans
Head of strategy and sustainability
Responsible for leading the implementation
of our sustainability strategy, including its climate-related actions
58
Airtel Africa plc Annual Report and Accounts 2023
Strategy: risk and opportunities
Following the work on our climate scenario analysis this year, the list of climate risks and opportunities has been further refined to align with our
business model and the geographical spread of our operations. In assessing our climate risks and opportunities, we have taken a disaggregated
approach. Whereas some physical risks apply to all our markets, there are certain climate risks that are peculiar to specific countries. For
instance, the risks of tropical storms and cyclones are localised to Madagascar and Malawi within our country portfolio while the risk of extreme
temperature increases, which are negatively impacting cooling costs, are more significant for countries located in arid regions such as Chad,
Niger and parts of Northern Nigeria. These factors have been built into our modelling process to ensure we get a credible assessment of our
most significant climate risks to be prioritised for the attention of our executive management and the Board.
Category
Risk type
Nature of impact
Transition risks Customer pressure
New regulations
New regulations
Change in customer expectations regarding the Group’s
climate action leading to a decrease in sales negatively
affecting revenues
Introduction of carbon taxes in the Group’s operating
markets adversely impacting profitability
Lack of a credible action on climate change could result in
increased stakeholder advocacy negatively impacting our
operations and, in turn, revenues
Planning horizon
Medium (five years)
Medium
Medium
New regulations
Increase in energy prices for use in logistics, own sites and
leased assets leading to an increase in cost
Medium
Shareholder/stakeholder
advocacy
Increasing requirements for mandatory disclosures of
climate performance and climate risks associated
with operations
Short (three years)
Reputation
Damage to brand reputation arising from a perceived lack
of action on climate initiatives
Short
Physical risks
Flooding
Increase in frequency and severity of flooding attributed to
rising sea level and/or increases in rainfall could damage
company infrastructure
Long (ten+ years)
Extreme weather events
Increase in the frequency and severity of extreme weather
events such as tropical storms, cyclones, typhons could
result in damage to company infrastructure
Heat
Increase in extreme heat events and days could increase
cooling requirements for data centres and, consequently,
operating costs
Business disruptions
Loss of revenue and productivity due to business
disruptions attributed to climate-related physical events
such as cyclones, coastal and river flooding
Opportunities
Enhanced market valuation
Improved ESG performance will have a positive effect on
share price performance and investor perception
Access to capital
Cost efficiency
Reputation
Increased access to and lower cost of sustainable
financing options
Adopting energy efficient methods and cheaper,
environmentally friendly business processes will improve
cost efficiencies
Improved company reputation will help us to attract and
retain customers and employees, reducing customer
acquisition and human resources-related costs
Long
Long
Long
Short
Short
Medium
Medium
Airtel Africa plc Annual Report and Accounts 2023
59
STRATEGIC REPORT
TCFD disclosures continued
Describe the impact of climate-related risks and
opportunities on the organisation’s businesses, strategy
and financial planning.
Our ‘Win with’ strategy now incorporates sustainability as a key
enabler of each of the strategic pillars. This reflects our ambition to
deliver profitable growth in the long term by integrating sustainability
into the core of our business strategy (see pages 26-37). ‘Our
environment’ pillar, encompassing climate risks and opportunities, is
one of the four pillars of our sustainability strategy. This highlights our
focus on environmental stewardship and our ambition to achieve
net zero emissions within our operations. See pages 38-55 for more
information about our sustainability strategy.
Our strategic and financial planning processes are closely aligned
with our sustainability strategy and our ambition to achieve net zero
emissions across our operations. Specifically, this financial year, we
have seen an acceleration of this integration between our strategic
plans and climate response actions due to significant fuel price
inflation in some of our markets which put a strain on our operating
costs. This has allowed us to take significant steps to accelerate our
transition planning to renewable energy sources in collaboration with
our towerco partners as part of our risk mitigation plans and strategic
response to this risk. This example shows that our climate action
plan and strategic planning processes are not separate processes
but an integrated approach to do what is best for our business, our
stakeholders, and the environment.
In parallel, we actively participate in industry initiatives, such as the
GSMA’s Climate Action Taskforce and the biodiversity subgroup which
we co-lead to work with industry peers and find common solutions to
address the climate crisis. We’ve started an industry-leading approach
to meet the challenges of creating a credible carbon reduction plan.
Our aim is to find and agree a common industry approach to ensure
credible long-term decarbonisation plans and targets.
Describe the resilience of the organisation’s strategy,
taking into consideration different climate-related
scenarios, including a 2OC or lower scenario.
This year, we conducted a scenario analysis exercise to assess the
resilience of our business in the light of the climate risks and
opportunities we are faced with.
The scenario testing was done under three scenarios:
1. Current policies scenario – global temperature at c. 3oC (no climate
action)
2. High temperature scenario – global temperature greater than c. 3oC
(extreme case)
3. Net zero Paris Agreement aligned scenario – global temperature at
c. 1.5oC (transition to net zero).
These scenarios were selected to assess the resilience of the business
under current policies without any transition to net zero, impact of a
transition to net zero and the extreme case of a high temperature
scenario on our business operations and physical assets.
This extensive analysis started with the identification of CROs
inherent in our business model, value chain and geographical footprint.
These climate risks and opportunities were then assessed for
likelihood, velocity,and financial materiality. The scenario-testing was
principally quantitative based with 81% of our CROs assessed using
quantitative data from externally-accessed climate datasets. For the
balanced CROs, we opted for qualitative assessment using likelihood
and velocity.
60
Airtel Africa plc Annual Report and Accounts 2023
The result of the scenario analysis shows that:
1. The most significant transition risks for our business are direct
carbon prices on our leased assets and network equipment as
these would have the impact of increasing our operating costs and
the potential introduction of carbon taxes in various countries
2. The key physical risks relate to increase in river and coastal flooding
in our operating markets with the potential to disrupt operations,
damage physical infrastructure and negatively impact revenues,
increase in air temperature resulting in increased cooling
requirements and, consequently, higher energy costs, and extreme
weather events such as tropical cyclones in two of our markets
(Madagascar and Malawi)
3. Finally, our most significant climate opportunities will result from
increased market valuation from early transition to net zero, access
to green financing opportunities, and improved cost efficiency from
the adoption of energy efficient methods and environmentally
friendly business processes.
The output of the scenario modelling shows that the Group stands to
benefit from an early transition to net zero through enhanced market
valuation and access to better ‘green’ financing options, and should
take every necessary step to mitigate the risks of extreme weather
events on its physical assets to prevent business disruptions which
could negatively impact our future revenues and profitability. The
outcome of the scenario analysis further justifies the company’s
strategy to achieve net zero by 2050.
Describe the organisation’s processes for identifying and
assessing climate-related risks.
We have a robust enterprise risk management process which is
uniformly implemented across all our operating subsidiaries. Our
process for identifying and assessing climate-related risks follows our
established risk management framework. The classification of climate
risk has been completed using the TCFD’s recommendations around
physical and transition risks. See page 61 for details of our enterprise
risk management framework.
As climate change has been recognised by the Board as an
emerging risk, this receives the ongoing attention of the Sustainability
Committee and the Audit and Risk Committee as part of our risk
review process. We mitigate physical climate risks through our
business continuity management processes, as well as the current
initiatives to address transition risks detailed within the environment
pillar of our sustainability strategy. See pages 38-55 for details of our
sustainability strategy.
Describe the organisation’s processes for managing
climate-related risks.
The Group Executive Risk Committee (ERC) assesses and mitigates
climate-related risks, with oversight by the Board through the
Audit and Risk Committee and the Sustainability Committee.
The Sustainability Committee directly oversees the implementation
of our sustainability strategy, including climate-related actions
and programmes related to our environmental objectives and
meets monthly.
Our head of strategy and sustainability is primarily responsible for the
design and implementation of our climate response actions. For a
detailed overview of our risk management process and framework,
see page 91.
Describe how processes for identifying, assessing and
managing climate-related risks are integrated into the
organisation’s overall risk management.
The process of identifying, assessing, and managing climate-related
risks follows our existing enterprise risk management framework.
Our framework allows for a uniform approach across the Group for
risk identification, assessment and prioritisation. Specifically, in relation
to climate-related risks, we have further assessed identified risks,
based on likelihood, velocity and potential financial impact using both
qualitative and externally available quantitative data sets as part of our
scenario analysis to determine the resilience of the business and the
prioritisation of the risks.
Disclose scope 1, 2 and, if appropriate, scope 3
greenhouse gas (GHG) emissions, and the related risks.
Since the launch of our sustainability strategy in October 2021, we
have been focused on understanding our scope 1, 2 and 3 emissions.
From the beginning of 2022, we have worked closely with The Carbon
Trust, the leading global environmental consultancy, to develop
detailed scope 1 and 2 modelling for calculating our GHG emissions
across all our operating footprint and value chain. We are engaging
with our towercos partners for an accurate assessment of our
2022/23 scope 3 emissions. We will keep our stakeholders updated
on the progress of this work. Our baseline data for scope 3 was
disclosed in our Sustainability Report 2022.
We have identified appropriate quantitative metrics for measuring and
tracking the impact of climate of our operations and we will continue to
review and identify other suitable metrics to be used to reliably assess
and measure our climate risks and opportunities on an ongoing basis.
Scope 1 emissions
Scope 2 emissions
Measure
tCO2e
tCO2e
Baseline data
(2021/22)
65,180
50,539
Current year
(2022/23)
67,266
47,577
The climate-related financial disclosures contained
in this report are consistent with the TCFD
recommendations and recommended disclosures
and the ‘Guidance for All Sectors’ as contained
in section C of the TCFD Annex, except for
metrics and targets (b) with respect to disclosure
of scope 3 emissions.
Since the launch of our sustainability strategy, we have set out to
reliably measure and report carbon emissions within our business and
value chain. The outcome of this work resulted in the publishing of our
scope 1, 2 and 3 baseline data in our inaugural Sustainability Report in
2022. In preparing this report, we have not published updated scope 3
emissions data as we are engaging with our towerco partners to
ensure the robustness and completeness of our scope 3 emissions
data. We expect that the outcome of this engagement will ensure that
we can reliably publish our scope 3 emissions data in future reporting.
Metrics and targets
Disclose the metrics used by the organisation to assess
climate-related risks and opportunities in line with its
strategy and risk management process.
We use the following metrics to measure and assess the impact of
climate-related risks (CROs) and opportunities on our business.
We will continue to assess the suitability of additional metrics that can
be reliably measured for a more robust assessment of our climate risks
and opportunities.
Our business model does not principally involve the use of water and/
or land resources and no metrics have been selected with respect to
water and land use as these are immaterial to our business.
Metrics
Scope 1 emissions
Scope 2 emissions
Total energy consumption
Carbon intensity
Measure
tCO2e
tCO2e
kWh
tCO2e per MW
Describe the targets used by the organisation to manage
climate-related risks and opportunities and performance
against targets.
We are committed to achieving our net zero ambition by 2050 as was
disclosed in our sustainability strategy. This commitment has led to
the integration of our long-term planning process in our sustainability
strategy to ensure the delivery of our sustainability objective as we
deliver on our business objectives. This is reflected for instance in our
capital expenditure planning process where our commitment towards
renewable energy transition is a key driver in the planning for new sites’
rollout and contract negotiations with our towerco partners as are
other considerations such as cost efficiency in the face of increased
fuel price inflation. This integration of our strategic planning process
and sustainability strategy is at the centre of our climate response plan
to ensure we can deliver on our commitment to transition to net zero
within our operations by 2050.
We have conducted an extensive feasibility study of our
decarbonisation interventions and have a near-term target to reduce
our carbon intensity by 62% and absolute emissions from our existing
assets (before accounting for future business growth and network
expansion) by 54% by 2032. We have taken a near-term target of
2032 which is 10 years from our baseline of 2022 which is in line with
the Science Based Target initiative (SBTi).
We have identified specific KPIs which allow us to measure our
performance and we will continue to evaluate the identification of
other suitable KPIs which are most aligned to our climate risks
and opportunities.
Members of our ExCo are financially incentivised to reduce our
carbon footprint, and our incentive plan includes performance against
achievement of the CROs as part of our broader sustainability strategy.
The incentives are linked to the delivery of sustainability strategy
which cuts across four pillars and nine dedicated workstreams, among
them, reduction of GHG emissions and environmental stewardship.
These incentives are linked to the key result areas (KRAs) and the
long-term incentive plan (LTIP) of our ExCo members as part of
the annual performance evaluation process. The incentive plan is
designed to ensure continued focus and delivery of year-on-year
tactical plans which are important for the delivery of our long-term
climate commitments.
Airtel Africa plc Annual Report and Accounts 2023
61
STRATEGIC REPORT
Business review
Markets and
performance
The significant growth in our
mobile money business has
meant we’ve evolved our
organisational structure.
This has led to changes in the information used by our CEO
(who is the chief operating decision-maker) for the allocation
of resources and the assessment of performance. This, in
turn, means we’re changing how we report performance.
From April 2022, we report on mobile money as a new
operating and reportable segment, while continuing to
report segmental performance for mobile services in Nigeria,
East Africa and Francophone Africa.
62
Airtel Africa plc Annual Report and Accounts 2023
Regional performance (mobile services and mobile money combined)
Nigeria – regional performance
Revenue
EBITDA
$2,128m
$1,091m
Reported currency
13.3%
Constant currency
20.3%
Reported currency
4.7%
Constant currency
11.1%
EBIDTA margin
51.3%
Reported currency
(424 bps)
Constant currency
(423 bps)
ARPU
$3.8
Reported currency
0.8%
Constant currency
7.0%
East Africa – regional performance
Revenue
Underlying EBITDA
Underlying EBIDTA margin
ARPU
$1,931m
$1,030m
Reported currency
12.5%
Constant currency
17.4%
Reported currency
16.9%
Constant currency
21.8%
53.3%
Reported currency
+202 bps
Constant currency
+193 bps
Francophone Africa – regional performance
Revenue
EBITDA
$1,201m
$560m
Reported currency
6.2%
Constant currency
12.7%
Reported currency
12.0%
Constant currency
18.3%
EBIDTA margin
46.6%
Reported currency
+242 bps
Constant currency
+220 bps
$2.7
Reported currency
4.4%
Constant currency
9.0%
ARPU
$3.7
Reported currency
(2.2%)
Constant currency
3.8%
Consolidated Group perfomance
Revenue
Underlying EBITDA
Underlying EBIDTA margin
APRU
$5,255m
$2,575m
Reported currency
11.5%
Constant currency
17.6%
Reported currency
11.4%
Constant currency
17.3%
49.0%
Reported currency
(3 bps)
Constant currency
(14 bps)
$3.3m
Reported currency
1.8%
Constant currency
7.4%
Airtel Africa plc Annual Report and Accounts 2023
63
STRATEGIC REPORT
Business review continued
Mobile services
Meeting the
demand for
connection,
through
excellent
execution
Revenue
Underlying EBITDA
Operating profit
Voice ARPU
$4,721m
$2,329m
$1,428m
$1.5
Reported currency
9.9%
Constant currency
16.2%
Reported currency
8.8%
Constant currency
14.9%
Reported currency
5.9%
Constant currency
11.6%
Reported currency
(3.5%)
Constant currency
2.1%
Data ARPU
$3.0
Reported currency
3.5%
Constant currency
9.3%
Revenue – Voice ($m)
Revenue – Data ($m)
FY’23
FY’22
2,491
11.8%
2,358
15.4%
FY’23
FY’22
1,787
23.8%
1,525
34.6%
Growth % in constant currency
Summarised statement of operations
Unit of
measure
$m
$m
$m
$m
$m
Description
Revenue1
Voice revenue
Data revenue
Other revenue
Underlying EBITDA
Underlying EBITDA margin %
Depreciation and amortisation $m
$m
Operating exceptional Items
$m
Operating profit
$m
Capex
$m
Operating free cash flow
Operating KPIs
Mobile voice
Customer base
Voice ARPU
Mobile data
Data customer base
Data ARPU
million
$
million
$
Year ended
Reported
currency
Mar-22
change
9.9%
4,294
5.6%
2,358
17.2%
1,525
7.6%
411
2,140
8.8%
49.8% (51) bps
13.9%
(100.0%)
5.9%
12.7%
7.2%
(697)
(32)
1,348
621
1,519
Constant
currency
change
16.2%
11.8%
23.8%
13.4%
14.9%
(57) bps
20.6%
(100.0%)
11.6%
12.7%
15.8%
128.4
1.6
9.0%
(3.5%)
46.7
2.9
16.9%
3.5%
2.1%
9.3%
Mar-23
4,721
2,491
1,787
443
2,329
49.3%
(794)
0
1,428
700
1,629
140.0
1.5
54.6
3.0
1 Mobile service revenue after inter-segment eliminations was $4,715m in year ended 31 March 2023 and
$4,290m in the prior year.
64
Airtel Africa plc Annual Report and Accounts 2023
Overview
We’ve been at the forefront of the rapid growth of mobile services in
sub-Saharan Africa in recent years – but there is still much further to
go in order to meet demand in a region that, while growing fast, is still
under-connected. Only 40% of the adult population has access to
mobile data, and the usage gap among those who are covered by
networks is almost 44%. That means demand for mobile services
in all our markets remains strong. We aim to meet it by connecting
more people, offering transparent voice and data products that meet
their needs, and expanding our physical and digital distribution
networks so that more customers can access our services effectively
and affordably.
Our customer base grew by 9.0% to 140 million in 2022/23, and
revenues grew by 16.2%, despite a year in which turbulence in the
global economy was expressed in our markets through a series of
headwinds, including cost-of-living pressures for our customers and
communities. Inflation in fuel and food prices meant that many
customers became even more price conscious. We’ve always taken
the approach of seeking revenue from increased usage, rather
than prices, so we continued to offer ‘more for more’. The rate of
smartphone adoption slowed in some markets as the cost of living
had an impact on discretionary spend – but usage of all our services
increased, reflecting the fact that they are increasingly seen as
essential services by users.
Our success in mobile services is built on the strength of our network
and the excellence of our distribution. We invested strategically in
our network in 2022/23, significantly expanding our 4G network,
modernising many of our sites, and launching 5G in selected markets
in readiness for future demand. At the same time, we continued to
refine and expand our distribution footprint, increasing our exclusive
outlets by 15.3% to 79,500+.
Our voice ARPU grew by 2.1% compared to 2021/22, and overall
our mobile voice business line – which includes pre- and post-paid
wireless voice services, international roaming, fixed-line phone services
and interconnect revenue – contributed 89.8% to Airtel Africa’s
consolidated revenue in 2022/23. The big opportunity for the future,
however, is data – which is why we have continued to consolidate our
leadership positions in 4G in most markets, supporting the digital
inclusion ambitions of our sustainability strategy while setting the
foundations for our continued growth.
Our performance
Overall mobile services revenue increased to $4,721m, up by 9.9%
in reported currency, while growth in constant currency was 16.2%.
Revenue growth was recorded across all regions and key services:
Nigeria up by 20.3%, East Africa by 13.4% and Francophone Africa
by 11.9%.
Voice revenue grew by 11.8% in constant currency, driven by both
customer base growth of 9.0% and voice ARPU growth of 2.1%.
Revenue growth for the first half of the year was slightly impacted by
the effect of barring outgoing calls in Nigeria for those customers
who had not submitted their National Identity Numbers (‘NINs’).
We continue to invest in our network to increase coverage, while also
expanding our distribution infrastructure to drive further customer
base growth.
Our continued expansion of network and distribution infrastructure
helped drive customer additions. Voice usage per customer increased
by 5.9%, resulting in voice ARPU growth of 2.1%. Voice usage per
customer increased to 272 minutes per customer per month from
257 minutes per customer per month, and total minutes on the
network increased by 16.0%.
Data revenue grew by 23.8% in constant currency, driven by strong
growth in customer base of 16.9% and data ARPU growth of 9.3%.
Revenue growth was recorded across all regions: Nigeria grew by
27.8%, East Africa by 22.8% and Francophone Africa by 16.2%,
respectively. Data customer base growth of 16.9% resulted from the
further expansion of our 4G network with 90.3% of total sites on 4G,
up from 87.6% (almost 100% of sites in six OpCos are now on 4G).
Total customers reached 54.6 million with 4G customers of 26.5
million, contributing to 48.5% of the total data customer base. Data
usage per customer increased by 29.1% driving data ARPU growth of
9.3%. Data usage per customer reached 4.4 GB per customer per
month up from 3.4 GB per customer per month in the prior period.
Q4’23 data usage per customer increased to 4.6 GB per month (up by
26.6%) and 4G data usage per customer at 7.6 GB per month from
5.9 GB per customer per month (up by 29.6%).
Mobile services underlying EBITDA was $2,329m, and grew by 14.9%
in constant currency with an underlying EBITDA margin of 49.3%,
declining 57 basis points in constant currency. The reduction in
underlying EBITDA margin was due to an increase in operating costs
in Nigeria reflecting energy price inflation.
Operating free cash flow was $1,629m, up by 15.8%, due to the
expansion of underlying EBITDA partially offset by higher capex.
Airtel Africa plc Annual Report and Accounts 2023
65
STRATEGIC REPORT
Business review
Nigeria – mobile services
Investing in
the future of
Nigeria’s digital
economy
Revenue
EBITDA
Operating profit
ARPU
$2,128m
$1,099m
$719m
$3.8
Reported currency
13.3%
Constant currency
20.3%
Reported currency
5.3%
Constant currency
11.8%
Reported currency
(6.6%)
Constant currency
(1.0%)
Revenue split
Reported currency
0.8%
Constant currency
7.0%
Revenue ($m)
FY’23
FY’22
Growth % in constant currency
EBITDA ($m)
FY’23
FY’22
* EBITDA margin %
2,128
20.3%
1,878
27.7%
Others
9%
Data
42%
1,099
51.6%*
1,043
55.5%*
Voice
49%
Year ended
Summarised statement of operations
Unit of
measure
$m
$m
$m
$m
$m
%
Description
Revenue
Voice revenue1
Data revenue
Other revenue2
EBITDA
EBITDA margin
Depreciation and amortisation $m
$m
Operating exceptional items
$m
Operating profit
$m
Capex
Operating free cash flow
$m
Operating KPIs
Total customer base
Data customer base
Mobile services ARPU
million
million
$
Mar-23
2,128
1,053
884
191
1,099
51.6%
(344)
–
719
293
806
48.4
23.8
3.8
Constant
Reported
currency
currency
change
Mar-22
change
20.3%
13.3%
1,878
13.4%
6.9%
985
27.8%
20.4%
734
27.5%
20.2%
159
1,043
11.8%
5.3%
55.5% (390) bps (389) bps
36.9%
28.6%
0.0%
0.0%
(1.0%)
(6.6%)
17.7%
17.7%
10.0%
1.5%
(268)
–
770
249
794
44.4
20.3
3.8
9.0%
17.3%
0.8%
7.0%
1 Voice revenue includes inter-segment revenue of $1m in the year ended 31 March 2023 and $1m in the
prior period. Excluding inter-segment revenue, voice revenue was $1,052m in year ended 31 March 2023
and $984m in the prior period.
2 Other revenue includes inter-segment revenue of $2m in the year ended 31 March 2023 and $2m in the
prior period. Excluding inter-segment revenue, other revenue was $189m in year ended 31 March 2023
and $157m in the prior period.
Other market participants
MTN
Globacom
9 Mobile
MAFAB Communication
66
Airtel Africa plc Annual Report and Accounts 2023
Overview
We’re very close to our customers in Nigeria, our largest single country
market, where a young and growing population has a huge appetite
for fast, affordable data and reliable mobile services. Nigeria’s dynamic
economy gains much of its energy from digital entrepreneurship – and
we aim to partner the country and our customers as they drive digital
transformation and economic empowerment.
We’re investing in that digital future. We’ve created 1,000+ km more
fibre infrastructure this year, with a focus on the major cities of Lagos,
Kano, Abuja and Enugu. We’re ensuring greater network reliability
to give customers a consistent experience and expanding our
distribution network to reach more people in remote, underserved
areas. And in December 2022, Airtel Nigeria bought additional 5G
spectrum at auction for $285m so that are ready for future 5G
demand, while we continued to expand our 4G footprint to 76.7%,
to reach more communities.
Meeting Nigeria’s National Identity Number (NIN) regulations has
continued to be an important business requirement in 2022/23.
While the government’s barring of people who had not registered
their NINs slowed growth and revenues at times during the year, we’ve
been proactive in conducting awareness campaigns, setting up NIN
registration facilities and increasing the number of our KYC centres,
while creating offers for NIN re-registration. Similarly, we’ve weathered
the significant pressures of a year in which fuel prices rose sharply,
elections dominated the political agenda, and devaluation and
currency shortages drove up underlying costs.
Despite these headwinds, the resilient performance of our teams on
the ground has meant this has been another year of growth, with our
customer base growing by 9.0%, and revenues by 20.3%.
Our performance
In reported currency, Nigeria revenue grew by 13.3% to $2,128m and
20.3% in constant currency. Strong growth in both voice and data
contributed to revenue growth, driven mainly by overall customer
base growth of 9.0% and data customer base growth of 17.3%.
ARPU grew by 7.0%, largely driven by higher data and other revenue.
Q4’23 revenue growth at 18.7% was lower compared to 23.1% in
Q3’23 mainly due to a shortage of cash in the country as a result of
the demonetisation initiative, which impacted our cash recharges
(50% of total recharges are cash based).
Voice revenue increased by 13.4% in constant currency, largely driven
by customer base growth of 9.0% supported by voice ARPU growth
of 0.9%. The barring of outgoing calls for customers who had not
submitted their NINs had an adverse impact on voice revenue.
A total of 13.6 million customers were originally barred, out of which
6.4 million customers (47%) have subsequently submitted their NINs
and 3.5 million customers (26%) have been fully verified and unbarred.
We estimate that this resulted in the loss of approximately $110m of
revenues in year ended 31 March 2023, providing a drag on revenue
growth of 6% in Nigeria.
Data revenue increased by 27.8% in constant currency, driven by both
data customer base growth of 17.3% and data ARPU growth of 9.9%.
Over the last year, we have enhanced our 4G network with ample data
network capacity to provide high-speed data to our customers with
almost 100% of our sites now on 4G and data capacity increase of
27.5%. This has contributed to 4G data customer growth of 27.6%.
Data usage per customer increased by 24.8% facilitating continued
data ARPU growth. Data usage per customer reached 5 GB per
customer per month from 4 GB per customer per month in the
previous period. In Q4’23, 4G data usage per customer increased to
9.5 GB per month (up by 46.5%) from 6.5 GB per customer per month
in the prior period. 4G data usage now contributes to 80.4% of total
data usage on our network.
Other revenues grew by 27.5% in constant currency, with the main
contribution coming from the growth in value added services revenue,
led by airtime credit services.
Nigeria mobile services EBITDA was $1,099m, up by 11.8% in
constant currency. The EBITDA margin declined to 51.6% from
55.5% due to an increase in operating costs arising from inflationary
pressures, particularly related to the fuel costs. The EBITDA margin
in Q4’23 stabilised at 52.3% from 52.1% in Q3’23.
Operating free cash flow was $806m, up by 10.0%, due to the
expansion of EBITDA partially offset by higher capex spend in
current period.
Transforming lives spotlight
Using satellite technology to
keep isolated customers
connected in Nigeria
Our customers rely on a stable, functioning
network to keep connected – especially
when times are challenging. In some rural
parts of Borno State in northeast Nigeria,
the telecommunications infrastructure has
been damaged during the insurgency in the
region, cutting access to services for people
there when they need it most – including
the region’s many internally-displaced
persons (IDPs).
In 2022, we deployed satellite technology
to reconnect the towns of Banki, Buratai,
Baga, Cross, Damasak, Monguno, Dikwa
and Ngala in Borno State, and began
integrating these satellite sites on
microwave technology in Dikwa, Ngala and
Gamboru. At the same time, we expanded
our distribution network, adding a further
60+ outlets.
Customers are now able to connect within
and between towns, and access services
such as banking and healthcare – critically
important for residents and IDPs. The
initiative has also reached a monthly
revenue of $200,000+ in March 2023.
Airtel Africa plc Annual Report and Accounts 2023
67
Revenue
Underlying EBITDA
Operating profit
ARPU
$1,508m
$753m
Reported currency
8.1%
Constant currency
13.4%
Reported currency
12.1%
Constant currency
17.5%
$456m
Reported currency
18.5%
Constant currency
24.5%
Revenue split
$2.1
Reported currency
0.4%
Constant currency
5.3%
Revenue ($m)
FY’23
FY’22
Growth % in constant currency
1,508
13.4%
1,395
19.3%
Others
9%
Voice
55%
Constant
currency
change
13.4%
12.2%
22.8%
(7.8%)
17.5%
174 bps
17.8%
(100.0%)
24.5%
(1.0%)
29.2%
Underlying EBITDA ($m)
FY’23
FY’22
Data
36%
753
49.9%*
672
48.1%*
* Underlying EBITDA margin %
Summarised statement of operations1
Unit of
measure
$m
$m
$m
$m
$m
%
Description
Revenue
Voice revenue2
Data revenue
Other revenue3
Underlying EBITDA
Underlying EBITDA margin
Depreciation and amortisation $m
$m
Operating exceptional items
$m
Operating profit
$m
Capex
Operating free cash flow
$m
Operating KPIs
Total customer base
Data customer base
Mobile services ARPU
million
million
$
Mar-22
1,395
783
457
155
672
Reported
currency
change
8.1%
6.8%
17.6%
(12.8%)
12.1%
48.1% 177 bps
12.8%
(100.0%)
18.5%
(1.0%)
20.4%
(230)
(32)
385
259
413
Year ended
Mar-23
1,508
836
537
135
753
49.9%
(260)
0
456
256
497
62.7
21.9
2.1
57.2
18.3
2.1
9.7%
19.9%
0.4%
5.3%
1 The East Africa business region includes Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.
2 Voice revenue includes inter-segment revenue of $1m in the year ended 31 March 2023 and $1m in the
prior period. Excluding inter-segment revenue, voice revenue was $835m in year ended 31 March 2023
and $782m in the prior period.
3 Other revenue includes inter-segment revenue of $11m in the year ended 31 March 2023 and $9m in the
prior period. Excluding inter-segment revenue, other revenue was $124m in year ended 31 March 2023
and $146m in the prior period.
STRATEGIC REPORT
Business review continued
East Africa –
mobile services
Unlocking digital
benefits for
customers,
communities
and our
business
Connecting the unconnected
means relentlessly focusing on
the basics – continuing to
expand our network coverage
while ensuring best-in-class
experience, increasing our
distribution reach to enable
easy access to our customers,
and providing affordable,
simple and easy-to-use
products and services.
Apoorva Mehrotra
Regional director – East Africa
Other market participants
Kenya – Safaricom and Telkom
Malawi – TNM
Rwanda – MTN
Tanzania – Vodacom, Tigo, and Halotel
Uganda – MTN, UTL and Lyca
Zambia – MTN and Zamtel
68
Airtel Africa plc Annual Report and Accounts 2023
Overview
Our six markets in East Africa host some of the strongest economies
in Africa, with regional GDP growth reaching 4.8% this year despite
macroeconomic disruption in the global economy. There are 221
million people in our region, and for that relatively young population
our products and services are a gateway to financial and digital
opportunity.
Our aim is to unlock commercial and digital benefits for all our
customers, their communities, and our business. In a year when
inflation has put pressure on every customer’s budget, we’ve offered
more value to our customers through ‘more-for-more’ product
offerings. At the same time, we’ve engaged regulators in each of our
markets to enable more competitive pricing, so that our customers’
greater usage has seen us increase revenues in voice and data.
We have continued to improve our network, simplify our products
and increase customer touchpoints for our services. Our population
coverage now stands at 90.3%, and we’ve added 1,400+ 4G sites in
the past year while modernising additional sites so we can offer better
connectivity and faster speeds for our customers. Fibre-to-the-home
(FTTH) and fibre-to-the-business (FTTB) has also expanded, while we
continue to benefit from increased home broadband and enterprise
custom. We’ve also invested in 5G spectrum in four markets, to ensure
we are ready for the additional demand for data we see ahead.
Meeting local regulatory requirements is an essential part of our
business, and this year we adopted new KYC regulations in Kenya,
Tanzania and Zambia, all requiring identification documents to register
SIM cards. We rapidly updated our onboarding and KYC processes to
minimise lost revenues from barred customers.
Distribution remains a crucial competitive advantage, and we ended
2022/23 with 179,400+ activating outlets, which is an increase by
22.3% since last year.
Our performance
In East Africa, mobile services revenue grew by 8.1% in reported
currency, and 13.4% in constant currency. The differential in growth
rates was due to average currency devaluation of the Kenyan shilling,
Ugandan shilling and Malawian kwacha, partially offset by an
appreciation in the Zambian kwacha. Current year was impacted by
the loss of tower sharing revenues (c. $21m) following the sales of
towers in Tanzania and Malawi which is reflected in the 7.8% decline
in other revenues over the period. Revenue growth, excluding the site
sharing revenue impact of tower sales, was 15.2% for the period.
Voice revenue grew by 12.2% in constant currency, driven by both
customer base growth of 9.7% and voice ARPU growth of 4.1%.
The customer base growth of 9.7% was supported by the expansion
of our network, enhanced coverage, and distribution infrastructure.
Site count increased by 9.2% and activating outlets increased by
22.3%. Voice usage per customer increased by 10.0% to 384 minutes
per customer per month resulting in voice ARPU growth of 4.1%. Total
minutes on the network increased by 18.5% to 279.0 billion minutes.
Data revenue grew by 22.8% in constant currency, largely driven by
both data customer base growth of 19.9% and data ARPU growth
of 9.2%. The expansion of our 4G network and ample data network
capacity helped us to grow both the data customer base and data
usage. 90.4% of our total sites in East Africa are on 4G as compared
with 85.9% in prior period. 47.3% of our total data customer base
is on 4G which contributes to 70.9% of total data usage (in Q4’23).
Data usage per customer increased by 28.3%, resulting in data ARPU
growth of 9.2%, and data usage per customer reached 4.2 GB per
customer per month from 3.3 GB per customer per month. In Q4’23,
4G data usage per customer increased to 6.5 GB per month from
5.5 GB per customer per month (up by 18.4% from the prior period).
Mobile services underlying EBITDA increased to $753m, up 17.5% in
constant currency. Underlying EBITDA margin improved to 49.9%, an
improvement of 174 basis points in constant currency, as a result of
revenue growth and improved operating efficiencies.
Operating free cash flow was $497m, up by 29.2% in constant
currency, largely due to expansion of underlying EBITDA.
Transforming lives spotlight
Overcoming challenging times to
provide essential services in Malawi
Customers and businesses in Malawi faced a range of
challenges in 2022/23 – and we responded by finding
new ways of working to maintain essential telecoms
services. Protracted power failures and a country-wide
fuel shortage meant that many telecommunication
towers were unable to operate for significant periods
– while communities also had to tackle the impact of
cyclones Gombe and Anna, sharp currency devaluations,
foreign exchange shortages, and inflation.
We formed a new partnership with our towerco,
Helios Towers, and engaged with the Malawi Energy
Regulatory Authority and Reserve Bank to ensure our
services were maintained. In addition, in 2022/23 we
invested around $15m in our network despite the
shortage of foreign currency in Malawi.
Maintaining our services helped us meet the demand
for data, which grew by 125% in 2022/23, and gave
customers access to mobile money services.
“Customers and regulators recognise us as an essential
service, especially when times are difficult – so keeping
our network running this year meant we could keep
connecting communities and businesses and enabling
financial inclusion.”
Charles Kamoto
Managing director, Airtel Malawi
Airtel Africa plc Annual Report and Accounts 2023
69
Revenue
EBITDA
Operating profit
ARPU
$1,090m
$476m
Reported currency
5.5%
Constant currency
11.9%
Reported currency
12.0%
Constant currency
18.2%
$252m
Reported currency
29.9%
Constant currency
35.5%
Revenue split
$3.3
Reported currency
(2.9%)
Constant currency
3.0%
Revenue ($m)
FY’23
FY’22
Growth % in constant currency
EBITDA ($m)
FY’23
FY’22
* EBITDA margin %
1,090
11.9%
1,033
15.8%
Others
10%
Data
34%
476
43.7%*
425
41.2%*
Year ended
Summarised statement of operations1
Unit of
measure
$m
$m
$m
$m
$m
%
Description
Revenue
Voice revenue2
Data revenue
Other revenue3
EBITDA
EBITDA margin
Depreciation and amortisation $m
$m
Operating exceptional items
$m
Operating profit
$m
Capex
Operating free cash flow
$m
Operating KPIs
Total customer base
Data customer base
Mobile services ARPU
million
million
$
Mar-23
1,090
607
366
117
476
43.7%
(190)
–
252
151
325
28.9
8.9
3.3
Mar-22
1,033
594
334
105
425
Reported
currency
change
5.5%
2.2%
9.6%
10.9%
12.0%
41.2% 255 bps
(4.7%)
0.0%
29.9%
32.5%
4.5%
(199)
–
194
114
311
26.8
8.2
3.4
7.8%
9.4%
(2.9%)
3.0%
1 The Francophone Africa business region includes Chad, Democratic Republic of the Congo, Gabon,
Madagascar, Niger, Republic of the Congo and the Seychelles.
2 Voice revenue includes inter-segment revenue of $3m in the year ended 31 March 2023 and $2m in the
prior period. Excluding inter-segment revenue, voice revenue was $604m in year ended 31 March 2023
and $592m in the prior period.
3 Other revenue includes inter-segment revenue of $3m in the year ended 31 March 2023 and $1m in the
prior period. Excluding inter-segment revenue, other revenue was $114m in year ended 31 March 2023
and $104m in the prior period.
Voice
56%
Constant
currency
change
11.9%
8.8%
16.2%
15.3%
18.2%
236 bps
1.7%
0.0%
35.5%
32.5%
12.7%
STRATEGIC REPORT
Business review continued
Francophone Africa –
mobile services
Data usage
driving our
growth, while
closing the
digital divide
We’re in an enviable position
as a business. Demand for our
services is out there, waiting for
us to build out our networks
and our service delivery
platforms to satisfy our
customers’ needs – and
our expansion drives the
sustainable development that
will help us thrive into the future.
Michael Foley
Regional director – Francophone Africa
Other market participants
Chad: Maroc, Sotel
The Democratic Republic of the Congo (DRC):
Vodacom, Orange and Africell
Gabon: Moov (Maroc Telecom)
Madagascar: Orange and Telma
Niger: Zamani, Moov (Maroc Telecom),
Niger Telecom
Republic of the Congo: MTN
The Seychelles: Cable & Wireless and
Intelvision
70
Airtel Africa plc Annual Report and Accounts 2023
Overview
Our Francophone Africa segment is made up of Chad, Democratic
Republic of the Congo, Gabon, Madagascar, Niger, Republic of the
Congo and the Seychelles – and it is home to more than 181 million
people. The region has a median age of 16*, and landline infrastructure
is scarce – which means that mobile services are the first and often
only way that millions of people can connect with each other and the
wider economy.
This creates a huge demand for data and voice services. This year
usage across all segments continued to grow, alongside our customer
base. Data usage, in particular, is growing fast, highlighting the
continuing appetite for internet access. We’ve invested in urban fibre
in cities such as Kinshasa, Niamey and N’Djamena, and in network
expansion across all markets. In DRC we invested in additional
spectrum, and in Chad, in a first for the region, we built a multiple-input
multiple-output (MIMO) antenna in N’Djamena. This investment across
the region was primarily driven by the need to meet demand for data
– and data usage grew by 57.8% in 2022/23.
Our resilient performance this year is a credit to the work of our teams,
who have faced significant challenges in several markets as price
inflation, fuel shortages and lack of security have disrupted the
economy and made life difficult for many in the communities we serve.
A number of markets have also experienced severe weather events
linked to climate change, with Chad, the DRC and Niger, in particular,
suffering floods that saw many thousands of people displaced –
situations in which we have made enormous efforts to maintain
essential mobile services.
Despite these headwinds, we’ve welcomed 0.8 million new data
customers, and grown our overall customer base by 7.8%, connecting
more people and communities than ever before.
Our performance
In Francophone Africa, mobile services revenue grew by 5.5% in
reported currency and by 11.9% in constant currency. The differential
in growth rates was driven primarily by the 11.7% devaluation of the
Central African franc.
Voice revenue increased by 8.8% in constant currency, mainly driven
by customer base growth of 7.8%. With continued investments in
network expansion and distribution infrastructure, total sites increased
by 9.2% and activating outlets increased by 12% (exclusive outlets
increased by 20%). Voice usage per customer grew by 10.1% to
150 minutes per customer per month, thereby resulting in a 19.5%
growth in total voice minutes on our network.
Data revenue increased by 16.2% in constant currency, driven by
both customer base growth of 9.4% and data ARPU growth of 7.8%.
We continue to expand our 4G network, with 69.0% of our sites in
Francophone Africa on 4G (up from 65.3% in prior period) and data
capacity on our network increased by 60.5%. Total data usage
increased by 57.8%, primarily driven by an increase in data usage
per customer by 46.3% to 3.5 GB per customer per month compared
with 2.4 GB in the prior period. As of Q4’23, 54% of the data customer
base is on 4G, contributing to 72.4% of total data usage. Q4’23 4G
data usage per customer increased to 5.6 GB per month (up by
18.4%) compared with 4.7 GB per customer per month.
Mobile services EBITDA at $476m, increased by 18.2% in constant
currency. EBITDA margin improved to 43.7%, an improvement of
236 basis points in constant currency. However, the current year
had a one-time opex benefit of approximately $19m in the first half,
resulting in a normalized EBITDA margin for 2022/23 of 42.0% –
an improvement of 68 basis points in constant currency.
Operating free cash flow was $325m, increased by 12.7%, driven
by the expansion in EBITDA and partially offset by higher capex.
* Source: World Bank report (2022)
Transforming lives spotlight
Deploying ‘Massive MIMO’
technology to improve our
network in Chad
Rapidly increasing demand for voice and
data services can put pressure on any
telecoms network – especially in towns
and cities with a high concentration
of customers.
This year, we explored an innovative
approach to improving our customers’
service: by deploying ‘Massive MIMO’
technology to N’Djamena, the capital city
of Chad. ‘MIMO’ stands for ‘multiple inputs,
multiple outputs’, and describes an
antennae technology that can help improve
download speeds. Our deployment in
22 sites in Chad in October 2022 was the
first use of Massive MIMO in our operations
which has had rapid results: data traffic on
these sites increased by 44% and capacity
almost doubled.
We’ve also seen a quick response from
customers, who are now better connected
than ever to each other, and to the digital
economy.
Airtel Africa plc Annual Report and Accounts 2023
71
STRATEGIC REPORT
Business review continued
Mobile money
Mobile money:
bridging the
financial divide
and fostering
commerce
Revenue
EBITDA
Operating profit
ARPU
$692m
Reported currency
25.1%
Constant currency
29.6%
Revenue ($m)
FY’23
FY’22
$344m
Reported currency
22.4%
Constant currency
26.4%
$318m
Reported currency
24.2%
Constant currency
28.0%
EBITDA ($m)
$2.0
Reported currency
3.1%
Constant currency
6.8%
692
29.6%
553
34.9%
FY’23
FY’22
344
49.8%*
281
50.8%*
Growth % in constant currency
* EBITDA margin %
Summarised statement of operations
Unit of
measure
$m
$m
$m
$m
$m
%
Description
Revenue2
Nigeria
East Africa
Francophone Africa
EBITDA
EBITDA margin
Depreciation and amortisation $m
$m
Operating profit
$m
Capex
Operating free cash flow
$m
Operating KPIs
Mobile money customer base million
Transaction value
Mobile money ARPU
$bn
$
Year ended
Mar-22
553
0
411
142
281
Constant
Reported
currency
currency
change
change
29.6%
25.1%
–
–
32.6%
29.1%
20.3%
13.4%
26.4%
22.4%
50.8% (107) bps (123) bps
31.6%
25.6%
28.0%
24.2%
29.5%
29.5%
26.1%
21.7%
(14)
256
25
256
26.2
64.4
1.9
20.4%
37.4%
3.1%
41.3%
6.8%
Mar-23
692
0
531
161
344
49.8%
(17)
318
33
311
31.5
88.6
2.0
1 Mobile money consolidates the results of mobile money operations from all operating entities within the
Group. Airtel Money Commerce B.V. (AMC B.V.) is the holding company for all mobile money services for
the Group, and as of 31 March 2023, it consolidates mobile money operations from 11 OpCos, currently
excluding operations in Nigeria, Republic of the Congo and Tanzania. It is our management’s intention to
continue work to transfer all these remaining mobile money operations into AMC B.V., subject to local
regulatory requirements.
2 Mobile money service revenue post inter-segment eliminations with mobile services was $540m in the
year ended 31 March 2023, and $424m in the prior year.
Airtel Money connects
communities, enables
payments and makes life
simpler for our customers.
Our financial services are
transformational to the
economies and communities
in which we operate, and we
are closely aligned with
governments’ objectives for
driving financial inclusion
and a digital economy.
Ian Ferrao
CEO, Airtel Money
72
Airtel Africa plc Annual Report and Accounts 2023
Overview
Across the region, mobile money is an increasingly important driver
of economic growth. This trajectory will continue: economies are
becoming increasingly cashless, consumers are embracing new
financial behaviours, and businesses of all sizes are finding it cheaper,
faster and more convenient to use mobile money services, whether
that’s to conduct regular small transactions or to make bulk payments
direct to their employees or customers’ mobile money wallets. And
among the many under-banked or un-banked people in our markets,
mobile money is creating access to basic financial services that
would otherwise be unavailable to them, and rapidly increasing
financial inclusion.
This year has seen excellent results for Airtel Money: we have widened
our customer base and driven increased revenues. We see significant
further opportunity ahead, and we have invested in our people and
technology in order to meet it, as well as expanding our distribution
network and float availability through our Airtel Money branches
(AMBs) which expanded by 11.5% in 2022/23, and our kiosks, which
increased by 10.8%.
Following the award of our Payment Service Bank (PSB) licence in
Nigeria in April 2022, we are now able to offer digital wallets and bank
accounts to customers in one of Africa’s largest markets through their
mobile phones. We have rapidly established a network of more than
52,000 agents in Nigeria, so we can start reaching customers and
including more people in our mobile money eco-system, while building
relationships with businesses and setting up our IT platforms to
ensure we offer a stable, reliable service. We have also launched an
information campaign to explain mobile money to potential customers
in a country where there is significant scope for greater financial
inclusion – more than 60 million Nigerians remain unbanked.
Elsewhere, we’re expanding the scope of our services and creating
increased ‘use cases’. In Uganda, Tanzania and Zambia, for example,
we’ve launched a new micro-merchant programme to bring more
small and informal businesses into the mobile money economy. Our
aim is to reach more than one million micro-merchants in the region in
2023/24. We’re working on interoperability in several markets, which
gives customers more access to financial services across borders.
And across the region as a whole, we’re continuing to expand our
offering of mobile wallet deposits and withdrawals, merchant
payments, enterprise disbursements, international money transfers,
and loans and savings.
Our performance
Mobile money revenue of $692m increased by 25.1% in reported
currency and by 29.6% in constant currency. The constant currency
growth was partially offset by average currency devaluations, mainly in
the Central African franc (11.7%), the Ugandan shilling (4.9%) and the
Malawian kwacha (22.6%), in turn partially offset by the appreciation
in the Zambian kwacha (8.8%). Revenue growth of 29.6% was driven
by both East Africa (up 32.6%) and Francophone Africa (up 20.3%).
In Nigeria, mobile money services (SmartCash) was launched in
June 2022. Our focus in the period has been to invest in the platform
technology as well as the business systems and processes to ensure
confidence and reliability in the platform. In addition, our continued
investment into the agent network continues to gain traction, driving
encouraging progress on customer acquisition over the last quarter.
Constant currency revenue growth of 29.6% was largely led by
customer base growth of 20.4%. The continued investment in
distribution infrastructure of exclusive channels of Airtel Money
branches and kiosks, as well as the expansion of mobile money agents,
helped us in driving strong customer growth.
The mobile money customer base reached 31.5 million, an increase of
20.4%, and mobile money customer base penetration reached 22.5%,
an increase of 2.1 percentage points. The expansion of distribution
enhanced transaction value per customer by 16.4%, resulting in
mobile money ARPU growth of 6.8%. Mobile money ARPU growth
was largely driven by an increase in transaction values and higher
contributions from cash transactions, merchant payments and mobile
service recharges through Airtel Money.
Our mobile money transaction value grew by 41.3% and Q4’23
annualised transaction value crossed $102bn in constant currency.
Q4’23 transaction value per customer reached $260 per month, an
increase of 26.1% in constant currency. Mobile money revenue now
accounts for 13.2% of total Group revenue for the year.
Mobile money EBITDA increased to $344m, up by 26.4% in constant
currency. The drop in mobile money EBITDA margin was largely due to
additional spend in Nigeria PSB related to the launch of SmartCash.
Transforming lives spotlight
Mobile money interoperability
in Tanzania and Zambia
In February 2022, the Bank of Tanzania, a regulatory
authority, launched the instant payments switch (TIPS)
system to enhance interoperability, boost financial
inclusion and further deepen the digitalisation of
payments in the country. This was an industry-wide
regulatory initiative aimed at integrating mobile money
platforms and banks in the country. Prior to the launch,
customers and businesses were often charged
substantial fees to transfer money between different
providers. In October 2022, Airtel Tanzania was
integrated into TIPS offering customers more ways to
transfer money seamlessly between different providers,
buy goods or pay bills regardless of which mobile money
platform they use.
Also, in 2022 we integrated our Zambia mobile money
services into the national financial switch (NFS) launched
by the Bank of Zambia to improve interoperability
between the banks and mobile network operators.
Customers can now send funds directly to banks from
their Airtel Money wallets and vice versa as well as make
transfers regardless of their mobile money providers.
The NFS system includes 19 banks in Zambia.
As of 31 March 2023, in Tanzania our mobile money
transaction value processed through the national switch
system was $2.5bn and in Zambia – $3bn, respectively.
In addition, as a result of these integrations, competition
has increased in the mobile money market and made
transactions more cost-effective for our customers.
Airtel Africa plc Annual Report and Accounts 2023
73
STRATEGIC REPORT
Airtel Business
Empowering entrepreneurs, and
supporting the organisations that
drive Africa’s growth
Our market
Flourishing enterprises are at the heart of Africa’s growth – and Airtel Business exists to
provide them with the dynamic, reliable communications they need to drive economic
opportunity. We’re aiming to be the service provider of choice for fibre, fixed wireless
broadband and satellite connectivity solutions across our region.
We offer mobile and fixed data services and a comprehensive suite of digital services
to major corporates, non-governmental organisations, government departments,
diplomatic missions, start-ups and small- and medium-sized businesses (SMEs). We also
offer business ICT support, including conferencing and collaboration services, cloud
and data centre co-location services, and Airtel Money services, and can provide data
sovereignty for organisations through in-country data centres. With our partner Cisco,
we provide access to Cisco Meraki SDWAN (software-defined wide area network),
which is a suite of features designed to allow a network to dynamically adjust to
maintain connectivity. At the same time, our low earth orbit (LEO) satellite connections
reach places that other networks can’t – delivering essential services to customers
including NGOs and mining, oil and gas companies.
In 2022/23, we agreed a distribution partnership with OneWeb, our related party,
to provide LEO connectivity for a wide range of use cases in rural areas, including
agriculture, hospitals, hotels and schools, as well as the energy and mining sectors.
We also agreed a partnership with Amazon Web Services to provide our customers
with cloud data services.
Our customers create value and unlock the possibilities of digitalisation in the wider
economy. So, by supporting them, we support opportunities for the people and
businesses around us, while also creating value for Airtel Africa: this year, Airtel Business
saw a 18% increase in fixed data connections. Our annual revenue grew by 17.5%.
Internet penetration is rising
across Africa and systems
are even more connected
as the digital transformation
is driving growth amongst
organisations. Through our
partnership with OneWeb, we
support SMEs, entrepreneurs,
corporates and governments
to do business across Africa,
with low latency and highly
resilient communication
services.
Luc Serviant
Group Enterprise director
+18.3%
fixed data
connections
17.5%
revenue growth
The DIAN project:
digital innovations
for agropastoral
communities
in Niger
We want digital inclusion to reach the remotest
parts of our markets – and few communities are
as remote as the agro-pastoral shepherds and
farmers of Niger. In July 2022, Airtel Business
co-launched a public-private partnership
dedicated to supporting that community: the
digital innovation for agro-pastoralists of Niger
(DIAN/IDAN) project.
The project aims to increase the resilience
and food security of agro-pastoral families in
southwestern Niger by providing an accessible
digital platform for people involved in agriculture
and livestock breeding. It includes a contact
centre, an e-marketplace, and a portfolio of mobile
financial products for agrobusinesses, allowing
micro credit, micro-savings, credit scoring, and
payments and reimbursement via mobile. Users
will be able to access Airtel Money services, and
get information on agriculture, livestock and
financial products.
DIAN depends on the cooperation of a range
of partners: SNV (Netherlands Development
Organisation), the Ministry of Livestock of
Niger, Airtel Niger, AREN (Association for the
Revitalisation of Livestock in Niger) and GAJEL
(Group for Cultural Action and Development of
Young Breeders). And it is a great fit with our
sustainability strategy, enabling digitalisation and
extending financial inclusion to a vital community
in Niger’s economy.
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Airtel Africa plc Annual Report and Accounts 2023
Digital Labs
Digital Labs: innovating
technologies for customers,
and improving our processes
africa
D I G I T A L L A B S
Digital Labs is our in-house digital hub for developing and delivering technology
platforms and digital products. We work across all 14 markets, innovating
technologies that enhance customers’ experiences, drive financial inclusion, and
harness the power of digitalisation. Our product development teams build products
for all our business lines – including voice and mobile services, Airtel Money, Airtel
Business and Airtel TV. We focus on digital consumer products, enterprise product
engineering, Fintech platforms, telco platforms and data analytics.
We aim to launch excellent products, at speed. Our new approval management
system, Probatus, was built in three months to manage complex financial approval
systems in our business, and now handles more than 2,500 processes per month.
This year we also developed a sales automation suite (registration app) that is now
in use in eight markets, which has accelerated our onboarding process for new sales
agents from three days to under five minutes. The Group has used the suite to
onboard more than 550,000 agents in 2022/23. Our unified customer dashboard,
CS Fusion, introduced in 2021/22, has been expanded to further transform our
contact centres.
To help our retailer network
stay compliant while serving
customers, we’ve developed
the retailer Tribe app. Tribe
has allowed us to deliver
new capabilities fast – and
also helps retailers grow
their business.
Razvan Ungureanu
Chief technology and information officer
550,000
agents onboarded
via sales suite
2,500
processes handled every
month in Probatus
‘Tribe’ – the app
helping our retailers
serve customers
while complying
with regulations
Tribe has allowed us to deliver new capabilities
fast – and also helps retailers grow their business.
The app supports both SSO (single sign-on) and
Airtel Money agents and has both GSM and Airtel
Money features, allowing retailers to add a new
revenue stream by becoming both an Airtel
Money agent and a SIM-selling outlet. The app
also helps retailers understand their gross
performance, track commissions, and understand
commission rules.
As of 31 March 2023, in Zambia alone, 4.3 million
Know Your Customer (KYC) transactions and
1.6 million SIM swap transactions were
conducted on the retailer Tribe app. We expect
this number to grow as we continue to strengthen
our retailer network and add features to Tribe.
The retailers and agents in our distribution
network are dedicated to connecting customers
to the Airtel network and improving their
experience – and they need to do so while
complying with the regulations and policies in
place in their market, including fraud prevention
rules. These regulations are unique to each of
our 14 markets, and change over time. So, to
help our retailer network stay compliant while
serving customers, we’ve developed the retailer
Tribe app.
The retailer Tribe app, available on the Android
platform, can be accessed by our network of GSM
retailers and Airtel Money retailers. It is a highly
configurable product, allowing us to build a
feature once and make it available to all 14
markets, while also providing a localised
experience that meets country-specific regulatory
requirements and can be adapted to enable
market-specific features. It can also meet local
language needs: currently, all features in the app
are supported in English, French, Malagasy,
Swahili and Kinyarwandan.
Airtel Africa plc Annual Report and Accounts 2023
75
STRATEGIC REPORT
Our stakeholders
Connecting
to people
and partners,
and considering
stakeholders’
views
We’re a business based
on connecting people.
Engaging with our
stakeholders helps us build
the shared understanding
and mutual, long-lasting
value that underpins our
purpose of transforming
lives. That enables us, and
those around us, to thrive.
76
Airtel Africa plc Annual Report and Accounts 2023
Our section 172 statement
This section describes how the directors have acted in relation to their duties under section 172 (a) to (f) of the Companies Act 2006 to
promote the success of the company with regard to the needs of wider society and stakeholders, including customers, consistent with
our core business objectives.
Each year, directors receive training on corporate governance from our corporate legal advisers Herbert Smith Freehills which includes
a reminder of their duties to apply section 172 to their considerations and decisions. Consistently applying our purpose, vision and
core values (particularly ‘respectful’) when making decisions and delivering our strategy helps us meaningfully engage with all of our
stakeholders, regardless of the outcome of any particular decision.
The information in this section explains how the Board oversaw stakeholders’ interests and concerns, and considered them when making
decisions in 2022/23.
How we work to understand
our stakeholders
Identifying the Group’s key stakeholders and their interests, needs
and level of influence is fundamental to successful stakeholder
engagement. Our stakeholder identification is guided by the
AA1000 Standard, which defines key stakeholders as ‘individuals,
groups of individuals or organisations that affect and/or could be
affected by an organisation’s activities, products or services and
associated performance with regard to the issues to be addressed
by the engagement’.
Our stakeholder matrix recognises stakeholders upon which we
have the most significant impact on and those with the most
material influence on the Group’s activities. This allows us to
identify priority stakeholders. The following priority stakeholder
groups were identified in the process:
• Our customers
• Our people
• Our communities
• Our partners and suppliers
• Governments and regulators
• Shareholders
How we work to understand
our stakeholders
To put stakeholder views at the heart of our decision-making, we
need to understand the interests of each stakeholder group. This
happens throughout our organisation, from informal conversations
to formal consultations, and we continue to work to ensure good
communication with all the people and groups we interact with.
Directors are kept informed about our stakeholders’ views in a
number of ways, including through their own direct interactions –
as outlined below.
Ensuring the Board stays informed
and engaged
Our Board stays connected to stakeholders through regular
reports and updates from our senior leadership team, who
channel information from our OpCos as well as engaging directly
with stakeholders themselves. Every Board paper now includes
stakeholder interests that are relevant to the decisions being
considered and the likely consequences of our decisions in the
long term. Directors visit our local operations, and we hold Board
meetings at regional offices that hear from representatives from
the local businesses.
Our stakeholder engagement policy is founded on the principles of
transparency, active listening, and equitable treatment, and favours
a consultative and collaborative engagement with all stakeholders.
The policy commits us to proactively keeping our stakeholders
informed of business developments, rigorously upholding
international standards for transparency, and continuously refining
our understanding of our stakeholders’ needs and expectations.
We know that our stakeholders will hold a range of views about
the decisions we take – and that not everything we do will please
everybody, all the time.
Our chair is committed to ensuring that the Board hears both
positive and negative stakeholder views and is supported in this by
the executive team. The chair, the chairs of each committee, senior
independent directors, CEO, CFO and our company secretary are
all available to address any concerns raised by stakeholders.
All engagements with stakeholders by anyone at Airtel Africa
are underpinned by our set of business standards, which have
stakeholder interests at their core. Our Code of Conduct sets out
our high expectations for how all of us should behave, including
respect for human rights, data privacy, and acting lawfully at all
times. It helps support our belief that the value we create as a
business must ultimately be shared between all stakeholders
and contribute towards renewing and reaffirming the trust that
they have in us – and we have in them.
For more information about our Code of Conduct and modern slavery
statement, see www.airtel.africa
Engaging with the media
We recognise the critical importance of local, regional and
international media engagement. As objective reviewers and
reporters of our progress, journalists and media outlets play an
important role in furthering our engagement with our wider
stakeholder groups. Our communications functions at the
Group level and across our 14 markets have established strong
relationships with key media outlets and journalists which they
continue to develop and evolve, providing regular and timely
updates on our progress, activities and important announcements.
We tailor our engagement with media to reflect the focus and
interest of each publication. For example, for international,
investment and business-led titles, we provide regular updates on
the financial performance and strategic direction of the business,
ensuring that our executive leadership team is available for
interviews and commentary. For regional and pan-African titles,
we update on market developments, product launches and our
contribution to Africa’s economic and societal development.
In our markets, we provide details of activities that are relevant
to the local communities. In addition, we communicate with
our industry sector titles and publications interested in our
sustainability performance. We are committed to complete
transparency in all our reporting to media and consider this
an important conduit to demonstrate our corporate purpose
and values.
Airtel Africa plc Annual Report and Accounts 2023
77
STRATEGIC REPORT
Our stakeholders continued
Our customers
More than 140 million
customers across Africa use
our data, voice and mobile
money services to connect,
live and work.
Total customers
140 million
Activating outlets
304,000+
Airtel Money customers
31.5 million
78
Airtel Africa plc Annual Report and Accounts 2023
How we engaged during the year
Feedback from our customers helps define the success of our
products and services – and plays a vital role in how we improve
customer experience.
This year, we stayed in touch with our customers through face-to-
face engagements and through our increasing range of self-care
touchpoints. In our growing network of 802 retail experience stores,
we had service and product purchase conversations, provided
assistance, answered inquiries, and listened to feedback. Customers
choosing self-care options could use social media platforms, email and
MyAirtel app to manage their accounts, access mobile money services
and get support.
Through our call centres, customers used our dynamic interactive
voice response (IVR) system or spoke directly to agents to get
assistance and service. Customers were asked to complete surveys
after interactions with our contact centres, through SMS.
Our Board continued to be informed of significant customer concerns
and priorities through the CEO’s regular update and was able to
channel these insights into its customer and product-related decisions.
Interests and concerns
We analyse qualitative and quantitative feedback from customers
regularly. From these analytics, we glean insights – ‘the voice of the
customer’ – regarding customer suggestions, ‘pain points’ and
‘pleasure points’.
Affordability was a key interest for customers in 2022/23, as many
people in our markets faced steep inflation, especially in food and fuel
prices. Reliability and network quality are also customer priorities, while
some customers wanted more options for personalising their plans to
suit their needs. Customers continued to tell us they want to be able to
easily use our products and services at times that are most convenient
for them, and they also want quick and easy support.
Airtel Money customers are looking for convenient platforms that
enable them to make payments and remittances across the globe as
simply as with cash, but with added safety and security – they were
particularly interested in wallet access, transaction success and
information availability.
Our enterprise customers told us they need dedicated support to
meet their service-related queries. The Board receives insights from
these activities as part of regular business reports at each meeting.
Outcome and actions
We’ve listened to our customers and continued to improve our
customer service, while our expanding network offers more
coverage and better access to data and mobile money services
than ever before.
We’ve strengthened our self-service options to make our service
faster, and in particular built on our Airtel Money self-service options,
enabling PIN management in seven markets, and simplified
transaction processes (and self-service transaction reversals to
remedy inadvertent errors). We also upgraded our contact centre
technology so that we have tailored services for Airtel Enterprise,
postpaid and broadband customers. Our new enterprise self-care
portal launched in two markets, and we intend to expand access to
all markets over time.
Our people
Listening to our people helps
us make Airtel Africa a great
place to work for all our
employees in 17 countries.
Airtel Africa people
4,000
Employee engagement
81%
Bi-annual employee engagement survey
How we engaged during the year
We are constantly looking for ways to enhance our communication,
connection and engagement with all our employees. This year,
that included:
• Town halls at Group and OpCo level, held after each quarterly results
announcement and on an ad hoc basis (such as our celebrations of
International Women’s Day in March 2023), where employees can ask
questions, make suggestions and raise concerns with senior leaders.
• One-on-one engagements where senior Group or OpCo leaders meet
employees as part of our open-door policy
• Regular OpCo visits where function heads and our CEO engage with
teams, then raise any issues or concerns at a Group ExCo level
• Monthly business reviews, where regional directors and our CEO
discuss employee issues
• Employee wellbeing initiatives, and celebrations of national days and
key holidays
Our Board actively engaged with employees throughout the year. Board
members attend town halls and visit OpCos to meet employees and
hear their views, as well as receiving regular updates from the CEO and
CHRO. They also stay connected on employee-related matters through
their involvement with our Sustainability Committee and the Human
Resources Committee which provide valuable insight when developing
and reviewing our people strategy. Our chair attended our annual
leadership conclave in March 2023, and meets senior leaders regularly.
Sunil Bharti Mittal is our designated Board director for employee
engagement, given his regular travel to our operating companies. He is
able to join employee events during the year to hear and respond to
questions and listen to people’s stories – both informally and formally.
He shares the outcomes of this with the Board and the senior
management team, as relevant. For more information about Sunil Bharti
Mittal’s engagement with employees in his capacity of the non-executive
director, see page 129.
Interests and concerns
There are 4,000 people in the Airtel Africa team, so the interests and
concerns they raise are varied and wide-ranging. Health and wellness
continue to be an important issue, alongside career growth, rewards,
and learning and development. In our town hall meetings employees
raise questions about our strategic direction – this year seeking
information about our move to 5G and our approach to our new fibre
holding company – and make suggestions on issues such as systems
and automation.
Employees also frequently express their support for the communities
in which they work and seek out opportunities to support the people
around them in areas such as education, health and disaster relief.
Outcome and actions
It is vital that we understand and respond to the views of employees,
because we want to continue to attract, develop and retain a highly
skilled, diverse and engaged workforce – and maintain a high-
performance culture. The Board has overseen and approved several
programmes and policies that support our people strategy.
To support employees’ health and wellbeing, we provide medical
check-ups at our offices and access to physical fitness sessions, while
we invite financial advisers to our workplaces to help employees
manage their money. Our employee assistance programme provides
access to professional counsellors.
We want our people to have fulfilling and rewarding careers, so we have
a defined performance and reward system, and we look to promote
internally, providing people with assignments where they can grow their
skills and capabilities. This is supported by our learning and development
programmes, including our online learning platform, Percipio, in-person
training, and cross-border and cross-functional training.
For more information about how our Board monitors our people’s KPIs, see
‘Win with people’ on page 37 and sustainability strategy on pages 38-55
Airtel Africa plc Annual Report and Accounts 2023
79
How we engaged during the year
We are always open to the views and interests of our communities,
and we place them at the heart of what we do – our ‘respectful’
value reminds us that we ‘share the joy and pain of the communities
around us’. People in our communities engage with us in a wide
range of ways, including through conversations with our OpCos
and regional leaders, letters, emails and text messages. We also
hear from governments and other organisations about key
community issues during the year, and connect to people through
our community initiatives, such as our ‘Touching lives’ programme
in Nigeria.
Our Board regularly reviews our formal programme of community
initiatives, and directors hear from senior management when
communities have made specific requests or raised concerns.
Interests and concerns
People in our communities have many concerns and interests that
are at the heart of our business strategy. These include extended
network coverage, reliable and affordable services, and financial
inclusion – reflecting the fact that many people in our communities
are customers as well as neighbours.
Communities also raise specific issues with our OpCos and regional
offices, relating to local needs in areas such as education, health
and disaster relief. This was particularly true in 2022/23, when rising
fuel and food prices in many markets contributed to significant
cost-of-living pressures, and some communities were still feeling
the economic and health effects of the Covid-19 pandemic.
Outcome and actions
We work with communities and governments across our markets to
transform the lives of some of the most vulnerable people on the
continent by:
• Creating educational opportunities, especially for less privileged
children
• Supporting people in times of need and emergency
• Bridging the digital divide through financial inclusion and
other initiatives
Our five-year $57m partnership with the United Nations Children’s
Educational Fund (UNICEF) covers 13 of our markets, championing
digital education through online platforms, connectivity and access
to quality digital learning. Six of our OpCos have now launched
initiatives through this partnership, supporting more than 250,000+
children with access to online education. Our long-standing ‘Adopt a
school’ programme also supports education, with several projects
undertaken in 2022/23.
We reported on many of our long-term projects in our Sustainability
Report, published in October 2022.
For more information about how we support communities, see our
sustainability strategy on pages 38-55
STRATEGIC REPORT
Our stakeholders continued
Our communities
With operations in 14 African
countries, we live and work closely
with our communities – doing all
we can to support their needs and
create positive change.
Airtel Touching Lives
100,330
requests for support in Nigeria
Educational resources
$57m
five-year partnership with UNICEF
Schoolchildren supported
250,000+
given access to digital learning in 2022/23
80
Airtel Africa plc Annual Report and Accounts 2023
Partners and
suppliers
We work with more than 2,600
suppliers across Africa, including
mobile brands, IT companies and
telecoms infrastructure providers –
with the top 100 suppliers accounting
for just over 88% of our procurements.
79%
of our top 100 suppliers responded to our
ESG self-assessment survey in 2022/23
96%
of suppliers who responded to our ESG SAQ
have established a code of conduct
How we engaged during the year
This year saw a welcome return to more direct, in-person engagement
with our partners and suppliers, as Covid-19 restrictions on movement
and meetings were almost entirely lifted. The experience of working
remotely, however, has meant that we now have well-established
channels to engage suppliers and partners both virtually and face-to-
face. We have also seen the benefits of our sourcing team being based
in Dubai, which is the regional headquarters for a number of suppliers
and partners in our markets.
We continued to engage with our top suppliers at both HQ and OpCo
levels. The post-pandemic return of the MWC Barcelona convention
meant we were able to engage a number of key suppliers at senior
leadership level, and our CEO met peers from our top suppliers
regularly during the year.
Engagement with suppliers included governance meetings,
commercial meetings and, where necessary, grievance meetings.
Our OpCo teams continued to discuss operational matters with
suppliers at country level.
Environmental, social and governance (ESG) issues were an important
area of engagement this year for our partners and for us, and we asked
our top 100 top suppliers to conduct an ESG survey.
The Board receives relevant information from our engagements with
suppliers through the CEO’s report. Our CEO then relays the Board’s
response to the business and leaders at his regular ExCo and business
review meetings.
For more information about our Code of Conduct and modern slavery
statement, see www.airtel.africa
Interests and concerns
Strong partnerships with suppliers have always been an important
part of our business model, and this year partners continued to
engage with us to discuss win-win solutions. Their interests this year
included discussing ways to reduce environmental impacts (for us
and them), and ways to navigate the economic situation, which
featured high inflation and currency devaluation in some markets.
Partners and suppliers also approached us about the adoption of
new technologies, and we discussed sales and project plans, bids
and proposals, and payments.
Outcomes and actions
We made useful progress in a number of areas related to our
sustainability strategy, while also publishing our first Sustainability
Report in October 2022. From our ESG survey of our top 100 suppliers
by spend, we received a 79% response rate, helping us build valuable
data on environmental impacts in our value chain that feeds into our
net zero plans, and which will identify opportunities to improve our
performance. At the same time, fuel price increases in a number of
markets accelerated our partnership programmes with key partners
and suppliers aimed at establishing a renewable or lower-carbon
approach to our operations.
We also reached agreement with four key suppliers to support us with
our rollout of 5G in six markets, building capacity in our business for the
data opportunity we see ahead.
Airtel Africa plc Annual Report and Accounts 2023
81
STRATEGIC REPORT
Our stakeholders continued
Governments
and regulators
We engage closely with governments
and regulators in all our markets,
supporting their ambitions for
digital and financial inclusion while
working to create a viable business
environment in which we can create
shared value.
Our Board continues to have
a productive and open dialogue
with regulatory bodies and
policymakers and sets high
standards of governance
across our business.
82
Airtel Africa plc Annual Report and Accounts 2023
How we engaged during the year
Our stakeholder engagement plan provides broad guidance on
who should engage governments and regulators on behalf of the
company, depending on the seriousness and materiality of the issue
under discussion.
Engagements can take various forms. For serious and material
issues, we rely on formal channels which may involve us writing to
the regulator or relevant government department on the issue of
concern, or holding a formal, minuted meeting. Other engagements
happen at informal government events, product launches, and
industry gatherings.
We also engage through local industry associations, and international
industry associations, including the GSMA.
Our Board continues to have a productive and open dialogue with
regulatory bodies and policymakers and sets high standards of
governance across our business. A special adviser to the chair and
the Board provides advice to the management on political, legal and
regulatory issues regarding our long-term strategy in Africa. The Board
has empowered the CEOs and chief regulatory officers of our OpCos
to represent them at country-level engagements with governments
and regulators and to feed back any issues for Board-level discussion.
An example of successful engagement at this level was the reduction
of corporate tax in Zambia from 40% to 35% to align with other
industries. Management also informs the Board about regulatory
developments in the markets each month. From time to time, we
also commission audits to verify levels of regulatory compliance.
Interests and concerns
Each government has unique priorities and approaches, but interests
and concerns in 2022/23 fell broadly into the following categories:
• Revenues – which were the main focus this year as economies
experienced turbulence in most of our markets
• Security – which includes a focus on KYC and anti-money
laundering regulations, particularly for countries addressing
internal security concerns
• Access to affordable services – a key issue for governments trying
to unlock the opportunity for financial and digital inclusion
• Fair competition – ensuring that markets are fair and open.
Outcomes and actions
We understand governments’ focus on revenues and we continue
to meet our tax obligations, being recognised as among the largest
taxpayers in most of our countries of operation. Alongside this, we
seek to demonstrate to governments that their societies benefit
from the shared value we create wherever we operate, and advocate
equitable taxation across all sectors of the economy. This is supported
by our sustainability strategy.
We ensure that all our activities are properly licensed, and use our
compliance management system to ensure that all our operations
comply with licence obligations. We closely monitor compliance
with KYC and AML requirements, which are a special focus area for
governments fighting terrorism, money laundering and the financing
of terrorism.
We monitor the quality of our network to ensure that it meets
regulators’ quality of service standards, and that their citizens
enjoy affordable coverage and a reliable service.
See our legal and regulatory frameworks section on pages 22-23
Shareholders
Through their investments, our
shareholders enable us to deliver
our strategy and create long-term
value for all stakeholders.
Capex investment
$748m
excluding spectrum
Investment in spectrum
$500m
including 5G
How we engaged during the year
We aim to encourage shareholder participation by understanding and
acting on shareholder feedback and by being clear and transparent
when communicating with our shareholders, and with potential
investors and analysts.
Our investor relations team maintains a two-way dialogue between
the investment community and Group management, executives and
the Board. At the same time, we keep a range of channels open for
communication, including this Annual Report, our Sustainability
Report, press releases and updates, and live conference calls and
presentations held at each quarterly results announcements. Our
website is kept updated for investors to access investor-specific
information on financial, operating and sustainability issues, and our
senior leaders hold investor road shows and investor conferences
where they meet shareholders virtually or in person.
Our Board receives and discusses a detailed report from our investor
relations team every month, which includes an update on shareholder
engagement and any interests or concerns raised. The Board also
receives regular updates from our corporate brokers. The Board uses
these insights to inform its shareholder engagement strategy and to
consider the long-term consequences of its decisions.
Interests and concerns
Investors are typically interested in the opportunity we have for
sustainable growth, and in 2022/23 focused particularly on our plans
for Airtel Money in Nigeria, following our award of a licence to operate
as a payment services bank in April 2022. There has also been
growing interest in our approach to environmental, social and
governance (ESG) issues, and in particular our performance on
carbon emissions.
They are also keen to understand our plans for capital allocation and
balance sheet intentions, and in 2022/23 were interested in how we
repatriate cash from key markets. Investors also want to understand
our approach to risk, and in 2022/23 were particularly interested in
how we mitigate foreign exchange risks, with some being concerned
about the volatility of currencies in some of our markets.
Shareholders are understandably also interested in shareholder
returns.
Outcomes and actions
Our Board is kept well informed of the views of shareholders and is
able to take them into account when taking major strategic and
operational decisions. As an example, since IPO the Board has taken
into consideration investor feedback when re-looking at the capital
allocation policy, by changing the dividend policy (and cutting the
dividend) and prioritising US dollar debt reduction alongside a lower
leverage target.
In October 2022, we published our first Sustainability Report to inform
shareholders and other stakeholders on our progress in ESG matters.
Our investment throughout the year in our network and in additional
spectrum demonstrates our confidence in the opportunity for
growth for our business. We also kept investors informed of our
initiatives to reduce Group debt, and to localise some debt to our
OpCos while arranging to pay more suppliers in local currency, to
mitigate currency risks.
Read more in our financial review on pages 84-89
For more information on how we manage our risk, see pages 90-97
For more information on our relationship with the majority shareholder,
see page 112
Airtel Africa plc Annual Report and Accounts 2023
83
STRATEGIC REPORT
Chief financial officer’s introduction to the financial review
Constant
currency
change
17.6%
11.8%
23.8%
29.6%
13.2%
18.0%
17.3%
(14) bps
16.4%
(100.0%)
20.1%
Profit and loss snapshot
Description
Revenue1
Voice revenue
Data revenue
Mobile money revenue2
Other revenue
Expenses
Underlying EBITDA3
Underlying EBITDA margin
Depreciation and amortisation
Operating exceptional items4
Operating profit
Net finance costs5
Non-operating exceptional items6
Profit before tax
Tax
Tax – exceptional items7
Total tax charge
Profit after tax
Non-controlling interest
Profit attributable to owners of the
company – before exceptional items
Profit attributable to owners of
the company
EPS – before exceptional items
Basic EPS
Weighted average no of shares
Capex
Operating free cash flow
Net cash generated from
operating activities
Net debts
Leverage (net debt to underlying
EBITDA)
Return on capital employed8
Unit of
measure
$m
$m
$m
$m
$m
$m
$m
%
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
Cents
Cents
in Mn
$m
$m
$m
$m
times
%
Year ended
March 2023 March 2022
4,714
2,358
1,525
553
407
(2,413)
2,311
49.0%
(744)
(32)
1,535
(403)
92
1,224
(471)
5,255
2,491
1,787
692
437
(2,694)
2,575
49.0%
(818)
0
1,757
(723)
–
1,034
(445)
161
(284)
750
(87)
Reported
currency
change
11.5%
5.6%
17.2%
25.1%
7.5%
11.6%
11.4%
(3) bps
9.9%
(100.0%)
14.5%
79.3%
(100.0%)
(15.5%)
(5.5%)
2 8373.4%
(39.5%)
(0.6%)
(30.0%)
(469)
755
(124)
512
602
(15.1%)
663
13.6
17.7
3,752
748
1,827
2,208
3,524
1.4x
23.3%
5.2%
(15.0%)
5.2%
(0.1%)
14.0%
10.4%
9.8%
631
16.0
16.8
3,754
656
1,655
2,011
2,941
1.3x
22.3% 101 bps
1 Revenue includes inter-segment eliminations of $152m for year ended 31 March 2023 and $129m for the prior period.
2 Mobile money revenue post inter-segment eliminations with mobile services was $540m for year ended 31 March 2023,
and $424m for the prior period.
3 Underlying EBITDA includes other income of $13m for year ended 31 March 2023, and $10m for the prior period.
4 Operating exceptional items of $32m in the year ended 31 March 2022 consists of a $12m provision for expected
settlement of a contractual dispute in which one of the Group’s subsidiaries is a party and $20m costs of agreeing historical
spectrum fees in one of the Group’s subsidiaries.
5 Net finance costs of $723m has increased $320m from the prior period largely due to higher foreign exchange and
derivative losses of $245m mainly comprised of a $67m loss on derivatives and higher foreign exchange losses arising
from the revaluation of balance sheet liabilities (a loss of $82m on devaluation of the Nigerian Naira, and other devaluation
losses of $96m mainly arising from the Kenyan and Ugandan shilling and Malawian and Zambian klwacha).
6 Non-operating exceptional items in the previous period include a gain of $111m on the sale of telecommunication tower
assets in the Group’s subsidiaries in Madagascar, Malawi, Rwanda and Tanzania, partially offset by costs of $19m on
prepayment of $505m of bonds.
7 Tax exceptional items in the year ended 31 March 2023 reflect the recognition of a deferred tax credit of $117m in Kenya,
$25m in the Democratic Republic of the Congo and $19m in Tanzania, respectively.
8 Return on capital employed (ROCE): the Group has revised the computation of ROCE by grossing up the ‘equity
attributable to owners of the company’ for put option provided to minority shareholders. The previous period ROCE
has also been restated for this change.
A resilient business, delivering on growth opportunities while managing
macroeconomic volatility
We have delivered a strong set of results which demonstrate the resilience of our business model
and the effective execution of our strategy across all our regions, with double-digit reported
currency revenue growth of 11.5% despite inflationary pressures and currency devaluation
in most of our markets. Underlying EBITDA grew by 11.4% in reported currency, while we
maintained our underlying EBITDA margin despite significant inflationary cost pressures.
We were also able to return considerable value from various OpCos, including Nigeria, where
the year saw challenges in the availability of US dollars.
“We continue to drive our
strategy to enrich the lives of
our customers, while
delivering sustained double-
digit revenue growth and
resilient underlying EBITDA
margin despite inflationary
pressures and currency
devaluations. Our operating
profit is up by 14.5%.
Jaideep Paul
Chief financial officer
Revenue
$5,255m
Reported currency +11.5%
Constant currency +17.6%
Underlying EBITDA
$2,575m
Reported currency +11.4%
Constant currency +17.3%
Operating profit
$1,757m
Reported currency +14.5%
Constant currency +20.1%
Capex
$748m
% change +14.0%
Basic earnings per share
17.7 cents
% change +5.2%
84
Airtel Africa plc Annual Report and Accounts 2023
We have further de-risked our balance sheet by continuing to localise
our debt into the OpCos and reducing our HoldCo debt. By year-end,
almost 64% of our OpCo debt was in local currency.
The opportunity for growth is still clear. Our markets remain
underpenetrated by both mobile and mobile money services, and
our strategy is meeting that demand, while delivering clear social
benefits by bridging the digital divide and fostering financial inclusion.
We anticipate sustained growth in the business, with continued
EBITDA margin resilience.
Our four main financial objectives remain the same:
1. Growing our operating profitability
We have delivered double-digit revenue and underlying EBITDA growth
in reported currency. Our profitability has proven to be resilient, too, as
we maintained underlying EBITDA margin broadly in line with last year,
despite significant inflationary cost pressures, particularly fuel costs in
Nigeria and some other markets, and an average currency devaluation
of 6.1%.
Operating profit during the year grew by 14.5% in reported currency,
with constant currency growth of 20.1%.
2. Investing for future growth and improving our return on
capital employed
Almost 87% of our capex investment in 2022/23 was directed to
growth initiatives which, combined with spectrum purchases, ensure a
sustainably strong and reliable network. We invested $748m in capex
(excluding spectrum), and almost $500m in spectrum (which includes
5G) in key markets, to improve network capacity and quality and
reinforce a future-ready network.
We also invested in IT and cybersecurity, to further protect our business
from the global threat of cyberattacks, focusing on the areas of
application, network and API security.
We monitor the effectiveness of our capex investment through our
financial KPI ‘return on capital employed’. Regular monitoring of this
KPI helps us track the performance of our assets while also taking
long-term financing into consideration. Our return on capital employed
has improved to 23.3%, an improvement of 101 basis points from
22.3% in the prior year.
3. De-risking our balance sheet
Our strong performance and continued focus on our capital allocation
priorities has helped us further de-risk our balance sheet. In July 2022,
the Group prepaid $450m of external debt at HoldCo. The remaining
debt at HoldCo is now $550m, falling due in May 2024.
We continued to localise our debt into our OpCos while reducing HoldCo
debt. Our gross OpCo debt of $3,676m (including lease liabilities) is now
higher than our remaining HoldCo debt of $550m. We will continue to
focus on further strengthening our balance sheet.
Leverage was at 1.4x in March 2023, broadly flat from the previous
year despite our significant investment in spectrum to enable our
future growth.
4. Returns to shareholders
Our aim is to enhance returns to shareholders over the medium- to
longer-term. Our progressive dividend policy aims to grow the dividend
annually by a mid- to high-single-digit percentage. In line with our
dividend policy, we paid an interim dividend of 2.18 cents per share
in December 2022, reflecting an increase of 9%. Further, the Board
recommended a final dividend of 3.27 cents per share, making total
dividends of 5.45 cents per share, which is an increase of 9% compared
to the prior year.
Basic EPS was 17.7 cents, up by 5.2% from 16.8 cents in prior period.
This increase was mainly due to higher operating profits and the
recognition of a deferred tax credit of $117m in Kenya, $25m in the DRC
and $19m in Tanzania, respectively partially offset by higher foreign
exchange and derivative losses. EPS before exceptional items and
excluding foreign exchange and derivative losses increased by 13.4%.
Outlook
We continue to deliver value to all our stakeholders, transforming lives of
our communities and supporting the economies of the countries where
we operate. We believe that the fundamentals of our business remain
strong, and we remain well positioned to seize growth opportunities
while at the same time continuing to strengthen our balance sheet,
improve our return on capital employed and increase return to
shareholders. We are mindful of inflationary pressures, currency
devaluation and re-patriation risks due to the fluctuating availability of
US dollars in some of our markets. These pressures are likely to continue
next year, and we will continue to work on mitigation plans. Our capex
outlook (excluding spectrum) for next year is around $800m to $825m,
which includes additional investment in our data centre and fibre
businesses, where we see opportunities to further monetise our
infrastructure assets.
Jaideep Paul
Chief financial officer
10 May 2023
Performance highlights
Operating key performance indicators (KPIs)
• Total customer base grew by 9.0% to 140 million, as the penetration
of mobile data and mobile money services continued to rise, driving
a 16.9% increase in data customers to 54.6 million and a 20.4%
increase in mobile money customers to 31.5 million.
• Constant currency ARPU growth of 7.4% was largely driven by
increased usage across voice, data and mobile money.
• Mobile money transaction value increased by 41.3%, with Q4’23
annualised transaction value exceeding $102bn in constant currency.
Financial performance
• Revenue in constant currency grew by 17.6%, with revenues
growing by 11.5% to $5,255m in reported currency.
• While each segment’s reported currency revenue growth was
impacted by currency devaluation, they all delivered double-digit
constant currency revenue growth. Across the Group mobile service
revenue grew by 16.2% in constant currency, driven by voice
revenue growth of 11.8% and data revenue growth of 23.8%.
Mobile money revenue grew by 29.6% in constant currency.
• Underlying EBITDA increased by 17.3% in constant currency, and
11.4% in reported currency to $2,575m, with an underlying EBITDA
margin of 49.0% reflecting the resilience of our operating model
despite inflationary cost pressures.
• Profit after tax was $750m, a decrease of only $5m after including
a higher foreign exchange and derivative losses of $245m.
• Basic EPS at 17.7 cents up by 5.2% due to higher operating profits
and exceptional gain on deferred tax credit recognition in Kenya, the
DRC and Tanzania partially offset by higher foreign exchange and
derivative losses. EPS before exceptional items was 13.6 cents, a
reduction of 15.0%, largely due to higher foreign exchange and
derivative losses of $245m. EPS before exceptional items and
excluding foreign exchange and derivative losses was 20.6 cents,
up by 13.4%.
Capital allocation
• Capex increased by 14.0% to $748m, in line with our guidance, as
we continue to invest for future growth. Additionally, we acquired
spectrum in Nigeria, the DRC, Tanzania, Zambia and Kenya during
the year.
• In July 2022, the Group prepaid $450m of outstanding external
debt at HoldCo. The remaining debt at HoldCo is now $550m,
falling due in May 2024. Cash at the holding companies was $398m.
Leverage was at 1.4x in March 2023, broadly stable despite $500m
of spectrum investment during the year.
• The Board has recommended a final dividend of 3.27 cents per
share, making the total dividend for 2022/23 5.45 cents per share,
an increase of 9% in line with our progressive dividend policy.
Airtel Africa plc Annual Report and Accounts 2023
85
STRATEGIC REPORT
Financial review
Revenue in reported currency grew by 11.5%, with constant currency
revenue growth of 17.6% partially offset by currency devaluation.
The slowdown in revenue growth from the previous year was due
to a loss of tower sharing revenues following the sale of towers in
Madagascar, Malawi and Tanzania in the second half of the year and
NIN-related barring of voice services in Nigeria. Excluding these, the
growth would have been approximately 21% in constant currency.
Total revenue for mobile services and mobile money services
combined grew in Nigeria by 20.3%, East Africa by 17.4% and
Francophone Africa by 12.7%, respectively.
Revenue growth was recorded across all reporting segments, with
mobile services revenue for the Group up by 16.2%, reflecting Nigeria
growing by 20.3%, East Africa by 13.4% and Francophone Africa by
11.9%, respectively. Double-digit revenue growth was recorded in
both key services: voice revenue grew by 11.8% and data revenue by
23.8%. Mobile money revenue grew by 29.6% in constant currency,
driven by 32.6% growth in East Africa and 20.3% growth in
Francophone Africa.
Net finance costs increased by $320m, largely due to higher foreign
exchange and derivative losses of $245m. This increase mainly
comprised a $67m loss on derivatives and higher foreign exchange
losses arising from the revaluation of balance sheet liabilities (a loss
of $82m on devaluation of the Nigerian naira, and other devaluation
losses of $96m mainly arising from the Kenyan and Ugandan shilling,
Malawian and Zambian kwacha).
GAAP measures
Revenue
Revenue grew by 11.5% to $5,255m in reported currency and by
17.6% in constant currency. The differential in growth rates was due to
an average currency devaluation between the periods, mainly in the
Central African franc (11.7%), which is largely pegged to the euro, the
Nigerian naira (6.1%), the Kenyan shilling (9.4%), the Ugandan shilling
(4.9%) and the Malawian kwacha (22.6%), in turn partially offset by
appreciation in the Zambian kwacha (8.8%). The revenue growth of
17.6% in constant currency growth was driven by both customer base
growth of 9.0% and ARPU growth of 7.4%.
Mobile services revenue grew by 16.2% in constant currency
supported by growth across the regions: Nigeria up by 20.3%, East
Africa by 13.4% and Francophone Africa by 11.9%, respectively.
Mobile services revenue growth was driven by both voice and data
services, voice revenue grew by 11.8% and data revenue by 23.8%.
Mobile money revenue grew by 29.6%, driven by 32.6% growth in
East Africa and 20.3% in Francophone Africa.
The slowdown in revenue growth from the previous year was due
to a loss of tower sharing revenues following the sale of towers in
Madagascar, Malawi and Tanzania in second half of the year and
NIN-related barring of voice services in Nigeria. Excluding these,
the growth would have been around 21% in constant currency.
Total tax charges were lower by $185m mainly due to the recognition
of a deferred tax credit of $117m in Kenya, $25m in the DRC and $19m
in Tanzania. Non-controlling interests was down $37m due to the
buy-back of minorities in Nigeria and lower minority allocation charges
in Tanzania, partially offset by the increase in Airtel Money minority
shareholdings.
Revenue ($m)
FY’23
FY’22
5,255
11.5%
4,714
21.3%
EPS before exceptional items was 13.6 cents, a reduction of 15.0%
largely because of higher foreign exchange and derivative losses of
$245m. Basic EPS at 17.7 cents up by 5.2% due to higher operating
profits and an exceptional gain on deferred tax credit recognition
in Kenya, the DRC and Tanzania partially offset by higher foreign
exchange and derivative losses. EPS before exceptional items and
excluding foreign exchange and derivative losses increased by 13.4%.
Our balance sheet has also been further de-risked by continued
localisation of our debt into the OpCos and continued debt reduction
in HoldCo, following the $450m HoldCo bond prepayment in July
2022. Leverage at 1.4x in March 2023 was broadly stable despite
$500m spectrum investment during the year.
In terms of outlook, long-term opportunities remain attractive for us.
While mindful of currency devaluation and repatriation risks, we
continue to work actively to mitigate all our material risks and deliver
value for all our stakeholders.
Operating profit
Operating profit increased by 14.5% in reported currency to $1,757m
as a result of strong revenue growth and continued improvements in
operating efficiency in East Africa and Francophone Africa.
Operating profit ($m)
FY’23
FY’22
1,757
14.5%
1,535
37.2%
Net finance costs
Net finance costs were $723m, an increase of $320m largely due to
higher foreign exchange losses of $178m and higher derivative losses
of $67m as a result of foreign exchange movements. The higher
foreign exchange losses arose from the revaluation of balance sheet
Profit after tax ($m)
MARCH 2022
190
755
(62)
693
MARCH 2023
161
750
(320)
26
589
March ’22
reported profit
after tax
March ’22
exceptional
items
March ’22
profit after tax
excluding
exceptional items
Operating
profit
Finance
cost
Tax
March ’23
profit after tax
excluding
exceptional items
March ’23
exceptional
items
March ’23
reported profit
after tax
86
Airtel Africa plc Annual Report and Accounts 2023
liabilities (including current and non-current borrowings and lease
liabilities) following certain currency devaluations across most of our
OpCos, including a loss of $82m on the devaluation of the Nigerian
naira, and other devaluation losses of $96m mainly arising from the
Kenyan and Ugandan shilling and Malawian and Zambian kwacha.
Net finance cost (excl. foreign exchange and derivatives losses) were
$385m, an increase of $75m, largely driven by higher interest on lease
liabilities. Interest costs on market debt were broadly flat.
The Group’s effective interest rate increased to 7.7% from 5.6% in the
prior period, largely driven by an increase in base rates, increase in local
currency OpCo debt and the repayment of HoldCo bond, which had
lower rate.
Taxation
Total tax charges were lower by $185m mainly due to the recognition
of a deferred tax credit of $117m in Kenya, $25m in the DRC and $19m
in Tanzania. Excluding exceptional items, tax was lower by $26m
mainly due to the lower profit before tax on account of higher foreign
exchange and derivative losses.
Profit after tax
Profit after tax was $750m, down by 0.6%, as growth in operating
profit was offset by higher foreign exchange and derivative losses of
$245m. Profit after tax excluding foreign exchange and derivative
losses was up by 21.2%.
Basic EPS
Basic EPS was 17.7 cents, up by 5.2% from 16.8 cents in the prior
period. This increase was mainly due to higher operating profits and
exceptional items gain on deferred tax credit recognition in Kenya, the
the DRC and Tanzania, partially offset by higher foreign exchange and
derivative losses.
Net cash generated from operating activities
Net cash generated from operating activities was $2,208m, up by
9.8% largely driven by higher operating profit which was partially
offset by higher tax payments on the increased local profits and
withholding tax on dividends by subsidiaries. While in some markets
we faced instances of shortage of foreign currency within the
local monetary system, we benefited from a broad geographical
diversification which enables access to liquidity, with limited impact
on the Group requirements.
Alternative performance measures
Underlying EBITDA
Underlying EBITDA was $2,575m, an increase of 11.4% in reported
currency and 17.3% in constant currency, driven by strong revenue
growth. Underlying EBITDA margins were largely flat at 49.0% despite
inflationary cost pressures, a drop of 3 basis points in reported
currency and 14 basis points in constant currency. We continue to
work towards mitigating the inflationary cost pressures through
various cost initiatives.
Foreign exchange had an adverse impact of $281m on revenue, and
$133m on underlying EBITDA, as a result of currency devaluations.
Average currency devaluations between the periods were mainly
in the Central African franc (11.7%), the Nigerian naira (6.1%), the
Kenyan shilling (9.4%), the Ugandan shilling (4.9%) and the Malawian
kwacha (22.6%), in turn partially offset by appreciation in the Zambian
kwacha (8.8%).
With respect to currency devaluation sensitivity, on a 12-month basis,
a 1% currency devaluation across all currencies in our OpCos would
have a negative impact of $51m on revenues, $31m on underlying
EBITDA and $23m on finance costs (excluding derivatives). Our largest
exposure is to the Nigerian naira, for which a 1% devaluation would
have a negative impact of $22m on revenues, $12m on EBITDA and
$7m on finance costs (excluding derivatives).
See the risk factors section for detailed disclosure on the currency
devaluation risk posed to the Group on page 96.
Underlying EBITDA ($m)
FY’23
FY’22
* Underlying EBITDA margin %
2,575
49.0%*
2,311
49.0%*
Effective tax rate
The effective tax rate was 38.8%, compared to 39.0% in the prior
period, due to profit mix changes amongst the OpCos. The effective
tax rate is higher than the weighted average statutory corporate tax
rate of approximately 33%, largely due to the profit mix between
various OpCos and withholding taxes on dividends by subsidiaries.
Exceptional items
No operating exceptional items were incurred in the current year.
Operating exceptional items in the previous period consists of a $12m
provision for expected settlement of a contractual dispute in which
one of the Group’s subsidiaries is a party and $20m costs of agreeing
historical spectrum fees in one of the Group’s subsidiaries.
Non-operating exceptional items in the previous period include a gain
of $111m on the sale of telecommunications tower assets in the
Group’s subsidiaries in Tanzania, Malawi, Madagascar and Rwanda,
partially offset by one off costs of $19m (including applicable premium
paid) on the early repayment of $505m bonds in March 2022.
The tax exceptional item in current period related to the recognition of
a deferred tax credit of $117m in Kenya, $25m in the DRC and $19m
in Tanzania.
Tax
Description
Reported effective tax rate
Adjusted for:
Exceptional items
Foreign exchange rate movement
for loss making entities and/or
non-DTA operating companies and
holding companies
One-off adjustment and tax on
permanent difference
Effective tax rate
Year ended March 2023
Year ended March 2022
Unit of measure
$m
Profit before
taxation
1,034
Income tax
expense
284
%
27.4%
Profit before
taxation
1,224
Income tax
expense
469
%
38.3%
$m
$m
$m
$m
–
161
106
4
1,144
–
(1)
444
38.8%
(60)
50
(12)
1,202
2
–
(2)
469
39.0%
Airtel Africa plc Annual Report and Accounts 2023
87
STRATEGIC REPORT
Financial review continued
EPS before exceptional items
EPS before exceptional items was 13.6 cents, a reduction of 15.0%
largely as a result of higher foreign exchange and derivative losses of
$245m. Excluding foreign exchange and derivative losses, the EPS
before exceptional item was 20.6 cents, an increase of 13.4%.
Description
March 2022 EPS before exceptional items
Exchange
Operating profit (constant currency)
Net finance charges
Derivatives and Forex gain/(loss)
Finance charges (excluding derivatives and forex)
Tax
Others
March 2023 EPS before exceptional items
$ cents
16.0
(1.9)
7.3
(8.7)
(6.5)
(2.2)
0.2
0.7
13.6
Operating free cash flow
Operating free cash flow was $1,827m, up by 10.4%, as higher
underlying EBITDA more than offset increased capital expenditure.
Capital expenditure during the period increased $92m due to planned
network expansion and investments into the PSB and data centre
opportunity in Nigeria.
Leverage and balance sheet measures
Leverage at 1.4x net debt/underlying EBITDA, was broadly stable
despite $500m of spectrum investment during the year. Our balance
sheet has also been further de-risked by continued localisation of our
debt into the OpCos – now almost 60% of our OpCos debt is in local
currency – and continued debt reduction in HoldCo. In July 2022, the
Group prepaid $450m of external debt at HoldCo. The remaining debt
at HoldCo is now $550m, falling due in May 2024. Cash at the holding
companies was $398m.
March 2023
March 2022
Description
Foreign currency
Holdco
OpCos
Local currency
OpCos
Less: cash and
cash equivalents
Net debt, excluding
lease liabilities
Lease liabilities
Net debt, including
lease liabilities
$m
1,144
550
594
1,035
1,035
Times
0.5x
0.2x
0.3x
0.4x
0.4x
$m
1,585
1,000
585
676
676
Times
0.7x
0.4x
0.3x
0.3x
0.3x
1,477
2,047
0.6x
0.8x
1,281
1,660
3,524
1.4x
2,941
0.6x
0.7x
1.3x
Net cash generated from operating activities
Particulars
Underlying EBITDA
Other non-cash items
Operating cash flow before
changes in working capital
Change in working capital
Net cash generated from
operations before tax
Income tax paid
Net cash generated from
operating activities
March 2023
$m
2,575
2
March 2022
$m
2,311
(38)
Change
$m
264
40
2,577
28
2,273
31
2,605
(397)
2,304
(293)
304
(3)
301
(104)
2,208
2,011
197
88
Airtel Africa plc Annual Report and Accounts 2023
Net debt bridge
Particulars
Net cash generated from
operating activities
Cash capex (tangible)
Cash capex (intangible)
Cash interest
Repayment of lease liabilities
Dividend paid to non-controlling interests
Subtotal (a)
Dividend to Airtel Africa plc shareholders
Acquisition of non-controlling interest
Increase in mobile money wallet balance
Proceeds from sale of tower assets
Proceeds from sale of shares to
non-controlling interests
Others
Subtotal (b)
Addition of lease liabilities
Repayment of lease liabilities
Foreign exchange on borrowings and
cash flows
Subtotal (c)
Net debt (increase)/decrease d= a+b+c
Opening net debt
Closing net debt
March 2023
$m
March 2022
$m
2,208
(779)
(502)
(371)
(279)
(75)
202
(195)
–
(86)
–
–
(73)
(354)
(776)
279
66
(431)
(583)
2,941
3,524
2,011
(717)
(22)
(351)
(251)
(48)
622
(169)
(164)
(64)
251
550
(13)
391
(651)
251
(24)
(424)
589
3,530
2,941
Purchase of intangible assets
Purchase of intangible assets of $502m mainly includes additional
spectrum payment of $317m in Nigeria, $123m in East Africa and
$42m in Francophone Africa.
Dividend paid to shareholders
Final dividend payment of 3 cents per ordinary share for year ended
31 March 2022 was paid during the year and an interim dividend
payment of 2.18 cents per ordinary share paid in December 2022.
In line with our progressive dividend policy which aims to grow the
dividend annually by a mid to high single-digit percentage.
Acquisition of non-controlling interest
Previous period had a cash outflow of $164m related to buy-back
of 8.22% non-controlling interest from the minority shareholders in
Airtel Networks Limited (Airtel Nigeria), a subsidiary of Airtel Africa plc.
Refer to Note 5(b) of consolidated statement of financial position as
set out on page 180 for details.
Proceeds from sale of tower assets
In the previous period, the Group received proceeds of $251m from
the sale of tower assets in Tanzania, Madagascar, Malawi and Rwanda.
This was in line with our focus on an asset-light business model. Refer
to Note 11 of consolidated statement of financial position as set out on
page 198 for details.
Proceeds from sale of shares to non-controlling interests
In line with the Group’s pursuit of strategic investment in mobile money
business, the Group received a minority investment of $550m in the
previous period from four investors in Airtel Mobile Commerce B.V.
Refer to Note 28(c) of consolidated statement of financial position as
set out on page 216 for details.
(702)
(0.3x)
(980)
(0.4x)
The Board recommended a final dividend of 3.27 cents per share for
year ended 31 March 2023.
Financial information by service
We provide performance data for our mobile voice and data services,
and Airtel Money in our business review on pages 62-73.
Balance held under mobile money trust
The balance held under mobile money trust represents the funds of
mobile money customers which are not available for use by the Group,
and these have increased by $103m.
Financial information by market
We provide performance data for each of our markets in our business
review on pages 66-71.
Consolidated statement of financial
position
The consolidated statement of financial position is set out on pages
174-175. Details on the major movements of our assets and liabilities
in the year are set out on this page.
Assets
Property, plant and equipment
Property, plant and equipment (including capital work in progress)
increased to $2,507m, an increase of $104m due to capital
expenditure of $735m, mainly related to expansion of our network,
PSB and IT security which was partially offset by $435m of
depreciation and $196m of foreign currency translation reserve.
Right of use assets
Right of use assets increased to $1,497m, an increase of $388m due
to the capitalisation of the present value of telecommunication towers
taken on long-term lease, partially offset by $280m of depreciation.
Other intangible assets
Other intangible assets, including assets under development increased
by $578m to $1,212m. This relates to $627m of investment in
spectrum and licence, and capitalisation of present value of deferred
spectrum charges amounted to $89m, partially offset by $103m
of amortisation.
Total equity and liabilities
Total equity
Total equity increased to $3,808m, an increase of by $159m related
to $750m profit for the period, partially offset by $195m dividend to
shareholders of Airtel Africa, other comprehensive loss of $353m
(largely due to foreign currency translation reserve) and $52m
dividend to minority shareholders in subsidiaries.
Borrowings
Gross borrowings (including short-term borrowings) increased by
$293m to $4,225m, largely due to increase in lease liabilities by $387m
and higher external loan of $368m at OpCos, mostly in local currency,
offset by prepayment of $450m bond at HoldCo. Net debt of the
Group as of 31 March 2023 was $3,524m.
Current liabilities
Current liabilities (excluding borrowings) increased by $268m to
$2,232m, largely due to renewal of 2100 MHz spectrum licence for
a gross consideration of $127m (paid in April 2023) and increase in
mobile money wallet balance.
Further details of the Group’s liquidity position and going concern
assessment are shown on page 175 and Note 2.2 of the financial
statements.
Dividends
The Board has recommended a final dividend of 3.27 cents per
ordinary share for the year ended 31 March 2023. The proposed final
dividend will be paid on 26 July 2023 to all ordinary shareholders
who are on the register of members at the close of business on
23 June 2023.
We will announce more details in due course. We paid an interim
dividend of 2.18 cents per ordinary share in December 2022.
Non-financial information statement
We are pleased to set out below where you can find information relating to non-financial matters in our strategic report, as required under
sections 414CA and 414CB of the Companies Act 2006.
Business model
Environmental matters
Our people
Social matters
Respect for human rights
Anti-corruption and anti-bribery
matters, health and safety
Strategic report
Business model and KPIs
Principal risks and mitigation
Our 2022/23 sustainability strategy update
Principal risks and mitigation: compliance to legal requirements, KYC and quality of service,
non-compliance, internal controls and compliance
Principal risks and mitigation: leadership succession planning, internal controls and compliance
Chair’s statement, company vision and values
Directors’ report
Stakeholder engagement: ‘Our people’
Principal risks and mitigation: Covid-19
Directors’ report
Information about our approach to tax can be found on our website: www.airtel.africa
Principal risks and mitigation: supply chain
Our Code of Conduct can be found on our website: www.airtel.africa
Directors’ report, modern slavery act, anti-corruption and anti-bribery matters
Our Code of Conduct and other related policies can be found on our website: www.airtel.africa
Page(s)
1-99
24-25
90-97
38-55
93-97
94
12-13, 24
139-143
79
92
139-143
94
139-143,
125
Airtel Africa plc Annual Report and Accounts 2023
89
Managing our risks
We operate in 14 markets across Africa. Our markets offer both
long-term growth opportunities and a diverse range of risks and
uncertainties. Managing these risks is an essential part of delivering
our strategy. It means we can continue to create value for our
business and shareholders, and for the millions of people whose
lives we help transform.
Identifying and managing risk
The directors have carried out a robust assessment of the company’s
principal and emerging risks to comply with Provision 28 of the
Governance Code. We have designed our risk management
framework to give us a consistent means of identifying, mitigating
and monitoring risk across all 14 of our OpCos and Group entities.
It provides senior management and our Board with oversight over
our principal risks and promotes a bottom-up approach to identifying
and managing risks across the Group.
Risk management governance
The Airtel Africa plc Board has overall responsibility for the Group’s
risk management framework and processes. Through the Audit and
Risk Committee, the Board oversees the Group’s risk management
framework and regularly reviews its principal risks as well as emerging
risks that may impact the Group. Within that overarching framework,
the governance of risk management has been cascaded to various
levels across the organisation to allow effective management of the
Group’s risks. The framework covers the interplay between risks
impacting Airtel Africa as a whole and risks identified at either the
OpCo-level (geography-related) or the functional level (business
function-related). Our Group Executive Risk Committee (ERC)
evaluates and prioritises the principal risks with the potential to
undermine our strategy, business model and solvency, in line with our
overall risk appetite. The committee also reviews on an ongoing basis
the external business environment to identify emerging risks which
could potentially have an impact on the Group’s business in the future.
Group functional teams identify functional risks cutting across our
OpCos to create a consistent Group-wide risk mitigation strategy
for similar risks. We operate a similar risk management governance
structure at Group level and within our OpCos, with both having an
Executive Risk Management Committee, and with overall risk
management responsibility resting with the respective boards. Each
OpCo identifies risks within their business environment and takes
appropriate mitigation actions. The governance of risk management at
each OpCo rests with the OpCo Executive Risk Committee (ERC) and
the OpCo Board, which is responsible for risk management processes
and oversees the OpCo’s principal risks and the effectiveness of its
mitigation actions.
STRATEGIC REPORT
Managing our risk
Understanding and
managing our risk
environment to support
the Group’s objectives
Identifying, mitigating and
managing risk is an essential
part of delivering our strategy
– and underpins our ability to
transform lives across Africa.
Ravi Rajagopal
Chair, Audit and Risk Committee
90
Airtel Africa plc Annual Report and Accounts 2023
Board – Audit and
Risk Committee
The Board has overall
responsibility for the Group’s
risk management processes.
Through the Audit and Risk
Committee (ARC), the Board
oversees the Group risk
management framework,
approves the Group’s risk
appetite, and regularly reviews
our principal and emerging risks.
The Board maintains oversight
on the effectiveness of the
Group’s risk management
processes through regular
reviews of the Group’s principal
and emerging risks. This year, the
ARC carried out several detailed
thematic risk reviews across
several functions within the
business. See pages 117-127
for the ARC chair’s report.
Risk identification process
Group Executive
Risk Committee
Functional risk
management reviews
The Group Executive Risk
Committee (ERC) is responsible
for the implementation of the risk
management framework across
the Group. The ERC reviews our
significant risks and the progress
and effectiveness of mitigation
actions, ensuring that the Group
operates within its defined
risk appetite.
The ERC meets quarterly and
carries out robust reviews of the
Group’s significant risks cutting
across its operating markets and
functions. It also reviews and
discusses emerging risk trends
with potential impact on the
Group’s business.
The Group executive functional
heads are responsible for
identifying and mitigating risks
across the Group within their
functional area. They are
responsible for embedding risk
management within operational
business processes. The Group’s
risk register is created from risks
identified either by the Group
functional heads or the OpCo
Executive Risk Committees.
The Group functional heads
carry out ongoing risk reviews
as part of their operational
functional processes. These risk
reviews address risks within
their functions across the
Group’s operating footprint.
OpCo Executive
Risk Committee and
OpCo Board
The OpCo Executive Risk
Committee (ERC) performs a
similar role to the Group ERC. It is
responsible for implementing the
risk management framework in
our subsidiaries. It identifies risks
within the local environment and
mitigation actions to manage
those risks. Each OpCo Board
has overall responsibility for the
risk management process within
that OpCo.
The OpCo ERC meets on a
quarterly basis while the OpCo
Boards review the OpCo’s
principal and emerging risks at
least on a semi-annual basis.
IDENTIFY
RISK ANALYSIS
RANK
OpCo
Function
Risks are identified by
analysing external and
internal context both at
an operating subsidiary and
at a Group functional level
Discuss and validate each risk
Identified risks are assessed on
Likelihood of
occurrence
Impact/
consequence
Score and prioritise
each risk
Each risk is then assigned
a risk rating based on the
likelihood of occurrence
and the possible impact/
consequence
Risk rating
Airtel Africa’s
principal risks
Risks impacting the
Group’s strategy,
business model
and solvency
Emerging risks
Ongoing review
of the external
environment and
potential risks
Our risk appetite framework
The Group’s risk appetite framework and statement formalises the Group’s risk appetite, tolerance limits and governance oversight
processes to ensure that risks across the Group are managed within acceptable limits. Airtel Africa adopts a four-point scale for risk
appetite, described below.
Open
Flexible
Cautious
Averse
We strongly accept these risks
as they are incidental to the
achievement of our business
objectives. These risks provide
good risk/reward trade-off, and
internal competencies exist
to manage or exploit these
risks effectively.
We are open to accepting these
risks on a justifiable basis. We will
consider available options and
select the option that provides
good returns with an acceptable
level of risk in the pursuit of
our objectives.
We will accept these risks only if
essential, with limited potential
for a negative outcome. We
prefer to avoid these risks and
where these risks are accepted,
the risks are carefully measured
and monitored.
We are strongly opposed to
these risks and prefer to avoid
them. We are not open to any
risk/return trade-off and will
always accept the lowest risk
option for these risks.
Airtel Africa plc Annual Report and Accounts 2023
91
STRATEGIC REPORT
Managing our risk continued
How we classify our risks
Category
Description
Philosophy/approach
Strategic risks
Operational
risks
These are risks arising from
changes in our external
business environment such as
macroeconomic conditions or
market/competitive dynamics
Risks affecting our ability to
effectively operate our business
model across a variety of
functional areas
Financial risks
Risks impacting our liquidity or
solvency, financial reporting,
or capital structure
Governance and
compliance risks
Risks affecting our ability to
comply with our legal, regulatory
and governance obligations
Risk heat map (residual risks)
Reference
in heat map
1 2
We operate in 14 countries across Africa with significant market opportunities
arising from low penetration of telecommunications and banking services.
The Group is bullish on the opportunities that Africa presents and is generally
open to taking increased levels of risks to capture these market opportunities.
Delivering on the Group’s strategic objectives requires an effective operating
model, execution excellence and operational rigour, with a focus on customer
satisfaction across the organisation. This operational excellence will ensure
that the Group can continue to deliver incremental revenue growth at minimal
marginal costs, resulting in a positive flow-through to profitability.
3 4 5 6
7 8
The Group is committed to prudent financial management built on a robust
system of controls and effective business partnering. The Group is flexible
in its risk-taking approach to financial management to support the Group’s
strategic growth objectives but averse towards any form of violation of its
system of key financial and internal controls.
We are committed to complying with laws and regulations in the jurisdictions
where we operate, and averse to violations of legal or regulatory obligations.
9
10
i
t
s
o
m
A
n
a
t
r
e
c
l
D
O
O
H
I
L
E
K
I
L
l
y
e
k
L
i
l
i
e
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s
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o
P
l
y
e
k
i
l
n
U
Strategic risk
1 Adverse competition and market disruption
2 Digitalisation and innovation
Operational risk
3 Technology obsolescence
4 Cyber and information security threats
5 Increase in cost structure
6 Leadership succession planning
7 Internal controls and compliance
8 Network resilience and business continuity
Financial risk
9 Exchange rate fluctuations and availability
of foreign currency for repatriation
Governance and compliance risk
10 Non-compliance to legal and regulatory
requirements
Currently, all principal risks are within our risk appetite
5
9
4
2
10
8
7
3
1
6
Minor
Moderate
Significant Extreme
I M P A C T
Changes in principal risks during the financial year
Risk
Covid-19
Exchange rate fluctuations and
shortage of foreign currency
Changes
This risk was dropped as a principal risk for the Group. Over the past three years since the start of the pandemic, the
Group has developed internal capabilities to effectively manage and adapt its operations to cope with varying levels
of disruptions attributed to the pandemic. The risk impact is also lower, as evidenced by the removal of public health
restrictions and the re-opening of economies around the world.
This risk has been modified from ‘Exchange rate fluctuations and availability of foreign currency for repatriation’ to
‘Exchange rate fluctuations and shortage of foreign currency’. This revised risk description reflects the fact that in
some of our operating markets, we face instances of limited supply of foreign currency within the local monetary
system, which not only constrains the ability of the Group to fully benefit from strong cash generation at the OpCo
but also negatively impacts our ability to make timely foreign currency vendor payments in the affected markets.
Uncertain and constantly evolving
legal and regulatory requirements
and environment
This risk has been modified from ‘Non-compliance to legal and regulatory requirements’ to ‘Uncertain and constantly
evolving legal and regulatory requirements and environment’. The Group takes all reasonable effort to comply with
its legal and regulatory obligations in all the jurisdictions where it operates. However, in some markets, we are faced
with the risk of unanticipated changes in the legal and regulatory environment and compliance requirements which
can expose the Group to adverse financial and/or reputational impact.
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Airtel Africa plc Annual Report and Accounts 2023
Principal risks and mitigation
Strategic risks
Description of risk
How we mitigate this risk
Key developments in the year
Risk
appetite
Risk
owners
RISK
1
Adverse competition and market disruption
We operate in an increasingly competitive
environment across our markets and segments,
particularly with respect to pricing and market
share. Aggressive competition by existing
players or the entry of a new player could put
a downward pressure on prices, adversely
affecting our revenue and margins, as well as our
profitability and long-term survival. The nature
and level of the competition we face varies for
each of our markets, products and services.
1 Ongoing monitoring of competitive
landscape and competitor activities
2 Emphasis on customer experience,
affordability, product penetration and
development of our product portfolio
3 The continued growth of our Airtel
Money business and the increased
penetration of our GSM customers
using Airtel Money services helping
to increase customer ‘stickiness’ on
our network
4 Simplifying customer experience
through self-care and other
applications across several
customer touchpoints
1 Acquisition of 4G and 5G spectrum
Open
in Nigeria and spectrum assets in the
Democratic Republic of the Congo,
Kenya, Tanzania and Zambia (see
page 23)
2 Launch of SmartCash Payment
Service Bank (PSB) in Nigeria (see
page 73)
Chief commercial
officer
RISK
2
Digitalisation and innovation
Failure to innovate through simplifying the
customer experience and developing adequate
digital touchpoints in line with changing customer
needs and the competitive landscape could
lead to loss of customers and market share.
We need to continually innovate to simplify our
user experience, make our business processes
more agile, and develop more digital touchpoints
to reach our customers and meet their
changing needs.
Operational risks
RISK
3
Technology obsolescence
An inability to effectively and efficiently invest in
and upgrade our network and IT infrastructure
would affect our ability to compete effectively
in the market. While we continually invest in
improving and maintaining our networks and
IT systems to address current levels of volume
and capacity growth, we need to continue to
commit substantial capital to keep pace
with rapid changes in technology and the
competitive landscape.
1 Rollout of digital apps and self-care
1 Continued strengthening of our
Open
channels to simplify customer
experience
2 Focus of Airtel Africa Digital Labs
on developing cutting-edge digital
solutions to address customer needs
and solve complex problems using
the latest technologies
3 Simplifying our core IT systems and
integration capabilities to allow for
faster deployment of new products
and services and integration with
third-party applications
digital team through the addition
of senior staff resource within the
team and introduction of digital
skills training programmes for
OpCos
2 Establishing the digital shared
services function supporting core
telco and mobile money needs
across the full customer lifecycle
from journey design, product
development and growth
3 Implementation of modernised
technology, deeper integration of
machine learning and scaling of
agile ways of work across Group
and OpCos
Chief technology
and information
officer and chief
commercial
officer
1 Continued modernisation of our
network and new site rollout in
addition to significant investment
in spectrum assets
2 Refresh of IT infrastructure
completed with a focus on cloud
technology to improve resilience
Flexible
Chief technology
and information
officer
1 Refreshing our IT infrastructure with
a focus on cloud technology
2 Network modernisation project
involving upgrades to our core
(mobile switching) and packet
(mobile data) networks
3 Reducing the cost of network
operations by adopting radio
agnostic technology, single RAN,
which allows easy switching of
network resources and spectrum
between 2G, 3G and 4G networks
at minimal marginal costs
RISK
4
Cyber and information security threats
Cybersecurity threats through internal or
external sabotage or system vulnerabilities could
potentially result in customer data breaches and/
or service downtimes. Like any other business,
we are increasingly exposed to the risk that third
parties or malicious insiders may attempt to use
cybercrime techniques, including distributed
denial of service attacks, to disrupt the
availability, confidentiality and integrity of our IT
systems. This could disrupt our key operations,
make it difficult to recover critical services and
damage our assets.
1 Ongoing review and implementation
1 Achieved ISO 27001 ‘Information
Averse
of security controls to mitigate
possible system vulnerabilities
2 Awareness campaign and training of
employees on IT and cybersecurity
risks and control measures
3 Continuing to identify risk and
assess vulnerability
Security Management System’ and
ISO 22301 ‘Business Continuity
Management System’ certifications
for all our operating markets
2 The Group’s subsidiary, Smartcash
Payment Service Bank (PSB)
Limited, received the payment card
industry data security standard
certification (PCI DSS)
Chief technology
and information
officer
Airtel Africa plc Annual Report and Accounts 2023
93
Key to our strategic pillars Win with technology Win with distribution Win with data Win with mobile money Win with cost Win with people STRATEGIC REPORT
Principal risks and mitigation continued
Operational risks continued
Description of risk
How we mitigate this risk
Key developments in the year
Risk
appetite
Risk
owners
1 Continuous review of our operating
model and supply chain processes
to identify cost optimisation
opportunities
2 Rolling out various initiatives to
optimise our operating structure to
improve business performance
3 Long-term planning and buying
strategies mitigating the effects of
short-term disruptions within our
supply chain
1 Kick-started the process of
Flexible
transitioning to renewable energy
sources for new site deployment and
the conversion of existing off-grid
sites to on-grid or renewable energy
sources in partnership with our
towerco partners in line with our
sustainability strategy and as a
long-term cost optimisation initiative
2 Continued digitalisation of our sales
and customer touchpoints to drive
cost savings
Chief supply
chain officer
RISK
5
Increase in cost structure
Adverse changes in our external business
environment and/or supply chain processes
could lead to a significant increase in our
operating cost structure and negatively impact
profitability. Our operating costs are subject to
supply chain risks, including fluctuations in global
commodity prices, market uncertainty, energy
costs (such as diesel and electricity), and the cost
of obtaining and maintaining licences, spectrum
and other regulatory requirements. Prevailing
macroeconomic conditions and a variety of other
factors beyond our control, such as rising global
inflation and the impact of the war in Ukraine on
the prices of commodities, also contribute to this
risk. To mitigate this risk, the Group continually
re-evaluates its operating model and cost
structure to identify innovative ways to
optimise our costs and improve profitability.
During the financial year, there was significant
inflation in the price of fuel (diesel) putting
pressure on our operating costs, particularly in
our Nigeria operation. This fuel price inflation
resulted in an opex increase of $245m in the
financial year attributed to increases in the cost
of diesel.
RISK
6
Leadership succession planning
We need to continually identify and develop
successors for key leadership positions across
our organisation to ensure minimal disruption
to the execution of our corporate strategy.
Our ability to execute our business strategies
depends in large part on the efforts of our key
people. In some of the countries in which
we operate, there is a shortage of skilled
telecommunications professionals. Any failure
to successfully recruit, train, integrate, retain
and motivate key skilled employees could have
a material adverse effect on our business, the
results of our operations, financial condition
and prospects.
1 Defined functional and leadership
development plans for critical roles
2 Building succession plans for Group
OpCo Executive Committees
3 Ongoing identification of high-
potential employees for talent
development
4 Talent mapping a larger talent pool
across Africa, Europe and Asia to
meet current and future business
needs
5 Long-term incentive arrangements
to encourage employee retention
and alignment to long-term
company objectives
1 Accelerated our ‘build’ strategy to
develop more internal talents and
high performers for leadership roles
2 Launched our ‘Women in Tech’
programme to accelerate female
leadership within the technology
functions of our organisation
3 Developing the diversity of our talent
pool through inter-OpCo transfers
in the form of short- and long-term
assignments
4 Developed and implemented
graduate programme across our
various OpCos
Cautious
Chief human
resources officer
94
Airtel Africa plc Annual Report and Accounts 2023
Key to our strategic pillars Win with technology Win with distribution Win with data Win with mobile money Win with cost Win with people Operational risks continued
Description of risk
How we mitigate this risk
Key developments in the year
Risk
appetite
Risk
owners
RISK
7
Internal controls and compliance
Gaps in our internal control and compliance
environment could affect our reputation and
lead to financial losses. Our financial reporting
is subject to the risk that controls may become
inadequate due to changes in internal or
external conditions, new accounting
requirements, or delays or inaccuracies in
reporting. We continue to implement internal
risk management and reporting procedures at
the Group and OpCo levels to protect against
risks of internal control weaknesses and
inadequate control over financial reporting.
1 Ongoing review and strengthening
of the Group’s internal controls over
financial reporting and compliance
processes
2 Review process for addressing and
mitigating findings from internal
audit, with oversight from the Audit
and Risk Committee
3 A robust system for assessing and
monitoring key controls across the
Group, and independent assurance
testing of these controls
1 Further enhancement to our Internal
Controls Over Financial Reporting
(ICOFR) framework with a focus on
our Airtel money business
2 Instituting an independent validation
process for our key controls
framework with a view to improving
the overall quality of control design
and execution across the
organisation
Averse
Chief financial
officer
RISK
8
Network resilience and business continuity
Our ability to provide quality of service to our
customers and meet quality of service (QoS)
requirements depends on the robustness and
resilience of our network and IT infrastructure
and our ability to respond appropriately to any
disruptions. Our telecommunications networks
are subject to risks of technical failures, aging
infrastructure, human error, wilful acts of
destruction or natural disasters. This can include
equipment failures, energy or fuel shortages,
software errors, damage to fibres, lack of
redundancy plans and inadequate disaster
recovery plans.
1 Implementing geographically
redundant disaster recovery sites to
provide back-up for our networks
and IT infrastructure across our
OpCos
2 Regular testing of fallback plans for
network and IT systems to ensure
reliability of switch over from active
to redundant nodes in the event of
a disaster
1 Disaster recovery sites are in place
for critical applications and disaster
recovery drills now occur at regular
intervals
Cautious
Chief technology
and information
officer
Airtel Africa plc Annual Report and Accounts 2023
95
Key to our strategic pillars Win with technology Win with distribution Win with data Win with mobile money Win with cost Win with people Risk
appetite
Risk
owners
Flexible
Chief financial
officer
STRATEGIC REPORT
Principal risks and mitigation continued
Financial risks
Description of risk
How we mitigate this risk
Key developments in the year
RISK
9
Exchange rate fluctuations and shortage of foreign currency
1 Renegotiating forex-denominated
contracts to local currency contracts
2 Hedging foreign currency
denominated payables and loans,
and matching assets and liabilities,
where possible
3 Adequate funding arrangements
to mitigate any short-term liquidity
constraints caused by fluctuations
in forex supply
4 Geographical diversification
enables access to liquidity across
our footprint
1 Early redemption of $450m of the
Group’s senior notes due in 2024,
reducing the Group’s foreign
currency debt (see page 189)
2 Signing of a $194m facility with the
International Finance Corporation
(IFC) to support operations and
investments in some of our markets
and diversify access to local funding
(see page 113)
Our multinational footprint means we are
constantly exposed to the risk of adverse
currency fluctuations and the macroeconomic
conditions in the markets where we operate. We
derive revenue and incur costs in local currencies
where we operate, but we also incur costs in
foreign currencies, mainly from buying equipment
and services from manufacturers and technology
service providers. That means adverse
movements in exchange rates between the
currencies in our OpCos and the US dollar
could have a negative effect on our liquidity and
financial condition. In some markets, we face
instances of limited supply of foreign currency
within the local monetary system. This negatively
impacts our ability to make timely foreign
currency vendor payments and constrains our
ability to fully benefit at the Group level from
strong cash generation by those OpCos.
Given the severity of this risk, specifically in some
of our OpCos, Group management continuously
monitors the potential impact of this risk of
exchange rate fluctuations based on the
following methodology:
a) Comparing the average devaluation of each
currency in the markets in which the Group
operates against US dollar on a three-year and
five-year historic basis and onshore forward
exchange rates over a one-year period.
b) If either of the above devaluations is higher
than 5% per annum, management selects the
highest of these exchange rates.
c) Management then uses this exchange rate to
monitor the potential impact of using that rate on
the Group’s income statement so that the Group
can actively monitor and assess the impact on
the Group’s financials.
Based on the this methodology, the weighted
average yearly potential devaluation of the basket
of currencies in which the Group is exposed is
estimated to be in the range of 7% to 8%.
With respect to currency devaluation sensitivity,
on a 12-month basis, a 1% currency devaluation
across all currencies in our OpCos would have a
negative impact of $51m on revenues, $31m on
EBITDA and $23m on finance costs (excluding
derivatives). Our largest exposure is to the
Nigerian naira, for which a 1% devaluation would
have a negative impact of $22m on revenues,
$12m on EBITDA and $7m on finance costs
(excluding derivatives).
This does not represent any guidance and is
being used solely to illustrate the potential impact
of further currency devaluation on the Group for
the purpose of exchange rate risk management.
The accounting under IFRS is based on exchange
rates in line with the requirements of IAS 21 ‘The
Effect of Changes in Foreign Exchange’ and does
not factor in the above-mentioned devaluation.
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Airtel Africa plc Annual Report and Accounts 2023
Key to our strategic pillars Win with technology Win with distribution Win with data Win with mobile money Win with cost Win with people Governance and compliance risk
Description of risk
How we mitigate this risk
Key developments in the year
Risk
appetite
Risk
owners
RISK
10
Non-compliance to legal and regulatory requirements
We operate in diverse legal and regulatory
environments. Establishing and maintaining
adequate procedures, systems and controls
enables us to comply with our obligations for
the services we provide to our customers in
all the jurisdictions where we operate.
In some of our markets, we are faced with
the risk of unanticipated changes in the legal
and regulatory environment and compliance
requirements exposing us to adverse
financial and reputational impact.
1 Instituting various policies across the
Group to comply with compliance
obligations in jurisdictions where
we operate
2 Continuing engagement with
regulators and active participation in
industry bodies on key policy matters
3 Implementing a regular compliance
tracking process, identifying root
causes for cases of non-compliance
and taking corrective actions
4 Implementing an escalation process
for reporting significant matters to
the Group office
5 Communicating with and training
employees on relevant company
policies
1 Preparatory work is underway by
Airtel Uganda to comply with Article
16 of Uganda’s National Telecom
Operator (‘NTO’) licence requiring
the local listing of 20% of its shares
by the deadline of 16 December
2023 (see page 23)
2 Our chief regulatory officer was
appointed as the Chair of the GSMA
sub-Saharan Africa Policy Group,
an industry group which focuses
on issues relating to public policy,
regulation, spectrum management
and advocacy
Averse-
cautious
Chief legal officer and
chief regulatory officer
Emerging risks
Climate change: we continue to evaluate the potential impact of
climate change on our business operations and on the economies
in which we operate. In October 2021, we launched an ambitious
sustainability strategy that underpins our well-established corporate
purpose of transforming lives. As part of our ‘reduction of greenhouse
gas (GHG) emissions’ goal, our ambition is to achieve net zero
emissions ahead of the 2050 deadline set out in the Paris Agreement.
To achieve this, we understand the importance of fully identifying,
measuring, and reducing GHG emissions which can only be achieved
in partnership with our peers and the wider industry.
In January 2022, we engaged The Carbon Trust, one of the world-
leading environmental consultancies, for their advice and assistance
with several aspects of our GHG emissions measurement,
management, and reporting. In October 2022 we published our first
Sustainability Report 2022 where we set out the framework for our
decarbonisation strategy and published our baseline GHG emissions.
For more details, see pages 38-55.
In addition, we plan to launch a sector-leading and credible
decarbonisation strategy which we will be publishing on our website
www.airtel.africa
Operating a uniform risk management
framework across our operating footprint
allows for consistency of approach and
puts us in good stead to deal with and
respond to our constantly changing
environment.
Peter Odedina
Chief compliance officer
Airtel Africa plc Annual Report and Accounts 2023
97
Key to our strategic pillars Win with technology Win with distribution Win with data Win with mobile money Win with cost Win with people STRATEGIC REPORT
Our long-term viability statement
The preparation of this long-term viability statement
involved the Board reviewing the Group’s long-term
prospects and ability to meet future commitments
and liabilities as they fall due over the three-year
review period, including scenario analysis on
liquidity events through stress and sensitivity
tests to assess the resilience and strength of
our forecasts.
Viability statement of Airtel Africa plc
In accordance with provision 31 of the 2018 UK Corporate
Governance Code, the Board assessed our long-term strategic
prospects, as well as the ability of the Group to meet future
commitments and liabilities as they fall due within the
assessment period.
The Group prepares a ten-year strategic business plan which is used
for long-term forecasting purposes and impairment testing (including
strategic decisions such as capital investment) and is aligned with the
average life of our regulatory licences and network assets and the
potential opportunities in the under-penetrated emerging African
telecom sector.
For the purpose of our long-term viability assessment, the Board
primarily focuses on liquidity and assesses the Group’s long-term
viability assessment over a three-year period for the following reasons:
• Our three-year liquidity plan matches the average tenure of our
financing arrangements and;
• Key macro and political developments which impact on our
headroom and liquidity include currency devaluation, inflation,
fiscal policies and sovereign credit ratings. Our visibility of impact
that these factors have on debt markets generally reduces past
three years.
While the Board believes the Group will be viable over a longer period,
given the inherent estimation uncertainty involved in forecasting
liquidity assumptions over a longer period, the Board concluded that
a three-year period provides a reasonable degree of confidence
while still retaining a longer-term perspective. Although our long-term
viability assessment is performed over a three-year period, which
matches the current tenure of our financing arrangements as a matter
of prudence, the Group also assessed viability on a five-year time
horizon. Given the maturities of our existing financing arrangements,
which are materially within the three-year period, the assessment on
this five-year period did not result in material changes in conclusion
as compared to the three-year assessment period. For goodwill
impairment test, the Group has used a ten-year period, taking into
account the nature of markets in which the Group operates, the
period of its licences, etc. as against the three-year period for
viability assessment which focuses on the Group’s liquidity plan.
In assessing the Group’s prospects, the directors considered 5G
cellular network potential in the markets in which the Group operates.
The Group’s first endeavour is to secure spectrum for 5G launch and
roll out 5G network in key markets. During the financial year, the Group
secured 5G spectrum in Nigeria, Kenya, Zambia and Tanzania and will
selectively launch 5G services in these markets. Given the relatively
low 4G customer penetration in the countries where it operates, the
Group will continue to focus on its strategy to expand its data services
and increase data customer penetration by leveraging and expanding
its leading 4G network.
This assessment is prepared based on our strategy, and adequate
sensitivity and stress tests have been conducted through various
scenarios, both individually and collectively, based on our overall risk
assessment framework.
98
Airtel Africa plc Annual Report and Accounts 2023
Board’s assessment
Assessment period
The viability assessment
is based on our current
business model (see
page 24 of this report),
a three-year prospect
horizon, and our strategy
(see pages 26-37).
Principal risk
assessment
Our risk evaluation is
described on pages 90-97.
While each principal risk
has been carefully
evaluated both individually
and collectively, and an
adequate monitoring and
mitigation plan has been
defined, we have also
considered sensitivity
analysis and stress tests
on the three-year
projections.
Long-term prospects
and headroom analysis
Our three-year plan has
been prepared considering
organic growth potential
in the geographies where
we operate.
Scenario analysis
We have quantified the
impact of sensitivities
on cash and liquidity
headroom availability, both
individually and collectively,
in reasonable worst-case
scenario. In assessing the
impact of sensitivities
on cash and liquidity
headroom, we have
considered various
mitigating actions which
could be undertaken to
ensure sufficient liquidity.
Assessment of headroom based on forecast cash flows and
sensitivities to assess our ability to meet future commitments
and liabilities as they fall due over the next three years.
Our multinational footprint means we are constantly exposed to
the risk of adverse currency fluctuations and the macroeconomic
conditions in the markets where we operate. We derive revenue and
incur costs in local currencies where we operate, but we also incur
costs in foreign currencies, mainly from buying equipment and
services from manufacturers and technology service providers. That
means adverse movements in exchange rates between the currencies
in our OpCos and the US dollar could have a negative effect on our
liquidity, financial condition, and long-term prospects. In some markets
(especially Nigeria and certain East African OpCos), we face instances
of limited supply of foreign currency within the local monetary system.
This not only constrains our ability to fully benefit at the Group level
from strong cash generation by those OpCos but also impacts our
ability to make timely foreign currency payments to our international
suppliers. Given the severity of this risk, specifically in some of our
OpCos, Group management continuously monitors the potential
impact of this risk of exchange rate fluctuations as well as the limited
supply of foreign currency and performs stress tests while assessing
the Group’s liquidity and prospects. The Group factors in the limited
supply of foreign currency by way of considering potential devaluation,
noting that an actual devaluation in future might result in better
availability of foreign currency.
Additionally in some markets, our operating costs are subject to
fluctuations in global commodity prices, market uncertainty, and
energy costs (such as diesel and electricity). Prevailing macroeconomic
conditions and a variety of other factors beyond our control, such as
rising global inflation and the impact of the war in Ukraine on the
prices of commodities, also contribute to this risk. To mitigate this risk,
the Group continually re-evaluates its operating model and cost
structure to identify innovative ways to optimise our costs and improve
profitability.
The company ended the year in a strong financial position. Net cash
generated from operating activities increased by 9.8% in the last 12
months to $2.2bn, and our net debt to EBITDA ratio is 1.4x at the end
of this financial year. Our cash balances, in conjunction with $525m of
committed undrawn facilities at the date of approval of these financial
statements, ensure we can continue to meet our financial obligations.
During the year, we repaid approx. $450m of bonds earlier than
their redemption date in May 2024. We were able to make these
repayments because of our increased cash generation. Post these
repayments, only $550m of long-term bonds will remain outstanding
for the Group, with maturity falling in May 2024.
The Group will continue to benefit from population growth and the
need for increased connectivity and financial inclusion in the medium
to long term in the countries where we operate. In this respect, in
2022/23, the Group invested about $1.2bn in capex, $748m in
tangible capex, and $500m in spectrum acquisition in line with
guidance. The vast majority of this capital expenditure is aimed at
continuing to capture the growth opportunities across our footprint
by increasing the coverage and capacity of our network as well as
expanding our distribution.
The key risks considered in the stress tests, keeping in mind the
demographic and sectoral dynamics along with their potential
negative impacts, are detailed in the table below:
Sensitivity
performed
Link to principal risks
and uncertainties
Description
Slowdown in
revenue
growth
• Adverse competition and
market disruption
• Technology obsolescence
• Network resilience and
business continuity
• Digitalisation and innovation
• Cyber and information
security threats
• Increase in cost structure
• Digitalisation and innovation
• Uncertain and constantly
evolving legal and regulatory
requirements and
environment
• Internal controls and
compliance
Increase in
operating
expenses
Unanticipated
regulatory
and tax levies
Exchange
rate
fluctuation
• Exchange rate fluctuation
and shortage of foreign
currency
Revenue is projected on a number of assumptions such as subscriber base, rates and
change in average revenue per user. A change in any of the assumptions due to adverse
competition and market disruption may affect overall revenue growth. In most cases,
changes in one such assumption (e.g., in rates) are compensated either fully or marginally
by a corresponding change in other variables (e.g., subscriber base). Changes not fully
compensated lead to a reduction in the rate of revenue growth. We have modelled stress
test scenarios for various levels of slowdown across segments and revenue streams.
With operations spread across 14 markets and each country having a different economic
and business environment, there is always a risk of operating costs increasing beyond
projected levels.
As we work in diverse and dynamic legal environments, it’s necessary to establish and
maintain adequate procedures, systems and controls to ensure we comply with our
obligations in all the jurisdictions in which we operate. There will always be a risk of
unanticipated regulatory and tax levies affecting our profitability and, therefore, additional
tax and regulatory levies have been considered in the stress tests.
We are constantly exposed to the risk of adverse currency fluctuations, given our operations
in 14 different markets with different functional currencies. Furthermore, we could face low
availability of foreign currency in some of our markets constraining our ability to fully benefit
at the Group level from the strong cash generation of our local businesses.
We have stress tested the plan for various levels of currency devaluation across operating
entities, including the risk of availability of foreign exchange, leading to repatriation of cash
from operating entities to the Group holding companies and the resulting impact on cash
flows and liquidity headroom at the Group level.
As part of our assessment, in considering the above sensitivities we
have also factored in possible mitigations against such sensitivities.
None of the sensitivities (net of possible mitigations) impact our
opening headroom by more than 10%.
Conclusion
The results of stress-testing our forecasts over the three-year period
for the above sensitivities demonstrate that the Group will be able to
withstand these impacts over the period of its financial forecasts. The
Board has a reasonable expectation that no single event or plausible
combination of events would affect long-term viability, even under the
severe stress tests, and the Group would be able to continue operating
and meet its liabilities over the three-year period.
In order to reach this conclusion, the Board has considered:
• Possible actions to mitigate the impact of risks in the severe stress
tests, including limiting or delaying discretionary capital expenditure
without compromising on network quality, optimising operating
expenditure and reducing or stopping dividend payments.
• Accessing additional funding, including financing facilities and
access to the debt capital markets in order to repay debt which
matures over the three-year period while maintaining adequate
liquidity headroom.
• The internal and external environment, current and long-term
prospects, and the strategic intents and directions adopted
by management.
• The risk framework, potential sensitivities around the principal risks
and mitigating factors.
The Board has concluded that the Group would be in a position to
access debt capital markets and meet our financing needs as and
when required.
Based on this assessment and in accordance with requirements of
provision 31 of the 2018 UK Corporate Governance Code, the Board
has concluded that we have the ability to continue our operations
and be able to meet our commitments and liabilities over the
assessment period.
The strategic report was approved by the Board of directors on
10 May 2023 and signed on its behalf by:
Olusegun Ogunsanya
Chief executive officer
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
99
GOVERNANCE REPORT
Governance
report
102 Our Board of directors
98 Our Executive Committee
100 Chair’s statement
102 Our leadership
107 Board evaluation
108 Audit and Risk Committee report
118 Nominations Committee report
123 Our compliance with the UK Corporate Governance Code
125 Directors’ report
129 Directors’ responsibilities statement
130 Directors’ remuneration report
100 Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023 101
GOVERNANCE REPORT
Our Board of directors
Sunil Bharti Mittal
Chair
N
Date appointed to Board: July 2018
Independent: no
Age: 65
Nationality: Indian
Skills, expertise and contribution
Sunil is the founder and chairperson of Bharti Enterprises, one of India’s foremost
first-generation corporations with interests in telecoms, financial services, processed
food, real estate and hospitality. Bharti Airtel, the flagship company of Bharti
Enterprises, is a global telecommunications company operating in 17 countries
across South Asia and Africa and ranking among the top three mobile operators
globally. Airtel is one of India’s largest integrated telecoms providers and the
second-largest mobile operator in Africa, serving over half a billion customers.
Sunil is the pioneering force behind the mobile revolution in India – he revolutionised
the business model at Bharti Airtel to make affordable voice and data services
available to all. Airtel has transformed the quality of lives of millions of people
globally, providing connectivity and digital empowerment. As chair of the Board, his
leadership has brought immense value to Airtel Africa through his futuristic vision,
vast knowledge and industry expertise.
In 2020, Sunil led Bharti Global’s partnership with the UK government to acquire
OneWeb, a new-age space communications company. This will provide high-speed,
low-latency broadband connectivity for the defence sector in remote areas and on
maritime and aviation routes around the world.
Sunil is a recipient of the Padma Bhushan, one of India’s highest civilian honours.
External commitments
• Founder and chairperson of Bharti Enterprises and Bharti Airtel
• Chairperson of OneWeb Holding Limited
• Member of the International Business Council, World Economic Forum (WEF)
• Member of the Global Board of Advisors, Council of Foreign Relations (CFR)
• Commissioner of the Broadband Commission
• Trustee at the Carnegie Endowment for International Peace (CEIP)
• Member of the Board of Qatar Foundation Endowment (QFE)
• Member of the India-US, India-UK and India-Japan and India-Sweden CEO Forums
• Co-chair of the India-Africa Business Council
• Chair of the B20 Action Council on African Economic Integration (under the Indian
government’s G20 presidency)
Previous roles
Sunil has served on the boards of several international bodies. He was the
chairperson of the International Chamber of Commerce (ICC) from June 2016 to
June 2018 and the chairperson of GSM Association (GSMA) from January 2017 to
December 2018. He was the president of the Confederation of Indian Industry (CII)
from 2007 to 2008. Sunil is associated with spearheading Indian industry’s global
trade, collaboration and policy – he has served on the Prime Minister of India’s
Council on Trade and Industry.
Sunil has also served on the boards of several multinational companies including
Unilever, Standard Chartered Bank and SoftBank Corp.
Sunil is a nominee of Bharti Airtel.
Olusegun Ogunsanya
Managing director and
Chief executive officer
M S
Date appointed to Board: October 2021
Independent: no
Age: 56
Nationality: Nigerian
Skills, expertise and contribution
Segun joined the Board after 10 years as managing director and CEO of our Nigeria
operations, with responsibility for our largest market in Africa. He brings a depth of
knowledge about African markets and more than 25 years of business management
experience in banking, consumer goods and telecoms. Segun attends all Board
meetings, Audit and Risk Committee and Sustainability Committee meetings and is
invited to attend the Remuneration and Nominations Committee meetings.
Other commitments
Board member of Bharti Airtel International (Netherlands) B.V., Bharti Airtel Africa B.V.,
Airtel Mobile Commerce B.V. and Airtel Networks Limited – all subsidiaries of
the Group.
Previous roles
Before joining Airtel in 2013, Segun held leadership roles at Coca-Cola’s bottling
operations in Ghana, Kenya and Nigeria (as CEO). He has also been the managing
director of Nigerian Bottling Company Ltd (Coca-Cola Hellenic owned) and head of
retail banking operations at Ecobank Transnational Inc, covering 28 countries in
Africa. Segun is a chartered accountant and an engineer. He was awarded African
Business Leader of the Year in September 2021.
Jaideep Paul
Chief financial officer
S
Date appointed to Board: June 2021
Independent: no
Age: 61
Nationality: Indian
Skills, expertise and contribution
Jaideep brings more than 30 years of leadership and financial experience to our
Board, with 18 of these in the telecoms industry. He chairs our Finance Committee
and attends all Board meetings, Audit and Risk Committee and Sustainability
Committee meetings.
Other commitments
Board member of Bharti Airtel International (Netherlands) B.V., Bharti Airtel Africa B.V.
and Airtel Networks Limited – all subsidiaries of the Group.
Previous roles
Before becoming our chief financial officer in 2014, Jaideep was CFO at Airtel Nigeria,
Fairtrade LLC Muscat and Bharti Retail. He has also held financial roles at Mumbai
Circle and Bharti Airtel Delhi Circle, as well as senior roles at HCL, Telstra V-Com
and Caltex. Jaideep started his career at Pricewaterhouse and is a qualified
chartered accountant.
102 Airtel Africa plc Annual Report and Accounts 2023
102 Airtel Africa plc Annual Report and Accounts 2023
Key to committeesAR Audit and Risk CommitteeN Nominations CommitteeR Remuneration CommitteeM Market Disclosure CommitteeS Sustainability Committee Committee chair Andrew Green CBE
Senior non-executive director
N AR M
Date appointed to Board: April 2019
Independent: yes
Age: 67
Nationality: British
Skills, expertise and contribution
Andy brings many years of global financial and strategic experience to the Board.
Through his work with a number of multinational organisations, he can draw on a
wide knowledge of diverse issues and outcomes to provide constructive challenge
and robust scrutiny of matters that come before the Board.
External commitments
• Group chair of Simon Midco Limited (the holding company of Lowell Group)
• Chair at Gentrack Group Limited (NZX/ASK)
• Non-executive director at Link Administration Holdings Limited (ASX)
• Commissioner at the National Infrastructure Commission
• Trustee of WWF UK
• Chair of Water Aid UK
Previous roles
Andy was previously senior independent director of ARM Holdings plc and
chairperson of the Digital Catapult and IG Group plc. He was chief executive officer
of Logica plc until its sale in 2012. His prior roles include those at BT Group plc,
including CEO of BT Openworld, CEO of BT Global Services and CEO of Group
Strategy and Operations and various roles at Shell and Deloitte. Andy has held a
number of non-executive directorships in the US, Hong Kong, Germany and the UK.
Awuneba Ajumogobia
(née Iketubosin)
Non-executive director
R AR
Date appointed to Board: April 2019
Independent: yes
Age: 64
Nationality: Nigerian
Skills, expertise and contribution
Awuneba is a chartered accountant with broad experience in assurance, taxation,
finance and advisory services across several industries. Her expertise as an
assurance and finance specialist, garnered at leading professional services firms
and in the Nigerian market, make her instrumental to Board decision-making.
External commitments
• Executive director at Multistream Energy Limited
• Board chair at CAP Plc
• Governing council chair at Grange School, Lagos
• Board member of University of Ibadan Research Foundation
• Member of the Finance Committee of the Musical Society of Nigeria (MUSON)
• Executive council member of Women in Management, Business and Public Service
(WIMBIZ)
Previous roles
Awuneba was a board member at UAC of Nigeria PLC (UACN) from 2009 to 2019.
During her tenure, she chaired the Risk Management Committee and was a
member of the Statutory Audit Committee. Prior to this, she developed her career
at Peat Marwick, Deloitte and Accenture. Awuneba has also held advisory and
implementation roles with a number of national development projects in Nigeria.
Douglas Baillie
Non-executive director
N R M
Date appointed to Board: April 2019
Independent: yes
Age: 67
Nationality: British
Skills, expertise and contribution
Doug brings vast leadership experience in both private and public sectors to the
Board and his role as the chair of the Remuneration Committee. His background in
diverse leadership roles and human resources is particularly useful to the Board
when considering the Airtel Africa culture, employee management, executive
remuneration and other employee-related activities.
External commitments
• Vice chairperson of the MasterCard Foundation
• Director of the Leverhulme Trust
• Non-executive director of the Huhtamaki Group
Previous roles
Doug spent 38 years at Unilever, where his roles included president of Western
Europe in the Netherlands until 2011, Group vice president of South Asia, CEO
Hindustan Unilever in India until 2008, Group vice president Africa and the Middle
East from 2004 until 2006, and chief HR officer from 2011 until 2016.
John Danilovich
Non-executive director
R
Date appointed to Board: April 2019
Independent: yes
Age: 72
Nationality: American
Skills, expertise and contribution
John has held executive leadership roles in international business and government
for several decades. As a global business leader and distinguished diplomat, he has
extensive experience in regional and international trade-related issues. To Airtel
Africa, he brings skills in building international partnerships and advocacy with
policymakers, foreign dignitaries and business leaders, and provides constructive
challenge and robust scrutiny of matters that come before the Board.
External commitments
• Board and council member at the Harvard Chan School of Public Health, the Center
for Strategic International Studies (CSIS) and Chatham House (UK)
• Member of the Council on Foreign Relations (New York) and of the American
Academy of Diplomacy
Previous roles
John was Secretary General of the International Chamber of Commerce (ICC) in
Paris from 2014 to 2018 and CEO of the Millennium Challenge Corporation in
Washington from 2005 to 2009. He has been the US ambassador to Brazil and
to Costa Rica. While on the board of the Panama Canal Commission, he acted as
chairperson of the Commission’s Transition Committee prior to the handover of the
canal by the US to Panama. In his distinguished career, he also played a significant
role in the Central American Free Trade Agreement (CAFTA).
Airtel Africa plc Annual Report and Accounts 2023 103
103
Airtel Africa plc Annual Report and Accounts 2023
GOVERNANCE REPORT
Our Board of directors continued
Tsega Gebreyes
Non-executive director
R
Date appointed to Board: October 2021
Independent: yes
Age: 53
Nationality: Ethiopian
Ravi Rajagopal
Non-executive director
AR N M
Date appointed to Board: April 2019
Independent: yes
Age: 67
Nationality: British
Skills, expertise and contribution
Tsega brings deep financial services and commercial experience to the Board
gained from global senior executive and non-executive roles in the financial
services, international business, mergers and acquisitions, mobile commerce
and technology sectors.
External commitments
• Board member of London Stock Exchange Group
• Founding director at Satya Capital Limited
Previous roles
Tsega formerly served as vice-chair and chair of the Finance Committee of SES SA.
She spent seven years at Celtel International (re-branded Zain Group), a leading
mobile telecommunications provider in the Middle East and North Africa. During her
time at Celtel, Tsega held various senior roles including senior group adviser for Zain
Africa BV, chief strategy and development officer, chief business development and
mergers & acquisitions officer, and director of Mobile Commerce and New Product
Development. From 1996 to 2000, Tsega was founding partner at New Africa
Opportunity Fund LLP.
In addition to her senior executive positions, Tsega has served as a non-executive
director of Celtel International BV, Hygeia Nigeria Limited, ISON Group and Sonae SA.
She has also been a trustee of the global charity Save the Children.
Skills, expertise and contribution
With experience in diverse industries such as healthcare and consumer brands, as
well as in chairing other audit committees, Ravi brings a wealth of recent financial
experience and cultural insight to our Board and Audit and Risk Committee.
External commitments
• Chairperson of Fortis Healthcare Limited, India
• Chairperson of SRL Diagnostics, a subsidiary of Fortis Healthcare, India
• Vice chair, Peabody Housing, UK
• Trustee of the Science Museum Foundation, UK
Previous roles
Ravi held financial leadership roles at Diageo until retiring in 2015, including group
controller in the UK with responsibility for the spirits business across sub-Saharan
Africa and global head of mergers and acquisitions. Starting in 1979, Ravi held
various roles at ITC India, including a secondment to West Africa with British
American Tobacco. He has held numerous positions on various joint venture boards
and was a non-executive director of United Spirits, a listed subsidiary of Diageo in
India, as well as a member of Diageo’s India advisory board. More recently, Ravi was
an independent director and chair of the Audit Committee of Vedanta Resources
Limited, UK and chairperson of JM Financial, Singapore Pte Ltd.
Annika Poutiainen
Non-executive director
AR S
Date appointed to Board: April 2019
Independent: yes
Age: 52
Nationality: Finnish
Skills, expertise and contribution
Annika’s wide-ranging experience in audit and regulatory engagements contributes
to her performance as a member of the Board and Audit and Risk Committee. With
her legal background and deep knowledge of auditing, accounting and financial
reporting, she brings a keen scrutiny to all governance and regulatory matters.
Annika is our Board sustainability champion.
Industrial advisor to strategic communications firm Kekst CNC
External commitments
•
• Member of the Swedish Audit Academy
• Member of the Nasdaq Helsinki Listing Committee
• Chair of the Carpe Diem Foundation, which runs the top-ranked Swedish elementary
school, Fredrikshovs Slott Skola
• Board member and chair of audit committee of Truecaller
• Advisory Board member of Unzer Group GmbH
Previous roles
Annika has been executive chair of the Council for Swedish Financial Reporting
Supervision; a board and audit committee member of listed companies eQ Abp,
Hoist Finance AB, Saferoad AS (delisted in September 2018) and Swedbank AB;
and industry advisor to strategic communications firm JKL Group. She advised the
Swedish government on the national implementation of the reformed EU market
abuse regime and was head of market surveillance Nordics at Nasdaq and head
of unit, prospectuses, exchanges and clearing houses at the Swedish Financial
Supervisory Authority. She was also an associate in the Capital Markets Group at
Linklaters London and has been a practising solicitor in the UK.
104 Airtel Africa plc Annual Report and Accounts 2023
Kelly Bayer Rosmarin
Non-executive director
Date appointed to Board: October 2020
Independent: no
Age: 46
Nationality: Australian
Skills, expertise and contribution
Kelly brings to the Board a unique blend of technology, commercial and management
expertise from a career spanning financial services, management consulting, the
Silicon Valley tech sector and telecoms. She also brings valuable acumen in
leadership, banking, risk management, regulated markets and innovation at scale.
Kelly has an impressive track record of delivering results, growing and operating large
global businesses. She is known for her expertise in leveraging technology, data and
analytics to develop leading customer services and experience.
In 2021, Kelly was named one of the top 3 tech CEOs in Australia and top 10 global
5G Leaders. She has also been named one of the Top 25 Women in Asia Pacific
Finance, the Top 10 Businesswomen in Australia, and 50 Most Powerful Women in
Australian Business. Kelly is Singtel’s nominee to our Board.
External commitments
• CEO at Singtel Optus Pty Limited and member of the Singtel Management
Committee
• Non-executive director at REA Group Ltd (ASX)
• Member of Chief Executive Women
• Elected as a Fellow of the Australian Academy for Technology, Science and
Engineering (ATSE)
Previous experience
Kelly has held a variety of executive roles, including Group Executive, Institutional
Banking and Markets on the executive team of the Commonwealth Bank of Australia.
Her career began in Silicon Valley with both start-ups and established software
companies working in product development, business development, marketing,
M&A and strategy. After a stint as a management consultant with the Boston
Consulting Group, Kelly joined Commonwealth Bank in 2004 and held a variety of
senior roles across the Institutional and Business Banking divisions, before being
appointed to the bank’s executive in 2013.
Kelly has previously been a board member at OpenPay, the Football Federation
of Australia (FFA) and served on the University of New South Wales Engineering
Faculty Advisory Board, the Australian Government’s FinTech Advisory Group and
NSW Government Digital Advisory Panel.
Akhil Gupta
Non-executive director
Date appointed to Board: October 2018
Independent: no
Age: 66
Nationality: Indian
Board age (years)
Board age (years)
Board tenure (years)
Board age (years)
70–79
8%
20–39
8%
40–49
8%
4-5 years
3
2-3 years
4
60–69
53%
50–59
23%
3-4 years
6
Skills, expertise and contribution
Akhil brings vast financial, strategic and telecoms expertise to our Board and is
invited to attend our Audit and Risk Committee meetings. He has played a pivotal
role in the Bharti Group’s phenomenal growth in the telecoms sector, both organically
and through various acquisitions. His innovative thought leadership has helped
Bharti Airtel achieve healthy margins while offering some of the lowest tariffs in
the world.
External commitments
• Vice chairman of Bharti Enterprises
• Chairman of Digital Infrastructure Providers Association (DIPA)
• President of Telecom Sector Skill Council (TSSC)
• Board member of OneWeb Holdings Limited
Board nationality
Board nationality
Board ethnicity
Board nationality
Ethiopian
8%
Finnish
8%
British
30%
White
5
Nigerian
16%
American
8%
Australian
8%
Asian British/
Indian
5
Previous roles
Akhil led the formation of various partnerships for Bharti with operators like British
Telecom, Telecom Italia, Singapore Telecom and Vodafone, as well as with financial
investors such as Warburg Pincus, Temasek, KKR, Qatar Foundation Endowment, AIF
and Sequoia. He was behind the separation of passive mobile infrastructure and the
formation of one of the largest tower companies in the world, Indus Towers Ltd – a
notable example of collaborating at the back end while competing at the front end.
He also executed the acquisition of Zain Group’s mobile operations in 15 countries
across Africa, the second-largest outbound deal by an Indian company.
Akhil is a nominee of Bharti Airtel.
Indian
23%
Black African
3
Board gender ratio
Board gender ratio
Board gender ratio
Board gender ratio
Independent non-executive
directors
Women
31%
Female
3
Male
4
Shravin Bharti Mittal
Non-executive director
Men
69%
Date appointed to Board: October 2018
Independent: no
Age: 34
Nationality: British
Skills, expertise and contribution
As the entrepreneurial founder of a top-performing global technology investment
firm, Shravin brings diverse views and expertise in the tech sector to our discussions
and decision-making. He is invited to attend our Remuneration Committee meetings.
External commitments
• Founder of Unbound, a long-term investment firm aiming to build and back disruptive
technology companies
• Managing director of Bharti Global Limited
• Board member of OneWeb Holdings Limited
• Board member of technology companies mPharma, Omni:us, Syfe, Paack, Aurora,
VAHA and Forto
Previous roles
Shravin was previously at SoftBank Vision Fund, a $100 billion fund investing in
technology companies, and assistant director at Better Capital, a private equity firm
in London where he turned around distressed retail and manufacturing businesses.
Before this, he was involved in the launch of 3G at Airtel India and on the senior
management team at Airtel Africa, where he spearheaded the post-acquisition
integration of Zain. Before Airtel, he worked with J.P. Morgan investment bank
covering technology, media and telecoms.
Shravin is a nominee of Bharti Airtel.
Airtel Africa plc Annual Report and Accounts 2023
105
Key to committeesAR Audit and Risk CommitteeN Nominations CommitteeR Remuneration CommitteeM Market Disclosure CommitteeS Sustainability Committee Committee chair GOVERNANCE REPORT
Our Executive Committee
Chief executive
officer
Chief financial
officer
Olusegun Ogunsanya
Jaideep Paul
Our executive
leadership is working
together to ensure
our business is
financially robust
for the long term.
Jaideep Paul
Chief financial officer
The Executive
Committee has the
experience and
skillset that serve
Airtel Africa well as
we move into the
future and continue
to deliver on our
‘Win with’ strategy.
Olusegun Ogunsanya
Chief executive officer
106 Airtel Africa plc Annual Report and Accounts 2023
Segment and/or regional directors
Ian Ferrao
CEO, Airtel Money
Ian was appointed as chief executive
officer of Airtel Money in 2022.
He leads our Airtel Money business –
managing its financial performance,
strategic direction and priorities, brand
strength and growth in customers.
Before this appointment, Ian was
regional director, East Africa.
Ian has spent the last 16 years leading
telecoms organisations in Africa, both
as an entrepreneur and a corporate
CEO. He joined Airtel Africa and the
ExCo in 2019 to lead our East Africa
operations in Kenya, Tanzania,
Uganda, Rwanda, Zambia and Malawi.
Before Airtel Africa, Ian was the CEO
for Vodacom Tanzania, where he led
the company’s IPO on to the DSE.
He’s also served as CEO of Vodacom
Lesotho, CCO for Vodacom Business
Africa, and commercial director and
shareholder of AfriConnect Zambia.
Business head
Luc Serviant
Group enterprise director
Luc leads our enterprise business
strategy. This includes helping SMEs,
corporate and government customers
across Africa adopt fixed and mobile
network solutions to accelerate their
growth, digital transformation and
business productivity.
Luc has more than 26 years’
international experience in marketing
and implementing core network and
ICT solutions for the enterprise sector.
He has held various roles at Orange
Business Services – from head of
global services in Switzerland to head
of consulting and solutions integration
APAC in Singapore, and most recently
as vice president Middle East and
Africa, based in Dubai. He has also
held a variety of positions at SITA
(Société Internationale de
Télécommunications Aéronautiques),
Global One Telecommunications and
Alcatel-Lucent.
Luc has been an ExCo member since
joining Airtel Africa in 2019.
Apoorva Mehrotra
Regional director
East Africa
Apoorva is responsible for managing
our financial performance and
accelerating profitable growth in East
Africa. He works with the MDs in each
market to develop strategy and
execution plans, helps develop local
leadership teams, and improves the
coordination between Group level and
local operating teams.
Apoorva has over 28 years’ experience
in operations, sales and marketing
across the telecoms, consumer
durables and FMCG sectors. Apoorva
joined Airtel as chief commercial officer
in Zambia in April 2017 and was
promoted to managing director in
April 2018. Before joining Airtel Africa,
he spent 14 years at Vodafone India,
where his last role was as executive
vice president and business head for
the Delhi NCR Circle.
Michael Foley
Regional director
Francophone Africa
Michael has been an ExCo member
since joining Airtel Africa in 2020. He
is responsible for managing financial
performance and accelerating
profitable growth in our Francophone
Africa operations. Michael works with
MDs in each market to develop
strategy and execution plans, helps
develop local leadership teams and
improves the coordination between
Group level and local operating teams.
Over the last 35 years, Michael has led
telecoms, consumer goods, fintech
and gaming businesses in the US,
Asia and Africa, as well as in his native
Canada. His most recent role was
as CEO of Telenor’s operations in
Pakistan, Bulgaria and Bangladesh.
Carl Cruz
Managing director and
CEO Airtel Networks
Limited (Nigeria), with
effect from 5 May 2023
Carl was appointed Regional
Operating Director on 5 May 2023,
joining the Airtel Africa ExCo as well as
the Airtel Networks Limited (Nigeria)
Board. He brings over 30 years of
experience in sales, distribution,
customer and brand development,
and trade and commercial functions
at Unilever. He has held leadership
positions with Unilever around the
world, including in his most recent role
as CEO and Managing Director: West
Africa. His board experience includes
being Executive Director in Unilever
Nigeria Plc, a non-executive Director
on the Unilever Ghana board, and
formerly as chairman and managing
director of Unilever Sri Lanka.
Razvan Ungureanu
Chief technology
and information officer
Razvan leads on our technology
strategy and the delivery of this to
the network leadership in each of our
14 markets. He focuses on strategic
network thinking, design, rollout and
the quality of our ongoing technical
operations.
Razvan has 30 years’ experience in
telecoms and has worked in Romania,
Belgium, Luxembourg and the
Dominican Republic. Before joining
Airtel Africa in 2016, he was chief
technology and information officer
for Digicel, with responsibility for
29 countries in the Caribbean and
Central America.
Stephen Nthenge
Chief of internal audit
Stephen is responsible for our internal
audit department, which provides
independent auditing and advice on
our risk management, governance
and control processes in line with the
purpose, role and responsibilities in the
Audit Charter. He also oversees the
integrity and reliability of our financial
and operational information, the
safeguarding of the company’s assets,
and our compliance with laws,
regulations, policies and procedures.
Stephen has more than 26 years’
experience in audit, enterprise risk and
information security management,
having worked for Deutsche Bank AG,
JP Morgan Chase and KPMG in
senior management roles in Australia,
Singapore, London and New York. In
addition to leading regional and global
audit teams, he helped to establish
risk and governance frameworks for
new products and services as well as
regulatory governance frameworks.
He has also led strategic risk mitigation
and transformational programmes.
Stephen is a certified information
systems auditor.
Stephen has been an ExCo member
since joining Airtel Africa in 2019.
Functional
chief officers
Ramakrishna Lella
Chief supply chain officer
Rama oversees the procurement of
our network equipment and IT. He
manages our tower companies and
bandwidth, sales and distribution,
supply chain for marketing and HR
services, and warehouse operations
and logistics. He also leads on our cost
reduction initiatives.
Ramakrishna has spent more than
30 years in the telecoms industry, with
more than half of this time at Airtel.
Before becoming our chief supply chain
officer in 2016, he led the team setting
up various types of networks (including
mobile, NLD/ILD, Enterprise and DTH)
and was the director of supply chain
management for Airtel Nigeria. He has
also held telecoms roles in research
and development, manufacturing
(Alcatel and Indian telephone
industries) and service providers
(Airtel and Reliance Jio).
Daddy Mukadi
Chief regulatory officer
Daddy is responsible for our regulatory
and government relations strategy in all
14 operations. This includes obtaining
all necessary resources (licence,
spectrum), ensuring full compliance
and actively helping to shape the policy
and regulatory landscape towards best
practice.
Before becoming our chief regulatory
officer in 2015, Daddy held several legal
and regulatory leadership roles across
Africa. His most recent role was as
executive head of international
regulatory affairs and executive head
of international commercial legal affairs
at Vodacom Group.
With a Master’s degree in
communications law (telecoms,
broadcasting, media and space and
satellite law) and as author of several
volumes of a handbook for media law
practitioners, Daddy brings a broad
understanding of legal and regulatory
affairs to his role at Airtel Africa.
Rogany Ramiah
Chief human resources
officer
Rogany is responsible for leading and
developing our people strategy to
support our overall strategic direction.
Her main areas of focus are succession
and talent planning, change and
performance management and
enhancing our overall employee
experience. Rogany sits on the
Sustainability Committee.
Rogany has 26 years’ experience in
retail, media and consulting, including
as senior director with Walmart’s
International People Division and as an
executive in Massmart (a division of
Walmart). To her role as CHRO, she
brings global expertise in supporting
businesses on strategy, cultural
transformation, business process
re-engineering and organisational
redesign. She also has experience in
talent acquisition, talent planning,
remuneration strategy, and developing
and leading HR transformations.
Rogany has been an ExCo member
since joining Airtel Africa in 2019.
Anthony Shiner
Chief commercial officer
Anthony is responsible for formulating
and implementing commercial
strategies across our 14 markets.
He has functional responsibility for
marketing, home broadband, sales
and distribution, brand and advertising,
product and digital (commercial) and
customer experience. Anthony became
an ExCo member when he joined Airtel
Africa in June 2022.
Anthony has over 25 years’
experience in commercial, digital and
transformation in the telecoms industry
across Australia, Singapore and the
Middle East. He joins us from Emirates
Integrated Telecommunications
Company where he held the roles
of chief digital, transformation and
innovation officer from 2018 to 2020,
and chief customer and channel officer
from 2020 until leaving in June 2022.
Previously, Anthony was executive
director of Digital for Telstra. He has
also held senior commercial roles with
Singtel and Optus.
Airtel Africa plc Annual Report and Accounts 2023
107
GOVERNANCE REPORT
Chair’s statement
Acting with purpose,
underpinned by
strong governance
Our robust governance
mechanism has built resilience
into our business and has
uniquely shaped us to capitalise
on market opportunities.
Sunil Bharti Mittal
Chair
108 Airtel Africa plc Annual Report and Accounts 2023
On behalf of the Board, I am pleased to present our Corporate
Governance Statement for the financial year 2022/23. As a Board,
we’re committed to applying the highest standards of corporate
governance and transparency, recognising that robust governance
and culture underpin business success. In this statement, we give
our investors and other stakeholders an insight into the governance
activities of our Board and its committees over the year.
By aligning our purpose, values, strategy and culture, we seek to
achieve good governance, regulatory compliance and our ambitious
sustainability strategy as we work across Africa. We do our best to lead
by example and are working both in the boardroom and on the ground
towards our corporate purpose: transforming lives. So we continue to
invest in creating educational opportunities for the communities we
serve, for example with our landmark partnership with UNICEF. I am
proud of our commitment to bring access to quality education to
more than one million children by connecting schools to the internet
and zero-rated educational platforms (free internet access).
Enhancing diversity
While our Board is diverse and inclusivity is one of our core values, we
have to do more to improve diversity and inclusion across all levels of
our organisation.
My Board is committed to supporting programmes and initiatives
across the entire Group that will nurture and mentor key talent.
And we’re continually examining our recruitment processes to
make sure they are perfectly aligned to meet these challenges.
We recognise that we’re not starting from the same place as
businesses in more developed economies. Even though we’re
determined to provide equal opportunities for women, gender parity
in our business is still some way off. This is despite our best efforts
and significant progress in appointing women to senior leadership
positions across our 14 culturally different markets.
These appointments, which we hope will attract more women to take
up senior leadership roles in our business, are shaping a deep talent
pool and pipeline from which we hope to make senior executive
appointments. This is critical to the long-term sustainability of Airtel
Africa. So we’ve once again included a gender diversity metric in
our executive directors’ variable pay scorecard – to drive forward
a diverse and inclusive workplace by increasing the proportion of
woman employees.
Remuneration
We’re also starting from a different point when it comes to the changes
being recommended to our remuneration policy. Finding, attracting
and retaining highly skilled talent is a challenge for all businesses –
and doing so across all the countries in which we operate adds to the
complexity. While we do all we can to employ good practices and fit
within a UK compliance framework, we have to balance our ambitions
with the realities and demands of doing business in Africa.
To enable us to meet these challenges, we’re submitting a revised
policy for approval at the AGM this year. Last year’s amendments were
prudent measures reflecting good housekeeping prompted by the
appointment of a new CEO (including pension arrangements, bonus
deferral and post-employment holdings). The proposed changes this
year to our remuneration policy are intended to help us do business
in Africa more effectively. These are fully explained in our directors’
remuneration report on pages 145-163.
The Board fully supports and endorses the work of the Remuneration
Committee to attract and retain the right talent. We believe that
granting a mix of performance shares with demanding performance
conditions and restricted shares with a financial underpin is both
appropriate and critical to delivering our talent agenda.
The Board also acknowledges the increasing governance expectations
of Remuneration Committees and the value of continuing to build an
understanding of broader remuneration policies and practices beyond
our executive directors and Executive Committee.
Employee development and engagement
During the year, the Board monitored projects to accelerate talent
acquisition and to support and keep our own employees. The Board
also ensured engagement with employees by attending gatherings
such as the quarterly all employee town halls. The questions asked at
these events provided a rich source of feedback for management.
Both the CEO and I are impressed by the quality, range and depth of
the topics discussed in this open forum.
Purpose, values and strategy and
alignment with culture
To meet their 2022/23 objectives of executing our purpose, values
and general strategy and objectives; assessing and monitoring our
culture; and promoting the alignment of culture with purpose, values
and strategy, our Board:
• Reviewed our strategy for Board and executive-level succession
planning and put into place processes for achieving this. See our
Nominations Committee report on pages 128-133.
• Monitored progress against our gender diversity targets at the levels
of Executive Committee, country managing director and leadership.
OpCo executive committee female gender representation also
increased from 28% to 29%.
• Supported our learning and development teams’ capacity-building
In conclusion
I remain confident that your Board is working effectively and is geared
to addressing the company’s needs. We have the right balance of
skills, expertise and professionalism to continue to deliver strong
governance, while allowing the CEO and CFO to implement and
deliver our strategy. While I’m pleased with the Board’s activities and
approach, we continually look for ways to learn and to improve our
corporate governance.
I very much look forward to meeting with shareholders at the AGM on
Tuesday 4 July 2023, which will be live streamed from London. Along
with all your directors attending the AGM, I’m available to respond to
your questions, concerns and suggestions at any time.
Sunil Bharti Mittal
Chair
10 May 2023
Governance highlights
for the year ended 31 March 2023
We published our first sustainability report in October 2022,
building on the commitments set out in our sustainability strategy
of October 2021.
We confirmed our commitment to achieve zero carbon emissions by
2050. A summary of our progress, including our engagement with
The Carbon Trust, is on page 56.
efforts across the Group, as well as ongoing initiatives around health,
wellbeing and recognition, such as a Digital Labs programme to
improve physical and mental health.
We published our second TCFD statement in line with LR9.8.6R (8)
requiring companies to share a clear statement of TCFD compliance
and in keeping with our roadmap published last year.
• Stayed up to date on projects to attract new employees as well
as to support existing employees, such as the ‘Women in Tech’
programme, Airtel Africa Mobility programme, young technology
leaders 2022 training programme, and the set-up of Nigeria
Digital Labs.
The Board continued to ensure that our resourcing – including
capital, finance and people – is sufficient to achieve our strategy
while continuously improving performance and diversity. This year, we
had to address several critical macroeconomic challenges, including
continuing fuel price increases, inflationary pressures coupled with
drought, especially in some East African countries, and continuing FX
shortages in Malawi and Nigeria. See pages 93-95 for more detail on
the mitigating strategies the Board put into place.
An effective and improving Board
Our Board evaluation confirmed that our Board functions effectively.
It’s well balanced and diverse, with a strong mix of relevant skills
and experience.
I’m grateful to all the members of the Board for their individual
contributions, and particularly to the chairs of each committee for
establishing and steering their respective committees during the year.
The Audit and Risk, Remuneration, Nominations and Sustainability
Committee chairs have provided their own reports on their
committees’ activities.
We’ve improved and further applied our business model to deliver our
strategic ambition to transform lives through financial inclusion and
empowerment across the African continent by rolling out a reliable
network, providing affordable data and serving our customers – see
page 24 for our business model and see page 26 for our strategy.
We’re delivering on our senior leadership succession plan: we made
the strategic addition of a chief commercial officer to our ExCo and
have seen several changes to our senior leadership team which will
ensure that we’ll continue to deliver our ‘Win with’ strategy.
We’re addressing the gender balance challenge across our OpCos
by championing initiatives that support diverse talent and thought
as critical enablers of sustainable growth – see page 131 for details.
We’ve nearly completed the separation of Airtel Money – see
page 112 for details.
We established new holding and subsidiary company structures for
our fibre businesses in support of our Win with technology strategy.
We are building a leading, modernised network that can provide
the data capacity to meet rapidly growing demand, and enhanced
connectivity and digitalisation needs of our markets.
We conducted a comprehensive, internally facilitated Board
evaluation – see page 116.
We continued working to fully comply with the requirements of
the UK Corporate Governance Code applying to Airtel Africa for
2022/23. We’re currently compliant barring one provision: 9 (the
independence of the chair).
Airtel Africa plc Annual Report and Accounts 2023
109
GOVERNANCE REPORT
Our leadership
Our governance structures
Our Board of directors is the primary decision-making group at Airtel
Africa. Its members guide our operational and financial performance,
set our strategy and for make sure we manage risk effectively.
See pages 102-105 for details of our Board members.
There is a clear division of responsibilities between our chair, who leads
the Board, and our CEO, who leads the business. You can read more
about the responsibilities of our Board, chair, CEO, senior independent
director and company secretary on our website at www.airtel.africa.
Board committees
In addition to the formal schedule of matters the Board considers,
it delegates key aspects of governance to its committees. We have five
main governance committees: Audit and Risk, Remuneration,
Nominations, Sustainability and Market Disclosure. Each committee
has written terms of reference which are available on our website at
www.airtel.africa.
Board
Governance committees
Audit and Risk
Committee
Monitors the integrity of
our financial reporting and
helps the Board review
the effectiveness of our
internal controls and risk
management.
Meets at least four times
a year.
Nominations
Committee
Advises on appointments,
retirements and
resignations from the
Board and its committees,
and reviews succession
planning and talent
development for our Board
and senior management.
Meets at least twice a year.
Remuneration
Committee
Reviews the performance
of our executive directors
and senior management
team.
Determines the overall and
specific remuneration for
executive directors, officers
and senior management,
as well as the Board
chair’s and non-executive
directors’ fees.
Meets at least four times
a year.
Chair:
Ravi Rajagopal
Members:
Andy Green
Annika Poutiainen
Awuneba Ajumogobia
Akhil Gupta also attends
as an appointed observer
on behalf of Bharti Airtel.
Chair:
Doug Baillie
Members:
Awuneba Ajumogobia
John Danilovich
Tsega Gebreyes
Shravin Bharti Mittal also
attends as an appointed
observer on behalf of
Bharti Airtel.
Chair:
Sunil Bharti Mittal
Members:
Doug Baillie
Andy Green
Ravi Rajagopal
See Audit and Risk
Committee report
on page 117
See Remuneration
Committee report
on page 145
See Nominations
Committee report
on page 128
Market Disclosure
Committee
Oversees our disclosure
of information to meet
our obligations under the
Market Abuse Regulations
(MAR) by determining
whether information is
insider information, or
when and how it needs
to be disclosed.
Monitors compliance
with our MAR disclosure,
controls, and procedures,
as well as the release of
information under the
Information Flow Protocols
and Services Agreement
with Bharti Airtel.
Meets as necessary
depending on market
information that requires
disclosure.
Chair:
Andy Green
Members:
Doug Baillie
Olusegun Ogunsanya –
CEO
Ravi Rajagopal
Sustainability
Committee
Reviews, challenges and
oversees the approval
and implementation of
our sustainability strategy,
including internal reporting
and balancing of non-
financial targets and our
commitments to delivering
value for shareholders and
other stakeholders.
Also oversees diversity
and inclusion matters and
the work of the Health and
Safety Committee.
Meets each month.
Chair:
Segun Ogunsanya – CEO
Members:
Annika Poutiainen – Board
sustainability champion
Jaideep Paul – CFO
Other members
(ex officio):
Rogany Ramiah –
Chief HR officer
Pier Falcione –
Deputy CFO and head of IR
Peter Odedina –
Chief compliance officer
Simon O’Hara –
Group company secretary
Vacant –
Head of strategy and
sustainability
See the sustainability
section of the strategic
report on page 38
Executive Committee (ExCo)
Advises and supports our CEO on the operation of our business.
Helps our CEO fulfil his responsibilities by, for example, developing and
implementing our strategy, monitoring our operating and financial performance,
assessing risk, allocating resources and day-to-day operational management.
The committee meets fortnightly.
More details on our ExCo can be found on page 106
110 Airtel Africa plc Annual Report and Accounts 2023
Our Executive Committee is supported by a number of operational committees:
• The Operating Company (OpCo) Functional Review Committee – led by
Group functional heads for their teams
• The OpCo Business Review Committee – led by regional directors,
with participants also including functional heads and OpCo managing
director teams
• The Regional Business Review Committee – led by our CEO with regional
directors and functional heads participating
• The Treasury Committee and Executive Risk Committee
Our sustainability governance
Our sustainability strategy lies at the heart of our business, informing
and influencing our corporate strategy at every stage. We have
established and enhanced our governance structure to ensure that
sustainability is a key responsibility of our Board of directors, and that
the delivery of the strategy and its goals is supported by dedicated
workstreams led by sustainability goal-holders (ExCo members).
Other committees
The Board also delegates certain responsibilities to our
Finance Committee.
Other committees
Finance Committee
Approves funding and other
financial matters in line with
our delegated authorities or
as requested by the Board.
Initiates and manages key
policies and major operational
decisions relating to treasury
and direct taxes.
Chair:
Jaideep Paul –
CFO
Members:
Ravi Rajagopal –
independent NED
Annika Poutiainen –
independent NED
Segun Ogunsanya –
CEO
Pier Falcione –
deputy CFO and head of IR
Attendee:
Akhil Gupta represents the
interests of Bharti Airtel in
proposed treasury transactions
(such as bond refinancing)
affecting our parent group and
to convey actions of Bharti Airtel
which may affect Airtel Africa.
Sustainability governance
Sustainability
champion
Annika Poutiainen
Board director, sustainability
champion, member of the
Sustainability Committee
Airtel Africa plc – Board of directors
Sustainability Committee
Chief executive officer
Segun Ogunsanya
CEO, Board director, Chair of the
Sustainability Committee
Health and Safety
Committee
Head of strategy
and sustainability
Executive Committee
(ExCo)
Our sustainability strategy
Pillar 1 –
Our
business
Pillar 2 –
Our
people
Pillar 3 –
Our
community
Pillar 4 –
Our
environment
Nine dedicated workstreams
Data security
Service quality
Supply chain
Commitment to our people
Digital inclusion
Financial inclusion
Access to education
Reduction of GHG emissions
Environmental stewardship
Airtel Africa plc Annual Report and Accounts 2023
111
GOVERNANCE REPORT
Our leadership continued
Compliance with the UK Corporate Governance Code
See pages 134-138 for how we comply with the UK Corporate Governance Code (the Code). Here we explain the provision not yet met.
Code provision
Provision 9: the chair
should be independent
on appointment when
assessed against the
circumstances set out
in Provision 10
Explanation
The Board has concluded that our chair, Sunil Bharti Mittal, did not meet the independence criteria of the Code due
to his interests in the company. However, in view of his extensive involvement with the company and the Bharti Airtel
Group over many years, the Board considers that he has made a major contribution to our growth and success and
unanimously agrees that his continued involvement is crucial to the ongoing success of Airtel Africa.
The Board has put several safeguards in place to ensure robust corporate governance during his tenure as chair.
These include appointing Andy Green as senior independent director to act as a sounding board and support for
the chair and as an intermediary for other directors and shareholders. The independent non-executive directors
have carefully considered Sunil’s leadership position. As part of the annual Board evaluation process, they’ve looked
at the checks and balances in place to mitigate the risk of having a non-independent chair, including the impact on
board effectiveness and Board dynamics. They’ve concluded that these checks and balances are strong and
effective. Airtel Africa has a strong culture, which has benefited from stable and consistent leadership of the
business. The seven independent non-executive directors on the Board provide a fresh perspective and challenge, a
range of corporate experience, and effective challenge to the chair and other executive directors. This was endorsed
by the three consecutive external evaluation exercises undertaken since listing. The separate committees for audit,
nominations and remuneration are each chaired by an independent non-executive director.
We also review the chair’s performance as part of the annual Board evaluation exercise. In line with the Code, the
chair only sits on the Nominations Committee, which he also chairs.
The Board believes Sunil Bharti Mittal continues to effectively oversee our leadership and maintain a balanced
shareholder agenda.
We’ll continue to report against this provision while Bharti Airtel remains a majority shareholder or until the chair is
no longer in place, at which time these arrangements will be reviewed.
During this financial year, we became compliant with Provision 41 of the Code.
For more information on how we became compliant, see page 137
The Board’s focus in 2022/23
As well as our six scheduled meetings and the AGM, during the
2022/23 reporting period the Board met an additional two times to
consider our full year financial statements and annual report approvals
process and to approve our first sustainability report. As well as extra
Board meetings when necessary, we have processes in place for
approving one-off transactions and other matters arising between
meetings – this occurred four times during the year.
Strategy and execution
• Reviewed our strategic plan and worked to make sure our strategy
stays robust in the light of forecast market and economic changes
• Considered the articulation of our corporate purpose – building on
our strong vision and values as stated in our business model
• Progressed the separation of Airtel Money
– Began the operational separation of Airtel Money from the GSM
business in preparation for its IPO
– Reviewed appropriate and optimal operating and ownership
structures for the Airtel Money entities, including local ownership
requirements
– Took steps to empower and add to the management team to
prepare for the separation
– Discussed the risk and control framework. Concluded that we
wanted to see a management system in place appropriate for a
financial services company – with a chief risk and compliance
officer and a culture of compliance and accountability
• Culture
– Discussed how to define a culture that promotes a positive feeling
of ownership around strong controls and compliance – and how
the Board sets the tone for this
– Discussed how the internal audit, risk and governance functions
can promote culture during a recent training session, and how the
Audit and Risk Committee should be assessing and monitoring
culture on an ongoing basis
• Deep dives
Undertook deep dives into:
– Our digital strategy
– Our SmartCash PSB business
– Our data centre plan
– Our fibre business plan
– Each segment: Nigeria, East Africa, Francophone Africa and Airtel
Money, which included discussion on the success of the execution
of the respective business plans and performance reviews
– Our organisational structure, including a restructuring of the ExCo
to align with the strategic ambition and planned separation of
Airtel Money
– Our regulatory function
112 Airtel Africa plc Annual Report and Accounts 2023
Strategy
– Continued to look at strategic opportunities to create value and
expand our Airtel Money business by securing payment service
bank licences and a super-agent licence in Nigeria – this allows us
to create an agency network through our SmartCash Payment
Bank subsidiary that can service the customers of licensed
Nigerian banks, payment service banks and licensed mobile
money operators in Nigeria
– This aligned with the Board’s strategy to revolutionise the financial
services landscape in Africa, particularly Nigeria. This will further
digitise the economy, and most importantly help bank the
unbanked by reaching the millions of Nigerians without access to
financial services by delivering current and savings accounts,
payment and remittance services, debit and prepayment cards
– Spent considerable time discussing the need for a more
entrepreneurial culture, not just at management level but also
within the Board. While keeping the highest levels of governance
and complying with all regulations, there’s scope to be more
entrepreneurial and to make faster decisions and approvals for
the businesses
– Reviewed the move of the administrative office from Kenya to
Dubai for our ExCo, and judged it to be a success with significantly
improved connectivity and enhanced cooperation across our
14 operating markets in Africa
– Reviewed and revised our investment strategy for buying
spectrum to support our 4G network capacity expansion across
our markets for both mobile data and fixed wireless home
broadband capability, and for future 5G rollout. This provides
significant capacity for continued strong data growth and reflects
our continued confidence in the opportunities in our markets
to support local communities and economies through digital
inclusion and connectivity
– Established a working group of the Board to work with the CEO
on spectrum auction matters, recognising the need to act quickly
in any auction within agreed parameters
– Reviewed and approved our first sustainability report showing the
Board’s commitment to developing infrastructure and services to
drive both digital and financial inclusion for people across Africa
– Reviewed and committed to our five-year pan-African partnership
with UNICEF to roll out digital learning through connecting
schools and ensuring free access to learning platforms in
13 countries
– Benefited from a presentation on geopolitical trends,
opportunities for Airtel Africa in 2023 and opportunities to
maximise influence – given by Paul Arkwright, special adviser
to the chair and Board on political and security developments
in our Op-Cos
– Reviewed the Board, committee and senior management
succession plans as presented by the Group chair on behalf
of the Nominations Committee
Financial
• Approved the full year results and financial statements, as well as
the Annual Report and financial statements and accompanying
RNS announcements for the 2022 financial year
• Approved the half year results statement and quarterly statements
for the 2023 financial year and accompanying RNS announcements
• Approved the payment of the interim dividend for the financial
half-year 2023 and recommended a final dividend for the financial
year 2022
• Continued to focus on strengthening our balance sheet
• Approved the Group’s tax strategy (see www.airtel.africa)
• Approved the annual operating plan for the year ending
31 March 2023
• Regularly reviewed our financial performance and forecasts
• Agreed to the early redemption of the Guaranteed Senior Notes
due in 2024 for $450m. This early redemption is from Group cash
reserves and is in line with our strategy of reducing external foreign
currency debt at Group level
• Determined a conservative leverage profile with a net debt to
underlying EBITDA ratio of 1.4x as of March 2023 in line with our
continued focus on a strong balance sheet
• Made significant progress in reducing holding company debt which
was $550m in March 2023 versus $1,000m in March 2022
• Agreed to commit to:
– A $125m revolving credit facility that provides potential interest
rate savings in exchange for achieving social impact milestones
linked to digital inclusion and gender diversity with a focus on rural
areas and women – also aligns with our sustainability strategy
– A $194m facility with International Finance Corporation (IFC),
a sister organisation of the World Bank and a member of the
World Bank Group – we’re committed to complying with the
IFC’s Performance Standards on social and environmental
sustainability and have put in place an environmental and social
action plan
• This is in line with our strategy to raise local currency and US dollar
debt in our local operating companies. These facilities underpin our
commitment to transforming lives across the communities where
we operate, including addressing inequality and supporting
economic growth
• Reviewed the legal, regulatory and commercial aspects of potential
structures for FX sourcing and repatriation of funds
• Discussed proposing an alternative Naira investment strategy in
light of the economic environment in Nigeria and the difficulty of
repatriating dollars – work still to be concluded
• Deloitte presented the audit plan and we considered whether this
would drive further improvement in audit quality
• Agreed that all future intermediary and consultancy fees above
$200,000 must be approved by the chair of the Audit and Risk
Committee and presented to that committee every six months
Airtel Africa plc Annual Report and Accounts 2023
113
GOVERNANCE REPORT
Our leadership continued
Leadership and employees
• Discussed how to support the new CEO as he transitioned and
progressed into his new role, made changes to his top team and
provided guidance and focus on operational issues
• Our CEO regularly updated the Board on employee engagement
and talent pipeline initiatives, including the encouraging results of
the recent people engagement survey and the Women in Tech
one-year mentoring programme
• Approved the submission of a revised remuneration policy to
shareholders at our 2023 AGM
• Worked to make sure our remuneration policy remains appropriate
and able to incentivise our executive team, while being able to adapt
to each year’s developments and strategy
• Endorsed the chief executive’s appointment of:
– Ian Ferrao as CEO, Airtel Money
– Anthony Shiner as chief commercial officer
– Apoorva Mehrotra as regional director, East Africa
– Yashnath Issur as CEO, Data centres
• Agreed that the chief HR officer should be invited to attend Board
meetings twice a year to give updates on people, culture and
diversity – and that relevant papers should be circulated to the
other two meetings as part of the sustainability focus
• Reviewed our people agenda and the robustness of our
succession plans for improving diversity, talent management
and bench strength
Internal control and risk management
• Considered and agreed the Group’s risk appetite and principal and
emerging risks
• Agreed the viability statement disclosed in the 2022 Annual Report
• Approved the adoption of going concern basis of accounting in
preparing the half and full year results
• Agreed the modern slavery act statement (available at
www.airtel.africa)
Governance and stakeholders
• Held two additional single topic Board meetings to deep dive
and review:
– 1. Our Annual Report to ensure it was fair, balanced and
understandable before formal approval at the May Board
– 2. Our Sustainability Report to ensure it was aligned with our
10-year business plan before publication
• Our corporate legal advisers, Herbert Smith Freehills LLP, provided
training on the political environment, governance reform, liability to
investors and the focus on directors’ duties. The subsequent Board
discussion focused on audit, diversity, market abuse and section 172
compliance
• Pathway to net zero and reduction of GHG emissions:
– Delivered our first report – timescales to publication reflect the
complexity of modelling and implementing scope 1 and 2
initiatives/interventions and modelling for scope 3
– Our strategy has been costed and is being rolled out to
the business
• Considered the output and recommendations from the Board and
committees’ effectiveness review and how to implement these
• Reviewed and approved the directors’ register of interests
• Reviewed our compliance with the UK Corporate Governance Code
and wider statutory and regulatory requirements
• Reviewed our Task Force on Climate-related Financial Disclosures
and identified climate-related risks and opportunities – and more
widely, continued to oversee and support the implementation of our
sustainability strategy
• Monitored and reviewed the effectiveness of the information sharing
and separation protocols between Airtel Africa and Bharti Airtel
and received updated training on applying these protocols from
our corporate legal advisers and company secretary
• Monitored and considered stakeholder feedback and continued to
actively promote wider engagement
• Reviewed the quarterly compliance certificates provided by
executive management confirming the adequacy of procedures
to review the effectiveness of our internal and disclosure controls
and discussed areas of non-compliance
• Received a joint presentation and had a discussion with our
corporate brokers on our share price performance since IPO,
investor profile, ESG profile and dividend yield
• Supported our Nigeria management team in identifying ways to
ensure all subscribers provide their valid National Identification
Numbers (NINs) and update their SIM registration records – this
followed a Nigerian Communications Commission (NCC) directive
to all Nigerian telecom operators
• Supported working closely with the regulator to minimise disruption
and make sure affected customers continued to benefit from full
connectivity in line with our aim to drive increased connectivity and
digital inclusion
114 Airtel Africa plc Annual Report and Accounts 2023
Board attendance
Directors make every effort to attend all Board and committee meetings. All Board and committee meetings had full attendance during the
reporting period.
If a director is unable to attend a meeting, they receive the papers in advance and give their comments to the chair to communicate at the
meeting. The chair follows up with them after the meeting about decisions taken.
Directors’ other significant commitments are disclosed to the Board during the process of their appointment, and they must notify the Board of
any subsequent changes. We have reviewed the availability of the chair and the non-executive directors to perform their duties and consider that
each of them can and does devote the necessary amount of time to Airtel Africa.
Board and Committee meeting attendance
Board members during 2022/23
Sunil Bharti Mittal2 (chair)
Segun Ogunsanya (CEO)
Jaideep Paul (CFO)
Andrew Green (independent non-executive director)
Awuneba Ajumogobia (independent non-executive director)
Doug Baillie (independent non-executive director)
John Danilovich (independent non-executive director)
Tsega Gebreyes (Independent non-executive director)
Annika Poutiainen (independent non-executive director)
Ravi Rajagopal (independent non-executive director)
Akhil Gupta2 (non-executive director)
Kelly Bayer Rosmarin2 (non-executive director)
Shravin Bharti Mittal2 (non-executive director)
Scheduled
Board
meetings
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
6 (6)
Number of
additional
Board
meetings
attended1
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
2 (2)
Audit and Risk
Committee
Remuneration
Committee
Market
Disclosure
Committee3
Nominations
Committee
3 (3)
9 (9)
9 (9)
9 (9)
9 (9)
5 (5)
5 (5)
5 (5)
5 (5)
2 (2)
2 (2)
2 (2)
3 (3)
3 (3)
3 (3)
2 (2)
1 Additional unscheduled Board meetings took place in connection with the approval of the Annual Report and related matters and approval of our sustainability strategy.
2 Appointed in line with the relationship agreement.
3 Communicates monthly in writing before releasing information in line with the information protocols and service agreement with Bharti Airtel.
Airtel Africa plc Annual Report and Accounts 2023
115
GOVERNANCE REPORT
Board evaluation
Board performance
During the year the Board undertook an internal evaluation (the
previous three annual exercises have been externally facilitated).
This was conducted by the Group company secretary circulating
questionnaires for feedback on a range of areas to the Board, the
directors, and each committee. The questionnaire sought input
on Board composition, stakeholder oversight, Board dynamics,
management and focus of meetings, Board support, Board
Committees and progress against the previous year’s actions.
The evaluation also probed the Board’s oversight of wider strategy,
risk management and internal controls, succession planning, and
people oversight and priorities for change.
A report was prepared on the completed questionnaires. The
Secretary then reported on this feedback to the chair and senior
independent director The results were discussed in detail by the Board
and each committee The chair had follow up discussions with directors
on the findings of the evaluation. Separately, the senior independent
director held a meeting of the non-executive directors without the
chair to consider his performance and the running of the Board. This
evaluation confirmed that the Board, its committees and individual
members all continue to operate effectively and that each performed
strongly during the year.
From the anonymised survey responses and interview feedback
we identified focus areas and recommendations for the Board and
its committees.
2022/23 evaluation results
The chair and company secretary presented the reports to the Board in May 2023 for discussion and review.
Recognising its strengths and areas to develop, the Board and its principal committees agreed actions for the coming year.
2022/23
evaluation
Board
Outcome
Strategic
oversight
Stakeholder
oversight
Key themes and areas
for focus
KPIs
Digital and data
developments
Risk
Partners, customers
and suppliers
Workforce
engagement
Governance
and
compliance
Board composition
Board agenda
Sustainability
strategy
Ensuring that our
sustainability
agenda is central
to the Board’s
discussions and
decisions, and the
company’s business
practices and
processes
Action
To include a dashboard of key financial metrics in Board papers for each meeting –
also covering markets in which we operate.
The Board will strengthen the IT function, cybersecurity and disaster recovery plans.
Strengthening of financial internal controls.
Our directors will engage with stakeholders in more ways during the year. Our Board
seeks more direct engagement with our key partners, customers and suppliers.
The management team and company secretary have been tasked with identifying
meaningful opportunities to engage and manage relationships with our suppliers.
The Board will identify and create more opportunities to engage directly with our
wider workforce across geographies and for monitoring employee sentiment
and culture.
We’ll review the size and composition of the Board, with a view to including more
telecom/fintech experience and African resident members with specific finance skills.
The evaluation identified topics to be added to the rolling forward agenda, the need
for sharper focus on areas where management require Board input and suggestions
for various improvements to the content and presentation of papers.
More focus on talent, succession and career planning.
The Board has requested one meeting a year be allotted specifically to discussion
of the sustainability strategy – which will be followed up with regular updates at
each meeting.
Re-election of directors
In line with the Code, all directors will be putting themselves forward
for re-election at our AGM on 4 July 2023. Following the formal
performance evaluation described here and taking into account
each director’s skills and experience (set out on page 116), the Board
believes that the re-election of all directors is in the best interests of
Airtel Africa.
Conclusions
The 2022/23 evaluation has shown that the Board has the appropriate
balance of skills, experience, independence and knowledge to perform
Board and committee responsibilities effectively. Respondents
unanimously agreed that the Board had performed well over the
year and was operating effectively.
The chair confirmed that individual directors continued to perform
effectively and show commitment to the role. The Board concluded
that all directors continue to give sufficient time to their Board duties
and are making valuable contributions. In light of this, the Board proposed
the re-elections set out in the 2023 Notice of Annual General Meeting.
The chair, assisted by the company secretary, drew up a list of action
points based on the evaluation and allocated responsibility for
completing the actions. The Board and each committee will review
progress against these at each meeting.
116 Airtel Africa plc Annual Report and Accounts 2023
Audit and Risk Committee report
Ravi Rajagopal
Chair
Attendance
Ravi Rajagopal Chair
Andy Green
Annika Poutiainen
Awuneba Ajumogobia
Meetings
attended (held)
9 (9)
9 (9)
9 (9)
9 (9)
Chair’s statement
I’m pleased to present the work of our Audit and Risk Committee for
the year ended 31 March 2023. My report sets out an overview of
how this committee discharged its duties in compliance with the
UK Corporate Governance Code and provides an insight into the
key matters and findings considered during the year.
Our members are unchanged. We remain a team of independent
non-executive directors with the financial experience, commercial
acumen and industry knowledge to fulfil our responsibilities.
In these challenging macroeconomic times, we continue to focus on
ensuring the integrity of the Group’s published financial information
and the effectiveness of its risk management, controls and related
processes.
As part of my commitment to connect with my management
colleagues in person, during the year l visited our operating entities
in Zambia and Nigeria. On these visits I met and spoke with local
management who gave me valuable insights into their operations.
Key areas of focus
We continued this year to look in depth at certain aspects of the
control environment, particularly the presumed risk of management
override of controls, including fraud, IT security and cyber risk.
The findings of internal audit reviews during the year in each of
these areas were shared with our committee.
There is one change and two modifications to our principal risks
for the year ended 31 March 2023: Covid-19 was dropped as a
principal risk for the Group, the risk on ‘Exchange rate fluctuations
and availability of foreign currency for repatriation’ was modified to
‘Exchange rate fluctuations and shortage of foreign currency’ and
the risk on ‘Non-compliance to legal and regulatory requirements’
was modified to ‘Uncertain and constantly evolving legal and
regulatory requirements and environment’. The principal and
emerging risks and significant judgements made in connection
with these risks are set out on page 93.
We examined in detail the interplay between the mandatory Task
Force on Climate-related Financial Disclosures (TCFD) and our
sustainability reporting. Our committee is comfortable with the
approach adopted. For our TCFD disclosures, see page 56 of the
strategic report.
As well as our usual review of accounting judgements and disclosures
on key accounting matters, we reviewed the treatment of significant
transactions during the year. These included the accounting treatment
for the transfer of minority shareholders’ interests in Nigeria
SmartCash to Airtel Networks Limited (our Nigerian subsidiary)
and, therefore, outside of Airtel Mobile Commerce BV (AMC BV)
and the introduction of mobile money as a new operating segment.
We continued to monitor the integrity of our financial statements
and the effectiveness of the internal and external audit processes.
In addition to scheduled committee meetings, we meet regularly
independently of management with both external and internal
auditors and are satisfied that neither is being unduly influenced by
management. I also hold regular meetings with our CFO and other
members of management to better understand the issues that need
discussion at committee meetings. And I regularly engage with key
stakeholders, including Group internal assurance, senior management
and our external auditor on committee work.
Our committee report is structured into five parts:
Part 1 – Our work during the year
Part 2 – Key transactions, judgements and estimates and our response
Part 3 – Risk management and internal controls
Part 4 – External auditors
Part 5 – Finance Committee
We continue to operate with openness and transparency, and a spirit
of robust challenge when necessary, to make sure our shareholders
and other stakeholders are protected.
In the coming year, our committee will focus on the control and
compliance environment for the Airtel Money business as it completes
its separation from the GSM business. We’ll continue to look at and
strengthen the focus on compliance across all levels and functions in
the organisation using various measures, including training, process
improvements, automation and robust consequence management
policies to hold people accountable for their actions. The committee
will also focus on actions to further mitigate risks of fraud, especially
relating to the mobile money business.
I’d like to thank the management team at Airtel Africa and each of
the committee members for their support and contribution during
the year.
I welcome questions from shareholders on this committee’s activities.
To discuss any aspect of this report, please contact me through
our company secretary, Simon O’Hara (see page 251 for contact
details). Also, I’ll be attending the 2023 AGM and look forward to the
opportunity to meet and speak to you there.
Ravi Rajagopal
Chair, Audit and Risk Committee
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
117
GOVERNANCE REPORT
Audit and Risk Committee report continued
Part 1
Other senior finance and Executive Committee leaders sometimes
attend and present to our committee if specialist knowledge is
required.
The committee chair meets privately and separately with each of the
Group CFO, chief internal auditor, chief compliance officer, and our
external auditor to ensure the effective flow of material information
between the committee and management. We also regularly make
time for discussion at the end of meetings without management
being present.
Effectiveness
The Board evaluation reviewed the committee’s effectiveness and
sought feedback from its members. We discussed the output, which
concluded that we had operated effectively throughout the year. Areas
of challenge are identified throughout this report. We also confirmed
our areas of focus for the year ahead.
2022/23
evaluation
Audit and
Risk
Committee
Outcome
Areas of
focus
Key themes
and areas for
focus
Risk
Compliance
and controls
developments
Action
We will review the meeting
agenda to spend more
time reviewing risk.
We will focus more on
embedding a culture of
compliance and ensuring
accountability for controls.
We review our terms of reference yearly to ensure clearer alignment
with Code provisions and updated FRC guidance. There were no
changes this year.
These terms of reference are available on our website at
www.airtel.africa.
For details of the Board evaluation, see page 116.
Committee governance
Key responsibilities
Our committee is responsible for overseeing:
• Accounting and financial reporting
• The role and mandate of the internal audit function
• The selection, appointment and management of the relationship
with the external auditor
• Internal control and risk management systems
Detailed responsibilities are set out in our committee’s terms of
reference, which can be found at www.airtel.africa/investors/
governance.
Composition
Our committee consists of four independent non-executive directors:
Ravi Rajagopal (chair), Andy Green, Annika Poutiainen and Awuneba
Ajumogobia. The Board believes these directors have the necessary
range of financial, risk, control and commercial experience required to
effectively challenge management.
Provision 24 of the Code states:
i. At least one committee member should have recent and
relevant financial experience. The Board is satisfied that Ravi
Rajagopal meets this requirement. Ravi held financial leadership
roles at Diageo until retiring in 2015, including Group controller in
the UK and global head of mergers and acquisitions. His skills in
finance, and control and risk, have been developed over a career
working in senior strategy and management roles. As a qualified
chartered accountant, Ravi has lectured at Oxford University and
Imperial College.
ii. The committee, as a whole, shall have competence relevant to
the sector in which the company operates. As a collective, we
have a thorough understanding of the telecoms and mobile money
services sector and emerging markets in Africa, including recent
and relevant financial experience and expertise gained through
various corporate and professional appointments over the years.
Detailed biographies of our committee members are on pages
102-105 of this Annual Report. Our company secretary is secretary
to this committee.
Meetings during the year
Our scheduled quarterly meetings take place shortly before Board
meetings. Before that, the committee has a pre-meeting to focus on
internal audit and discuss any issues needing more time. We held
five scheduled meetings and four combined internal assurance and
pre-meetings during the year. Attendance during the year is set out
on page 115.
We also met three times between the end of the financial year and the
signing of this Annual Report.
Our meetings are also attended by the CEO, CFO, deputy CFO, head of
internal audit and chief compliance and risk officer, along with internal
audit partners (EY) and other senior executives. Representatives of our
external auditor, Deloitte, were invited and attended all meetings. Akhil
Gupta also attends our committee meetings as an appointed observer
on behalf of Bharti Airtel.
118 Airtel Africa plc Annual Report and Accounts 2023
Part 1
Our work during the year
At each quarterly meeting, we review summary reports from internal assurance, as well as financial results and details of actions taken or
proposed plans. We also receive summary reports from our external auditors at the half year and year end. Our Committee chair then reports
to the Board on our activities, recommendations, and other relevant matters.
The committee’s focus in 2022/23
Cross-reference
See pages
90-92
See page 61
Strategic focus for risk management and internal control
2022/23 committee objectives
Looking closely at the robustness
of our systems for risk reporting,
assessment and control and
ensuring that we focus on the
areas of greatest risk
Actions taken
We’ve increased our focus by spending more time in meetings on the subject. We completed
deep dives on areas of risk, including network technology, IT systems, cybersecurity, revenue
assurance and fraud controls.
As part of the quarterly key control status update, we received descriptions of the key controls
monitoring and reporting cycle for both ICOFR key controls and non-ICOFR key controls. Our
discussions led to improved controls training and a more consistent approach (ICOFR is an
internal control over financial reporting process consisting of policies and control procedures
to assess financial statement risk and reduces the risk around inaccurate financial reporting).
Reviewing our risk management
framework and conducting
thematic risk reviews to ensure
risk remains within our agreed
appetite and is monitored and
reviewed as needed to reflect
external and internal changes
As part of our key issues report, we conducted design and compliance reviews, assessed the
quality of quantitative data and qualitative assessment and ensured that learnings were applied
across the business.
We continued to make progress in embedding the Risk Appetite Statement (RAS) framework
and an exception-based risk reporting approach. We conducted an annual review of the key risk
indicators and tolerance limits.
We also made several improvements to the framework and plan, and conducted the following
thematic reviews:
Enterprise risk management review: we reviewed the Group compliance strategy and its
mission ‘to establish and maintain adequate procedures, systems and controls to enable Airtel
Africa to comply with its obligations’. The strategic goals are to:
• Improve the maturity of risk management practices
• Enhance the whistleblowing programme
• Focus on high-risk areas
Data privacy: we reviewed the evolving risk landscape, including the changing legal framework
for data privacy risk across the Group’s operating footprint. We adopted a Group-wide compliance
strategy for data privacy risk. We subsequently received updates on progress and risk mitigation
actions, and were assured by the Group’s response to these changes.
Fraud risk assessment update: after implementing the fraud risk assessment policy the
previous year, we ensured that all risks identified and entered on the risk register were
accompanied by a risk mitigation plan and mapped to the audit plan. We welcomed the
approach outlined and framework and methodology being adopted.
Financing and foreign currency risk: we discussed:
• Exchange rate volatility and devaluation risk
• Liquidity and refinancing risk
• Depth of market/new products and banking landscape and treasury governance
• Related internal controls and compliance
As most of Airtel Africa’s operations are in currencies which have and are expected to devalue
against the USD in the medium/long term, we discussed mitigation strategies. We continue to
oversee the rebalancing of debt from Group level to OpCo level.
Airtel Africa plc Annual Report and Accounts 2023
119
GOVERNANCE REPORT
Audit and Risk Committee report continued
2022/23 committee objectives
Clarifying processes and controls
to help people identify, monitor
and mitigate risk earlier and
more effectively
Part 1
Actions taken
Airtel Money Commerce B.V. (AMC BV): our committee discussed in detail the business
process risk audit for the Airtel Money business. We agreed that the Nigeria Airtel Money rollout
should be a separate item given the size and value of the risk. We sought to understand how
the AMC BV Board was reviewing the issues identified by the Group internal assurance Airtel
Money audits.
Before the launch of the Airtel Money service in Nigeria, we conducted risk reviews to ensure the
adequacy of the controls and systems and to ensure they were in line with our service objectives.
We kept abreast of all actions arising from these reviews.
We discussed in detail our responsibilities for overseeing the AMC BV business, particularly given
the increasing pace of separation activities and the desire to avoid any unnecessary duplication
of effort with the AMC BV Board. We analysed the current Airtel Money risk and compliance
structure and systems to assess their fitness for purpose. We reviewed the plan reaching
appropriate financial services regulatory supervisory standards, as well as the risk and
compliance scope for the Airtel Money business.
We reviewed the register of significant risks and assessed regulatory-related implications of a
breach. And we reviewed back-end controls and supported actions to strengthen Know Your
Customer and minimise commission arbitrage.
Cybersecurity: we conducted a review of known incidents, commissioned several internal audit
reviews and made an assessment of related risk on the business following which we adopted
remediation plans. As a result, we reviewed the Group’s cybersecurity strategy and appointed a
Group chief information security officer with responsibility for defining and securing the Group’s
information security systems and processes, and for ensuring a robust information security
control environment within our operations. We performed a cyber threat intelligence action to
discover the risk of exposure of confidential data related to Airtel Africa from social media, dark
web and other breached databases, and reviewed physical back up strategy and arrangements.
We recognised that Airtel Africa’s pre-paid model mitigates against any direct risk to customers,
given that customers’ personal bank details are not held.
Having reviewed cybersecurity risk, our committee adopted the Group’s ransomware policy,
cyber insurance policy, information security policy, data protection and privacy policy, and the
virtual desktop infrastructure (VDI) implementation. We reviewed the cybersecurity policy to
ensure appropriate legal and technical advice was obtained and breach notification obligations
understood. We also reviewed the strategic communications strategy.
Key risks and remediation actions for 2022/23 were identified. The ISO 2700 standard had been
achieved and ISO 22301 certification status is being pursued.
We reviewed the risk of technology obsolescence and examined our network resilience and
business continuity plans.
Culture: we reviewed the culture of compliance and arranged a training session. As a result
of this, our chief internal auditor was instructed to establish a robust reporting framework for
assessing and monitoring culture on an ongoing basis and to include these findings in the
quarterly internal audit report to the Audit and Risk Committee, for subsequent sharing with
the Board. The Remuneration Committee was also asked to review our incentivisation schemes
to ensure the business is driving behaviours consistent with our purpose, values, strategy and
culture. This work is ongoing.
We advised the Board that our risk management and internal control systems were effective.
Following its own review of the reports submitted to it, the Board agreed that our system of
internal control continues to be effective in identifying, assessing and ranking the various risks we
face as a business, as well as in monitoring and reporting progress in mitigating potential impact.
We started the process of self-certification by business units as a further check on the rigour of
the internal audit and external audit assurance process. This places accountability for assurance
on operational staff.
Following a deep dive of fraud perpetrated in one OpCo, processes to improve revenue assurance
and fraud prevention and detection were strengthened and rolled out across the whole business.
We started to review overall ratings on the quality of processes and controls identified for each
OpCo, alongside a rating of end-to-end processes across all OpCos.
Continuous Control Monitoring (CCM)
We reviewed and endorsed a data-led approach to continuous monitoring. We adopted an
analytics platform which runs algorithms and checks on a large volume of transactions to identify
potential red flags or outliers. Over time, we can assess baseline controls using this platform.
Cross-reference
See page 56
for our climate
change risk
disclosures
120 Airtel Africa plc Annual Report and Accounts 2023
2022/23 committee objectives
Reviewing the assurance
processes supporting certain
aspects of the TCFD and
sustainability sections in the
2022/23 annual report
Supporting the Group’s
sustainability strategy
Cross-reference
Part 1
Actions taken
The Group has identified its climate risks and opportunities after an assessment of the possible
impact of climate change across its business and geographies. The Group has also put in place
mitigation actions to address these risks as can be seen from the Group sustainability strategy
and report. This important piece of work has governing oversight not only from the Audit and
Risk Committee but also the Board Sustainability Committee which meets monthly to review
the various mitigation actions in line with the Group’s strategy. Additionally, we have taken steps
to develop the technical capability of our teams in identifying, assessing, modelling and creating
viable plans to address these long-term climate risks. This is underpinned by our engagement
with The Carbon Trust who have been instrumental in helping us along this journey and building
the internal capacity within our teams.
We, therefore, have concluded that the assurance processes supporting the narrative reporting
in the Annual Report are satisfactory.
Airtel Africa officially joined the Joint Audit Cooperation (JAC), an association of telecoms
operators aiming to verify, assess and develop corporate social responsibility implementation
across the manufacturing centres of suppliers. This action addresses third-party risks from an
ESG perspective and whether third parties are complying with standards of compliance required
from an ESG perspective with respect to labour laws, health and safety and other practices.
Membership of the JAC allows us to conduct these ESG audits in a cost-effective manner through
cost sharing with other global telcos.
Ongoing financial reporting activities
We reviewed the integrity of the quarterly, half year and full year financial statements. We also examined other statements containing financial
information, including trading updates and investor presentations and packs, and recommended their approval to the Board. At each of our
meetings, we reviewed and constructively challenged the accounting methodologies, key estimates, and judgements and disclosures set out
in the papers prepared by management – determining the appropriateness of these with input from the external auditor. Key transactions,
judgements and estimates in relation to this year’s financial statements are listed on page 123. We also reviewed existing and emerging litigation
and regulatory risks.
2022/23 committee objectives
Reviewing financial reporting
controls and considering issues
and findings raised by the Internal
Audit team
Considering management’s
significant accounting judgements,
the policies applied to quarterly,
half year and full year financial
statements, and how the statutory
audit contributed to the integrity of
our year-end financial reporting
Reviewing the proposed audit
strategy for the year’s external
audit, including the level of
materiality applied
Reviewing the basis of preparation
of financial statements as a
going concern as set out in our
accounting policies
Assessing the effectiveness of the
2022/23 audit
Reviewing related party
transactions and disclosures
Actions taken
Our committee was satisfied that management had resolved, mitigated or set out action plans
for all issues or concerns identified by Internal Audit teams.
Cross-reference
See page 125
We assessed:
See page 178
1. The quality, appropriateness and completeness of the significant accounting policies and
practices and any changes to these
2. The reliability and integrity of our financial reporting, including key judgements and whether
to support or challenge management’s judgements
3. The external audit findings, including their review of key judgements and the level of
misstatements
4. The rationale for the accounting treatment and disclosures around judgements and estimates,
as reported by the CFO
5. The overall level of reasonableness applied by management in their judgements and estimates
around significant half year and full year matters, considering also the views of Deloitte UK and
evidence of bias
We challenged management on some judgements and sought explanations of the interpretation,
making recommendations to the Board for the approval of half and full year accounts and
financial statements.
We assessed the detailed audit scope and strategy for the year, including the application of Group
and component materiality. Furthermore, we monitored the external auditor’s progress against
the agreed plan and considered issues as they arose.
We made recommendations to the Board to support the going concern statement which was
prepared on an appropriate basis.
We concluded that the audit was effective. The Board will recommend the reappointment of
Deloitte as external auditor for the year ending 31 March 2024 at the AGM.
We reviewed related party transactions entered by the Group during the year and determined
that these were at arm’s length. The committee sees the related party disclosures in our financial
statements as appropriate.
See page 125
See pages 123
and 178 for the
statement
See page 126
See page 220
Airtel Africa plc Annual Report and Accounts 2023
121
GOVERNANCE REPORT
Audit and Risk Committee report continued
Part 1
2022/23 committee objectives
Reviewing updates from regulators
on corporate reporting
Actions taken
We reviewed updates on FRC’s thematic reviews and other guidance issued by the FRC during
the year.
Cross-reference
Reviewing whether the company’s
position and prospects as
presented in the 31 March 2023
Annual Report and financial
statements were fair, balanced
and understandable
The Group already complied with the majority of the recommendations, and our 2023 Annual
Report has been updated to adopt best practice as appropriate.
We assessed:
1. The completeness and consistency of disclosures in the Annual Report, interim reports, our
business model and strategy
2. The internal verification of the non-financial factual statements, key performance indicators
See page 122
and descriptions within the narrative
3. The use of APMs
4. The treatment of items as exceptional
5. Feedback from external parties (corporate reporting specialists, remuneration advisers,
external auditors) to enhance the quality of our reporting
6. The FRC’s guidance on clear and concise reporting, as well as compliance with financial
reporting standards and other reporting requirements
7. The FRC’s guidance on what makes a good annual report to ensure our Annual Report is
prepared in line with clear corporate reporting principles and effective communication
techniques as outlined by the FRC
Reviewing the services, fees and
policy for non-audit services
provided by the auditor for the year
Approving the statutory audit fee
for the year
We recommended to the Board that the 31 March 2023 Annual Report and financial statements
presented a fair, balanced and understandable assessment of Airtel Africa’s position and
prospects.
We approved the non-audit services and related fees provided by Deloitte for 2022/23 and
concluded that no changes were required to the policy for non-audit fees provided by the auditor.
See page 127
The 2021/22 statutory audit fee was paid, and the committee approved the fees for the
2022/23 audit.
See page 197,
Note 8.1
Reviewing the 2023 Annual Report
At the request of the Board, we reviewed this Annual Report to consider whether, taken as a whole, it was fair, balanced and understandable.
We have robust governance processes in place to support the year-end review of the Annual Report, including ensuring that everyone involved
understands the ‘fair, balanced and understandable’ requirements. Our considerations included:
Fairness and balance
• Is the Annual Report open, honest and accurate? Are we reporting on our weaknesses, difficulties and challenges alongside our successes
and opportunities?
• Do we clearly explain our KPIs and is there strong linkage between our KPIs and our strategy?
• Is there a fair balance between alternative performance measures (APMs) and reported figures?
• Do we show our progress over time and is there consistency in our metrics and measurements?
• Does the narrative and analysis in the Annual Report effectively balance the needs and interests of our key stakeholder groups?
Understandable
• Do we explain our business model, strategy and accounting policies in a simple way, using precise and clear language?
• Do we break up lengthy narrative with quotes, tables, case studies and graphics?
• Do we define industry terminology and acronyms?
• Do we have a consistent tone across the Annual Report?
• Are we clearly ‘signposting’ to where more information can be found?
Iterations of the draft Annual Report were provided to committee members throughout the production process. Following our formal review in
meetings on 28 April, 4 May and 9 May, we confirmed to the Board that this Annual Report is fair and balanced and provides enough clarity for
shareholders to understand our business model, strategy, position and performance. The directors then made their assessment following the
Board’s review of the document at its meetings on 28 March, 9 May and 10 May 2023.
122 Airtel Africa plc Annual Report and Accounts 2023
Part 1
Governance
At each quarterly meeting, we receive and review summary reports with updates on upcoming proposals and regulations to UK corporate
reporting. The FRC publishes thematic reviews and other guidance to help improve the quality of corporate reporting. We also receive
summarised reports from our external auditors highlighting any proposed amendments to UK corporate reporting.
2022/23 committee objectives
Meeting the UK’s Transparency
Directive (TD) ESEF Regulation
(ESEF regulatory technical
standard), including ‘phase 2’
requirements, prepared using
the UKSEF taxonomy
Staying up to date with
regulatory reform
Reviewing the findings of the yearly
evaluation of our committee
Reviewing Group policies
Actions taken
We paid special attention to the preparation of our consolidated financial statements and the
additional ‘phase 2’ notes text block tagging in digital format under the TD ESEF Regulation.
We made sure the necessary procedures had been completed by all parties, including our
technical accounting team and our specialist external digital reporting providers. Our 2023
digital report uses the UKSEF taxonomy created by the UK Financial Reporting Council (FRC).
We commissioned a voluntary assurance review on our 2023 ESEF Annual Report by Deloitte UK.
Deloitte confirmed that the ESEF Annual Report was prepared and marked up in line with the
requirements of the ESEF RTS. Deloitte’s ESEF review opinion is included at the end of this
Annual Report.
The committee noted the recommendations of the UK government’s Department for Business,
Energy and Industrial Strategy (BEIS) in response to last year’s white paper on restoring trust in
audit and corporate governance. We have already started preparing for the proposed regulations,
specifically with regards to the audit and assurance policy and strengthening of our internal
controls. The Group continued to further enhance its risk management processes, key controls
monitoring and reporting processes for both internal controls over financial reporting (ICOFR)
related key controls and non-ICOFR related key controls.
Our committee will continue to monitor proposed regulatory changes to ensure Airtel Africa fully
complies.
We reviewed the evaluation results and set out an action plan to deliver its recommendations.
The Board considered the results of the review and considered the Audit and Risk Committee
to be effective.
We reviewed and approved updated Group policies in relation to data privacy, ransomware and
information security.
Part 2
Cross-reference
See page 252
See page 118
See page 119
Accounting and financial reporting issues and our response
We considered the following accounting and financial reporting issues, judgements and estimates in the context of the financial statements and
management override of controls and fraud, discussed them with our external auditor, and have found the response to each appropriate and
acceptable.
Issue
Going concern
and long-term
viability
statement
How this was addressed by our committee
As we advise the Board on the form and basis of conclusion underlying the long-term viability statement and going
concern assessment, we reviewed these in depth and also considered the Group’s strategy and business model.
Our review covered:
• The Group’s prospects
• The period under consideration
• Principal risks (refer to pages 90-97)
• Longer-term cash flow forecasts
• The sensitivities considered in management’s stress-test to respond to principal risks
Taking into account potential mitigating actions, we were satisfied with the conclusion and disclosure on the Group’s
long-term viability and going concern.
Our 2022/23 long-term viability statement and more details on the assessment is set out on page 98.
Deferred tax
asset recognition
and classification
as an exceptional
item
More details about going concern assessment are on page 178.
One of our subsidiaries in Kenya had carried forward losses and timing differences on which deferred tax assets had not
been recognised until 2022/23. During the year, management proposed the recognition of deferred tax assets on these
losses based on projected profitability. Additionally, the Group has also trued-up deferred tax assets in our subsidiaries
in Tanzania and DRC on deductible temporary differences based on updated probability of future taxable profits in
these subsidiaries.
We reviewed and challenged management’s assumptions and were satisfied that there were taxable profits against which
tax losses and temporary differences could be used – meaning that such deferred tax assets should be recognised. We
were also satisfied with the transaction being classified as an exceptional item in accordance with the Group policy on
exceptional items.
Airtel Africa plc Annual Report and Accounts 2023
123
GOVERNANCE REPORT
Audit and Risk Committee report continued
Part 2
Issue
Transfer of
Nigeria
SmartCash
outside of the
AMC BV
perimeter
Disclosure of
currency
devaluation risk
How this was addressed by our committee
The Group’s minority shareholders in Nigeria have interests in SmartCash Payment Service Bank Limited, a direct
subsidiary of the Airtel Mobile Commerce BV Group (AMC BV). As outlined on page 189, Note 5 of the financial
statements, in August 2022, as directed by Central Bank of Nigeria, SmartCash was transferred to Airtel Networks
Limited (ANL), a subsidiary of Airtel Africa plc outside the perimeter of Airtel Mobile Commerce BV Group.
The non-controlling interest in respect of SmartCash continued to be recognised in Airtel Africa’s consolidated financial
statements despite the legal transfer of SmartCash from the AMC BV perimeter to ANL.
Our committee reviewed the accounting for the transaction and was satisfied that the conclusions were appropriate.
As outlined in the principal risks and uncertainties section of this Annual Report, the Group is constantly exposed to the
risk of adverse currency fluctuations and the macroeconomic conditions in the markets where it operates. Adverse
movements in exchange rates between the currencies in OpCos and the US dollar could have a negative effect on liquidity
and financial performance. Given the severity of this risk, specifically in OpCos who face a limited supply of foreign currency
in the local monetary system, management presented how it continuously monitors the potential impact of this risk of
exchange rate fluctuations.
After performing a detailed review, our committee was satisfied with:
• Management’s methodology for monitoring the potential impact of this risk of exchange rate fluctuations
• The mitigating action plans in place
• The reasonability of sensitivities adopted
• That appropriate disclosures are included in quarterly reports and the Annual Report
Mobile money as
a new reporting
segment and
consequent
goodwill
reallocation
For more details on currency devaluation disclosures, see page 222, Note 32.
As outlined on page 190, Note 6.1 of the financial statements, the Group identified mobile money services as a new
operating and reportable segment as of April 2022. This is due to the significant growth in mobile money and a
corresponding change in its organisation structure combined with changes in the information provided to the chief
operating decision-maker for allocating resources and assessing performance. Information for both current and
comparative periods was presented for the four segments: Nigeria, East Africa and Francophone Africa mobile services,
and mobile money services. Consequently, as per the requirements of IAS 36, the Group’s goodwill was re-allocated
between four groups of CGUs based on the new segments, with $1.3bn being allocated to the mobile money group of CGUs.
Review of tax/
legal/regulatory
matters
Goodwill
impairment
Our committee reviewed the basis for this change and is satisfied that appropriate segmental disclosures and goodwill
allocations are included in the financial statements.
We reviewed the key developments in material tax, legal and regulatory cases during the period, management’s estimate
of key tax, legal and regulatory disputes, and how these were rated as probable, possible or remote. We were satisfied with
the accounting conclusions reached by management.
We received a detailed management paper on impairment and challenged the appropriateness of the assumptions
and judgements adopted for the annual impairment testing exercise in December 2022. We reviewed the sensitivities
performed by management on key assumptions such as the discount rate, growth rates and the headroom if a five-year
plan were adopted with appropriate long-term growth rates.
We also reviewed management’s consideration of the impact of climate change. Based on the analysis conducted so far,
we were satisfied that any related costs are adequately covered as part of the impairment sensitivities and, therefore,
no impairment would arise.
Alternative
performance
measures (APMs)
For more information on the Group’s goodwill impairment assessment, refer to page 97 of the financial statements.
The Group has revised the computation of return on capital employed (ROCE) by grossing up the ‘equity attributable to
owners of the company’ for put option provided to minority shareholders. The previous period’s ROCE was also restated
for this change.
Further, during the year, underlying revenue has not been defined as an APM due to the absence of any exceptional items
during the period.
The committee performed a detailed review on the use and disclosures of APMs within the Annual Report (including
reconciliations disclosed) and concluded that the balance and equal prominence of APMs (in comparison to GAAP
measures) was appropriate. The committee challenged management on changes to APMs and satisfied itself that the
changes were appropriate.
For more information on APMs, refer to pages 240-245 of the Annual Report.
124 Airtel Africa plc Annual Report and Accounts 2023
Part 3
Risk management and internal controls
Our approach to risk
As highlighted in the strategy and risk sections of the strategic report,
risk management is inherent to our management thinking and
business planning processes. The Board has overall responsibility
for establishing and maintaining our risk management and internal
control systems.
For more information on our risks and mitigation and our risk
management framework, see the risk report on pages 90-97 and 161.
The Board also approved the statement of the principal risks and
uncertainties set out on pages 93-97.
Progress in 2022/23
Each quarter, our CEO and CFO provide a compliance certificate
connected to the preparation of our financial results. This includes
the policies and procedures for areas of the business under their
responsibility and confirms the existence of adequate internal control
systems throughout the year. Our committee reviews any exceptions
noted in this exercise.
Working to minimise the risk of fraud, bribery and
corruption
Minimising the risk of fraud is one of the key priorities for internal audit,
and we do this in a range of ways. These include assessing the quality
of balance sheet reconciliations, key judgement matters, tenders and
quotations, and controls over payments and associated applications.
The committee received and reviewed reports of attempted and
actual fraud incidents during the year. We received comprehensive
updates from management on the incidents and reviewed the root
cause analysis and remediation plans to address gaps noted. The
committee will continue to monitor the implementation of these
plans across all markets, through management updates followed by
verification from the internal audit team.
We continue to focus on limiting our potential exposure to bribery
and corruption risks, for example by providing mandatory training,
reviewing financial records and developing our policies and
procedures. Our contract management system includes mandatory
certification to our Code of Conduct and anti-bribery and corruption
policy. Each year, every employee must take part in computer-based
training on anti-bribery and corruption and our Code of Conduct. Our
internal audit team reviews our anti-bribery compliance programme
to assess its continued effectiveness. We will continue to assess
bribery risks in our markets to refine and improve our anti-bribery
compliance programme.
Our committee also monitors and oversees procedures around
allegations of improper behaviour and employee complaints.
Whistleblowing procedures
Our whistleblowing programme is a confidential channel through
which employees can report unethical practices or wrongdoing.
We have an independent whistleblowing process managed by an
external professional services firm from their Centre of Excellence
in South Africa.
Throughout the reporting period, we received updates on the volume
of reports, key themes emerging from these reports and the results
of related investigations. We assess the reports for the category and
level of concern and consider these in line with a protocol for review,
investigation, action, closure and feedback. This is done independent
of management where necessary, and involving senior business unit
or HR management as appropriate.
We continue to monitor the volume, geographic distribution and range
of reports made to the hotline to understand key themes, the results of
investigations undertaken, significant regional compliance concerns,
and whether access to this facility is less understood or publicised in
some countries.
During the 12 months ended 31 March 2023, we investigated
34 incidents (2022: 74) received through various touch points
and our formal whistleblowing channels. These were of varying
magnitude, with five above the ExCo threshold – these and the
measures taken in response have been reported to our committee.
Of these 34 cases, 92% have been closed. The very small number
of reports that contained allegations of a breach of our Code of
Conduct were thoroughly investigated and disciplinary action was
taken where appropriate.
The majority of reports received during the period were human
resource issues which indicated no compliance concerns or serious
breaches of our Code of Conduct.
Our committee chair reports to the Board at each of its meetings on
the operation of our Code of Conduct, anti-bribery and corruption
and whistleblowing procedures. This report contains enough detail to
enable the Board to oversee these areas and make sure arrangements
are in place for a proportionate and independent investigation of
related matters and for follow-up action.
Internal Audit
Our internal audit team considers compliance with internal policies,
regulatory obligations and fraud risk mitigation as part of its
independent testing and evaluation. Airtel Africa has adopted an
internal audit co-sourcing model where the internal audit activity is
carried out by a partnership of our group internal audit department
and EY as the internal audit service provider. The team is governed
by the internal audit charter, as approved by the Audit and Risk
Committee, and is headed by our chief internal auditor who reports
to the committee and the CEO. The committee chair regularly meets
with the chief internal auditor to discuss the team’s activity and any
significant issues arising from its work.
Our committee approves the annual audit plan in the first meeting of
each financial year. We then receive quarterly updates on activities,
progress against the plan, the issues arising from audits and action
plans to address concerns. This year, we reviewed and approved the
detailed audit plan as dynamic and ensuring that internal audit’s areas
of focus remain appropriate. During the year, internal audit focused
on principal risks as well as emerging risks, including cybersecurity
and regulatory compliance. This year, we looked closely at how to
remediate key issues more quickly and address risks in order of priority.
During the reporting period, we also approved the three-year Internal
Assurance strategic plan that will guide the development of this
function. This is focused on improving delivery, increasing automation
and on a new approach to talent and staffing centred on recruiting
and retaining a team with varied professional experience and
supplementing it with external expertise as necessary.
Airtel Africa plc Annual Report and Accounts 2023
125
GOVERNANCE REPORT
Audit and Risk Committee report continued
Part 3
Part 4
We’ll continue to monitor the implementation of this strategy through
quarterly updates on its progress and milestones from the chief
internal auditor being achieved.
In evaluating the work, effectiveness and independence of internal
audit, the audit committee drew its own conclusion based on its
experience and regular contact with the chief internal auditor, and
co-source partner. In addition, the committee reviewed the annual
internal audit work plan, received periodic reports on the results of the
internal audit work and monitored management’s responsiveness to
the internal auditor’s findings and recommendations.
Key controls
We continued to monitor the implementation and standardisation of
key controls to enhance our internal control environment. A review
of the initial set of key controls led to a redefined and expanded set
of controls incorporating all functions. The revised controls were
progressively implemented during the year and the full set will be
operational during the next financial year. With the separation of Airtel
Money, an initial set of key controls were also developed and adopted
for the mobile money business, and incorporated into the overall key
controls programme.
Automation
Internal audit continued to adopt new technology to improve its
effectiveness. We’ve brought in more extensive and insightful analytics
and are using more expansive data to identify key emerging themes
and risks.
As well as using enhanced data analytics, we piloted a continuous
controls auditing programme for three functions across all 14 markets.
This identified an initial set of 65 risk scenarios for the proof-of-concept
phase. The programme will be rolled out progressively for all functions
across our markets. This will enable us to flag errors and control
violations as they happen.
During the next financial year, we’ll establish a dedicated data analytics
and automation team. The practices of data analytics and continuous
auditing will become even more central to our methodology to ensure
effective and sustainable auditing and monitoring of controls.
External auditors
Engaging our auditor
Our committee manages the Group’s relationship with the external
auditor. Each year, we assess their performance, effectiveness and
independence and recommend their reappointment or removal to
the Board.
The Group’s external auditor is Deloitte LLP (UK), and the lead partner
is Ryan Duffy. He was appointed as the engagement partner for our
2022/23 year after Mark Goodey retired.
Effectiveness of the external audit process
Our committee makes recommendations to the Board on whether to
reappoint the external auditors, their independence from our business,
and the scope and fee for the audit. After reviewing and challenging
the work done by Deloitte during the year, we approved Deloitte’s
terms of engagement and are fully satisfied with their performance,
objectivity, quality of challenge and independence.
Having reviewed Deloitte’s performance in committee, with
management and other key stakeholders, our committee
recommended to the Board that they be reappointed as our
external auditor for the 2023 financial year. The Board will
recommend this to shareholders as resolution 19 at our 2023 AGM.
Our committee works in line with the UK Corporate Governance Code,
the FRC Guidance on Audit Committees and EU regulations on audit
reform for our external audit tendering timetable.
We will continue to follow the annual appointment process until our
next competitive tender. In line with current regulations, our next
mandatory tender will be in readiness to retain our current auditor or
move to a new audit firm for the 2029 financial year. This timetable
is subject to an annual assessment of Deloitte’s effectiveness and
independence. The audit was last subjected to a tender in 2019
when Deloitte were appointed (four years).
Our choice of auditor is not restricted by contractual obligations or a
minimum appointment period. We’ve complied with the provisions
of the Competition and Markets Authority’s Order for this financial
year relating to audit rotation and tendering and the provision of
non-audit services.
Working with our auditor
The lead external audit partner and his team attend our committee
meetings to provide insight and challenge and to report on their
review of the half year results and audit of the year-end financial
statements. To facilitate open dialogue and assurance, we also hold
private sessions with our auditor without management present.
Our committee chair regularly meets with Deloitte outside of
scheduled committee meetings.
A number of external audit teams are involved in the audit, given the
need to report both our own financial results and to report to our
parent company, Bharti Airtel.
Throughout the year, audit teams deliver:
• An half year review report on Airtel Africa’s interim condensed
consolidated financial statements by Deloitte UK
• The audit report on Airtel Africa’s consolidated and company only
financial statements signed by Deloitte UK
• Local statutory accounts audited by each Deloitte Africa team,
with some work performed by Deloitte India
126 Airtel Africa plc Annual Report and Accounts 2023
Part 4
Part 5
During its half year and full year results reporting, Deloitte did not
report any significant deficiencies in controls or issues with our
accounting judgements and estimates.
Our committee receives a detailed audit plan from Deloitte identifying
key risks and areas of focus. We review and challenge this external
audit plan, including audit scope and materiality, to make sure Deloitte
has identified all key risks and developed robust audit procedures and
communication plans. We also look at the quality of auditors’ reports
throughout the year and consider responses to accounting, financial
control and audit issues as they arise.
This year we agreed to refine the audit scope into three groups: full
scope audits (Scope A), specified account balance audits (Scope B),
and review procedures (Scope C). Deloitte visited all Scope A and
Scope B OpCos during the year and some Scope C OpCos to meet
local management and to perform audit procedures.
Using our auditor for non-audit services
We safeguard auditor independence and objectivity through a
number of control measures, including limiting the nature and value
of non-audit services performed by the external auditor.
Where we consider our external auditor to have the most appropriate
skills, expertise and safeguards, we may consider using them for
certain acceptable non-audit services pursuant to law or regulation or
where there are typically significant efficiencies to be had when done
in combination with the audit. Their knowledge of our business may
make such services more cost effective and ensure confidentiality.
Our non-audit services policy sets out the circumstances in which
the external auditor can perform non-audit services. It restricts the
provision of non-audit services as prohibited by the FRC Revised
Ethical Standard 2019 and provides a monetary threshold for
approved services. Our committee reviews and pre-approves any
non-audit services with fees above the threshold or not stipulated
by the policy.
Under our policy on non-audit services, the CEO and CFO have
authority to approve permitted services up to $50,000, with any
amounts above this needing committee approval.
Our review of the auditor’s performance during the reporting period
included non-audit services and the ability of Deloitte to maintain
independence while providing these services. The non-audit services
work for the financial year included half year review work for our
company, quarterly audits for our parent, Bharti Airtel, non-statutory
audit of Airtel Mobile Commerce B.V. financial statements, and control
attestation in Zambia required by local regulations, certification of
SmartCash Payment Services Bank Limited’s customers’ deposits
required by local regulations in Nigeria, mobile money regulatory
reporting required by local regulations in Uganda and Single Electronic
Format (ESEF) assurance. The value of this was $1.9m, representing
approximately 31% of Deloitte’s total remuneration as set out on
page 197, Note 8.1 of the consolidated financial statements.
Finance Committee
Our Finance Committee is an operational management committee
overseen by and subsidiary to our committee. Its two independent
non-executive director members are also members of the Audit and
Risk Committee.
Given the complexity and importance of finance, treasury and tax
policy matters, the Board has delegated oversight and governance
to this specialist Finance Committee. This has strengthened our
adherence to the relationship agreement and treasury and tax
controls. This committee frames our finance policies and procedures,
creating risk framework mechanisms for treasury and tax to help
achieve our strategic financial goals with a balance of initiative and
risk control.
Committee duties
• Ensures our treasury activities are carried out within an agreed
policy framework
• Makes sure activities are within agreed levels of risk and will
contribute to our financial performance through focused
management
• Makes sure operations are appropriately funded and conducted in
line with policy
• Ensures the overall treasury objective and specific objectives for
each main treasury activity are consistent with both financial and
corporate business objectives
• Recommends the strategic tax policy for approval by the Board
• Ensures adequate liquidity to meet financial obligations based on
cash flow forecasts
• Optimises the interest cost on gross debt within prudent risk
parameters
• Determines and approves the derivatives policy on swaps, foreign
exchange and interest rate hedges
• Generates reasonable commercial returns on investments to
protect investment capital and ensure desired liquidity
• Minimises the adverse impact of foreign exchange movements
associated with transactions and our operating exposure in various
currencies due to multinational operations
• Maintains diversified access to various local and global debt and
borrowings markets
• Determines and approves our strategic tax planning policies
• Approves new debt and the cancellation and modification of
borrowing and debt facilities
Committee members
Members were appointed by the Board on the recommendation of
the Nominations Committee in consultation with the Audit and Risk
Committee chair. They are Jaideep Paul, CFO, as chair; CEO Segun
Ogunsanya; deputy CFO Pier Falcione; and two independent non-
executive directors, Ravi Rajagopal and Annika Poutiainen. We review
the composition of the committee and the continued participation of
independent non-executive directors each year.
Airtel Africa plc Annual Report and Accounts 2023
127
GOVERNANCE REPORT
Nominations Committee report
Sunil Bharti Mittal
Chair
Attendance
Sunil Bharti Mittal
Chair
Andy Green
Senior independent non-executive director
Ravi Rajagopal
(Audit and Risk Committee chair)
Doug Baillie
(Remuneration Committee chair)
Meetings
attended
3 (3)
3 (3)
3 (3)
3 (3)
Committee responsibilities
• Reviews the balance, diversity, independence and effectiveness
of the Board
• Oversees the selecting, interviewing and appointing of new
Board members
• Reviews succession and contingency planning for the Board
and senior leadership, including training, development and
talent management
• Makes recommendations to the Board about the continued
service of directors, including suspensions and terminations
of service
• Makes sure directors disclose the nature and extent of any
actual or potential conflicts of interest, monitors and assesses
these disclosures and makes recommendations to the Board
as appropriate
• Oversees, with the chair of the Board, an annual evaluation of
Board, committee and director performance – in particular,
determines with the chair whether this evaluation should be
externally facilitated and, if so, the nature and extent of the
external evaluator’s contact with the Board, committees and
individual directors
• Oversees policy and objectives on diversity and inclusion in
light of our strategy, objectives and culture, and monitors the
implementation of policies and progress towards objectives
at all levels of our business
• Through the committee chair, engages with shareholders on
subjects relevant to committee responsibilities
128 Airtel Africa plc Annual Report and Accounts 2023
Chair’s statement
I’m pleased to present the Nominations Committee report for 2022/23
and to share our plans for the coming year.
Changes to the Board
We continue to make sure our Board members have the necessary
drive, abilities, experience and diversity to lead Airtel Africa in delivering
on our strategy.
We also continue to regularly monitor succession planning for senior
management immediately below the Board to ensure we have a
consistent pipeline of diverse talent for progression to the Board.
We’re working to support and encourage a growing pool of talent
potentially suitable for senior roles at Airtel Africa.
2022/23 saw the strengthening of our ExCo with significant changes:
• The recruitment of Anthony Shiner as our new chief
commercial officer
• The appointment of Ian Ferrao as CEO of Airtel Money
• The promotion of Apoorva Mehrotra to regional director, East Africa
We also made some significant senior management appointments: PD
Sarma as CEO of FibreCo and Yashnath Issur as CEO of Data Centres.
We’re expecting to be able to share news on our appointments of chief
information officer and head of strategy and sustainability roles in the
near future.
Our work to identify executives with potential and to encourage their
development led to several key internal promotions in and across
our operating companies this year. As well as Ian and Apoorva,
Ashish Malhotra was promoted to managing director for Airtel Kenya
Networks Ltd in May 2022. Ashish was previously head of sales and
marketing, Africa.
As part of our onboarding and review process, we’ve supported
Segun Ogunsanya as new MD and CEO of Airtel Africa since October
2021 and Jaideep Paul, CFO, since his appointment to the Board as
executive director in June 2021. We are pleased with the progress
of both.
Board diversity
Airtel Africa is a multicultural business, and our ethnic diversity is
reflected in our Board, our leadership team and our employee mix.
We’re committed to ensuring diversity in terms of culture, age, gender,
ethnicity, length of service and educational background – and will
continue to build an inclusive and diverse workplace. We count this
as a core strength of our business.
We’re privileged to have a Board of directors with a wide diversity of
skills, experience, age and nationality to perform their vital role. This is
invaluable in developing our business strategy and further enhancing
our governance capabilities.
We reviewed the tenure of all directors and discussed future Board
rotation as part of our ongoing review of the Board’s current and future
needs. Our Board is not yet gender balanced, despite including four
women. We foresee this imbalance being corrected through our Board
succession plans and retirement and rotation over the next 12 months.
As you can see from their biographies on pages 102-105, our
committee chairs and members have recent and relevant skills,
experience and expertise.
Employee engagement
As the non-executive director with responsibility for engaging with our
employees, I was delighted to be able to join several employee events
during the year to hear and respond to questions and listen to people’s
stories. This included the leadership conclave in February 2023,
when I met with over 200 colleagues, both informally and formally.
I have shared the outcomes of this with the Board and the senior
management team, as relevant. Our independent non-executive
directors are also invited to all-employee quarterly town halls where
they can take questions and provide answers.
Given my extensive travel to our operating companies throughout
the year, the Board considers my role as non-executive director
with responsibility for engaging with employees to be an effective
engagement mechanism. The Board intends to review how we can
both collectively and individually enhance engagement with our
people during the coming year.
Evaluating our Board
As part of our corporate governance review each year, we examine the
independence and diversity of our Board and the balance of skills and
development needs of members.
We regularly map the skillsets of our Board members against our
current strategy and annual operating plan. We confirmed that
collectively our non-executive directors have significant experience
across the critical areas of strategy, risk management, M&A,
technology, media and telecoms (TMT) and Africa.
I welcome questions from shareholders on this committee’s activities.
If you would like to discuss any aspect of this report, please contact
me through our company secretary, Simon O’Hara (see page 127 for
contact details). I will be attending the 2023 AGM and look forward to
the opportunity to meet you and answer your questions there.
Sunil Bharti Mittal
Chair, Nominations Committee
10 May 2023
About the committee
Led by the chair of our Board, our committee consists of independent
non-executive directors. Our CEO and chief HR officer are also invited
to attend committee meetings and submit reports.
We met formally three times during the 2022/23 financial year. Our
focus, driven by a more ambitious strategic agenda and the planned
separation of Airtel Money, was on longer-term succession planning
for the senior executive team, short-term senior leadership changes,
and supporting the CEO on his proposal to restructure our Executive
Committee (ExCo). Improving the gender balance at senior leadership
level across our business, including in our HQ and OpCos, remained
fundamentally important.
Having reviewed the composition and performance of the Board and
its committees, we believe our Board has the experience, expertise
and appetite for challenge to take Airtel Africa forward in line with our
strategy while maintaining good governance. We keep this under
regular review.
The committee’s work and focus in 2022/23
• Reviewed the Board’s composition, balance, diversity, skill sets,
individual directors’ time commitment and overall effectiveness
against future needs
• Reviewed our succession and contingency planning across the
business, linking this to individuals’ professional development at
senior management level to help senior management show their
potential for progression and to help build a diverse pipeline of talent
• Reviewed proposals from the CEO to restructure and reduce the
ExCo to create a more empowered and accountable group for faster
decision-making, deeper bench strength and more accountability
for expanding the diversity and gender balance of the business
• Reviewed the Board and committee structure of Airtel Money (AMC
B.V.) and progress towards the strategy and roadmaps for creating
a standalone Airtel Money entity. Also reviewed the trajectory
towards listing and the strength of talent to manage this new
entity once separated
• Considered the early stage policy for creating a new distinct
business unit for Airtel Business (Enterprise, Data Centres and
FibreCo) each led by a separate CEO, including the structure and
skillset to support implementation
• Identified gaps in development plans for those in the Airtel Money
and PSB Nigeria businesses and recommended remedial actions
• Identified vulnerabilities in the senior management compliance and
risk reporting structure and recommended remedial actions
• Recommended to the Board that each director be proposed for
re-election by shareholders at the July 2023 AGM
• Reviewed the mentoring programmes for the CEO and the
onboarding and mentoring arrangement for Ian Ferrao when
promoted to CEO of Airtel Money
• Reviewed policies and processes to promote diversity in our
operating country Boards and senior management teams and
put in place a development programme for suitable internal
candidates and agreed actions redressing gender imbalance
in management positions
• Worked to attract diverse, highly skilled and talented employees by:
– Tackling unconscious bias
– Maintaining a gender balance on shortlists for management
positions
– Ensuring all recruiters have signed the Standard Voluntary Code
of Practice
• Worked to retain the best talent by:
– Promoting a good work/life balance
– Encouraging equal opportunities for all
• Made four senior female Group appointees: Group tax director,
Group digital and product director, head of economic regulatory,
products, services and compliance, and Group finance officer B2B
• Monitored the progress towards targets to increase the number
of women in leadership positions by 2026 and to achieve gender-
balanced shortlists.
• Appointed three women to senior roles in our operating companies:
internal assurance director, Nigeria; finance director, Niger; and
marketing director, Zambia.
• In 2022/23:
– 26% of total Group employees were women
– 29% of our operating companies’ Executive Committees were
women (target 30% by the end of 2023)
– 20% of appointments during the year at the level of general
manager and above were women
Airtel Africa plc Annual Report and Accounts 2023
129
GOVERNANCE REPORT
Nominations Committee report continued
International Woman’s Day
In addition to a number of equality, diversity and inclusion-related
initiatives and campaigns across our OpCos, the Group celebrated
International Women’s Day for the third consecutive year. Employees
took part in talks, debates and activities to recognise women across
the Group and to consider some of the barriers and challenges facing
women in the workplace.
As at 31 March 2023
Percentage of employees
that are women
26%
2022: 26%
Percentage of women in
ExCo at the OpCo level
29%
2022: 28%
Board tenure as at 31 March 2023
Sunil Bharti Mittal
Akhil Kumar Gupta
Shravin Bharti Mittal
Andrew James Green
Douglas Anderson Baillie
Awuneba Ajumogobia
John Joseph Danilovich
Ravi Rajagopal
Liisa Annika Poutiainen
Segun Ogunsanya
Jaideep Paul
Kelly Bayer Rosmarin
Tsega Gebreyes
2-3 years
•
3-4 years
•
4-5 years
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Developing our Board
The ongoing development of our Board members is a priority. We
inform directors about relevant seminars and training and encourage
and support their attendance. We provide regulatory updates at
each Board meeting; and specialist advisers brief our committees
on topics such as changes to accounting procedures and UK
corporate governance. Our Board undertook a series of development
activities during the reporting period, including training provided
by our corporate legal advisers Herbert Smith Freehills LLP on the
political environment, governance reform, liability to investors and
directors’ duties.
We also reviewed the induction programme for directors and
concluded that this is appropriate.
Employee engagement
Our Board engages with employees in various ways to understand
how we can enhance our people strategy and continue to bring our
values to life. To understand the business at all levels, directors are
encouraged to engage with local operations, either by visiting in
person or through online meetings, strategy sessions and quarterly
reports from our HR Committee. We arrange visits each year to
operations, either individually or in small groups – with representatives
from the business present. This year, two of our Board and committee
programmes once again took place in Dubai and were attended by
many senior colleagues. These created opportunities for employees
at all levels to discuss both professional and personal matters.
The Board stays on top of employee-related issues through:
• Our open-door policy, where employees can connect directly with
our CEO or any ExCo director about anything
• Quarterly CEO-led town halls in English and French, where senior
executives update employees on our business performance,
organisational changes and take questions from employees
• Remuneration Committee updates on remuneration, people, culture,
conduct and diversity
• Quarterly presentations and one-to-one meetings as necessary
from our chief HR officer
• Quarterly reports from the HR Forum and Remuneration
Forum chair to the Remuneration Committee on people,
culture and wellbeing
• The results of our employee engagement survey and regular pulses
shared in various OpCos and OpCo-led town halls
• One-to-one meetings between our ExCo and OpCo MDs and other
leaders to discuss employee and personal wellbeing, team updates
and career aspirations
• Regular ExCo market visits where leaders interact with teams at all
levels of the business
Sunil Bharti Mittal is our designated Board director for employee
engagement, given his regular travel to our operating companies.
In this role, he is not expected to take on the responsibilities of an
executive director or the Chief HR officer.
130 Airtel Africa plc Annual Report and Accounts 2023
He is responsible for supporting directors’ collective responsibility to
consider a wide range of stakeholder perspectives when making
Board decisions, including:
This enables us to focus our search process on appointing someone
who will complement and enhance the Board’s effectiveness and
overall performance.
• Understanding the concerns of the workforce and articulating their
views and concerns in Board meetings
• Ensuring that the Board, particularly executive directors, take
appropriate steps to evaluate the impact of proposals and
developments on the workforce
• Where relevant and appropriate, providing feedback to the
workforce on Board decisions and direction during the
engagement process
• Making sure that feedback Is gathered from all levels of the
workforce in various locations
Each of our non-executive directors is invited to attend all quarterly
employee town halls to hear feedback from employees and is
encouraged to engage directly with employees when the opportunity
arises. Feedback can then be shared immediately with the company
secretary or chief HR officer, or with the Board at its next meeting.
In 2023, we’ll continue to identify and create mechanisms for effective
and meaningful dialogue with our broad employee base.
For more on how we engaged with our people during the reporting
period, see page 79.
Employee development and engagement
During the year, our Board stayed up to date on projects to
accelerate talent acquisition and to support and keep our own
employees. These included:
• Our Women in Tech programme – a one-year developmental
immersive programme targeting over 70 high-performing
women employees in tech or engineering
• The young technology leaders 2022 training programme and
set-up of Nigeria Digital Labs, both of which offer engineering
employment opportunities
• The Airtel Africa Mobility Programme – a women-focused
framework to support talent development and succession
planning, which will create the opportunity to spend months in
other OpCos
• The rollout of online learning programmes for capability building
and functional training, as well as for key competency areas like
management effectiveness and project management
• The rollout of mandatory compliance training across the Group
Board and committee balance, diversity, independence
and effectiveness
The chair of the Board is responsible for making sure independent
non-executive directors can constructively challenge executive
directors, while supporting them to implement the strategy and run
the business effectively. He works with our committee to make sure
the Board has the right blend of skills, independence and knowledge.
Appointing and re-electing directors
Our appointment processes
The Board has the power to appoint additional directors or to fill any
vacancy. When recruiting new members for the Board, our committee
adopts a formal and transparent procedure – this considers the skills,
knowledge and level of experience required, as well as diversity.
We begin by evaluating the balance of skills, knowledge and
experience of existing Board members, the diversity of the Board, and
ongoing requirements and strategic developments of the business.
We review a long list of globally drawn potential candidates and
shortlist candidates for interview based on the objective criteria set
out in the agreed specification. These include the requirements of
the Group, the diversity of the Board, and the skills, knowledge and
experience of current members. Non-executive appointees must be
able to show they have time available to devote to the role, and before
being appointed all candidates must identify any potential conflicts
of interest.
Shortlisted candidates are interviewed by the committee chair, other
committee members and the CEO. The committee then recommends
the preferred candidate, who is invited to meet other Board members.
Finally, the committee takes up detailed external references before
making a formal recommendation to the Board for appointment.
There were no Board changes in 2022/23.
No director took on a significant new appointment during the year.
Before accepting any appointment, each director is expected to
discuss the anticipated time commitment with our chair and company
secretary to make sure they continue to have adequate time for Airtel
Africa Board duties.
Re-election
All directors will stand for re-election at each year’s AGM while in
office. Each director proposed for re-election at our AGM has been
unanimously recommended by other members of the Board.
More information on our appointments process is on page 131.
Effectiveness
The internal Board evaluation reviewed our committee’s effectiveness
and sought feedback from the committee members. We discussed
the output of the evaluation, which concluded that we continued to
operate effectively throughout the year and confirmed our intended
areas of focus for the year ahead.
2022-23
evaluation
Nominations
Committee
Outcome
Areas of
focus
Key themes
and areas
for focus
Priorities for
change
Action
We will focus on our
Board and executive
succession planning to
ensure greater gender
diversity.
Areas of challenge are identified throughout this report.
Each director goes through a performance review process as part
of the annual Board effectiveness review. This confirmed that each
director continues to make an effective contribution to the Board.
Advice available to the Board
All directors have access to the advice and services of the company
secretary. Directors may also take independent professional
advice at our expense where this is judged necessary to fulfil their
responsibilities. During the year, the Board took advice from:
• Alvarez & Marsal through the Remuneration Committee, as
explained in more detail on page 162
• Herbert Smith Freehills LLP, our corporate legal advisers, through
the Market Disclosure Committee on the identification of insider
information
• Legal advisers Clifford Chance on share plan and remuneration
policy matters
• Our brokers on the sector and the relative performance of our
share price
Airtel Africa plc Annual Report and Accounts 2023
131
GOVERNANCE REPORT
Nominations Committee report continued
Diversity
We see diversity as fundamental to the successful operation of our
Board and to creating a balanced culture across our business. The
Board represents a broad range of skills, experience, age, education,
social background, ethnicity, gender and nationality. Our youngest
director is 34, and the Group is ethnically diverse. Most have spent
a considerable amount of time living outside the UK, and this range
of experience is invaluable in developing our business strategy and
enhancing our governance capabilities.
Our policy is to appoint and promote the best person for each role
without regard to age, ethnicity or disability – only considering factors
such as educational and professional backgrounds as appropriate for
the position. This applies to the entire business, including the Board.
We’re working to build diversity into our appointment and promotion
processes at every level. All Airtel Africa employees have completed
our annual Code of Conduct training and certification, which covers
our commitments on diversity, inclusion and anti-discrimination.
The Board regularly reviews its balance and composition considering
targets and recommendations for gender diversity, as well as the
Parker Review and its report into ethnic diversity. We’ve gone far
beyond the Parker Review target for FTSE 250 boards to have at least
one director from an ethnic minority background by 2024. We also fully
endorse to increase senior leadership diversity, including its listing rule
requirement target of 40% women on Board, Executive Committee
and senior management teams. As part of this review the Committee
considered the Group’s ongoing compliance with the Board diversity
policy and the new Listing Rule Disclosure as at 31 March 2023
requirement, pursuant to which at least one woman should be
appointed as chair or senior independent director on the Board or as
either our CEO or finance director by the end of 2025. The Board is not
currently compliant with these two Listing Rule targets.
As at 31 March 2023, women made up 31% of the directors and
there were no woman in senior Board positions. Of our directors,
62% identified as being from a non-white or minority-white
background. This represented no change in the Board’s gender
and ethnic diversity compared to 31 March 2022. We are compliant
with the Listing Rule target of having one individual on the Board of
directors from a minority ethnic background.
While we haven’t yet achieved the FTSE Women Leaders Review’s
Board level gender-balance target, its attainment is an integral part of
our succession planning. Our two most recent Board appointments
have been women, and this number will increase as Board members
retire and we appoint new directors.
Gender diversity in our Group level Executive Committee remains a
challenge. We’re working to increase the number of women at this
level by 2026. We are making considerable strides in addressing the
gender imbalance at our OpCo Executive Committee level and in our
senior management teams who report to the ExCo. For more on this
see below.
We’re making sure the specification for any new senior management
role is equally suited to applicants of any gender and that there’s no
discrimination at any stage in the selection process based on applicant
characteristics. Diversity and inclusion are, and will continue to be,
a key focus for Airtel Africa.
Gender balance
The gender balance of the Group’s employees as at 31 March 2023, was as follows:
Category
Group Board
Group Executive Committee Member
OpCo Executive Committee
Senior and middle management*
All other employees
Total
Women
4
1
41
156
844
1,046
Men
9
12
101
685
2,160
2,967
Total
13
13
142
841
3,004
4,013
Women (%)
31%
8%
29%
19%
28%
26%
Men (%)
69%
92%
71%
81%
72%
74%
* Senior management is all general managers and above, excluding the OpCo ExCo, and middle management includes all employees at senior management level
** This table is intended to meet the broader strategic report requirement under S414C (8)(C)
Ethnicity table* as at 31 March 2023, was as follows:
Asian/Asian British
Black /African/Caribbean/Black British
White British or other white (including minority-white groups)
Mixed/multiple ethnic groups
Other ethnic group, including Arab
Not specified/prefer not to say
Number of
Board members
5
3
5
–
–
–
Number of senior
positions on the
Board (Chair, SID,
CEO, CFO)
2
1
1
–
–
–
Percentage
of the Board
38%
24%
38%
–
–
–
Number in
executive
management**
1
1
Percentage in
executive
management
8%
8%
–
–
–
–
–
–
* The data for these tables was collected by asking individuals to anonymously self-report against the categories displayed in the table above as part of the annual Board
evaluation exercise
** This is the number of executive managers on the Board
Women in leadership* as at 31 March 2023, was as follows:
Women
Men
Number of
Board members
4
9
Percentage
of the Board
31%
69%
Number of senior
positions on the
Board (Chair, SID,
CEO, CFO)
0
4
Number in
executive
management**
0
2
Percentage in
executive
management
27%
73%
* This represention on sex rather than gender identity as defined by the listing rules
** This is the number of executive managers on the Board
132 Airtel Africa plc Annual Report and Accounts 2023
Training and awareness
1. An ongoing programme to counter unconscious bias
2. Using town hall sessions to create awareness and set the right
tone from the top
3. All employees completing yearly Code of Conduct training and
certification covering our commitments on diversity, inclusion and
anti-discrimination
Monitoring and reporting
1. A monthly diversity review by our chief HR officer with the HR
directors of our regional businesses
2. Quarterly progress reports to our Executive Committee and
Remuneration and Sustainability Committees before being
reported to the Board
3. Quarterly progress reports to our management HR Committee
Our ‘Win with’ strategy aims to drive the sustainable, profitable
growth we need to continue creating value for all our stakeholders.
To facilitate this, we aim to be an employer of choice with a
diverse and inclusive working environment and a culture of high
performance, wellbeing, skills enhancement and coaching.
Our diversity policy
Purpose
We have a clear and ongoing purpose of transforming lives.
Diversity and inclusion are a part of who we are and how we
do business – in line with our values of being alive, inclusive
and respectful.
Policy statement
We recognise that a diverse workforce is key to delivering value to
our customers. So we work to create an inclusive environment that
embraces our differences and helps employees work to their true
potential. Our practices and policies to shape this include global
mobility, talent acquisition and learning and development. We’re
particularly focused on developing women in management and
leadership roles across our business.
Initiatives
1. Finding and using diverse talent pools for all management and
senior leadership recruitment
2. Building succession and leadership development plans that
encourage the promotion of women, such as the ‘Women in Tech’
programme, the young technology leaders 2022 training
programme, Digital Labs and the Airtel Africa Mobility programme
3. Mentoring programmes
4. Facilities for expectant and new mothers, such as reserved parking
and mothers’ rooms
5. The CEO’s Women in Leadership council
6. Women’s entrepreneurship programme to increase the
percentage of self-employed women in sales and distribution roles
Airtel Africa plc Annual Report and Accounts 2023
133
GOVERNANCE REPORT
Our compliance with the UK Corporate Governance Code
1. Board leadership and company purpose
A. An effective and entrepreneurial board
Our Board is responsible for Airtel Africa’s system of corporate
governance. As such, directors are committed to developing and
maintaining high standards of governance that reflect evolving
good practice.
The Board provides strategic and entrepreneurial leadership within
a framework of strong governance, effective controls and an open
and transparent culture. This enables opportunities and risks to be
assessed and managed appropriately. Our Board also sets our
strategic aims and risk appetite, makes sure we have the financial
and human resources in place to meet our objectives, and monitors
our compliance and performance against our targets. And finally,
the Board ensures we engage effectively with all our stakeholders
and considers their views in setting our strategic priorities.
Roles and responsibilities
We have well-documented roles and responsibilities for directors,
and a clear division of key responsibilities between our chair and
CEO to help maintain a strong governance framework and the
effectiveness of our Board. Our clearly defined policies, processes
and procedures govern all areas of the business. These will continue
to be reviewed and refined to meet business requirements and
changing market circumstances.
We re-examine budgets considering business forecasts throughout
the year to make sure they’re robust enough to reflect the possible
impact of changing economic conditions and circumstances.
We conduct regular reviews of actual results and future projections
compared with the budget and prior year results, as well as with
various treasury reports. We monitor any disputes that could lead
to significant litigation or contractual claims at each Board meeting,
with updates provided by the CEO and CFO as part of their reports
or tabled by the company secretary.
We have a Board-approved framework of delegated authority to
identify and monitor individual responsibilities of senior executives.
B. Purpose, values and strategy and alignment with culture
Our purpose is to transform the lives of people across sub-Saharan
Africa. We do this through products, services and programmes
that foster financial inclusion, drive digitisation and empower our
140 million customers and the communities in which they live.
To continue to serve our vision of enriching the lives of our
customers, we have a clear business objective: to grow market
share profitably and create superior enterprise value while delivering
our sustainability strategy.
We provide essential services that are unlocking the potential for people
and economies to grow. The Board sets the strategy for aligning with
our purpose. Our ‘Win with’ strategy ensures that working to deliver
our sustainability strategy underpins everything we do.
Our Board believes that a healthy culture, which drives the right
behaviours, protects and generates value and helps employees
engage with our values, will lead to the successful delivery of our
strategy. It is responsible for defining our values and setting clear
standards from the top. Our chair leads the way by ensuring our
Board operates correctly and with a clear culture of its own which
can be promoted to our wider operations and dealings with all
stakeholders. Our CEO, with the help of the CFO and his management
team, is responsible for the culture within our wider operations.
We’ve continued to build our people capability through:
• Enhancing our online learning platform for greater access
• Encouraging skills development through short-term assignments
and exchanges between operating companies
• Mentoring
• Ensuring all employees have mandatory training in compliance
areas such as our Code of Conduct, anti-bribery and corruption,
and information security
Simon O’Hara
Group company secretary
Achieving our corporate governance
and transparency in reporting goals
is a shared ambition of all the teams
at Airtel Africa.
As Airtel Africa plc ordinary shares have been
trading on the main market of the London Stock
Exchange since 3 July 2019, we apply the
principles and provisions of the 2018 UK Corporate
Governance Code (the Code) and explain any
non-compliance. (See the Code at frc.org.uk.) While
we have a secondary listing on the Nigerian Stock
Exchange (NGX), we’re permitted by NGX listings
requirements to follow the corporate governance
practices of our primary listing market in London.
The UK Financial Reporting Council (FRC)
promotes high-quality corporate governance and
reporting through the Code. All companies with a
premium listing on the London Stock Exchange
must either comply in full or explain why and to
what extent they don’t yet comply.
Throughout the year ended 31 March 2023,
we’ve applied the principles and complied with
the provisions set out in the 2018 UK Corporate
Governance Code except for in the area:
Provision 9, requiring that the chair be
independent on appointment.
134 Airtel Africa plc Annual Report and Accounts 2023
The Board receives regular reports that allow it to assess our culture to
ensure this continues to support our strategy and purpose. Our Audit
and Risk Committee reviewed the culture of compliance and arranged
a presentation facilitated by Deloitte UK. As a result of this, our chief
internal auditor was instructed to establish a robust reporting
framework for assessing and monitoring culture on an ongoing basis
and to include these findings in the quarterly internal audit report to
the Audit and Risk Committee, for subsequent sharing with the Board.
Our Remuneration Committee helps our Board oversee our culture
by making sure our incentivisation schemes are driving behaviours
consistent with our purpose, values, strategy and culture; and
through its focus on diversity and inclusion, people and community
engagement. The committee tracks performance in these areas and
reports to the Board as appropriate.
These reports have led to Board discussions on matters ranging
from gender balance metrics across the business to how to achieve
wider workforce engagement. In both instances, the Board
recommended changes to be able to satisfy itself that policy,
practices and behaviours throughout the business were aligned
with our purpose, values and strategy.
Annika Poutiainen is the Board sustainability champion, supported by
the CEO, CFO and company secretary as fellow committee members.
She reports to each Board meeting on the work of the Sustainability
Committee. This committee, which became a full committee of the
Board at the beginning of the financial year, meets monthly and
receives occupational health and safety updates at each meeting.
Our chief HR officer regularly attends Board meetings and all
Remuneration Committee meetings to provide updates on HR matters
– including on culture, diversity and inclusion, talent acquisition and
retention and employee engagement. The chair of the Remuneration
Committee also includes these matters in his own report to the Board.
While our leadership establishes our culture and leads by example,
our clear policies and Code of Conduct ensure that our obligations to
shareholders and other stakeholders are clearly understood and met,
as described in more detail on pages 37 and 77.
C. Company performance and risk management
Our CEO manages the Group’s business in line with the strategic plan
and approved risk appetite and takes responsibility for the operation
of the internal control framework. Our Audit and Risk Committee
oversees potential risks and provides the Board with strategic advice
on current and potential future risk exposures. Our risk management
framework supports informed risk-taking by our businesses, setting
out the risks that we’re prepared to be exposed to and the risks that
we want to avoid.
More information on risk management can be found on page 90 and on
page 222, note 32
D. Stakeholder engagement
Our Board members are increasingly taking a more active role in
engaging with shareholders and wider stakeholders and addressing
their concerns. This is in keeping with our sustainability strategy, which
addresses stakeholder concerns as advised by the Global Reporting
Initiative (GRI), and the ongoing development of our remuneration
policy. Our director induction process includes directors’ duties under
section 172 of the Companies Act 2006.
The Board regularly receives feedback on shareholder sentiment
and sell-side analysts’ views of our business and the wider industry.
Our investor relations team and management have frequent contact
with the 12 active equity research analysts who follow Airtel Africa.
Our culture
u
O
r p u r p o s e is to transform lives
i s t o e n r ich the lives of our customers
r v i s i o n
O u
We have
a growth
mindset and a
collaborative
way of working
A clear
Business
Strategy
We are a high
performance
culture
We are
transforming
to a digital
environment
r people
u
O
We value
diversity and
inclusion and the
value it brings to
our business
A clear
Sustainability
Strategy
O
u
r
s
t
r
a
t
e
g
y
Our
culture
A clear
purpose
and vision
Clear
objectives
U
n
d
Alive
e
r
p
i
n
n
e
Our val u e s
Inclusive
d b
y a strong governance f r a m e w o r
n
k a
Respectful
d c o d e of conduct
Airtel Africa plc Annual Report and Accounts 2023
135
GOVERNANCE REPORT
Our compliance with the UK Corporate Governance Code continued
Our Board discusses the impact of all major decisions on our
workforce before drawing its conclusion. We also consider stakeholder
impact in relation to material acquisitions and strategic expansion.
While we’re working to better embed stakeholder considerations in
Board decision-making, we do factor the needs and concerns of our
stakeholders into Board discussions and decisions in accordance with
section 172 of the Companies Act 2006 (see statement on page 77).
Sunil Bharti Mittal is our designated Board director for employee
engagement, given his regular travel to our operating companies.
We continue to seek to identify and facilitate mechanisms for more
effective and meaningful dialogue with our people.
The Board is aware that Sunil Bharti Mittal did not meet the
independence criteria of the Code when he was appointed due to his
interests in the company. Considering his extensive involvement with
the Bharti Airtel Group over many years and his major contribution to
Airtel Africa’s growth, the Board unanimously agrees that his continued
involvement is crucially important to our ongoing success. We have a
number of safeguards in place to ensure robust corporate governance
during his tenure as chair, including Andrew Green in position as a
strong senior independent director.
The Board believes Sunil Bharti Mittal continues to effectively oversee
our leadership and maintain a balanced shareholder agenda.
E. Workforce policies and practices
We expect all businesses and employees to work with the highest
standards of integrity and conduct at all times. Our Code of Conduct,
which can be found on our website, sets out our expectations in
detail. We also have policies focused on anti-bribery and corruption,
whistleblowing and data protection (GDPR) setting out the ethical
framework that all companies and employees are expected to follow.
Each year, our employees receive up-to-date training on legislative and
regulatory matters.
Our management processes and divisions of responsibility are detailed
in the following documents, which can be seen on our website:
• Schedule of matters reserved for Board decisions, including profit
expectations and dividend policy
• Terms of reference for Audit and Risk, Nominations, Sustainability
and Remuneration Committees
• Policies covering operational, compliance, corporate responsibility
and stakeholder matters, including ones related to the Bribery Act
2010 and anti-corruption – these are updated as necessary in line
with developments in corporate governance and legislation
• Our Articles of Association
Our policies are reported on to the Board and Audit and Risk
Committee by our head of internal audit and risk assurance, chief
compliance officer or Group company secretary.
A description of our whistleblowing procedures is set out on page 125.
2. Division of responsibilities
F. Role of the chair
The roles and responsibilities of the chair and CEO have been clearly
defined, set out in writing and signed by Sunil Bharti Mittal and
Olusegun Ogunsanya.
The chair leads our Board and is responsible for its overall
effectiveness in directing the company.
Our chair and the senior independent director hold separate meetings
at least once a year with non-executive directors without the CEO
present. Each did this once during the 2022/23 reporting period.
Led by the senior independent director, the non-executive directors
also meet at least once during the year without the chair to appraise
his performance. The chair also meets formally with independent
non-executive directors without our CEO or other non-executive
directors present. Through these meetings, the chair ensures we
maintain a fair and open culture where all Board members can make
a strong contribution.
G. Composition of the Board and division
of responsibilities
Our Board consists of 13 directors: non-executive chair Sunil Bharti
Mittal, who is not independent, CEO Segun Ogunsanya, CFO Jaideep
Paul, seven independent non-executive directors and three non-
executive directors. Andrew Green, CBE, is the senior independent
director and Simon O’Hara is our Group company secretary. For more
on our Board composition, see pages 102-105.
The Board has an established framework of delegated financial,
commercial and operational authorities which define the scope and
powers of the CEO and of operational management.
For more on our Board and executive roles, see pages 102-107
H. Role of non-executive directors
Our independent non-executive directors offer advice and guidance to
the CEO and CFO, drawing on their wide experience in business and
diverse backgrounds. They also provide constructive challenge and
hold management to account – monitoring the overall direction and
strategy of the company, scrutinising the performance of the CEO
and CFO, and ensuring the integrity of the financial information made
available to the Board and our shareholders. They play an important
part in general succession planning for the Board and other executive
and senior management positions.
The senior independent director and the independent directors also
play a critical role in fulfilling the requirements of the separation
governance framework and ensuring Airtel Africa’s independence.
Following their appointment, each of our non-executive directors
(both independent and non-independent) received an induction that
focused on the culture, operational structure and key challenges of
Airtel Africa.
I. Board processes and role of the company secretary
We have a range of processes in place to make sure our Board is
fully informed in a timely manner to be able to perform its duties.
Directors receive papers before each Board and committee meeting.
This allows them to prepare for meetings and to send in their views if
unable to attend.
The CEO sends updates to members on important issues between
meetings. Members also receive a monthly report on key financial and
management information, as well as regular updates on shareholder
issues and analysts’ notes. This information is distributed through a
secure online portal.
All directors have direct access to the advice and services of the
Group company secretary. And non-executive directors can take
independent legal advice at our expense when necessary to fulfil
their duties to the company.
136 Airtel Africa plc Annual Report and Accounts 2023
We take time at the end of each Board meeting to review our Board
and committee processes and to build on actions introduced as a
result of the annual evaluation exercise. Coordinated by the Group
company secretary and led by the chair, we consider feedback from
Board members to improve our efficiency.
3. Composition, succession
and evaluation
J. Board appointments
As part of our 2022/23 Board evaluation, we reaffirmed that each of
our independent non-executive directors is independent in character
and that there are no relationships which could affect their judgement.
The main objective of our Nominations Committee is to make sure
we have the best possible leadership team by overseeing a formal
and rigorous and transparent process for appointing and removing
directors to or from the Board, our committees and other senior roles.
The committee also works to improve diversity and develop our
succession-planning processes. During the reporting period, no
new directors were appointed to the Board.
For more on our Nominations Committee’s activities and processes,
see pages 128-133
K. Skills, experience and knowledge of the Board and
its committees
We have an engaged and diverse Board who reflect the cultural and
ethnic diversity of the countries in which we operate. Our Board
members bring a range of practical experience and deep expertise to
our business – and at least half of our directors, excluding the chair,
are independent non-executive directors, in line with the Code’s
recommendations.
The Board considers that each director brings relevant and
complementary skills, experience and background to the Board,
details of which are set out in the biographies on pages 102-105.
L. Board evaluation
As part of good governance, it’s important to make sure our Board as
a whole, its committees and each director is operating and performing
effectively. The Code requires an externally facilitated evaluation at
least every three years. We have chosen to do this in each of the
three previous years since listing to enable us to plan effectively for
the future. This year we have undertaken an anonymised internally
facilitated evaluation under the direction of the company secretary.
See page 116 for details
4. Audit, risk and internal control
N. Fair, balanced and understandable assessment
Pages 17-19, 24-25, 26-37, 90-97 of the strategic report set out our
performance, business model and strategy, as well as the risks and
uncertainties relating to the company’s future prospects. When taken
as a whole, the directors consider this Annual Report is fair, balanced
and understandable and provides information necessary for
shareholders to assess our performance, business model and strategy.
For more on the Audit and Risk Committee’s assessment of fair, balanced
and reasonable see page 122
O. Risk management, internal control and determining
principal risks
As highlighted in the strategy and risk sections of the strategic report,
risk management is inherent to our management thinking and
business planning processes. The Board has overall responsibility
for establishing and maintaining our risk management and internal
control systems. Our Audit and Risk Committee supports the Board
in reviewing the effectiveness of our internal controls, including
financial, operational and compliance, and risk management systems.
For more on the activities and processes of this committee,
see pages 117-127
5. Remuneration
P. Remuneration policies and practices
Our proposed policy is intended to attract, motivate and retain
high-calibre directors, to promote the long-term success of Airtel
Africa, and to be in line with best practice and the interests of our
stakeholders. There are two key principles of our remuneration policy.
One, the structure of remuneration packages and the design of
performance-based schemes, should be aligned with stakeholders’
interests and support our business strategy and objectives. And two,
the performance-based element of remuneration should be
appropriately balanced between the achievement of short-term
objectives and longer-term objectives.
Our current Remuneration Policy was originally introduced at the 2020
AGM. It was designed to be appropriate for a newly listed company
in the UK while taking account of our very specific circumstances:
being listed on the LSE with a secondary listing on the Nigerian Stock
Exchange and operating in 14 countries in Africa.
In 2022, changes were made to the remuneration policy to incorporate
best practice features and reflect the appointment of a new CEO and
CFO in line with current good practice. The committee decided to
adapt the policy in two areas: requiring one-third of any bonus paid to
executive directors to be deferred (rather than any bonus of more than
100% of salary) and introducing a two-year post-employment holding
period. No changes were made to policy maximum pay levels. These
changes were supported by shareholders at the 2022 AGM.
M. Independence and effectiveness of internal and
external audit
Each year, our Audit and Risk Committee identifies the key risks to
be reviewed and assessed by Internal Audit as part of its programme
of work to enhance our control environment; and satisfies itself as
to the policies and procedures that ensure the independence and
effectiveness of internal and external audit functions and satisfies
on the integrity of financial and narrative statements.
During 2022/23, Deloitte UK performed an external statutory audit of
year ended 31 March 2023, and a half-yearly review. See page 126 for
a discussion of their independence and effectiveness.
Provision 41: engagement with the workforce
Airtel engages with employees on a number of issues, including
remuneration, in a variety of ways. For example, the designated
non-executive director for employee engagement holds regular
meetings with employees when he visits sites throughout the year,
and Board members when they visit markets during any year hold
engagement sessions with the workforce. Through these meetings
and engagement, our board members inform employees on executive
remuneration and receive feedback. This engagement approach is
kept under review as we continually seek to improve the Board’s
dialogue with employees.
For more on the activities and processes of our Audit and Risk Committee,
see pages 117-127
The topic of engaging with our people forms part of the chief HR
officer’s report to each Board meeting.
Airtel Africa plc Annual Report and Accounts 2023
137
GOVERNANCE REPORT
Our compliance with the UK Corporate Governance Code continued
Copies of our Annual Report detailing the executive directors’
remuneration are widely shared and available for employees to see
on our website.
During our annual strategy meeting and Q3’23 Board and Committee
meetings in Dubai, UAE, the Board met both formally and informally
with our wider management team and other colleagues when
questions were asked. A similar opportunity is offered to employees
attending the Q&A session following each quarterly Group-wide town
hall meeting. The Board is satisfied that we’re compliant with Provision 41.
See page 137 for details
Q. Procedure for developing remuneration policy
The committee regularly reviews our policy to ensure that it operates
as intended, is in line with best practice and is aligned to our evolving
business strategy. The committee has decided to put the policy to a
shareholder vote at the AGM later this year. The policy differs from the
previous shareholder-approved policy in these key areas:
• A reduction in the CFO’s maximum annual bonus opportunity
• An increase in the LTIP opportunity allowable to provide headroom
for larger award sizes over the next three years if Airtel Africa
continues to deliver high levels of growth
• A cap on RSU opportunity of 50% of base salary
• The introduction of a facility for one-off awards linked to key
strategic initiatives
R. Exercising independent judgement
In the year ended 31 March 2023, Alvarez & Marsal provided
remuneration advice and benchmarking data, and Clifford Chance
provided legal advice in relation to share plan matters and
remuneration advice to our Remuneration Committee.
The committee uses its discretion, within the maximum policy limits,
to consider the target bonus taking account of market development
opportunities, specific events and evolving roles. While the committee
has the discretion to change the metrics and weighting for the bonus
plan from year to year, we normally consult with major shareholders
before making any significant changes.
See our remuneration report on pages 145-163 for more detail
LR 9.8.6R Climate-related financial disclosures
For our TCFD disclosure pursuant to the Financial Conduct Authority’s
LR9.8.6R (8) requirement, see page 56.
138 Airtel Africa plc Annual Report and Accounts 2023
Directors’ report
About this report
The directors of Airtel Africa present this report
together with the audited consolidated financial
statements for the year ended 31 March 2023.
This report has been prepared in accordance with the
requirements outlined in the Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations
2008. It forms part of our management report as required
under Disclosure Guidance and Transparency Rule (DTR) 4.
Certain information that fulfils the requirements of the directors’
report can be found elsewhere in this document and is referred
to below. This information is incorporated into this directors’
report by reference.
The directors’ report comprises pages 102-138 and 145-163
of the governance report and this report on pages 139-143.
Other relevant information which is incorporated by reference
can be found in the strategic report:
• Financial performance on pages 86-89
• Business environment on pages 20-21
• Outlook and financial management strategies, including
important events affecting the company since the year end
(with subsidiary undertakings included in the consolidated
statements) on pages 1-99 and on page 230, note 34
• The principal risks and risk management framework on
pages 93-97
• Our engagement with suppliers, customers and others
Other relevant information (required by Listing Rule 9.8.4 R is
incorporated by reference to the directors’ report and appears in
the Annual Report as follows:
Information
Details of our long-term share plans
Details of where a shareholder has agreed to waive
future dividends:
The ongoing waiver of our EBT and dividends payable
on shares held in trust for use under our employee
share plans
Relationship agreement
Climate-related financial disclosures (LR 9.8 6R)
Page
151
140
141
56
This section contains the remaining matters not covered
elsewhere on which the directors are required to report
each year.
Profit and dividends
Statutory profit for Airtel Africa after tax for 2022/23 was $750m
(2021/22: $755m), and for the company the profit after tax for
2022/23 was $229m (2021/22: loss after tax was $7m). Details of
our dividend distribution during the year are set out on page 215,
note 27.1 to the consolidated financial statements.
Subject to the approval of our shareholders, the directors have
recommended a final dividend for the financial year ended 31 March
2023 of 3.27 cents per ordinary share, which will be paid out of
distributable reserves. You can find more about the dividend, including
key dates, on our website at www.airtel.africa. On 30 October 2022,
the Board declared an interim dividend of 2.18 cents per ordinary
share. This was paid on 9 December 2022 to shareholders who were
on the UK and Nigerian share registers on 11 November 2022.
Directors
The names of our current directors, along with their biographical
details, are set out on pages 102-105 and are incorporated into this
report by reference. Directors serving during the year are listed on
page 115.
Details of directors’ interests in our share capital are in our
remuneration report on page 158.
Our Articles of Association govern the appointment, removal and
replacement of our directors and explain the powers given to them.
Avoiding conflicts of interest
The Board regularly reviews each director’s interests outside Airtel
Africa and considers how the chair ensures he is applying objective
judgement in his role, as required by the UK Corporate Governance
Code. To help directors avoid conflicts (or possible conflicts) of
interest, the Board must first give clearance to any potential conflicts,
including directorships or other interests in outside companies
and organisations. This is recorded in a statutory register kept for
this purpose.
If a director considers they are, or might be, interested in any contract
or arrangement in which the company is or may be involved, they must
give notice to the Board in line with the Companies Act 2006 and our
Articles of Association. In this instance, unless allowed by the articles,
the director cannot take part in any discussions or decisions about the
contract or arrangement.
Articles of Association
The Articles of Association can be amended in line with the
Companies Act 2006 through a special shareholder resolution.
The information below sets out the provisions in the Articles of
Association in place at the date of this report.
Airtel Africa plc Annual Report and Accounts 2023
139
GOVERNANCE REPORT
Directors’ report continued
Share capital and control
We have two classes of shares:
1. Ordinary shares of $0.50 – each carries the right to one vote
at our general meetings and other rights and obligations as set
out below.
2. Deferred shares – these carry no voting rights.
Following the conclusion of our AGM, Airtel Africa intends to apply its
authority to purchase all deferred shares from their holders before
proceeding to cancel the shares.
Details of our share capital movement during the year are set out in the
consolidated statement of changes in equity on page 176.
Rights of members
There are no restrictions on the size of a holding, the exercise of voting
rights, or the transfer of shares. The directors are not aware of any
agreements between shareholders that might restrict the transfer
of shares or voting rights.
Share plans and rights under the
employee share scheme
We operate an Employee Benefit Trust (EBT) for some employee share
plans. The trustees of the EBT have all rights attached to Airtel Africa
shares unless specifically restricted in the plan’s governing document.
Under these plans, we can satisfy entitlements by acquiring existing
shares or issuing new shares. Existing shares are held in the trust.
The trustee purchases shares in the open market as required to enable
us to issue shares to satisfy awards that vest. The trustee does not
register votes in respect of these shares at our AGMs and has waived
the right to receive any dividends. At 31 March 2023, the EBT held
7,326,058 ordinary Airtel Africa shares. During the year, the EBT
transferred 3,933,952 shares to satisfy the vesting of awards under
our share-based incentive plans.
Purchase of own shares
The articles do not prevent Airtel Africa from purchasing its own
shares. No one person has any rights of control over our share capital
and all issued shares are fully paid.
Major shareholders
Major shareholders have the same voting rights as other shareholders. We publish information given to us by substantial shareholders through
the regulatory information service and on our website www.airtel.africa, in line with the FCA’s Disclosure Guidance and Transparency Rules.
At 31 March 2023, we had been notified, in keeping with Rule 5, of the following holdings of ordinary share voting rights2:
Shareholder
Airtel Africa Mauritius Limited
Indian Continent Investment Limited
Singapore Telecom International Pte Ltd
Warburg Pincus LLC
Qatar Holding LLC
Bharti Global Limited
1 % interest in voting rights attaching to issued shares.
Number of voting rights
2,105,108,805
% of capital1
56.01
292,424,330
148,093,705
145,212,068
134,726,964
127,147,531
7.78
3.94
3.86
3.58
3.38
2 The company has not received any notifications in accordance with DTR5 from 1 April 2023 to the date of this Annual Report.
Significant agreements
(change of control)
Airtel Africa’s borrowing and bank facilities contain the usual
provisions which could potentially lead to prepayment and
cancellation by the other party if there’s a change of company
control. There are no other significant contracts or agreements that
would take effect, change or come to an end on a change of control
following a takeover bid. All our share plans contain provisions for
a change of control as summarised in the directors’ remuneration
report on page 153.
We do not have agreements with any director or employee that
would compensate for loss of office or employment resulting from
a takeover bid.
Airtel Mobile Commerce BV (AMC BV)
AMC BV, a wholly owned subsidiary of Airtel Africa, is currently the
holding company for several of Airtel Africa’s mobile money operations.
It is intended to own and operate the mobile money businesses across
all of Airtel Africa’s 14 operating countries once the inclusion of the
remaining mobile money operations under AMC BV is completed.
Airtel Africa plc has sold minority equity stakes in AMC BV to
four investors.
140 Airtel Africa plc Annual Report and Accounts 2023
Airtel Money Investments at a glance
1
2
3
4
5
1st Investment
Agreement
signed with
The Rise Fund
II Aurora SARL
on 17 March
2021
($200m)
2nd Investment
Agreement
signed with
Mastercard
Asia/Pacific
Pte Ltd on
31 March 2021
($100m)
3rd Investment
Agreement
signed with
Qatar
Holdings LLC
on 30 July
2021
($200m)
1st Completion
conditions
precedent met on
30 July 2021
1st Completion
conditions
precedent met on
30 July 2021
1st Completion
conditions
precedent met on
19 August 2021
2nd Completion
conditions
precedent met
in November
2021
4th Invesment
Agreement
signed with
Chimetec
Holdings LLC
on
15 December
2021
($50m)
Airtel Africa aims to explore the potential listing of the mobile money
business within four years of the announcement to do so made in
March 2021. Under the terms of the transaction with the four minority
stakeholders, the minority investors have the option to sell their shares
in AMC BV to Airtel Africa or its affiliates in very limited circumstances:
if there’s no Initial Public Offering of shares in AMC BV within four years
of first close, or if there are changes of control without prior approval.
This sale would be made to provide liquidity to the minority investors
and would be at fair market value, determined by a mutually agreed
merchant bank using an agreed internationally accepted valuation
methodology. The option is subject to a minimum price equal to the
consideration paid by the investors for their investment (less the value
of all distributions and any proceeds of sale of the shares, and with no
time value of money or minimum built in) and a maximum number of
shares in AMC BV.
Ownership of Airtel Mobile Commerce BV
Airtel Africa plc
(United Kingdom)
Bharti Airtel International (Netherlands) B.V.
(The Netherlands)
Airtel Mobile Commerce B.V.
(The Netherlands)
The Rise Fund II Aurora,
SARL
Mastercard Asia/
Pacific PTE LTD
Qatar Holding LLC
Chimetec Holdings LLC
This represents desired shareholding structure on the basis that all restructuring
is completed successfully by final closing date.
However, actual shareholding may differ on account of closing adjustments and
completion of ongoing restructuring activities
Relationship agreement
In accordance with the Listing Rules, Airtel Africa entered into a
relationship agreement with Bharti Airtel, Airtel Africa Mauritius
Limited (AAML), our majority shareholder and an indirect subsidiary of
Bharti Airtel, and Bharti Telecom on 17 June 2019. This agreement
regulates the ongoing relationship and ensures that transactions
and arrangements between parties are conducted at arm’s length
and on normal commercial terms. It also contains the independence
undertakings and provisions required by the Listing Rules. During the
financial year, Airtel Africa has complied with the terms and provisions
of the relationship agreement.
Board and meeting participation
As long as Bharti Airtel and/or AAML are a controlling shareholder,
Board meetings and certain committee meetings must include a
non-executive director nominated by Bharti and/or AAML (subject to
certain exemptions) to be valid (quorate). Each Board and committee
meeting must include three directors including two independent
directors to be valid.
As long as Bharti Airtel and/or AAML and their associates hold (directly
or indirectly) ordinary shares in Airtel Africa, they are entitled to appoint
non-executive directors to the Board as follows:
• One non-executive director for 10% or more interest in the
ordinary shares
• Two non-executive directors for 15% or more interest in the
ordinary shares
For every 10% or more interest (directly or indirectly) in the ordinary
shares above 15% in aggregate, Bharti Airtel and/or AAML can
nominate one additional non-executive director to the Board, up to
a maximum of four directors. Independent non-executive directors
must form the majority of the Board.
Similarly, as long as Bharti Airtel and/or AAML and Bharti Telecom and
their associates have a 10% or more interest in Airtel Africa ordinary
shares, each can appoint one observer (who must be a director) to
attend meetings of the Audit and Risk Committee and Remuneration
Committee. This observer can attend and speak at meetings but does
not count towards quorum or have a right to vote. As such, Akhil Gupta
attends the Audit and Risk Committee meetings, and Shravin Bharti
Mittal attends the Remuneration Committee meetings.
Airtel Africa plc Annual Report and Accounts 2023
141
Directors’ indemnities
We have agreed to indemnify directors for certain losses and
liabilities in connection with their duties, powers and office. Qualifying
third-party indemnity provisions (as defined by section 234 of the
Companies Act 2006) were in force during the financial year ended
31 March 2023. We also hold liability insurance covering our directors
for any legal action against them. We took legal advice on this subject.
Branch and representative offices
Airtel Africa Services (UK) Limited has an office in Dubai, UAE.
We were issued a commercial licence in Dubai on 30 September 2021
with number 99099.
Bharti Airtel International (Netherlands) B.V. has a branch office in
Nairobi, Kenya. It was issued a certificate of compliance on 7 October
2010 with number CF/2010/33117.
Anti-bribery and anti-corruption
In line with the Bribery Act 2010, we have written policies on avoiding
and not tolerating bribery or corruption. These apply across all our
businesses and can be found on our website. All employees are
trained in anti-bribery and anti-corruption to help mitigate the risk
of reputational damage, financial penalties and possible exclusion
from certain approved partnerships.
Political donations
In line with our policy, we have not made any donations to political
parties during the year.
At our next AGM, our directors will again be asking for the authority
to make political donations of no more than £25,000 in total. This is
to strengthen our corporate governance by making sure that neither
Airtel Africa nor our subsidiaries inadvertently breach the wide
definitions in Part 14 of the Companies Act.
Employing people with disabilities
It is our policy that people with disabilities should be fairly considered
for any job vacancy.
We are committed, wherever possible, to making sure people with
disabilities are supported and encouraged to apply for employment
and able to work successfully at Airtel Africa.
Important events since the end of the
financial year
Details of important events affecting the Group which have occurred
since the end of the financial year are set out in the strategic report
and on page 235, note 36 to the consolidated financial statements.
GOVERNANCE REPORT
Directors’ report continued
Other provisions
The agreement provides that Airtel Africa will not make any market
purchases that would cause Bharti or Bharti Telecom to have to
make a mandatory offer under Rule 9 of the Takeover Code, unless
Airtel Africa has the necessary consents and waivers to prevent a
mandatory offer obligation.
Amendments can only be made to this relationship agreement in
writing and with the recommendation of a majority of the independent
directors. The relationship agreement will come to an end upon the
earlier of:
• Ordinary shares of Airtel Africa no longer being listed on the
premium listing segment and traded on the London Stock Exchange
(LSE)
• Bharti Airtel, AAML and Bharti Telecom, together with their
associates, ceasing to be interested (directly or indirectly in
aggregate) in at least 10% of issued ordinary shares
The relationship agreement will terminate upon the shares ceasing to
be listed on the LSE’s main market or the principal shareholders and
their associates ceasing to hold at least 10% of the issued shares.
We believe that the terms of this relationship agreement enable Airtel
Africa to carry out its business independently of Bharti Airtel, AAML
and Bharti Telecom.
Services agreement
Bharti Airtel provides services to Airtel Africa and its subsidiaries
including Bharti Airtel International (Netherlands) B.V. (BAIN) under
a services agreement.
Provision of information
To provide services to Airtel Africa under the services agreement,
Bharti Airtel will have access to information related to the Airtel Africa
Group which may include sensitive or confidential information. Bharti
Airtel will ensure its affiliates comply with the terms of the information
flow protocol to the extent that it is legally able to do so. Airtel Africa
will provide Bharti Airtel with service-related information necessary
for it to provide services under the agreement.
Future developments
The strategic report contains details of likely future developments
within Airtel Africa.
Group policy compliance
Each Group policy is owned by a member of the Executive Committee
to ensure clear accountability and the authority to make sure the
associated business risk is adequately managed. The senior leadership
team member responsible for each Group function has primary
accountability for ensuring compliance with all Group policies by all our
markets and entities. Our Group compliance team supports the policy
owners and local markets in implementing policies and monitoring
compliance. All of the key Group policies have been consolidated
into our Code of Conduct which applies to all employees and those
who work for or on behalf of Airtel Africa. It sets out the standards
of behaviour expected in relation to areas such as insider dealing,
bribery, and raising concerns through our whistleblowing process.
142 Airtel Africa plc Annual Report and Accounts 2023
Our auditor
Deloitte LLP have confirmed their willingness to continue as our
auditor. Following our Audit and Risk Committee’s review of their
effectiveness (described on page 126), we’ll propose at our AGM that
we reappoint Deloitte.
Our policy is that our auditor will not carry out non-audit services,
except where appropriate and in line with our policy for doing such
work. Our Audit and Risk Committee also considers the ethical and
auditing professional standards related to non-audit services by our
external auditor. Deloitte provided limited non-audit services during
the year in line with our policy as described in the Audit and Risk
Committee report – see page 127.
As at the date of this report, so far as each director is aware, there’s
no relevant audit information of which our auditor is unaware. Each
director confirms that they’ve taken all appropriate steps to make
themselves aware of relevant audit information and to make sure our
auditor is aware of that information. This confirmation is given and
should be interpreted in accordance with the provisions of section 418
of the Companies Act 2006.
Audit and Risk Committee
recommendations and statements
of compliance
The committee has completed its review of the effectiveness of
internal controls, including risk management, during the year and up to
the date of this Annual Report. The review covered all material controls
including financial, operating and compliance. As such, we can provide
assurance to the Board under the 2018 UK Corporate Governance
Code. This is covered in more detail in the Audit and Risk Committee
report – see pages 117-127.
Airtel Africa has complied throughout the reporting period with the
provisions of the Statutory Audit Services for Large Companies Market
Investigation (Mandatory Use of Competitive Tender Processes and
Audit Committee Responsibilities) order 2014.
Annual general meeting (AGM)
Our AGM will be live streamed on Tuesday 4 July 2023 at 11am BST
from 53/54 Grosvenor Street, London W1K 3HU. Details of the
business to be transacted at the AGM are included in our 2023
notice of the AGM available on our website at www.airtel.africa.
In line with recent practice and good governance, we’ll conduct all
voting on resolutions at this year’s AGM by poll. The Board believes
that this way of voting gives as many shareholders as possible the
opportunity to have their votes counted.
This directors’ report has been approved by the Board and is signed
on its behalf by:
Simon O’Hara
Group company secretary
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
143
Responsibility statement
We confirm that to the best of our knowledge:
• The financial statements, prepared in accordance with the
relevant financial reporting framework, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the company and the undertakings included in the
consolidation taken as a whole.
• The strategic report includes a fair review of the development
and performance of the business and the position of the
company and the undertakings included in the consolidation
taken as a whole, together with a description of the principal
risks and uncertainties that they face.
• The Annual Report and financial statements, taken as a
whole, are fair, balanced and understandable and provide
the information necessary for shareholders to assess the
company’s position and performance, business model
and strategy.
This responsibility statement was approved by the Board of
directors on 10 May 2023 and is signed on its behalf by:
Olusegun Ogunsanya
Chief executive officer
10 May 2023
GOVERNANCE REPORT
Directors’ responsibilities statement
The directors are responsible for preparing the Annual Report
and the financial statements in accordance with applicable law
and regulations.
Company law requires the directors to prepare financial statements
for each financial year. Under that law, the directors are required to
prepare our financial statements in accordance with UK adopted
international accounting standards in line with the requirements of
the Companies Act 2006. We have elected to prepare the company’s
financial statements in accordance with UK Generally Accepted
Accounting Practice (GAAP), including FRS 101 Reduced Disclosure
Framework. Under company law, the directors must not approve the
accounts unless satisfied that they give a true and fair view of the state
of affairs of our company and of our profit or loss for that period.
In preparing our company’s financial statements, the directors are
required to:
• Select suitable accounting policies and then apply them consistently
• Make judgments and accounting estimates that are reasonable
and prudent
• State whether applicable UK Accounting Standards have been
followed, subject to any material departures disclosed and explained
in the financial statements
• Prepare the financial statements on the going concern basis
unless it is inappropriate to presume that Airtel Africa will continue
in business
In preparing the Group financial statements, International Accounting
Standard 1 requires that directors:
• Properly select and apply accounting policies
• Present information, including accounting policies, in a way that
provides relevant, reliable, comparable and understandable
information
• Provide additional disclosures when the specific requirements in
IFRSs do not enable readers to understand the impact of particular
transactions, other events and conditions on our financial position
and financial performance
• Make an assessment of our ability to continue as a going concern
The directors are responsible for keeping adequate accounting
records that show and explain the company’s transactions and
disclose with reasonable accuracy at any time our financial position.
These records must also enable them to ensure that the financial
statements comply with the Companies Act 2006. Directors are also
responsible for safeguarding the assets of the company and for taking
reasonable steps to prevent and detect fraud and other irregularities.
The directors are responsible for the maintenance and integrity of
the corporate and financial information included on our website.
UK legislation governing the preparation and dissemination of
financial statements may differ from legislation in other jurisdictions.
144 Airtel Africa plc Annual Report and Accounts 2023
Directors’ remuneration report
Doug Baillie
Chair, Remuneration Committee
This report sets out the remuneration policy for our
directors, what they’ve been paid in the year and
how this is linked to the performance achieved.
There are three sections to the report:
Part 1
An introduction from the committee chair – this
explains our approach to remuneration, summarises
the key decisions made by the committee during
the year (also part of the annual remuneration
report), and gives an overview of our 2022/23
approach and policy.
Part 2
The directors’ remuneration policy – this sets out
the proposed remuneration policy for our CEO,
CFO, chair and non-executive directors, which will
be submitted for shareholder approval at the 2023
AGM and will remain in force until the 2026 AGM
at the latest.
Part 3
Our annual report on remuneration – this sets out
in detail how we applied our current remuneration
policy in 2022/23, the remuneration received by
directors for the year and how the policy will be
applied in 2023/24. This report will be put to an
advisory shareholder vote at the AGM.
All amounts in this report are in US dollars ($), unless stated
otherwise.
Chair’s introduction
I’m pleased to present the Remuneration Committee’s report for
2022/23.
Performance outcomes for the year
To recap on the performance as described in the strategic report, this
year Airtel Africa delivered a strong performance, with double-digit
revenue, underlying EBITDA and operating free cash flow growth.
Airtel Africa has delivered on growth opportunities despite
macroeconomic volatilities, with the customer base growing to
140m customers.
Annual bonuses for 2022/23 were based on a scorecard of measures:
net revenue (35%), EBITDA (35%), operating free cash flow (10%)
and ESG and Governance objectives (20%). Given the Group’s strong
performance with 18.3% growth in net revenue on a constant
currency basis, 17.3% growth in underlying EBITDA and 18.6% growth
in operating free cash flow, the targets for all of the financial objectives
were exceeded. Both of our executive directors in the year also had
role-specific personal objectives for the year – see page 156 for details.
As a result, bonuses of 74.45% of maximum were awarded to our CEO
and our CFO. One-third of the bonuses will be deferred into shares for
two years.
Our CFO was granted an award in 2020 which vested subject to
performance up to 31 March 2023. This award vested at 100%.
See page 157 for details.
Considering formulaic outcomes
Our committee reviewed the formulaic outcomes against the bonus
and LTIP targets and decided that these were a fair reflection of the
overall performance achieved for shareholders. We confirm that in
assessing performance against the targets, no discretion was applied
to the outcome and that the policy operated as intended.
Review of the policy in 2022/23
Last year, we made minor amendments to the policy before its expiry
in order to incorporate best practice features. However, we did not
conduct a full review of the policy at that time.
The current policy provides for base salary, benefits, pension, annual
bonus and long-term incentive awards (LTIP) and allows long-term
incentive awards to be delivered in a mix of performance shares (PSP)
and restricted shares (RSU) with a performance underpin. It includes
best practice features such as bonus deferral, post-vesting holding
periods, in-employment and post-employment shareholder
requirements, and malus and clawback.
This policy received strong support from our shareholders, having
received 94.98% of votes in support of its adoption at the 2023 AGM.
Now, in line with our normal review schedule, we have reviewed the
policy to ensure it continues to support our strategic goals for the next
three years.
Since the IPO, our remuneration policies have provided headroom to
allow incentive levels to increase in line with the achievement of our
ambitious growth plans. In accordance with this approach, the policy
maximum has been set above the intended grant level. Since the IPO
actual incentive opportunities have been below the maximum levels
and have not increased in the last three years even though Airtel Africa
has grown and even exceeded its growth targets.
Airtel Africa plc Annual Report and Accounts 2023
145
GOVERNANCE REPORT
Directors’ remuneration report continued
Airtel’s strong growth since IPO has now resulted in the policy
maximum LTIP level falling behind market median for a company
of Airtel’s size. Moreover, the current policy maximum will be a
constraining factor in delivering remuneration at market levels as
Airtel continues to grow.
As a result, we are proposing a new policy which seeks to achieve the
following goals:
(a) Bring total target remuneration to market levels, which is supported
by Airtel’s strong performance.
(b) Continue to provide headroom so that incentive opportunities can
be increased if Airtel continues to achieve its ambitious growth
targets over the next three years.
(c) Introduce differentiation in incentive levels between the CEO and
other executive directors.
(d) Continues to weight variable remuneration towards the long-term
components.
(e) Continues to support our entrepreneurial culture.
In addition, the next three years will include some major strategic goals
fundamental to our growth strategy, such as the IPO of Airtel Money.
As a result, the new policy will also include a facility to motivate and
reward the achievement of these goals, as these will not necessarily
lend themselves to being covered by our existing annual bonus or LTIP.
Proposed changes to the Directors’
Remuneration Policy and amendment to
the rules of the long-term incentive plan
As a result of the review of the remuneration policy, the Committee is
proposing the following changes to the current remuneration policy:
(a) Differentiate annual bonus opportunities for the CEO and other
executive directors by reducing the annual bonus policy maximum
for other executive directors.
(b) Increase and differentiate the policy maximum LTIP award levels for
the CEO and other executive directors.
(c) Place a cap on annual RSU award levels within the overall maximum
LTIP award levels.
(d) Introduce a facility for a one-off exceptional award opportunity
to incentivise a strategic initiative (such as a successful IPO of
Airtel Money).
This policy would be implemented in a similar manner to our previous
policies. Incentive levels will initially be set below the policy maximum
levels, and will result in total target remuneration for each executive
director which is around the market median level for companies of
similar market cap to Airtel Africa, and whilst taking into account
remuneration levels at like-minded direct comparators in Africa, which
include Vodacom, MTN Safaricom and Orange Africa. This approach
of providing headroom in the policy provides the necessary flexibility
for a company with high growth ambitions.
In order to enable the company to make one-off exceptional awards
under the new policy, shareholders will be asked to approve certain
amendments to the rules of our existing long-term incentive plan at
our 2023 AGM.
Applying the new policy in 2023/24
Salaries for the CEO and the CFO will be increased by 5%, which is
below the planned increase for employees which is slightly above 8%.
Maximum bonus opportunity is capped at 200% of base salary for
the CEO, and 175% of base salary for the CFO, under the new policy,
if approved by shareholders at the 2023 AGM. The actual 2023/24
bonus opportunities for the executive directors will be set below
these policy maximum levels. The 2022/23 target bonus will be set
at 75% of base salary for the CEO and 70% of salary for the CFO.
In line with the policy, one-third of any bonus will be deferred into
shares for two years. It is intended that metrics and weightings remain
unchanged from last year, with 80% based on financial metrics (net
revenue, underlying EBITDA and operating free cash flow) and 20%
non-financial.
LTIP grants will also be made at levels below the maximum levels
permitted under the new policy, if approved by shareholders at the
2023 AGM. LTIP grants will consist of performance shares (with a
maximum face value of 150% of salary for the CEO and 100% of
salary for the CFO), and restricted stock units (with a face value of
50% of salary for the CEO and 40% of salary for the CFO). These
increases will bring the CEO and CFO target remuneration to around
market median levels, and deliver the majority of the increase in
performance-linked long-term remuneration. We believe that a
significant proportion of pay should be tied to performance. We will
continue to set robust and challenging performance targets for
both the bonus and the performance shares component of the LTIP,
with vesting of restricted stock units dependent on the satisfaction
of a financial underpin.
As in 2022/23, three performance conditions will apply to the
performance shares: relative TSR (20%), underlying EBITDA (40%)
and net revenue (40%), with each measured over three years. The
underlying EBITDA and net revenue targets will not be disclosed at
grant as they are currently considered to be commercially sensitive.
They will be disclosed when this changes – no later than the report for
the year in which the awards vest. The underpin applying to the grant
of restricted stock units will require a positive operating free cash flow
over the three financial years ending the year before the units vest.
During the next three years, a successful IPO of Airtel Money is a
strategic priority and will create significant value for Airtel Africa
shareholders. Given the importance of this goal, and the role which
the executive directors play in its achievement, the committee
intends to grant a one-off incentive award linked to a successful listing.
This incentive will sit alongside the annual bonus and PSP awards,
which are designed to incentivise the successful management of
the remaining businesses, and its key terms are as follows:
(a) Award of equity in Airtel Money shares
(b) Award will vest on IPO subject to this not being later than three
years from grant and subject to the meeting of performance
targets linked to the IPO price, (which will be disclosed
retrospectively) and continued employment. If the IPO does
not occur within three years from grant, the award will lapse
(c) Award is subject to clawback and malus
(d) Award is subject to a one year post-vesting holding period
No vesting will occur if a threshold IPO price which creates significant
value for shareholders is not achieved. The award will align the
remuneration of executive directors with Airtel Africa’s current
strategic priorities and the interests of shareholders.
146 Airtel Africa plc Annual Report and Accounts 2023
Conclusion
The past year has once again demonstrated the strong resilience
of all of Airtel Africa’s employees. The company has maintained its
position as one of the fastest growing and most profitable mobile
communications company in Africa and made very good progress
in embedding its sustainability plan in all it does. Importantly it has
continued to live out its purpose of delivering vital services and helping
to transform the lives of all its stakeholders.
I would like to thank my fellow committee members for their continued
diligence and dedication. We look forward to seeing your support
for the new policy and remuneration report at this year’s AGM and,
more importantly, seeing the continued benefits of our work to all our
stakeholders over the coming years.
I will be attending the 2023 AGM and look forward to engaging with
shareholders at the meeting. In the meantime, if you’d like to discuss
any aspects of this report please contact me through our company
secretary, Simon O’Hara (see page 251 for contact details).
The implementation of the policy, as set out above, will motivate and
reward the achievement of our strategic goals by increasing the
portion of variable remuneration linked to three-year performance
measures, by including a new incentive linked to the successful IPO
of Airtel Money, and by bringing remuneration closer to market
median levels. This planned implementation will result in total target
remuneration for the CEO and CFO around or below market median
levels, when compared to companies of similar size.
Doug Baillie
Chair, Remuneration Committee
10 May 2023
Remuneration Committee
• Advises the Board on remuneration for Board members, executive
directors, the company secretary, the Executive Committee and
other senior employees
• Makes sure that remuneration arrangements identify and
mitigate reputational and other risks from excessive rewards and
inappropriate behaviour linked to target-based incentive plans
• Ensures targets are appropriate, geared to delivering our strategy
and enhancing shareholder value
• Makes sure rewards for achieving or exceeding agreed targets are
not excessive
• Promotes the increasing alignment of executive, employee and
shareholder interests through appropriate share plan participation
and executive shareholding guidelines
• Reviews employee remuneration and policies and the alignment
of incentives with culture, particularly when setting the executive
directors’ remuneration policy
• Through the committee chair, engages with shareholders on
remuneration-related matters
Main activities in 2022/23
During the financial year, the committee:
• Agreed annual salary increases and reviewed senior executive
remuneration
• Implemented and made awards under our share plans
• Determined the level of bonus payments for the previous
financial year
• Determined the level of LTIP vesting for the CFO
• Drafted and agreed the directors’ remuneration report
• In line with our three-year cycle reviewed and updated the
Remuneration Policy for approval with shareholders at the AGM
• Received training in key areas of the UK Corporate Governance
Code and The Investment Association’s guidance
• Held regular updates on latest investor thinking and emerging and
future remuneration trends, including the expected impact of ESG
trends on remuneration
Shareholder consultation
Shareholders were consulted during the year on the proposed policy
and its implementation. Letters were sent to major shareholders and
voting advisory bodies in order to explain the rationale for the policy
changes and understand the views of our shareholders. Only a
minority of shareholders who were contacted decided to participate
in the consultation, and the chair of the Remuneration Committee
responded to their questions through correspondence and meetings.
Shareholders’ main questions related to the rationale for the special
incentive arrangement, why the policy maximum levels were being
positioned above market median, and how the comparator group
for benchmarking purposes had been selected. The responses to
shareholders were in line with the information provided earlier in this
annual statement on each of these topics.
Engaging with employees
The report on pages 132 and 137 explains our work on diversity and
the various ways in which management engaged with employees
during the year. While our committee doesn’t directly consult
employees on executive remuneration, a non-executive director
attended our regular town halls at which a wide range of topics
were discussed with our CEO, including employee remuneration.
Effectiveness
The external Board evaluation reviewed our committee’s
effectiveness and sought feedback from the committee members.
We discussed the output of the evaluation, which concluded that
we continued to operate effectively throughout the year. We also
confirmed our intended areas of focus for the year ahead.
2022/23 evaluation
Outcome
Key themes and areas for focus
Action
Remuneration Committee
Areas of focus
Priorities for change
We will focus our Board on ensuring greater
gender diversity across our executive and
senior management teams through our choice
of ESG metrics; and we will continue to keep
the Remuneration Committee up to date with
best practice and external developments.
Airtel Africa plc Annual Report and Accounts 2023
147
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Directors’ remuneration report continued
Summary of remuneration
2022/23 performance
Net revenue
18.3%
Underlying EBITDA
Operating free cash flow
17.3%
18.7%
up on last year in constant currency
$4,760m
up on last year in constant currency
$2,688m
up on last year in constant currency
$1,942m
Annual bonus outcomes
All amounts are in $million
Net revenue
Underlying EBITDA
Operating free cash flow
Non-financials CEO
Details on page 156
Non-financials CFO
Details on page 156
Bonus outcome as % of maximum
Weighting
Threshold
4,565
2,564
1,814
35%
35%
10%
20%
20%
Target
4,682
2,641
1,891
Maximum
Outcome (%)
4,799
2,726
1,976
4,760.1 (29.2%)
2,688.5 (27.3%)
1,940.6 (7.95%)
(10%)
(10%)
Segun Ogunsanya
Jaideep Paul
74%
74%
Long-term incentive plan
Only legacy LTIP awards which were granted to the CEO and CFO
prior to their appointment as directors vested during the year. Only
one of these awards granted to the CFO had a performance period
covering his time as a director, and this is included in the single figure
table on page 155. The CFO’s first award granted in his current role
will vest in 2024, and the first award to the CEO will vest in 2025.
See pages 162 and 163 for details of their legacy LTIP awards.
Single figure of remuneration ($000s)
Olusegun Ogunsanya
2021/22
(part year)
2022/23
$1,404
Jaideep Paul
2021/22
(part year)
$1,590
$2,434
2022/23
$2,243
Link between remuneration and business strategy – metrics for 2023/24
Annual bonus
Long-term incentive plan
Measure
Weighting Why chosen
Measure
Weighting Why chosen
Net revenue
35%
Underlying
EBITDA
35%
Operating free
cash flow (OFCF)
10%
Non-financials
20%
Key indicator of our growth,
market penetration and
customer retention
Measure of our profitability
and cash-generating ability
from year to year
Measure of the underlying
profitability from our
operations, as well as our
ability to service debt and
other capital commitments
Indicator of the performance
of the organisation in key
non-financial areas
Special one-off incentive
Measure
IPO price
Weighting Why chosen
100% Measures additional value
created for Airtel Africa
shareholders on an IPO of
Airtel Money
148 Airtel Africa plc Annual Report and Accounts 2023
20%
TSR, relative to a peer
group of competitors
For grants in 2023, we intend
to use a peer group of
international emerging market
communication services
organisations (MSCI Emerging
Markets Communication
Services Index constituents).
Net revenue
40%
Underlying
EBITDA
40%
Measures the total returns to our
shareholders, providing close
alignment with shareholders’ interest
A key indicator of long-term
growth in the market, highlighting
the importance of sustained
performance
A key indicator of long-term growth
on profitability from operations,
highlighting the importance of
sustained performance
Operating free
cash flow (OFCF)
RSU
underpin
Measure of the underlying profitability
from our operations, as well as our
ability to service debt and other
capital commitments
Summary of remuneration
Proposed remuneration structure for 2023/24
Component
Purpose and link to strategy
23/24 24/25 25/26 26/27 27/28 28/29 Deferral and holding
Base salary
Benefits
(including
pension)
Annual bonus
To recruit and reward
executive directors of a
suitable calibre for the role
To provide market
competitive benefits
To incentivise and reward
annual performance
achievements. To also
provide sustained alignment
with shareholders through
a component deferred in
shares
Long-term
incentive plan
– PSUs
Long-term
incentive plan
– RSUs
To incentivise and reward the
delivery of the company’s
strategic objectives and
provide further alignment
with shareholders through
the use of shares
requirements
n/a
n/a
Deferral of
one-third of
any bonus
Deferral period
Holding period
Two-year post-
vesting holding
period
Special one-off
incentive
To incentivise a successful
IPO of Airtel Money
One-year post-
vesting holding
period2
Shareholding
requirement
To further align the interests
of executive directors with
those of shareholders
Proposed implementation
for 2023
CEO: $1,008,788
CFO: $642,758
Benefits in line with
policy
CEO: 150% of salary
maximum
CFO: 140% of salary
maximum
Metrics1:
Net revenue, underlying
EBITDA, operating free
cash flow, non-financial
CEO grant: 150% of
salary in PSP and 50%
of salary in RSUs
CFO grant: 100% of
salary in PSP and 40%
of salary in RSUs
Metrics1:
TSR, relative to a peer
group of competitors,
Net revenue,
Underlying EBITDA,
RSU underpin: operating
free cash flow
75% of base salary for
CEO and CFO
Metrics1:
IPO price
CEO: 250% of salary
CFO: 200% of salary
1 The target ranges are considered by the committee to be commercially sensitive and will be disclosed in the 2023/24 directors’ remuneration report for the annual bonus,
and at the time of performance measurement for the LTIP and special one-off incentive.
2 Vesting is on IPO providing no later than three years from grant, followed by a one-year holding period.
Airtel Africa plc Annual Report and Accounts 2023
149
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Directors’ remuneration report continued
Part 2
Directors’ remuneration policy
This sets out the policy which will be submitted for shareholder
approval at the 2023 AGM.
We developed the policy taking into account the principles of the UK
Corporate Governance Code, the views of our major shareholders,
and pay and conditions of other employees which were considered
when the Committee discussed the new policy. The policy is intended
to attract, motivate and retain high-calibre directors, to promote the
long-term success of Airtel Africa, and to be in line with good practice
and the interests of our shareholders. To avoid conflicts of interest,
executive directors were not included in discussions on the new
policy, and the policy was approved by the Remuneration Committee.
The policy will be implemented by the Remuneration Committee.
The policy differs from the previous shareholder approved policy in the
following key areas:
• Differentiation in the maximum annual bonus opportunities allowed
under the policy.
• Increase in the LTIP opportunity allowable under the policy to
provide headroom over the next three years for larger award
sizes if Airtel Africa continues to deliver high levels of growth.
These opportunities will not be used in full in FY2023/24.
• Cap on RSU opportunity of 50% of base salary.
• Introduction of a facility for one-off awards linked to key
strategic initiatives
There are other minor wording changes to make sure the policy is clear
and easily understood.
Key principles of our remuneration policy
Our committee took into account the UK Corporate Governance
Code’s six factors in Provision 40 in determining the remuneration
policy. We believe the policy addresses these factors:
• Clarity: the structure of remuneration is designed to support our
company strategy, aligning the interests of our executive directors
with those of our shareholders.
• Simplicity: we operate a simple remuneration framework,
comprising fixed pay, short- and long-term incentives. The use of
both performance and restricted shares may add a little complexity,
but this is appropriate and critical to our talent agenda for the
markets in which we operate.
• Proportionality: remuneration is set at competitive levels to ensure
our ability to attract and retain premium talent. There is a direct link
between the success of the strategy and the value received by
executive directors.
• Alignment to culture: the remuneration approach supports our
strategy objectives and reflects the diversity of our business. The
structure of the package, and benefits in particular, reflects local
practices and employment conditions in the countries in which
executive directors are based and/or recruited from.
• Predictability: a significant proportion of executive directors’
remuneration should be performance based. The policy sets out
the possible future value of remuneration executive directors
can receive.
• Risk: the package is appropriately balanced between the
achievement of short-term and longer-term objectives and does not
reward poor performance or encourage inappropriate risk-taking.
Executive directors’ remuneration policy table
Purpose and link
to strategy
How we assess performance
Base salary
To recruit and
reward executive
directors of a
suitable calibre
for the role and
duties required
Normally reviewed annually by committee, taking account of company and
individual performance, changes in responsibility and levels of increase for
the broader employee population.
Reference is also made to market levels in companies of similar size and
complexity.
We consider the impact of any base salary increase on the total
remuneration package.
Salaries (and other elements of the remuneration package) may be paid in
different currencies as appropriate to reflect the geographic location.
Benefits and
pension
To provide market
competitive
benefits
Benefits for executive directors will typically reflect their country of
residence.
Where an executive director receives an expatriate package, additional
cash benefits may be provided. Expatriate benefits may include housing
allowance, education allowance and home leave tickets. Car allowances,
life and medical insurance may also be provided. Statutory benefits as
required under local law of the host country will also be paid.
Pensions may be provided where this is in line with the workforce provision
and statutory requirements in the executive’s home location.
We may also equalise for double taxation between the required work
location and the executive’s country of residence, if required.
Maximum opportunity
There is no prescribed
maximum salary or
annual increase.
However, increases will
generally be guided by
increases for the broader
employee population.
Increases above this level
may be made in specific
situations to recognise
development in the role,
changes in responsibility,
material changes to the
business or exceptional
company performance.
Maximum values are
determined by reference
to market practice,
avoiding paying more
than is necessary. Where
pension is offered, this will
be in line with statutory
requirements in the
executive’s home location
and in line with the
wider workforce for
that location.
150 Airtel Africa plc Annual Report and Accounts 2023
Bonus plan
Part 2
Purpose and link
to strategy
To incentivise and
reward annual
performance
achievements.
To also provide
sustained
alignment with
shareholders
through a
component
deferred in shares
How we assess performance
Awards are based on annual performance against a scorecard of metrics
aligned with our strategy, KPIs and other yearly goals. Financial measures
have the highest weighting. Performance against strategic financial and
non-financial objectives may also be used, but will not normally account for
more than 20% of the total.
The policy gives the committee the authority to select suitable performance
metrics aligned to our strategy and shareholders’ interests, and to assess
the performance outcome.
One-third of any bonus is normally delivered in shares deferred for a further
two years. Any dividend equivalents accruing on shares between the date
when the awards were granted and when the awards vest will normally be
delivered in shares.
Malus and clawback provisions apply to both the cash and share-based
element of awards for a period of two years from the date of payment (cash)
or date of release (shares) if there is:
• Misstatement of the company’s accounts
Long-term
incentive plan
(LTIP)
To incentivise
and reward the
delivery of the
company’s
strategic
objectives and
provide further
alignment with
shareholders
through the use
of shares
• An error in calculating performance
• Gross misconduct resulting in dismissal
• Material failure in risk management
• Reputational damage
• Material downturn in financial performance
• Any other event or events that the committee considers to be both
exceptional and sufficiently adverse to the interests of the company
Awards may comprise performance shares (PSP) and/or restricted stock
units (RSUs). Individuals are considered each year for an award of shares
that normally vest after three years to the extent that any performance
conditions are met and in line with the terms of the shareholder-approved
plan.
PSP awards are made subject to continued employment and the
satisfaction of stretching performance conditions normally measured over
three years set by the committee before each grant.
The committee will have discretion to change the metrics and weighting
from year to year. Major shareholders will normally be consulted before any
significant changes.
Awards of RSUs depend on continued employment and a financial underpin
set by the committee before each grant. Awards granted in 2022 will require
positive operating free cash flow over three financial years.
The LTIP vesting outcome can be reduced, if necessary, to reflect the
underlying or general performance of Airtel Africa.
A two-year post-vesting holding period also normally applies to LTIP
awards that vest (net of tax) after the adoption of this policy. Any dividend
equivalents will normally be delivered at the end of the vesting period in
shares based on the proportion of the award that vests.
Malus and clawback provisions apply to awards made for three years from
the date on which the award vest when there has been:
• A misstatement of the company’s accounts
• An error in calculating performance
• Gross misconduct resulting in dismissal
• Material failure in risk management
• Reputational damage
• Material downturn in financial performance
• Any other event or events that the committee considers to be both
exceptional and sufficiently adverse to the interests of the company
Maximum opportunity
The maximum annual
bonus is 200% of base
salary for the CEO, and
175% for other executive
directors.
The committee will use
its discretion within
these limits to consider
the maximum bonus
opportunity each year,
taking account of
market development
opportunities, specific
events and role expansion.
Threshold performance
results in a payment of
30% of maximum.
Dividend or dividend
equivalents may be
earned on the deferred
bonus component.
Change from previous
policy: Reduction in policy
maximum from 200% to
175% of base salary for
other executive directors.
The maximum annual
grant limit is 300% of
base salary (face value
of shares at grant) for
the CEO and 250% of
base salary for other
executive directors.
No more than 50% of
base salary may be
granted as RSUs to
any one person in a
single year.
A maximum of 25% of the
PSP award is available for
threshold performance,
rising to 100% of the
grant for performance
at the stretch level.
In accordance with the
LTIP plan rules, dividend
or dividend equivalents
may be earned on
vested shares.
Change from previous
policy: Increase in LTIP
award level from 200% of
base salary to 300% of
base salary for the CEO
and to 250% of base
salary for other executive
directors. New cap on
RSU award level of 50%
of base salary.
Airtel Africa plc Annual Report and Accounts 2023
151
GOVERNANCE REPORT
Directors’ remuneration report continued
Part 2
One-off
award for
exceptional
strategic
initiatives
Purpose and link
to strategy
To incentivise,
in exceptional
circumstances,
the achievement
of strategic
initiatives
How we assess performance
An award of cash or equity linked to the achievement of an exceptional
strategic initiative.
Awards would be subject to performance measures linked to the strategic
initiative. The performance period would be aligned to the achievement of
the strategic initiative, or a specific milestone.
Malus and clawback provisions apply to awards made for three years from
the date on which the award vest when there has been:
• A misstatement of the company’s accounts
Share
ownership
policy
To further align
the interests
of executive
directors with
those of
shareholders
• An error in calculating performance
• Gross misconduct resulting in dismissal
• Material failure in risk management
• Reputational damage
• Material downturn in financial performance
• Any other event or events that the committee considers to be both
exceptional and sufficiently adverse to the interests of the company
In-employment
The CEO is expected to build up and retain shares worth 250% of base
salary within five years of being appointed to the Board. Other executive
directors are expected to build up and retain shares worth 200% of base
salary within the same timescale.
Post-employment
Executive directors are required to retain shares equal in value to the lower
of their holding on the date of cessation or 50% of their in-employment
requirement for two years. Only shares acquired from LTIP and deferred
bonus awards granted after their appointment to the Board will count
towards this requirement.
Maximum opportunity
Maximum annual award
level of 100% of base
salary (face value of
equity award at grant,
or maximum value of
cash award).
Where a threshold target
is set, the minimum
amount payable would
normally be 25% of
the award.
Change from previous
policy: New element of
remuneration.
Not applicable
Discretion in operating the incentive plans
To make sure these plans are operated and administered efficiently,
the committee has discretion in relation to a number of areas.
Consistent with the marketplace, these include (but are not limited to):
The committee has the right to amend or substitute any performance
conditions if something occurs that would stop the condition from
achieving its original purpose. Any amended condition would not be
materially easier to satisfy in the circumstances.
• Selecting the participants
• The timing of grant and/or payment
• The size of grants and/or payments (within the limits set out in the
policy table)
• The extent and timing of vesting based on the assessment of
performance
• Determining a ‘good leaver’ and, where relevant, the extent of
vesting for share-based plans
• Treatment in exceptional circumstances such as change of control,
when the committee would act in the best interests of our business
and its shareholders
• Making the adjustments required in certain circumstances (such
as rights issues, corporate restructuring, variation of capital and
special dividends)
• The form of settlement of awards in accordance with the discretions
set out in the plan rules
• The annual review of performance measures, weightings and
targets for the discretionary incentive plans from year to year
• The interpretation and operation of requirements related to the
holding of shares in Airtel Africa
Choice of performance measures and approach to
target setting
Targets for each year’s annual incentive and long-term incentive
award are determined by the committee, and, if relevant, any one-off
award for exceptional strategic initiatives, taking a range of factors
into account. Financial goals include the annual budget, the relevant
three-year strategic plan, analysts’ consensus factors, wider economic
facts and affordability for the business. Non-financial goals reflect the
priorities of our business and responsibilities of the role.
The annual bonus is based on performance against a stretching
combination of financial and non-financial performance measures
aligned with our KPIs and operational goals for the year. As such, they
typically include measures of revenue, profitability and cash flow, which
reflect our focus on profitable growth, cash generation and satisfying
our debt and other capital commitments. For 2023 these will comprise
net revenue (35%), underlying EBITDA (35%), operating free cash flow
(10%), and non-financial objectives (20%) as key indicators of our
growth, profitability and financial health. Executive directors and
members of our senior management team are also assessed on
personal objectives, as agreed by our committee at the start of each
year. The committee reviews and adapts the objectives each year as
appropriate to reflect the priorities for the business in the year ahead.
The committee sets a sliding scale of targets for each financial
measure to encourage continuous improvement and to stretch
performance. The policy gives the committee the authority to
select suitable performance metrics aligned to our strategy and
shareholder interest.
152 Airtel Africa plc Annual Report and Accounts 2023
Part 2
The performance conditions for the PSP in 2023/24 are based on
relative TSR against the MSCI Emerging Markets Communication
Services Index (20%), net revenue (40%) and underlying EBITDA
(40%). The underpin for grants of RSUs are based on operating
free cash flow. These measures are key indicators of our growth,
financial health and are aligned with our shareholders’ interests.
The committee sets a sliding scale of challenging performance
targets for each measure for the PSP – for more on these targets,
see page 157. The committee reviews the choice of performance
measures and the appropriateness of the performance targets and
TSR peer group before each PSP grant. While different performance
measures and/or weightings may be applied for future awards, the
committee will consult with major shareholders before making any
significant changes.
The performance conditions for any one-off awards for strategic
initiatives would be linked to the successful delivery of the strategic
initiative and the creation of value for Airtel Africa shareholders.
The performance targets would be tailored to the specific strategic
objective, but would be set so that: (a) the maximum award would be
only payable for achieving a stretching level of performance, and (b)
the delivery of a ‘target’ level of performance would result in around
50% of the maximum award becoming payable.
Legacy arrangements
Airtel Africa has the authority to honour any commitments entered
into with current or former directors before this policy is approved or
before their appointment to the Board. Details of any such payments
will be set out in the remuneration report for the relevant year.
Executive directors’ existing service contracts
Our executive directors can enter into agreements with a fixed or
indefinite term that may be terminated by either party on three
months’ written notice. At the committee’s discretion, we may make
a payment in lieu of notice – this is calculated relative to base salary
and benefits only, paid on a phased basis and subject to mitigation.
Entitlement to both annual bonus and LTIP awards will typically lapse
on cessation. In good leaver circumstances pro-rata bonuses may be
paid and LTIP awards may vest in line with our policy and the plan
rules. If a director commits an act of gross misconduct or similar, they
may be dismissed without notice and without further payment or
compensation, except for sums accrued up to the leaving date.
Name of director
Date of service contract
Unexpired term
Segun Ogunsanya
1 October 2021
Jaideep Paul
1 June 2021
10 years
10 years
Approach to remuneration for new executive directors
The remuneration package for a newly appointed executive director
will be set in line with the remuneration policy in force at the time.
Variable remuneration will be determined in the same way as for
existing executive directors, and is subject to the maximum limits
on variable pay referred to in the policy table on page 150.
The committee may also buy out any remuneration and contract
features that an executive director may be giving up in order to
become an executive director of Airtel Africa. Such buyouts would take
into account the nature of awards forfeited and would reflect (as far
as possible) performance conditions, the value foregone and the
time over which they would have vested or been paid. Where shares
are used, these awards may be made under the terms of the LTIP or
under a separate arrangement as permitted under UK Listing Rules.
The committee may agree that certain relocation, legal, tax
equalisation and other incidental expenses will be met as appropriate.
For an internal appointment, any legacy arrangements related to the
previous role will be allowed to pay out as per their original terms
unless they are bought out by the company, even if these are in conflict
with the policy in place at the time.
Service contracts for new executive directors and policy on loss of office
Contracts for new executive directors will normally include up to six months’ notice by either party. This table summarises how the main elements
of pay will normally be treated.
Good leaver
Other leavers
Dismissal for cause
Base salary
Payable for unexpired portion of notice period or settled by making a cash
payment in lieu
Benefits and pension
Continues to be provided for unexpired portion of notice period or settled in cash
Nil
Nil
Annual bonus
Paid for period worked and subject to the normal performance conditions
Paid following the relevant year end in cash
Deferred bonus awards Typically vest on normal timetable without pro-rating for time
Share-based awards
Typically vest according to normal schedule subject to performance conditions
(if applicable) and usually pro-rated for time
Normally lapse Lapse
Normally lapse Lapse
Normally lapse Lapse
The committee would try to mitigate any payments in lieu of notice by, for example, making payments in instalments that can be reduced
or ended if the former director wants to begin alternative employment during the payment period. We will pay as necessary any statutory
entitlements or sums to settle or compromise claims in connection with a termination (including, at the discretion of the committee,
reimbursement for legal advice and provision of outplacement services).
On a change of control of Airtel Africa, outstanding awards will normally vest early to the extent that the performance conditions have been
satisfied. Awards would normally be reduced pro-rata to reflect the time between the grant date and the date of the corporate event.
If there is a demerger, special dividend or other event the committee thinks may affect the current or future value of shares, they may decide
that awards will vest on the same basis as on a change of control. If there is an internal corporate reorganisation, awards will be replaced by
equivalent new awards over shares in a new holding company, unless the committee decides that awards should vest on the same basis on
a change of control.
Airtel Africa plc Annual Report and Accounts 2023
153
GOVERNANCE REPORT
Directors’ remuneration report continued
Remuneration scenarios at different performance levels
These charts illustrate the total potential remuneration for the CEO and CFO at three performance levels.
Part 2
Remuneration scenarios ($000)
Fixed pay
Annual bonus
Long-term incentives
One-off strategic award
$3,903
10%
34%
19%
37%
$1,432
100%
$5,719
13%
36%
26%
25%
Minimum
Target
Maximum
$6,728
11%
46%
22%
21%
Max with 50%
share price
growth for LTI
$2,101
11%
30%
21%
38%
Target
$3,082
16%
30%
29%
29%
26%
Maximum
$800
100%
Minimum
$3,531
14%
38%
25%
23%
Max with 50%
share price
growth for LTI
Chief Executive Officer
Chief Financial Officer
1 Assumptions:
Minimum = fixed pay only (salary + benefits + pension)
On-target = 50% vesting of maximum bonus and 55% for PSP awards and 100% for RSUs
Maximum = 100% vesting of maximum bonus and LTIP awards
2 Salary levels (on which other elements of the package are calculated) are based on those applying on 1 April 2023 and incentive levels are based on the implementation
levels for 2023/24.
3 Benefit values exclude the costs of business travel and accommodation
4 To reflect the impact of a share price increase in Airtel Africa plc shares between award and vesting, the LTIP value in the maximum column has been increased by 50% in
the maximum with 50% share price growth column
Remuneration policy for non-executive directors
Element
Purpose and link to strategy
Operation
Non-
executive
Board
chair fees
To attract and retain
high-calibre chairs with the
necessary experience and
skills. To provide fees that
reflect the time commitment
and responsibilities of the
role.
The chair receives an annual fee, plus a fee for chairing
the Nominations Committee.
We may also pay fees reflecting additional time
commitments or time required to travel to Board
meetings.
The chair may also be provided with a company car as
long as he meets the full cost of this benefit out of his fee.
Maximum opportunity
The committee reviews chairs’ fee
periodically.
While there is no maximum fee level, we
set fees by reference to market data for
companies of similar size and complexity.
Other
non-
executive
fees
To attract and retain
high-calibre non-executive
directors with the necessary
experience and skills. To
provide fees that reflect
the time commitment and
responsibilities of the role.
Non-executive directors are paid a basic fee. We may
also pay additional fees to reflect extra responsibilities or
time commitments, for example, for Board committee
chairs, senior independent directors or designated
non-executive directors, or time required to travel to
Board meetings.
Non-executive directors’ fees are
reviewed periodically by the chair and
executive directors.
While there is no maximum fee level, fees
are set by reference to market data for
companies of similar size and complexity.
We may reimburse the reasonable expenses of directors that relate to
their duties for Airtel Africa (including tax if applicable). We may also
provide advice and assistance with directors’ tax returns where these
are affected by their duties on our behalf.
All non-executive directors have letters of appointment for an initial
period of three years. In keeping with best practice, non-executive
directors are subject to re-election each year at our AGM. The chair’s
appointment may be terminated be either party with six months’
notice, and the appointments of the other non-executive directors
may be terminated by either party with one month’s notice. Either
appointment can also be terminated at any time if the director is
removed by resolution at an AGM or pursuant to the Articles.
Directors’ letters of appointment are available for inspection during
normal business hours at our registered office and also at our yearly
AGM. All directors were appointed for a fixed term ending on the date
of our 2022 AGM and were renewed for a further three years, with
the exception of Kelly Bayer Rosmarin and Tsega Gebreyes who have
letter of appointment end dates of 27 October 2023 and 12 October
2024 respectively reflecting their date of appointment to the Board.
Shareholder context
The committee considers the views of shareholders when reviewing
the remuneration of executive directors and other senior executives.
154 Airtel Africa plc Annual Report and Accounts 2023
We consult directly with major shareholders about any material
changes to the policy and work with shareholders to understand
any concerns. For example, the committee consulted with major
shareholders on changes to this policy during the development of
this proposed policy.
Broader employee context
The committee considers executive remuneration in the context of our
wider employee population. Remuneration for executive directors is
more weighted towards variable pay than for other employees so that
more of their pay is conditional on the successful delivery of business
strategy. Our aim is to create a clear link between the value created for
shareholders and the remuneration of our executive directors.
Airtel engages with employees on a number of issues, including
remuneration, in a variety of ways. For example, the designated
non-executive director for employee engagement holds regular
meetings with employees when he visits sites throughout the year,
and Board members when they visit markets during any year hold
engagement sessions with the workforce. Through these meetings
and engagement, our Board members inform employees on executive
remuneration and receive feedback. This engagement approach is
kept under review as we continually seek to improve the Board’s
dialogue with employees.
Annual Report on Remuneration
This report has been prepared by the committee and approved by our Board. As stipulated by UK regulations, Deloitte LLP have independently
audited these items:
Part 3
• Executive directors’ and non-executive directors’ remuneration and associated footnotes on page 158
• The table of share awards granted to executive directors and associated footnotes on page 156
• The statement of directors’ shareholdings and share interests on page 161
2022/23 remuneration of directors (audited)
This table sets out the total remuneration for the executive directors for the year ended March 2023.
All amounts are in $’000
Segun Ogunsanya
Jaideep Paul
Notes
Base salary
Benefits3
Pension
contribution4
2022/23
2021/221
2022/23
2021/222
952
458
607
486
322
214
157
165
95
46
–
–
Annual
bonus
1,064
686
633
680
LTIP5,6
Other
Total fixed
–
–
846
259
–
–
–
–
1,370
718
764
651
Total
variable
1,064
686
1,479
939
Total
2,434
1,404
2,243
1,590
1 From the date of joining the Board on 1 October 2021.
2 From the date of joining the Board on 1 June 2021.
3 Segun’s benefits included ($’000) of: expatriate housing benefit of $247, car benefit value of $71, and insurance costs of $5. Jaideep Paul’s benefits included ($’000) of:
expatriate housing of $69, car of $58, expatriate home leave tickets entitlement of $25 and insurance costs of $5.
4 Only Segun Ogunsanya receives a pension contribution of 10% of his salary – this is in in accordance with his legacy arrangements which reflect statutory requirements
for employees in his home location of Nigeria.
5 For Jaideep Paul, the 2022/23 figure includes 397,590 PSU awards and 198,795 RSU awards which were granted on 30 October 2020 and will vest in 2023. The PSU
awards were subject to a performance condition and the RSU awards were subject to a performance underpin, both of which had performance periods ending on
31 March 2023. The value of these awards has been estimated using the average price of Airtel Africa shares between 1 January 2022 and 31 March 2022. For 2022/23,
the total value estimated attributable to share price appreciation is $550,900.
6 The 2021/22 LTIP value for Jaideep Paul has been restated based on the share price of $1.941 on the vesting date of 01 June 2022. For the 2021/22 LTIP the total value
estimated attributable to share price appreciation is $124,401. Last year’s report contained an estimate of the level of vesting for the TSR element of these awards. It was
estimated that 100% of the shares subject to the TSR performance condition would vest, and this estimate has since been confirmed, as Airtel Africa’s TSR of 26% per
annum over the performance period placed it first amongst the three comparators and exceeded the 10% per annum requirement for full vesting. The value in last year’s
report was estimated using an average share price.
Annual bonus
Airtel Africa delivered strong performance, exceeding the targets in all key financial metrics. Revenue growth in constant currency continued to
grow double digit, as did underlying EBITDA and operating free cash flow. In more detail, revenue grew by 18.3%, underlying EBITDA grew by
17.3%, and operational free cash flow grew by 18.6%.
Performance was equally strong across all the key operational KPI’s. Total customer base increased to 140 million (up 9%), as the penetration
of mobile data and mobile money services continued to rise, driving up the data and the mobile money customer base. The mobile money
business performed strongly with annualised transaction value reaching nearly $102bn, as Airtel Africa continues to drive financial inclusion in
the continent. It is in this context that we have assessed the performance achieved against the incentive targets. The strong in-year performance
resulted in performance for all financial measures falling in between the target and stretch levels set at the beginning of the year. As a result,
a bonus between target and the maximum level has been awarded, of which one-third will be deferred into shares for two years.
Airtel Africa plc Annual Report and Accounts 2023
155
GOVERNANCE REPORT
Directors’ remuneration report continued
2022/23 bonus outcomes (audited)
Weighted total
Outcomes (weighted % of maximum)
Segun Ogunsanya (weighted % of maximum)
Jaideep Paul (weighted % of maximum)
Part 3
Bonus performance measures
Underlying
EBITDA
35%
27.3%
Operating
free cash flow
(OFCF)
10%
7.95%
Net revenue
35%
29.2%
Personal
20%
10.0%
10.0%
Total
100%
74.45%
74.45%
Financial objectives
Financial performance was assessed against the underlying net revenue, underlying EBITDA and operating free cash flow (OFCF) ranges set
for 2022/23.
All amounts are in $million
Net revenue
EBITDA
OFCF
Weighting
(%)
Threshold
(30%)
Target
(50%)
Maximum
(100%)
35%
35%
10%
4,564.7
2,563.7
1,813.7
4,681.7
2,641.3
1,891.3
4,798.8
2,725.5
1,975.5
Actual
4,760.1
2,688.5
1,940.6
All targets and achievements are in constant currency as at 31 March 2022.
Personal objectives
Personal objectives for the executive directors during the year are as follows:
Weighting (%)
Target
Performance achieved
Outcome
(weighted % of
maximum)
Segun
Ogunsanya
ESG – Our People
10% Proportion of female employees
Threshold: 27%
Target: 28%
Maximum: 29%
Compliance
10%
Threshold: 66
Target: 70
Maximum: 74
Jaideep Paul
ESG – Our People
10% Proportion of female employees
Threshold: 27%
Target: 28%
Maximum: 29%
Internal audit score for finance
10%
Threshold: 66
Target: 70
Maximum: 74
All targets and achievements are in constant currency as at 31 March 2022
26%
0%
80.1
10%
26%
0%
85.7
10%
Annual bonus awarded
Name
Segun Ogunsanya
Jaideep Paul
Awarded
in cash
709.6
422.0
Awarded
in shares
354.8
211.0
Total
1,064.4
633.0
156 Airtel Africa plc Annual Report and Accounts 2023
Part 3
Long-term incentive plan (LTIP) (audited)
LTIP awards granted in 2022/23
During the year, Segun Ogunsanya and Jaideep Paul were granted the following LTIP awards on 28 June 2022.
Segun Ogunsanya
2022 LTIP – PSU
Type of award
Jaideep Paul
2022 LTIP – RSU
2022 LTIP –PSU
2022 LTIP – RSU
Maximum
number
of shares
Share price used
to determine
level of award1
514,688
228,750
273,281
127,531
$1.6814
$1.6814
$1.6814
$1.6814
Face value
$865,396
$384,620
$459,495
$214,431
Face value as a
% of salary
Threshold
vesting
End of the
performance period
90%
40%
75%
35%
25% 31 March 2025
100% 31 March 2025
25% 31 March 2025
100% 31 March 2025
1 Average closing share price and FX rate for the three dealing days immediately prior to grant
RSUs may not vest unless aggregate operating free cash flow is positive over the three financial years ending the year before the RSUs vest.
The performance conditions for the PSUs are based on three performance measures – net revenue growth (40%), underlying EBITDA margin
(40%) and relative TSR (20%). Performance is measured over a three-year period, and this combination of measures helps to align the operation
of the LTIP with shareholders’ interests and our business strategy. Net revenue growth provides a key indicator of long-term growth achieved in
the market. Underlying EBITDA margin is a key indicator of long-term growth in profitability from our operations. Relative TSR measures the total
returns to our shareholders providing close alignment with shareholder interests.
Airtel Africa operates only in Africa. We have three main competitors, none of whom disclose targets in their Annual Remuneration Reports. For
competitive and commercial reasons, the Board does not believe it would be in the interests of our shareholders to disclose our net revenue and
underlying EBITDA LTIP targets. The targets will be disclosed when they’re no longer considered commercially sensitive. This will be no later than
the year in which the awards vest. Our targets are based on the 2022/23 three-year plan and will require competitive market-leading growth in
net revenue at target with more than 5% up and down to threshold and maximum. The underlying EBIT from an already high competitive base
will be equally stretching, and both targets will be fully disclosed on vesting. On TSR against the MSCI Emerging Markets Communications
Service Index, threshold will vest at the 50th percentile with the maximum at the 75th percentile.
Targets applying to the 2022 performance share plan (PSP) awards
Metric
Weighting
Threshold (25%)
Target (50%)
Maximum (100%)
Net revenue (CAGR %)
Underlying EBITDA margin
Relative total shareholder return against MSCI
Emerging Markets Communications Service Index
40%
40%
Target minus more
than 5%
Commercially
sensitive
Based on 3-year plan
Based on 3-year plan
Target plus more
than 5%
Commercially
sensitive
20%
50th percentile
–
75th percentile
Share awards vesting in relation to 2022/23
The CFO was granted a RSU award over 198,795 shares subject to an Operating free cash flow performance underpin, and a PSP award over
397,590 shares on 30 October 2020 subject to performance measured to the end of 31 March 2023 against the following conditions:
All amounts are in US$million
Metric
2020 LTIP awards –
PSP-financial
2020 LTIP awards –
PSP-TSR
Weighting by
tranche
Below
threshold
(0%)
Threshold
(25%)
Target
(50%)
Maximum
(100%)
Net revenue CAGR
40%
<11.6%
11.6%
13.6%
15.6%
Actual
21.1%
Increase in Underlying
EBITDA Margin
40% <40 basis
points
40 basis
points
80 basis
points
120 basis
points
470 basis
points
Relative TSR
20% Upper
quartile
%
achievement
(of maximum)
100%
100%
100%
All targets and achievements are in constant currency
The underpin for the RSU awards required aggregate Operating free cash flow to be positive over the three-year performance period ending on
31 March 2022. Over the three financial years, aggregate Operating free cash flow was $4,770m, which resulted in the underpin being satisfied.
Airtel Africa plc Annual Report and Accounts 2023
157
GOVERNANCE REPORT
Directors’ remuneration report continued
As a result the following awards will vest:
Part 3
All amounts are
in $’000
Jaideep Paul 2020 LTIP
Type of award
Applicable performance conditions
RSUs
PSUs
PSUs
PSUs
Operating free cash flow underpin
Net Revenue CAGR
Underlying EBITDA margin
Relative TSR against comparator group
Maximum
number
of shares
198,795
159,036
159,036
79,518
Number
of shares
vesting
198,795
159,036
159,036
79,518
Estimated
value on
vesting
($000s)1
Estimated value
attributable to
share price
difference
($000s)1
282
226
226
113
184
147
147
73
1 The estimated value on vesting is the average price of Airtel Africa’s shares in the period between 1 January 2023 to 31 March 2023: $1,419 (£1,168). The estimated
value attributable to share price difference is the change from the share price on the date of grant of $0.495 (£0.617).
2022/23 remuneration of non-executive directors (audited)
This table lists the non-executive directors’ remuneration in accordance with UK reporting regulations.
All amounts are in ’000
Sunil Bharti Mittal3
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin4
Tsega Gebreyes
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
2022/23
2021/22
NED fees1
£300
£178
£85
£85
£90
£90
£80
£80
£90
£90
£70
£70
£70
£70
£80
£80
£90
£90
£70
£70
£82
£31
Benefits
(actual paid)
N/A
£56
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
N/A
Total
£300
£244
£85
£85
£90
£90
£80
£80
£90
£90
£70
£70
£70
£70
£80
£80
£90
£90
£70
£70
£82
£31
As at 31 March
2023 $2
$372
$303
$105
$105
$112
$112
$99
$99
$112
$112
$87
$87
$87
$87
$99
$99
$112
$112
$87
$87
$102
$38
1 NED fees determined in pounds sterling.
2 Adjustable closing FX rate of GBP/USD on 31 March 2022 – £1 = $1.24. USD values for 2021/22 are restated using this FX rate to aid comparison.
3 Benefits for 2021/22 are restated to reflect the final value paid in respect of the year. Last year the benefits were estimated in £000s as £67.
4
In line with Singtel Group Code of Conduct and Optus conflict of interest policies, Kelly Bayer Rosmarin’s fees are paid directly to Singtel Group.
158 Airtel Africa plc Annual Report and Accounts 2023
Our TSR performance from admission
The following graphs sets out our comparative TSR relative to the FTSE 250 and FTSE 100 indices from 28 June 2019 (the date of our listing)
to 31 March 2023, as required by UK reporting regulations. The FTSE 250 Index was chosen as a broad equity market index of which we were
a member from listing until early 2022. The FTSE 100 was chosen as the index of which we’re now a member.
Part 3
Total shareholder return
)
d
e
s
a
b
(
)
£
(
e
u
a
V
l
250
200
150
100
50
0
28/06/2019
31/03/2020
31/03/2021
31/03/2022
31/03/2023
Airtel Africa
FTSE 250
FTSE 100
This graph shows the value on 31 March 2023 of £100 invested in Airtel Africa on the date of admission (28 June 2019), compared with the
value of £100 invested in the FTSE 250 Index over the same time period.
CEO remuneration from our listing (28 June 2019)
This table sets out the single figure for the total remuneration paid to the CEO, together with the annual bonus payout and the LTIP payout (both
as a percentage of the maximum opportunity). Over time, the data in this table will show the CEO’s remuneration over a ten-year period. Financial
year 2021/22 is split between the two people acting as CEO during this period.
Total remuneration ($’000)
% of maximum bonus earned
% maximum LTI vested
1 From 28 June 2019 to 31 March 2020.
Raghunath Mandava
Segun Ogunsanya
2019/201
$3,140
60%
76%
2020/212
$3,608
100%
100%
2021/223
$3,484
100%
86%
2021/224
$1,404
100%
N/A
2022/23
$2,434
74%
N/A
2 The 2020/21 single figure has been updated to reflect the value of the LTIP on vesting.
3 From 1 April 2021 to 30 September 2021. 2021/22 LTIP reflects the portion of outstanding LTIP awards which vested on cessation, after pro-rating.
4 From 1 October 2021 to 31 March 2022.
CEO pay ratio
As the majority of our employees are based in Africa, with only seven in the UK, we’re not required to publish a CEO pay ratio. Given the numbers
of employees in the UK versus those overseas and the fact that the people in the UK are mainly involved in operating our head office, the ratio
produced by comparing CEO remuneration with that of our UK employees is likely to be misleading. As such, we’ve decided not to publish this
information. However, the committee takes into account pay relativities, employee wellbeing when setting executive remuneration, and we aim
to be an employer of choice with a diverse and inclusive work environment that continues to foster a culture of high performance, wellbeing,
skills enhancement and coaching.
Airtel Africa plc Annual Report and Accounts 2023
159
GOVERNANCE REPORT
Directors’ remuneration report continued
Part 3
Percentage change in remuneration of the directors and employees
This table shows the percentage movement in the salary, benefits and annual bonus for our directors between the current and previous
financial year.
Percentage change in remuneration
elements from 2019/20 to 2020/21
Percentage change in remuneration
elements from 2020/21 to 2021/22
Percentage change in remuneration
elements from 2021/22 to 2022/23
Base salary/
fees
Benefits1
Bonus
Base salary/
fees
Benefits
Bonus
Base
salary/fees
Benefits
Bonus
Segun Ogunsanya2
Jaideep Paul3
Sunil Bharti Mittal4
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin5
Tsega Gebreyes6
Full-time employees7,8
n/a
n/a
0%
3%
0%
0%
0%
0%
0%
0%
0%
n/a
n/a
5%
n/a
n/a
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-8%
10%
n/a
n/a
97%
2%
0%
0%
0%
0%
0%
0%
0%
133%
n/a
6%
n/a
n/a
0%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
-7%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
6%
108% 50.5% 55.1%
25%
-5%
-7%
69% -100%
0%
0%
0%
0%
0%
0%
0%
0%
0%
164%
7%
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
n/a
24%
12%
1 The reduction in benefits reflects currency movements, changes to the applicable tax rates and also reflects a reduction in home leave expenses due to the global
pandemic.
2 Joined the Board on 1 October 2021.
3 Joined the Board on 1 June 2021.
4 Fee increased from 1 November 2021.
5 Joined the Board on 27 October 2020.
6 Joined the Board on 12 October 2021.
7 Based on employees of the Group.
8 Provisional bonuses are used for year-on-year comparison.
Payments to past directors and payments for loss of office (audited)
No payments for loss of office were made during 2022/23. No payments to past directors were made in 2022/23 apart from those disclosed
in previous remuneration reports.
Relative importance of spend on pay
This table sets out, for the year ended 31 March 2023, the total cost of our employee remuneration and the total distributions to shareholders
through dividends.
$million
Dividends
Overall remuneration expenditure
2021/22
2022/23
% change
$169
$297
$195
$287
15%
-3%
160 Airtel Africa plc Annual Report and Accounts 2023
Non-executive directors’ remuneration
The table below summarises the fees payable to non-executive directors. During the year, our committee reviewed the Board fees. Following its
review, the committee decided not to increase fees.
Part 3
Role
Board chair fee
Non-executive base fee
Additional fees
Committee chair fee
Supplement for senior independent director
Committee membership fee (one committee)
Committee membership fee (two committees)
1 NED fees determined in pound sterling.
2 Adjustable closing FX rate of GBP/USD on 31 March 2023 – £1 = $1.24.
As at
31 March 2023
$2
Annual fee1
£300,000
$372,000
£70,000
$86,800
£20,000
£20,000
£10,000
£15,000
$24,800
$24,800
$12,400
$18,600
Statement of directors’ shareholdings and share interests (audited)
The beneficial and non-beneficial share interests of our directors and their connected persons in line with regulations, as at 31 March 2022 and
31 March 2023 (or on appointment or departure to the Board if different), are listed below.
Executive directors (audited)
Executive directors must build up and maintain a shareholding in Airtel Africa equivalent to 250% of their base salary within five years of being
appointed to the Board. Under the proposed policy, the CFO will be required to build and maintain a shareholding of 200% of their salary over the
same time period. While the executive director is building to this shareholding level, deferred bonus awards (net of expected taxes) that will apply
on vesting will count towards this requirement. LTIP shares that have vested and that are within the two-year post-vesting holding period will also
count on a net of tax basis.
To deal with unexpected circumstances, the committee has the discretion to make exceptions and allowances if it sees fit.
Shareholding at
31 March 2022
Shareholding at
31 March 2023
Total
shareholding
as multiple of
salary (%)
Maximum
unvested
LTIPs
Unvested awards
subject to service
condition
Segun Ogunsanya
Jaideep Paul
0
379,613
335,895
585,675
65%
155%
1,805,492
1,569,787
466,441
375,918
Non-executive directors (audited)
Sunil Bharti Mittal1
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal1, 2
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin
Tsega Gebreyes
Unvested
options
0
0
Vested but
not exercised
share options
705,632
751,086
Shareholding at
31 March 2022
Shareholding at
31 March 2023
–
–
–
–
20,000
460,000
20,000
548,000
–
–
–
–
292,424,330 292,424,330
30,000
122,250
30,000
122,250
–
–
–
–
1 Sunil Bharti Mittal and Shravin Bharti Mittal do not have any direct shareholding in the company. Airtel Africa is an indirect subsidiary of Bharti Airtel, a listed company
in India. Sunil Bharti Mittal and Shravin Bharti Mittal are members of the Bharti Mittal family group which has an indirect shareholding in Bharti Airtel. Indian Continent
Investment and Bharti Global are held ultimately by the Bharti Mittal family group. Each of Bharti Airtel, Indian Continent Investment and Bharti Global hold voting rights
in Airtel Africa as set out on page 140 (major shareholders).
2 Shares held by Bharti Global, a connected person of Shravin Bharti Mittal for the purposes of this disclosure.
There has been no change in the interests of the directors and their connected persons between 31 March 2022 and the date of this report.
Airtel Africa plc Annual Report and Accounts 2023
161
GOVERNANCE REPORT
Directors’ remuneration report continued
Part 3
Committee governance
The Remuneration Committee is a formal committee of the Board. Its remit is set out in terms of reference available on our website:
www.airtel.africa. The committee reviews its performance against these terms each year and is satisfied that it has acted in line with
the terms of reference during the year.
Committee composition
Members throughout the year
Douglas Baillie, chair
John Danilovich
Awuneba Ajumogobia
Tsega Gebreyes
Other regular attendees
• Chief executive officer
• Group head of HR
• Company secretary
• External remuneration consultants
Meeting
attendance
(5 meetings
in the year)
5 (5)
5 (5)
5 (5)
5 (5)
The committee is authorised to seek information from any director and employee and to obtain external advice. The committee is solely
responsible for the appointment of external remuneration advisors and for the approval of their fees and other terms. The committee recognises
and manages conflicts of interest when receiving views from executive directors and other attendees, and no director or other attendee takes
part in any discussion about his or her personal remuneration.
In the year, Alvarez and Marsal (A&M) provided remuneration advice and benchmarking data to the committee. A&M were appointed in light
of the experience and expertise of their team in remuneration advisory work – and are expected to provide independent advice. A&M does not
undertake any other work for Airtel Africa and has no connection to the Board or any director. A&M have signed the Code of Conduct of the
Remuneration Consultants Group requiring the advice they provide to be objective and impartial. Total fees paid to A&M for the year in review
were £226k (excluding VAT) charged on a time and materials basis.
Sums paid to third parties for directors’ services
No sums were paid or received by third parties for the services of any director of Airtel Africa while acting as a director of the company or of any
our subsidiaries, or as a director of any other undertaking by our nomination, or otherwise in connection with the management of our company
or any undertaking during the year to 31 March 2023.
Share awards held by the executive directors (audited)
Segun Ogunsanya
Type of award
IPO share options
Replacement award – tranche 11
Replacement award – tranche 21
2021 LTIP – PSU
2021 LTIP – RSU
2022 Deferred bonus
2022 LTIP – PSU
2022 LTIP – RSU
Maximum
unvested
awards
held on
31 March
2022
235,212
330,280
330,280
735,268
326,786
Awards
granted
during year
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
136,161
514,688
228,750
Vested
in year
235,212
330,280
Nil
Nil
Nil
Nil
Nil
Nil
Lapsed
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Maximum
unvested
awards
held as at
31 March
2023
Date of
grant
Exercise
price
Vesting
date
Nil
3 July 2019
£0.8
1 June 2022
Nil 28 June 2021
Nil 28 June 2022
330,280 28 June 2021
Nil 28 June 2023
735,268 28 June 2021
Nil 28 June 2024
326,786 28 June 2021
Nil 28 June 2024
136,161 28 June 2022
Nil 28 June 2024
514,688 28 June 2022
Nil 28 June 2025
228,750 28 June 2022
Nil 28 June 2025
1 Buyout of a previous cash-based incentive which was granted as an award of restricted shares with the same expected value as the fair value foregone, with vesting in two
equal tranches in June 2022 and 2023.
162 Airtel Africa plc Annual Report and Accounts 2023
Part 3
Awards
granted
during year
Vested
in year
Lapsed
Jaideep Paul
Type of award
IPO Share options
2019 LTIP awards – PSP-financial
2019 LTIP awards – PSP-TSR
2019 LTIP – RSU
2020 LTIP – PSP
2020 LTIP – RSU
2021 LTIP – PSP
2021 LTIP – RSU
2022 LTIP – PSU
2022 LTIP – RSU
2022 Deferred bonus
One-off Share award1
One-off Share award1
Maximum
unvested
awards
held on
31 March
2022
250,362
26,666
80,000
26,668
397,590
198,795
390,402
182,188
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
250,362
26,666
80,000
26,668
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
273,281
127,531
134,954
60,241
240,964
Nil
Nil
60,241
Nil
Maximum
unvested
awards
held as at
31 March
2023
Nil
Nil
Nil
Nil
397,590
198,795
390,402
182,188
273,281
3 July 2019
3 July 2019
3 July 2019
30 Oct 2020
30 Oct 2020
28 June 2021
28 June 2021
28 June 2022
127,531
28 June 2022
134,954
28 June 2022
Nil 30 October 2020
240,964 30 October 2020
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Nil
Date of
grant
Exercise
price
Vesting
date
3 July 2019
£0.8
1 June 2022
Nil
Nil
Nil
1 June 2022
1 June 2022
1 June 2022
Nil 30 October 2023
Nil 30 October 2023
Nil
Nil
Nil
Nil
Nil
Nil
Nil
28 June 2024
28 June 2024
28 June 2025
28 June 2025
28 June 2024
30 Oct 2022
30 Oct 2023
1 One tranche of this award vested on 30 October 2022. As the award does not have any performance conditions, it is not included in the single figure of remuneration,
in accordance with the regulations.
Airtel Africa share price
The closing price of an ordinary share on the London Stock Exchange on 31 March 2023 was 106.5p, with the range between 1 April 2022 and
31 March 2023 being 104.6p to 170.9p.
Statement on voting at the 2021 Annual General Meeting (unaudited)
At our 15 July 2022 AGM, votes cast on the directors’ remuneration report and directors’ remuneration policy were as follows:
Percentage of votes cast
Number of votes cast
For
Against
For
Against
Withheld
99.08%
94.98%
0.92% 3,381,623,020
31,297,216
58,732,404
5.02% 3,241,503,962
171,412,682
58,735,995
Directors’ remuneration report
Directors’ remuneration policy
On behalf of the Board
Doug Baillie
Chair, Remuneration Committee
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
163
FINANCIAL STATEMENTS
Financial
statements
166
Independent auditor’s report
174 Consolidated statement of comprehensive income
175 Consolidated statement of financial position
176 Consolidated statement of changes in equity
177 Consolidated statement of cash flows
178 Notes to consolidated financial statements
236 Company statement of financial position
237 Company statements of changes in equity
238 Notes to company only financial statements
164 Airtel Africa plc Annual Report and Accounts 2023
Airtel Africa plc Annual Report and Accounts 2023
165
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Airtel Africa plc
Report on the audit of the financial
statements
1. Opinion
In our opinion:
• the financial statements of Airtel Africa plc (the ‘company’) and
its subsidiaries (the ‘Group’) give a true and fair view of the state
of the Group’s and of the company’s affairs as at 31 March
2023 and of the Group’s profit for the year then ended;
• the Group financial statements have been properly prepared
in accordance with United Kingdom adopted international
accounting standards and International Financial Reporting
Standards (IFRSs) as issued by the International Accounting
Standards Board (IASB);
• the company financial statements have been properly prepared
in accordance with United Kingdom Generally Accepted
Accounting Practice, including Financial Reporting Standard
101 “Reduced Disclosure Framework”; and
• the financial statements have been prepared in accordance
with the requirements of the Companies Act 2006.
We have audited the financial statements which comprise:
• the consolidated statement of comprehensive income;
• the consolidated and company statements of financial position;
• the consolidated and company statements of changes in equity;
• the consolidated cash flow statement; and
• the related notes 1 to 35 of the Group financial statements and the
related notes 1 to 11 of the company financial statements.
The financial reporting framework that has been applied in the
preparation of the Group financial statements is applicable law, United
Kingdom adopted international accounting standards and IFRSs as
issued by the IASB. The financial reporting framework that has been
applied in the preparation of the parent company financial statements
is applicable law and United Kingdom Accounting Standards, including
FRS101 ‘Reduced Disclosure Framework’ (United Kingdom Generally
Accepted Accounting Practice).
2. Basis for opinion
We conducted our audit in accordance with International Standards on
Auditing (UK) (ISAs (UK)) and applicable law. Our responsibilities under
those standards are further described in the auditor’s responsibilities
for the audit of the financial statements section of our report.
We are independent of the Group and the company in accordance
with the ethical requirements that are relevant to our audit of the
financial statements in the UK, including the Financial Reporting
Council’s (the ‘FRC’s’) Ethical Standard as applied to listed public
interest entities, and we have fulfilled our other ethical responsibilities
in accordance with these requirements. The non-audit services
provided to the Group and company for the year are disclosed in
note 8.1 in the Group financial statements. We confirm that we have
not provided any non-audit services prohibited by the FRC’s Ethical
Standard to the Group or the company.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
3. Summary of our audit approach
Key audit matters
Materiality
Scoping
Significant changes
in our approach
The key audit matters that we identified in the
current year were:
• Prepaid and Airtel Money (mobile money)
revenue
• Airtel Money restricted cash; and
• The classification of legal cases.
Within this report, key audit matters are
identified as follows:
• Newly identified
• Increased level of risk
• Similar level of risk
• Decreased level of risk
The materiality that we used for the Group
financial statements was $65m which
represents 6.3% of profit before tax (March
2022: 5.1% of profit before tax) and 2.5%
(March 2022: 3%) of underlying earnings
before interest, tax, depreciation and
amortisation (underlying EBITDA).
Our scope covered seventeen components.
Of these, three were full-scope audits.
Six components were subject to an audit
of specified account balances and seven
components were subject to analytical
review procedures. A further component is
the Group’s shared service centre in India.
The scope of this component was either a
full scope or an audit of specified account
balances depending on the scope of the
component managed at the shared service
centre. These covered 96% of Group profit
before tax, 97% of Group revenue and 96%
of the Group total assets. Components
and balances not in scope were subject to
analytical procedures performed by the
Group audit team.
Airtel Money restricted cash has now been
included as a separate key audit matter given
the increase in size and prominence of the
Group’s mobile money business.
Going concern has not been included as key
audit matter this year given the continued
profitability of the Group and the early
prepayment of bonds in the current year.
Gabon, Chad, Congo B, Rwanda, Seychelles
and Madagascar are now subject to
analytical review procedures this year as
these components are deemed not to be
significant to the Group.
We tested the operating effectiveness of
controls relating to IFRS16, the classification
of legal and regulatory matters as well as the
consolidation process this year.
4. Conclusions relating to going concern
In auditing the financial statements, we have concluded that the
directors’ use of the going concern basis of accounting in the
preparation of the financial statements is appropriate.
Our evaluation of the directors’ assessment of the Group’s and
company’s ability to continue to adopt the going concern basis
of accounting included:
166 Airtel Africa plc Annual Report and Accounts 2023
• Obtaining an understanding of the relevant controls over the
Group’s forecasting process;
• Performing retrospective reviews of historical forecasts to assess
the reasonableness of the Group’s forecasting process;
• Performing risk assessment procedures in response to the
economic disruption risk. This covered a period of at least twelve
months from the date of approval of the financial statements;
• Assessing the reasonableness of the anticipated impact of the
Group’s principal risks on the Group’s cash flow projections and
how these were factored into the Group’s reasonable worst case
forecast, including: currency devaluation; a reduction in revenue
and profit; and legal, tax and regulatory claims;
• Assessing and challenging the assumptions used by the directors in
each of the cash flow forecasts, considering our own expectations
based on our knowledge of the Group;
• Assessing and challenging the key mitigating actions available,
including a reduction in capital expenditure and lower dividends
payouts;
• Obtaining direct confirmations of the value, duration and terms for
the Group’s undrawn committed facilities as at the year-end;
• Recalculating the cash headroom available using undrawn
committed facilities in each of the scenarios prepared by
management and approved by the directors and testing the
integrity and mechanical accuracy of the going concern model; and
• Assessing the appropriateness of the disclosures in the financial
statements.
Based on the work we have performed, we have not identified
any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group’s
and company’s ability to continue as a going concern for a period
of at least twelve months from when the financial statements are
authorised for issue.
In relation to the reporting on how the Group has applied the UK
Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors’ statement in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting.
Our responsibilities and the responsibilities of the directors with
respect to going concern are described in the relevant sections
of this report.
5. Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of
the current period and include the most significant assessed risks of material misstatement (whether or not due to fraud) that we identified.
These matters included those which had the greatest effect on: the overall audit strategy, the allocation of resources in the audit; and directing
the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do
not provide a separate opinion on these matters.
5.1. Prepaid and mobile money revenue
Key audit matter
description
As set out in note 6 to the financial statements, revenue of $5,255m (March 2022: $4,714m) is derived from the provision
of voice, data, mobile money and other services. These revenue streams account for $5,245m of revenue (March 2022:
$4,307m) with voice and data accounting for $4,278m (March 2022: $3,883m) of revenue and mobile money services
accounting for $540m (March 2022: $424m) of revenue.
How the scope
of our audit
responded to the
key audit matter
88% of voice and data revenue derives from customers who subscribe to services on a prepaid basis. Mobile money
revenue relates to the commission earned on allowing customers to transfer funds and pay bills on the Group’s mobile
money IT platform, Mobiquity. The Group’s accounting policies on prepaid and mobile money revenue are set out in
note 2.21.
Due to the complexity of the Group’s revenue recording systems (IN for prepaid revenue and Mobiquity for mobile money)
and the volume of customer data, we identified a key audit matter relating to prepaid revenue, specifically (i) the correct
set up of tariffs on the applicable systems and (ii) the manual journal posting of revenue from the billing system to the
general ledger. For mobile money, we identified a key audit matter in relation to the accuracy of rates and tariffs within the
Mobiquity system. Errors in either would impact the accuracy of prepaid and mobile money revenue. We also identified a
fraud risk in respect of both matters.
Our procedures involved:
• Working with our IT specialists to understand the IT environment in which the revenue recording systems reside,
including interface controls between different IT applications. This included the IN billing system for prepaid revenue
and the Mobquity IT platform for mobile money;
• Testing the relevant controls over (a) approvals and maintenance of new plans in the IN billing system, and (b)
authorisation of rate changes and the maintenance of rates within the IN and Mobquity systems;
• Testing the reconciliation process between the general ledger and IN and Mobiquity, including any manual
adjustments posted;
• For prepaid revenue, testing a sample of call record validations to test the accuracy of prepaid revenue and the
resolution of exceptions in addition to performing independent call testing to evidence that the amounts charged
to the subscriber is consistent with the approved tariffs;
• We analysed key movements in prepaid revenue recorded within the general ledger against cash collection in the billing
systems at the Group level;
• For prepaid revenue, tested a sample of tarrifs set up in IN system;
• For Airtel Money, tested a sample of tariffs set up in Mobiquity system; and
• We also created our expectation of the Airtel Money revenue by considering the transactions and the applicable rates
and compared the actual revenue recorded with the expected revenue.
Key observations Based on our work, we noted no significant issues on the accuracy of prepaid and mobile money revenue recorded in
the year.
Airtel Africa plc Annual Report and Accounts 2023
167
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Airtel Africa plc continued
5.2. Mobile money restricted cash
Key audit matter
description
Airtel Money has been identified as a separate reportable segment for the year ended 31 March 2023 due to the growth
in this business together with changes to the Group’s organisational structure, including the separate reporting of the
results of mobile money to the Chief Operating Decision Maker (CODM) for the allocation of resources and assessment
of performance.
How the scope
of our audit
responded to the
key audit matter
The Group holds cash on behalf of its mobile money customers, which is restricted for use by the Group. The total
restricted cash balance as at 31 March 2023 amounted to $617m (March 2022: $513m) and is presented as ‘balance
held under mobile money trust’ under cash and cash equivalents.
We identified a key audit matter and a fraud risk related to the existence of this restricted cash balance.
Our procedures involved:
• Testing the relevant controls around the exsistence and valuation of the Airtel Money restricted cash balance.
• Obtained and tested the Airtel Money bank reconciliations, tracing the amounts held to external, independent
confirmations.
• Testing a sample of transactions at or around period end to ensure the transactions were appropriate and did not
constitute transfers into the Group’s own operating bank accounts.
Key observations Based on our work, we noted no exceptions regarding the existence of the mobile money restricted cash balance.
5.3 Classification of legal matters
Key audit matter
description
Management has recorded a provision of $7m (March 2022: $7m) in respect of legal claims against components
operating within complex jurisdictions. This is included in the total provision for legal and regulatory cases amounting
to $34m (March 2022: $51m) as set out in note 25 to the financial statements. Contingent liabilities as at 31 March
2023 for legal claims in these jurisdictions amounted to $69m (March 2022: $70m) as described in Note 29 to the
financial statements.
Airtel Africa has business operations in 14 countries across Africa, each with different legal environments. Certain
components operate in higher-risk and complex jurisdictions than others. Each component maintains legal registers which
are updated on a monthly basis to summarise the current position of each legal case and to consider whether a legal case
is assessed as probable, possible or remote in accordance with IAS 37: Provisions, Contingent Liabilities and Contingent
assets, and consequently whether a provision or contingent liability disclosure is required. Management of these matters
is frequently supported by external counsel in the local markets and the opinion of counsel is considered in assessing the
classification of the matter as probable, possible or remote in accordance with IAS 37: Provisions, Contingent Liabilities
and Contingent assets.
Further information on the Group’s policies for legal matters, including the judgements taken, can be found in notes 2.19
and 2.20 of the financial statements, and within the key source of estimation uncertainty disclosures in note 3.1. The Audit
and Risk Committee also comment on this area in their report on page 106.
We identified a key audit matter relating to the appropriate classification and presentation of legal cases within the
financial statements as remote (no disclosure), possible (contingent liability, note 29) and probable (provision, note 25) in
accordance with IAS 37, with a focus on components operating in complex jurisdictions. There is an incremental challenge
in predicting the outcome of the ongoing cases in these jurisdictions due to the significant number of cases and the high
value of the claims. Management has exercised significant judgement in determining their assessment of the outcome
and the accounting consequences thereon. As a result of these factors, we consider there to be a fraud risk associated
with this key audit matter due to susceptibility of the judgement to bias.
Our procedures involved:
• Obtaining an understanding of the relevant controls concerning the classification of legal cases and testing the design,
implementation and operating effectiveness of these controls;
• Assessing a sample of cases and challenging whether the cases are appropriately classified as probable, possible or
remote based on IAS 37: Provisions, Contingent Liabilities and Contingent Assets;
• Holding discussions with internal legal counsel and obtaining supporting evidence for a sample of cases;
• Circularising external legal counsel for a sample of cases and checking their assessment of whether a case is
probable, possible or remote is appropriate. We also evaluated the competence, capability and objectivity of external
legal counsel;
• Assessing the consistency and completeness of approach across each operating company by considering if there
is any precedent for similar cases to be settled within each jurisdiction, as well as current legal settlements; and
• Evaluating the financial statement disclosures, including the articulation of each material case.
How the scope
of our audit
responded to the
key audit matter
Key observations Based on the procedures performed we consider the classification of legal cases as probable, possible and remote to
be appropriate.
We consider the provision and contingent liability disclosures within notes 25 and 29 of the financial statements to
be appropriate.
168 Airtel Africa plc Annual Report and Accounts 2023
6. Our application of materiality
6.1 Materiality
We define materiality as the magnitude of misstatement in the financial statements that makes it probable that the economic decisions of a
reasonably knowledgeable person would be changed or influenced. We use materiality both in planning the scope of our audit work and in
evaluating the results of our work.
Based on our professional judgement, we determined materiality for the financial statements as a whole as follows:
Materiality
$65m (March 2022: $62m)
Group financial statements
Basis for determining
materiality
6.3% of profit before tax (March 2022: 5.1% of profit
before tax) and 2.5% of underlying EBITDA (March 2022:
3% of underlying EBITDA).
Rationale for the
benchmark applied
Profit before tax is our primary benchmark as it impacts
distributable reserves and dividends, which is key for
investors. Underlying EBITDA is also a key performance
measure for the Group.
Parent company financial statements
$41m (March 2022: $33.5m)
1% of net assets (March 2022: 1% of net assets ).
Airtel Africa plc is a holding company, which holds
investments in a number of subsidiaries. Thus, the primary
users of the company’s financial statements are the
Group’s shareholders and the directors and management
of its holding company (Bharti Airtel Limited) and ultimate
holding company (Bharti Enterprises (Holding) Private
Limited which is held by the private trusts of the Bharti
family). We therefore considered net assets to be the most
appropriate benchmark given the primary purpose of the
company is a holding company.
Profit before tax
$1,034m
Profit before tax
Group materiality
$65m
Group materiality
$3m to $49m
Component materiality range
$3.3m
Audit and Risk Committee
reporting threshold
6.2 Performance materiality
We set performance materiality at a level lower than materiality to reduce the probability that, in aggregate, uncorrected and undetected
misstatements exceed the materiality for the financial statements as a whole.
Performance
materiality
Basis and rationale
for determining
performance
materiality
Group financial statements
Parent company financial statements
65% (March 2022: 60%) of Group materiality
65% (March 2022: 60%) of parent company materiality
In determining performance materiality, we considered the following factors:
a. Our experience of auditing the Group: this is the fifth year of our audit of the consolidated financial statements and
fourth year of auditing the Group as a listed entity on the London Stock Exchange;
b. Our ability to visit component management and component audit teams in India, Dubai and Africa during the year
following the easing of covid-related travel restrictions; and
c. The maturity of the Group’s control environment.
As a result of these factors, we increased performance materiality to 65% of Group materiality (March 2022: 60% of
Group materiality). We applied the same approach in calculating parent company materiality.
6.3 Error reporting threshold
We agreed with the Audit and Risk Committee that we would report to the Committee all audit differences in excess of $3.3m (March 2022:
$3.1m), as well as differences below that threshold that, in our view, warranted reporting on qualitative grounds. We also report to the Audit and
Risk Committee on disclosure matters that we identified when assessing the overall presentation of the financial statements.
Airtel Africa plc Annual Report and Accounts 2023
169
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Airtel Africa plc continued
7. An overview of the scope of our audit
7.1 Identification and scoping of components
Our component audit scope requires us to (a) achieve sufficient
coverage across the Group to address the key risk areas and (b)
meet the requirements of ISA (UK) 600 to plan and oversee the work
performed by component audit teams. Our Group audit was scoped
on an entity-level basis, assessing components against the risk of
material misstatement at the Group level. We also considered the
quantum of financial statement balances and individual financial
transactions of a significant nature. In performing our assessment,
we have considered the geographical spread of the Group and risks
presented within each region.
The Group operates across fourteen countries across Africa (each
were identified as a component for audit purposes) and supported
by the Group’s shared service centre based in India, as well as a key
holding company based in the Netherlands (Bharti Airtel Netherlands
B.V.) which holds a part of the Group’s debt, and Airtel Africa plc,
the company.
Component teams performed full scope audits on two components
(Nigeria and Uganda) and audits of specified account balances on
five components as set out in the table below. We performed interim
audit procedures for the 9 months ended 31 December 2022 on
Nigeria, Uganda, Tanzania, Kenya, Malawi, Zambia and the DRC and
additional procedures for the period to the year ended 31 March 2023.
For Congo B, Gabon, Niger, Chad, Seychelles, Rwanda and
Madagascar we performed analytical review procedures at the Group
level for the year ended 31 March 2023 as these components are not
significant to the Group.
We performed a full scope audit on Airtel Africa plc and an audit
of specified account balances on Bharti Airtel Netherlands B.V.
A component audit team also performed procedures at the shared
service centre in India. The scope of the shared service centre
matched the scope of each African component e.g. the Nigeria
transactions at the shared service centre were subject to a full
scope audit.
The Group team performed analytical review procedures on the
remaining balances not included within audit scope, each of which
are insignificant. This included other holding companies within the
Netherlands, including AMC B.V., the holding company of the main
Airtel Money entities. We also made inquiries of management and
evaluated and tested management’s Group-wide controls across a
range of locations and segments in order to address the risk of residual
misstatement on a segment-wide and component basis. At the
Group level, we also tested the consolidation process and performed
procedures over significant risks and controls. We also assessed the
accounting for key transactions in the year, as set out in note 5 to the
financial statements.
The below table summarises the segment allocation and scope of the Group’s components:
Segment
Nigeria
East Africa
Full scope audit
Audits of specified balances
Analytical review procedures
Nigeria
Uganda
–
–
Tanzania, Malawi, Kenya and Zambia
Rwanda
Francophone
–
Democratic Republic of the Congo
Congo Brazzaville, Niger, Chad, Gabon,
Madagascar and Seychelles
Other components deemed insignificant
to the Group
Central
Revenue
Airtel Africa plc and shared service
centre in India for the full scope
components
Netherland holding company and
shared service centre in India for other
components in scope
14%
Total assets
10%
37%
32%
58%
Full audit scope
Specified audit procedures
Review at Group level
1%
33%
49%
Full audit scope
Specified audit procedures
Review at Group level
Profit before tax
66%
Full audit scope
Specified audit procedures
Review at Group level
170 Airtel Africa plc Annual Report and Accounts 2023
7.2 Our consideration of the control environment
7.2.1 IT controls
As a business, the Group is heavily reliant on IT systems. Therefore,
effective IT controls are important not just to address financial risks,
but also for other areas such as operational, regulatory and
reputational risk. Given the high volume, low value nature of the
Group’s transactions, reliance on the IT control environment is a
fundamental part of the audit approach, not least for revenue.
Our assessment of the IT control environment included testing
general IT controls (such as user access and IT change management),
automated controls (such as appropriate configuration of tariffs)
and system generated reports (such as daily recharge reports).
Key systems in scope for the audit were the accounting and revenue
recording systems (IN, Intec and Mobiquity), including revenue
recording systems managed in country (such as those relating to
prepaid, mobile money and interconnect revenue) and the Group’s
general ledger system. The Group is reliant on third parties for the
support and maintenance of these systems, and arrangements are
in place with a range of third-party IT providers.
7.2.2 Business processes
We previously relied on controls for our full scope audits and audits of
specified balances over the prepaid revenue, interconnect revenue,
mobile money revenue, expenditure and payables, property plant
and equipment and payroll cycles. In the year we expanded this to
cover reliance over the classification of legal and regulatory cases,
the recording or leases and the consolidation processes following
improvements in the controls of these areas.
7.2.3 Governance controls
We paid particular attention to the governance of the relationship
with the company and entity level controls. We did not identify any
significant findings in these areas.
7.3 Our consideration of climate-related risks
The Group has disclosed its Task force on climate-related financial
disclosures (‘TCFD’) on pages 56-59 of the Annual Report, including
its governance process for managing climate related risks, the climate
related risks and opportunities and how these risks and opportunities
are managed. We assessed the TCFD recommended disclosures
within the Annual Report and considered whether they are materially
consistent with the financial statements and our knowledge obtained
in the audit.
We obtained an understanding of management’s process for
considering the impact of climate-related risks. We evaluated these
risks to assess whether they were complete and consistent with
our understanding of the Group and our wider risk assessment
procedures. The key focus was the impact of climate change on the
impairment review performed on the Group’s assets, particularly
in respect of Goodwill. Management disclosed in note 15 that no
reasonable possible change in any assumption underpinning the
impairment review would lead to an impairment which includes the
impact of climate change. We assessed this as part of our work on
impairment and agree with the conclusions drawn.
7.4 Working with other auditors
The work on all components subject to either full audit or an audit
of specified account balances was performed by Deloitte member
firms. The majority of account balances are managed and audited
at the shared service centre in India. This is supplemented by the
management and audit of account balances at each operating
company and the Group head office in Dubai.
We held a planning meeting in Dubai with all the component audit
teams to discuss and agree the planning and execution of the audit; at
the same meeting we met with Group management to communicate
our planned audit strategy, including key audit focus areas.
As part of oversight procedures, we visited all the full scope
components and all the components subject to audit of specified
account balances (Nigeria, Uganda, the DRC, Kenya, Tanzania,
Malawi and Zambia). We also visited Gabon and Congo Brazzaville
components, which was subject to Group analytical review
procedures, the shared service centre in India and the Group’s head
office in Dubai. We remained in regular contact with all component
teams throughout the year to understand key issues and appropriately
plan and execute the year end audit. The frequency of these
interactions was increased during the key audit periods and included
direct calls between senior members of the Group and component
audit teams.
We issued detailed instructions to our component audit teams,
included them within our team briefings and regular status calls,
and reviewed component auditor working papers during the above
component visits and remotely via online review of their audit files.
Throughout the core period of the audit, we held regular, and at times
daily calls with Group management, which also involved Deloitte India,
who audit the shared service centre in India and where the majority of
account balances are managed.
8. Other information
The other information comprises the information included in the
annual report, including the strategic report, the corporate governance
report, the directors’ remuneration report and the directors’ report,
other than the financial statements and our auditor’s report thereon.
The directors are responsible for the other information contained
within the annual report.
Our opinion on the financial statements does not cover the other
information and, except to the extent otherwise explicitly stated in our
report, we do not express any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent with
the financial statements or our knowledge obtained in the course of
the audit, or otherwise appears to be materially misstated.
If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether this gives rise
to a material misstatement in the financial statements themselves.
If, based on the work we have performed, 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.
9. Responsibilities of directors
As explained more fully in the directors’ responsibilities statement,
the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view,
and for such internal control as the directors determine is necessary
to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the Group’s and the company’s ability to continue as a going
concern, disclosing as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either
intend to liquidate the Group or the company or to cease operations, or
have no realistic alternative but to do so.
Airtel Africa plc Annual Report and Accounts 2023
171
FINANCIAL STATEMENTS
Independent auditor’s report to the members of Airtel Africa plc continued
We also obtained an understanding of the legal and regulatory
frameworks that the Group operates in, focusing on provisions
of those laws and regulations that had a direct effect on the
determination of material amounts and disclosures in the financial
statements. The key laws and regulations we considered in this
context included the UK Companies Act and relevant tax legislation
in the jurisdictions that the Group operates.
In addition, we considered provisions of other laws and regulations that
do not have a direct effect on the financial statements but compliance
with which may be fundamental to the Group’s ability to operate or
to avoid a material penalty. This primarily includes the regulations set
by the telecommunication and mobile money regulator within each
operating entity and the relevant financial regulations which govern
the components.
11.2 Audit response to risks identified
As a result of performing the above, we identified prepaid and mobile
money revenue, the existence of mobile money restricted cash and
the classification of legal cases in components operating in certain
jurisdictions as key audit matters related to the potential risk of fraud
or non-compliance with laws and regulations. The key audit matters
section of our report explains the matter in more detail and describes
the specific procedures we performed in response to those key
audit matters.
In addition to the above, our procedures to respond to risks identified
included the following:
• reviewing the financial statement disclosures and testing to
supporting documentation to assess compliance with provisions of
relevant laws and regulations described as having a direct effect on
the financial statements;
• enquiring of management, the audit and risk committee and
in-house legal counsel of actual and potential litigation and claims;
• performing analytical procedures to identify any unusual or
unexpected relationships that may indicate risks of material
misstatement due to fraud;
• reading minutes of meetings of those charged with governance,
reviewing internal audit reports and reviewing correspondence with
relevant tax authorities;
• in addressing the risk of fraud through management override of
controls, testing the appropriateness of journal entries, including
enhanced testing of manual journal entries which demonstrate
characteristics of audit interest; assessing whether the
judgements made in making accounting estimates are indicative
of a potential bias; and evaluating the business rationale of any
significant transactions that are unusual or outside the normal
course of business.
We also communicated relevant identified laws and regulations and
potential fraud risks to all engagement team members, including
specialists and component audit teams and remained alert to any
indications of fraud or non-compliance with laws and regulations
throughout the audit.
10. Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about whether the
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 (UK) will always detect a material misstatement
when it exists. Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users
taken on the basis of these financial statements.
A further description of our responsibilities for the audit of
the financial statements is located on the FRC’s website at:
www.frc.org.uk/auditorsresponsibilities. This description forms
part of our auditor’s report.
11. Extent to which the audit was considered capable of
detecting irregularities, including fraud
Irregularities, including fraud, are instances of non-compliance
with laws and regulations. We design procedures in line with our
responsibilities, outlined above, to detect material misstatements
in respect of irregularities, including fraud. The extent to which our
procedures are capable of detecting irregularities, including fraud
is detailed below.
11.1 Identifying and assessing potential risks related
to irregularities
In identifying and assessing risks of material misstatement in respect
of irregularities, including fraud and non-compliance with laws and
regulations, we considered the following:
• the nature of the industry and sector, control environment and
business performance, including the design of the Group’s
remuneration policies, key drivers for directors’ remuneration,
bonus levels and performance targets;
• results of our enquiries of management, internal audit and the Audit
and Risk committee about their own identification and assessment
of the risks of irregularities, including those that are specific to the
Group’s sector;
• any matters we identified having obtained and reviewed the Group’s
documentation of their policies and procedures relating to:
– identifying, evaluating and complying with laws and regulations
and whether they were aware of any instances of non-compliance;
– detecting and responding to the risks of fraud and whether they
have knowledge of any actual, suspected or alleged fraud;
– the internal controls established to mitigate risks of fraud or
non-compliance with laws and regulations;
• the matters discussed among the audit engagement team, including
significant component audit teams and involving relevant internal
specialists, including tax, valuations, and IT specialists regarding how
and where fraud might occur in the financial statements and any
potential indicators of fraud.
As a result of these procedures, we considered the opportunities
and incentives that may exist within the organisation for fraud and
identified the greatest potential for fraud in the following areas: prepaid
and mobile money revenue, the existence of mobile money restricted
cash and the classification of legal matters in components operating in
certain jurisdictions. In common with all audits under ISAs (UK), we are
also required to perform specific procedures to respond to the risk of
management override.
172 Airtel Africa plc Annual Report and Accounts 2023
Report on other legal and regulatory
requirements
12. Opinions on other matters prescribed by the
Companies Act 2006
In our opinion the part of the directors’ remuneration report to be
audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
• the information given in the strategic report and the directors’
report for the financial year for which the financial statements
are prepared is consistent with the financial statements; and
• the strategic report and the directors’ report have been prepared
in accordance with applicable legal requirements.
In the light of the knowledge and understanding of the Group and
the company and their environment obtained in the course of the
audit, we have not identified any material misstatements in the
strategic report or the directors’ report.
13. Corporate governance statement
The Listing Rules require us to review the directors’ statement in
relation to going concern, longer-term viability and that part of the
Corporate Governance Statement relating to the Group’s compliance
with the provisions of the UK Corporate Governance Code specified
for our review.
Based on the work undertaken as part of our audit, we have
concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial
statements and our knowledge obtained during the audit:
• the directors’ statement with regards to the appropriateness
of adopting the going concern basis of accounting and any
material uncertainties identified set out on pages 123 and 178;
• the directors’ explanation as to its assessment of the Group’s
prospects, the period this assessment covers and why the
period is appropriate set out on pages 98-99;
• the directors’ statement on fair, balanced and understandable
set out on page 122;
• the Board’s confirmation that it has carried out a robust
assessment of the emerging and principal risks set out on
page 90;
• the section of the Annual Report that describes the review of
effectiveness of risk management and internal control systems
set out on pages 90-97; and
• the section describing the work of the Audit and Risk
Committee set out on pages 117-127.
14. Matters on which we are required to report
by exception
14.1 Adequacy of explanations received and accounting
records
Under the Companies Act 2006 we are required to report to you if, in
our opinion:
• we have not received all the information and explanations we require
for our audit; or
• adequate accounting records have not been kept by the company,
or returns adequate for our audit have not been received from
branches not visited by us; or
• the company financial statements are not in agreement with the
accounting records and returns.
We have nothing to report in respect of these matters.
14.2 Directors’ remuneration
Under the Companies Act 2006 we are also required to report if in our
opinion certain disclosures of directors’ remuneration have not been
made or the part of the directors’ remuneration report to be audited is
not in agreement with the accounting records and returns.
We have nothing to report in respect of these matters.
15. Other matters which we are required to address
15.1 Auditor tenure
Following the recommendation of the audit and risk committee,
we were appointed by the Board in April 2019 to audit the financial
statements for the year ended 31 March 2019 and subsequent
financial periods. The period of total uninterrupted engagement,
including previous renewals and reappointments of the firm is five
years, covering the years ended 31 March 2019 to 31 March 2023.
15.2 Consistency of the audit report with the additional
report to the Audit and Risk Committee
Our audit opinion is consistent with the additional report to the Audit
and Risk Committee we are required to provide in accordance with
ISAs (UK).
16. Use of our report
This report is made solely to the company’s members, as a body, in
accordance with Chapter 3 of Part 16 of the Companies Act 2006.
Our audit work has been undertaken so that we might state to the
company’s members those matters we are required to state to them
in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company’s members as a body, for
our audit work, for this report, or for the opinions we have formed.
As required by the Financial Conduct Authority (FCA) Disclosure
Guidance and Transparency Rule (DTR) 4.1.14R, these financial
statements form part of the European Single Electronic Format (ESEF)
prepared Annual Financial Report filed on the National Storage
Mechanism of the UK FCA in accordance with the ESEF Regulatory
Technical Standard (‘ESEF RTS’). This auditor’s report provides no
assurance over whether the annual financial report has been prepared
using the single electronic format specified in the ESEF RTS. We have
been engaged to provide assurance on whether the annual financial
report has been prepared using the single electronic format specified
in the ESEF RTS and will report separately to the members on this.
Ryan Duffy (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
Birmingham, United Kingdom
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
173
FINANCIAL STATEMENTS
Consolidated statement of comprehensive income
(All amounts are in US$ millions unless stated otherwise)
For the year ended
Notes
31 March 2023
31 March 2022
Income
Revenue
Other income
Expenses
Network operating expenses
Access charges
License fee and spectrum usage charges
Employee benefits expense
Sales and marketing expenses
Impairment loss on financial assets
Other operating expenses
Depreciation and amortisation
Operating profit
Finance costs
Finance income
Other non-operating income
Share of profit of associate and joint venture accounted for using equity method
Profit before tax
Income tax expense
Profit for the year
Profit before tax (as presented above)
Less: exceptional items (net)
Underlying profit before tax
Profit after tax (as presented above)
Less: exceptional items (net)
Underlying profit after tax
Other comprehensive income (‘OCI’)
Items to be reclassified subsequently to profit or loss:
Loss due to foreign currency translation differences
Tax expense on above
Share of OCI of associate and joint venture accounted for using equity method
Net loss on net investments hedge
Items not to be reclassified subsequently to profit or loss:
Remeasurement loss on defined benefit plans
Tax credit on above
Other comprehensive loss for the year
Total comprehensive income for the year
Profit for the year attributable to:
Owners of the company
Non-controlling interests
Other comprehensive loss for the year attributable to:
Owners of the company
Non-controlling interests
Total comprehensive income for the year attributable to:
Owners of the company
Non-controlling interests
Earnings per share
Basic
Diluted
174 Airtel Africa plc Annual Report and Accounts 2023
6
7
8
9
10
10
12
11
11
5,255
13
5,268
1,027
410
241
287
243
14
471
818
3,511
1,757
752
(29)
–
(0)
1,034
284
750
1,034
–
1,034
750
(161)
589
(350)
(3)
–
–
(353)
(0)
0
(0)
(353)
397
750
663
87
(353)
(341)
(12)
397
322
75
4,714
10
4,724
817
407
244
297
224
5
451
744
3,189
1,535
441
(19)
(111)
(0)
1,224
469
755
1,224
(60)
1,164
755
(62)
693
(4)
(3)
1
(8)
(14)
(0)
0
(0)
(14)
741
755
631
124
(14)
(12)
(2)
741
619
122
13
13
17.7 cents
17.7 cents
16.8 cents
16.8 cents
Consolidated statement of financial position
(All amounts are in US$ millions unless stated otherwise)
Assets
Non-current assets
Property, plant and equipment
Capital work-in-progress
Right of use assets
Goodwill
Other intangible assets
Intangible assets under development
Investments accounted for using equity method
Financial assets
– Investments
– Derivative instruments
– Others
Income tax assets (net)
Deferred tax assets (net)
Other non-current assets
Current assets
Inventories
Financial assets
– Derivative instruments
– Trade receivables
– Cash and cash equivalents
– Other bank balances
– Balance held under mobile money trust
– Others
Other current assets
Total assets
Liabilities
Current liabilities
Financial liabilities
– Borrowings
– Lease liabilities
– Derivative instruments
– Trade payables
– Mobile money wallet balance
– Others
Provisions
Deferred revenue
Current tax liabilities (net)
Other current liabilities
Net current liabilities
Non-current liabilities
Financial liabilities
– Borrowings
– Lease liabilities
– Put option liability
– Derivative instruments
– Others
Provisions
Deferred tax liabilities (net)
Other non-current liabilities
Total liabilities
Net assets
Equity
Share capital
Reserves and surplus
Equity attributable to owners of the company
Non-controlling interests (‘NCI’)
Total equity
Note
31 March 2023
31 March 2022
As of
14
14
30
15
15
15
16
17
12
18
17
19
20
20
21
18
22
30
17
23
25
24
22
30
17
23
25
12
24
26
2,295
212
1,497
3,516
813
399
4
0
9
34
1
337
151
9,268
15
4
145
586
131
616
142
259
1,898
11,166
945
395
5
460
582
533
83
183
194
192
3,572
(1,674)
1,233
1,652
569
43
147
21
108
13
3,786
7,358
3,808
3,420
215
3,635
173
3,808
2,214
189
1,109
3,827
632
2
6
0
3
7
22
222
134
8,367
3
3
123
638
378
513
124
215
1,997
10,364
786
323
9
404
496
376
121
162
220
176
3,073
(1,076)
1,486
1,337
579
–
88
20
114
18
3,642
6,715
3,649
3,420
82
3,502
147
3,649
The consolidated financial statements of Airtel Africa plc (company registration number: 11462215) were approved by the Board of directors and
authorised for issue on 10 May 2023 and were signed on its behalf by:
For and on behalf of the board of Airtel Africa plc
Olusegun Ogunsanya
Chief executive officer
10 May 2023
Airtel Africa plc Annual Report and Accounts 2023
175
FINANCIAL STATEMENTS
Consolidated statement of changes in equity
(All amounts are in US$ millions unless stated otherwise)
Equity attributable to owners of the company
Share capital
Reserves and surplus
No of shares4
Amount
Retained
earnings
(Note 27a)
Transactions
with NCI
reserve
Other
components
of equity
(Note 27c)
As of 1 April 2021
6,839,896,081
3,420
2,975
(594)
(2,396)
As of 31 March 2022
6,839,896,081
3,420
3,436
(942)
(2,412)
Profit for the year
Other comprehensive loss
Total comprehensive
income/(loss)
Transaction with owners
of equity
Employee share-based
payment reserve
Purchase of own shares
Transactions with NCI
Dividend to owners of
the company
Dividend (including tax)
to NCI1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
631
(0)
631
(1)
–
–
(169)
–
–
–
–
–
–
(348)
–
–
Profit for the year
Other comprehensive
income/(loss)
Total comprehensive
income/(loss)
Transaction with owners
of equity
Employee share-based
payment reserve
Purchase of own shares
Transactions with NCI2 3
Dividend to owners of
the company (refer to
Note 5(a))
Dividend (including tax)
to NCI1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
663
(0)
663
(2)
–
–
(195)
–
–
–
–
–
–
13
–
–
–
(12)
3
(6)
(1)
–
–
–
6
(11)
–
–
–
Equity
attributable
to owners
of the
company
Non-
controlling
interests
(NCI)
3,405
631
(12)
(52)
124
(2)
Total
(15)
631
(12)
Total
equity
3,353
755
(14)
(12)
619
619
122
741
2
(6)
2
(6)
–
–
2
(6)
(349)
(349)
153
(196)
(169)
(169)
–
(169)
–
82
663
–
3,502
663
(76)
147
87
(76)
3,649
750
(341)
(341)
(341)
(12)
(353)
(341)
322
322
75
397
4
(11)
13
4
(11)
13
–
–
3
4
(11)
16
(195)
(195)
–
(195)
–
–
(52)
173
(52)
3,808
As of 31 March 2023
6,839,896,081
3,420
3,902
(929)
(2,758)
215
3,635
1 Dividend to NCI include tax of $3m (March 2022: $4m).
2 Transaction with NCI reserves’ increased due to reversal of put option liability by $16m for dividend distribution to put option NCI holders. Any dividend paid to the put
option NCI holders is adjustable against the put option liability based on the put option arrangement.
3 ‘Transaction with NCI reserves’ was reduced and NCI was increased by $3m i.e. NCI’s proportionate share of the consideration for transfer of SmartCash Payment Service
Bank Limited (PSB) from the control of AMC BV to Airtel Networks Limited. For details, refer to note 5(b).
4 Includes ordinary and deferred shares, refer to Note 26.
176 Airtel Africa plc Annual Report and Accounts 2023
Consolidated statement of cash flows
(All amounts are in US$ millions unless stated otherwise)
Cash flows from operating activities
Profit before tax
Adjustments for:
Depreciation and amortisation
Finance income
Finance cost
Share of profit of associate and joint venture accounted for using equity method
Non-operating income adjustments
Other non-cash adjustments1
Operating cash flow before changes in working capital
Changes in working capital
Increase in trade receivables
(Increase)/decrease in inventories
Increase in trade payables
Increase in mobile money wallet balance
(Decrease)/increase in provisions
Increase in deferred revenue
Increase in other financial and non financial liabilities
Increase in other financial and non financial assets
Net cash generated from operations before tax
Income taxes paid
Net cash generated from operating activities (a)
Cash flows from investing activities
Purchase of property, plant and equipment and capital work-in-progress
Proceeds from sale of tower assets
Purchase of intangible assets and intangible assets under development
Maturity of deposits with bank
Investment in deposits with bank2
Proceeds from sale of tower subsidiary (net of cash acquired)
Investment in joint venture
Dividend received from associate
Interest received
Net cash used in investing activities (b)
Cash flows from financing activities
Proceeds from sale of shares to non-controlling interests
Acquisition of non-controlling interests
Purchase of own shares by ESOP trust
Proceeds from issue of shares to non-controlling interests
Proceeds from borrowings
Repayment of borrowings
Repayment of lease liabilities
Dividend paid to non-controlling interests
Dividend paid to owners of the company
Interest on borrowings and lease liabilities and other finance charges
Outflow on maturity of derivatives (net)
Net cash used in financing activities (c)
Increase/(decrease) in cash and cash equivalents during the year (a+b+c)
Currency translation differences relating to cash and cash equivalents
Cash and cash equivalents as at beginning of the year
Cash and cash equivalents as at end of the year (refer to Note 20)3
For the year ended
31 March 2023
31 March 2022
1,034
1,224
818
(29)
752
(0)
–
2
2,577
(45)
(13)
9
120
(32)
37
92
(140)
2,605
(397)
2,208
(779)
–
(502)
350
(126)
–
(0)
2
29
(1,026)
–
–
(8)
–
906
(1,018)
(279)
(75)
(195)
(400)
(49)
(1,118)
64
(70)
847
841
744
(19)
441
(0)
(111)
(6)
2,273
(18)
4
34
64
14
27
50
(144)
2,304
(293)
2,011
(717)
171
(22)
301
(388)
79
–
–
19
(557)
550
(164)
(6)
2
973
(2,115)
(251)
(48)
(169)
(370)
(9)
(1,607)
(153)
(3)
1,003
847
1 For the years ended 31 March 2023 and 31 March 2022, this mainly includes movement in trade receivables impairment and other provisions.
2 Includes investment in deposits with original maturity of more than three months and deposits placed against certain borrowings. These are included within other bank
balances in the consolidated statement of financial position.
3 Includes balance held under mobile money trust of $616m (2022: $513m) on behalf of mobile money customers which are not available for use by the Group.
Airtel Africa plc Annual Report and Accounts 2023
177
FINANCIAL STATEMENTS
Notes to consolidated financial statements
(All amounts are in US$ millions unless stated otherwise)
1. Corporate information
Airtel Africa plc (‘the company’) is a public company limited by
shares incorporated and domiciled in the United Kingdom under
the Companies Act 2006 and is registered in England and Wales
(registration number 11462215). The registered address of the
company is First Floor, 53/54 Grosvenor Street, London, W1K 3HU,
United Kingdom. The company is listed on the London Stock
Exchange (LSE) and on the Nigerian Stock Exchange (NGX). The
company is a subsidiary of Airtel Africa Mauritius Limited (‘the parent’),
a company registered in Mauritius. The registered address of the
parent is c/o IQ EQ Corporate Services (Mauritius) Ltd., 33, Edith
Cavell Street, Port Louis, 11324, Mauritius.
The company, together with its subsidiary undertakings (hereinafter
referred to as ‘the Group’) has operations in Africa. The principal
activities of the Group, its associate and its joint venture consist of
the provision of telecommunications and mobile money services.
2. Summary of significant accounting
policies
2.1 Basis of preparation
The consolidated financial statements have been prepared in
accordance with the requirements of the Companies Act 2006
and International Financial Reporting Standards as issued by the
International Accounting Standards Board (IASB) and approved for
use in the United Kingdom (UK) by the UK Accounting Standards
Endorsement Board (UKEB).
All the amounts included in the financial statements are reported in
United States dollars, with all values rounded to the nearest millions
($m) except when otherwise indicated. Further, amounts which are
less than half a million are appearing as ‘0’.
The accounting policies as set out in the following paragraphs of this
note have been consistently applied by all the Group’s entities to all
the periods presented in these financial statements.
a. New and amended standards and interpretations that
are effective for the current year
No new IFRS issued during the year are applicable to the Group.
Amendments to existing IFRSs have been applied by the Group as
required, however these amendments do not have any material
impact on the Group’s financial statements. The list of newly issued
amendments is as follows:
• Amendments to IAS 37 in relation to ‘Onerous contracts – cost of
fulfiling contracts’.
• Amendments to IAS 16 in relation to ‘Proceeds before intended use
of property, plant and equipment’.
2.2 Basis of measurement
The financial statements have been prepared on the historical cost
basis except for financial instruments that are measured at fair value
at the end of each reporting period as explained in the accounting
policies below. Historical cost is generally based on the fair value of
the consideration given in exchange for goods and services.
Fair value measurement
Fair value is the price at the measurement date at which an asset can
be sold, or the price paid to transfer a liability in an orderly transaction
between market participants.
The Group is required to classify the fair valuation method of the
financial/non-financial assets and liabilities either measured or
disclosed at fair value in the financial statements using a three level
fair-value hierarchy (which reflects the significance of inputs used in
the measurement of fair value). Accordingly, the Group uses valuation
techniques that are appropriate in the circumstances and for which
sufficient data is available to measure fair value, maximising the
use of relevant observable inputs and minimising the use of
unobservable inputs.
The three levels of the fair-value hierarchy are described below:
• Level 1 – fair values derived on the basis of quoted (unadjusted)
prices for identical assets or liabilities in active markets.
• Level 2 – fair values derived on the basis significant inputs other
than quoted prices within Level 1 that are directly or indirectly
observable.
• Level 3 – fair values derived on the basis valuation techniques that
used significant inputs that are not based upon observable market
data (unobservable inputs).
Going concern
These consolidated financial statements have been prepared on a
going concern basis. In making this going concern assessment, the
Group has considered cash flow projections to June 2024 (going
concern assessment period) under both base and reasonable
worst-case scenarios taking into considerations its principal risks
and uncertainties, including a reduction in revenue and EBITDA and
a significant devaluation of the various currencies in the countries in
which the Group operates, including the Nigerian naira. As part of this
evaluation, the Group has considered available ways to mitigate these
risks and uncertainties and has also considered committed undrawn
facilities of $525m expiring beyond the going concern assessment
period, which will fulfil the Group’s cash flow requirement under both
the base and reasonable worst-case scenarios. Having considered all
the factors above impacting the Group’s businesses, the impact of
downside sensitivities, and the mitigating actions available, including
a reduction and deferral of capital expenditure, the directors are
satisfied that the Group has adequate resources to continue its
operational existence for the foreseeable future. Accordingly, the
directors continue to adopt the going concern basis of accounting
in preparing the consolidated financial statements.
2.3 Basis of consolidation
a. Subsidiaries
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiaries) up to 31 March each year. The Group controls an
entity when it has power over the entity (that is, existing rights that
give it the current ability to direct the relevant activities), it is exposed to
or has right to variable return from its involvement with the entity and
has the ability to affect those returns through its power over the entity.
The Group re-assesses whether or not it controls the entity, if the
underlying facts and circumstances indicate a change in the above-
mentioned parameters that determine the existence of control.
Subsidiaries are fully consolidated from the date when the Group
obtains control and are de-consolidated from the date that control
ceases. No subsidiaries are excluded from the Group consolidation.
Non-controlling interestis the equity in a subsidiary not attributable
to the parent and is presented separately from equity attributable
to the owners of the company. Non-controlling interests consist of
the amount at the date of the business combination and its share
of changes in equity since that date. Profit and loss and other
comprehensive income/loss are attributed to the controlling and
non-controlling interests in proportion to their ownership interests,
even if this results in the non-controlling interests having a deficit
balance. However, in cases where there are binding contractual
arrangements that determine the attribution of the earnings, the
attribution specified by such arrangement is considered.
178 Airtel Africa plc Annual Report and Accounts 2023
2. Summary of significant accounting
policies continued
The Group has written a put option to non-controlling shareholders in
one of the Group’s subsidiaries to purchase their equity interest in the
subsidiary, for cash and/or another financial assets. This gives rise to a
financial liability for the present value of the likely redemption amount.
This is the case even if the contract itself is an equity instrument or
even if the obligation to purchase the equity interest is conditional on
the counterparty exercising a right to redeem. The financial liability
is recognised initially at the present value of the likely redemption
amount by debiting equity (‘Transactions with NCI reserve’) while
continuing to recognise the non-controlling interest if the non-
controlling shareholders continue to have present access to returns
on the underlying equity interest of the subsidiary. Subsequently,
the financial liability is re-measured in accordance with IFRS 9. If the
contract expires without delivery, the carrying amount of the financial
liability is reclassified to equity (‘Transactions with NCI reserve’). If the
option is exercised, the corresponding non-controlling interest (if any)
to the extent of shares re-acquired from non-controlling shareholders
is de-recognised through equity (‘Transactions with NCI reserve’) at
the time of exercise of the put option.
The profit/loss on disposal of a subsidiary (associated with loss of
control) is recognised in profit and loss being the difference between
(i) the aggregate of the fair value of consideration received and the
fair value of any retained interest, and (ii) the previous carrying amount
of the assets (including goodwill) and liabilities of the subsidiary and
any non-controlling interests. In addition, any amounts previously
recognised in other comprehensive income in respect of the de-
consolidated entity, are accounted for as if the Group had directly
disposed of the related assets or liabilities of the subsidiary (i.e.,
reclassified to profit and loss or transferred to another category of
equity as required/permitted by applicable IFRS). At such disposal
any retained interest in the entity is remeasured to its fair value with
the resultant change in carrying value being recognised in the profit
and loss.
A change in the ownership interest of a subsidiary, without a change
of control, is accounted for as a transaction with equity holders. Any
difference between the amount of the adjustment to non-controlling
interests and any consideration exchanged is recognised in ‘the
transactions with NCI reserve’, within equity.
b. Associate and joint venture (JV)
An associate is an entity over which the Group has significant
influence. Significant influence is the power to participate in the
financial and operating policy decisions of the investee but is not
control or joint control over those policies.
A joint venture is a type of joint arrangement whereby the parties that
have joint control of the arrangement have rights to the net assets of
the joint venture. Joint control is the contractually agreed sharing of
control of an arrangement, which exists only when decisions about
the relevant activities require the unanimous consent of the parties
sharing control.
The Group’s investments in its associate and joint venture are
accounted for using the equity method from the date on which the
Group starts exercising significant influence over the associate or
joint control over the joint venture.
At each reporting date, the Group determines whether there is
objective evidence that the investment is impaired. If there is such
evidence, the Group calculates the amount of the impairment as the
difference between the recoverable amount of the investment and its
carrying value.
c. Method of consolidation
The standalone financial statements of subsidiaries are fully
consolidated on a line-by-line basis after adjusting for business
combination adjustments. Intra-group transactions, balances and
unrealised gains on transactions between Group companies are
eliminated. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset.
The Group’s investments in its associate and JV are accounted for
using the equity method. Accordingly, the investment is carried at cost
less any impairment loss, as adjusted for post-acquisition changes in
the Group’s share of the net assets of the investee. Any excess of the
cost over the Group’s share of net assets in its associate/JV at the date
of acquisition is presented as goodwill. The goodwill is included within
the carrying amount of the investment. The unrealised gains resulting
from transactions with the associate/JV are eliminated against the
investment to the extent of the Group’s interest in the associate/JV.
Unrealised losses are also eliminated unless the transaction provides
evidence of an impairment of the asset transferred.
Adjustments in respect of accounting policies of the Group’s
subsidiaries, associate and JV are made to ensure consistency
with the accounting policies that are adopted by the Group.
2.4 Business combinations
The Group accounts for business combinations using the acquisition
method of accounting; accordingly, the identifiable assets acquired
and the liabilities assumed in the acquisition are recorded at their
acquisition date fair values (except certain assets and liabilities which
are required to be measured as per the applicable standards) and the
non-controlling interest is initially recognised at the non-controlling
interest’s proportionate share of the acquiree’s net identifiable assets.
The consideration transferred for the acquisition of a subsidiary is the
aggregation of the fair values of the assets transferred, the liabilities
incurred or assumed and the equity interests issued by the Group in
exchange for control of the acquiree.
The consideration transferred also includes the fair value of any asset
or liability resulting from a contingent consideration arrangement.
Any contingent consideration to be transferred by the acquirer
is recognised at fair value at the acquisition date. Contingent
consideration classified as an asset or liability is subsequently
measured at fair value with changes in fair value recognised in profit
and loss. Contingent consideration that is classified as equity is
not re-measured and its subsequent settlement is accounted for
within equity.
The excess of the consideration transferred, along with the amount of
any non-controlling interests in the acquiree and the acquisition-date
fair value (with the resulting difference being recognised in the profit
and loss) of any previous equity interest in the acquiree, over the fair
value of the Group’s share of the identifiable net assets acquired is
recorded as goodwill. Acquisition-related costs are expensed in the
period in which the costs are incurred.
If the initial accounting for a business combination is incomplete as at
the reporting date in which the combination occurs, the identifiable
assets and liabilities acquired in a business combination are measured
at their provisional fair values at the date of acquisition.
Subsequent adjustments to the provisional values are made within the
measurement period, if new information is obtained about facts and
circumstances that existed as of the acquisition date and, if known,
would have resulted in the recognition of those assets and liabilities as
of that date, otherwise, the adjustments are recorded in the period in
which they occur.
Airtel Africa plc Annual Report and Accounts 2023
179
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
2. Summary of significant accounting
policies continued
A contingent liability recognised in a business combination is initially
measured at its fair value. Subsequent to initial recognition, it is
measured at the higher of:
(i) the amount that would be recognised in accordance with IAS 37,
‘Provisions, Contingent Liabilities and Contingent Assets’, and
(ii) the amount initially recognised less, where appropriate, cumulative
amortisation recognised in accordance with IFRS 15 ‘Revenue from
Contracts with Customers’.
Common control transactions
Transfers involving entities or businesses in which all the combining
entities or businesses are ultimately controlled by the same party or
parties both before and after the business combination, (and that
control is not transitory) are accounted for at their historic carrying
values. The difference between the consideration paid/received and
the historic carrying values is recorded in equity.
2.5 Foreign currency transactions
a. Functional and presentation currency
The items included within the financial statements of each of the
Group’s entities are measured using the currency of the primary
economic environment in which each entity operates (i.e., ‘functional
currency’).
The financial statements are presented in US dollars, which is also the
functional and presentation currency of the company.
b. Transactions and balances
For the purpose of presenting the consolidated financial statements,
transactions in foreign currencies are initially recorded in the
relevant functional currency at the rates prevailing at the date of
the transaction.
Monetary assets and liabilities denominated in foreign currencies are
translated into the functional currency at the closing exchange rate
prevailing as at the reporting date with the resulting foreign exchange
differences on subsequent re-statement/settlement recognised in the
profit and loss within finance costs/finance income. Non-monetary
assets and liabilities denominated in foreign currencies are translated
into the functional currency using the exchange rate prevalent at the
date of initial recognition (in case they are measured at historical cost)
or at the date when the fair value is determined (in case they are
measured at fair value) – with the resulting foreign exchange difference
on subsequent re-statement/settlement recognised in the profit and
loss, except to the extent that it relates to items for which gains and
losses are recognised in the other comprehensive income or directly
in equity.
The equity items denominated in foreign currencies are translated at
historical exchange rates.
c. Foreign operations
The assets and liabilities of foreign operations (including goodwill and
fair value adjustments arising on the acquisition of foreign entities)
are translated into US dollars at the exchange rates prevailing at the
reporting date. Items recognised in profit and loss are translated
into US dollars at monthly average exchange rates, with equity
translated at the historical rate. The resulting exchange differences
are recognised in other comprehensive income and held within the
foreign currency translation reserve (FCTR), a component of equity.
On disposal of a foreign operation (i.e., disposal of Group’s entire
interest in a foreign operation or disposal involving loss of control),
all the accumulated exchange differences accumulated in FCTR in
respect of that foreign operation is reclassified to profit and loss.
d. Net investment in foreign operation
When a monetary item forms part of the Group’s net investment in
a foreign operation, the exchange differences are then recognised
initially in other comprehensive income and are held within the foreign
currency translation reserve (FCTR). Such FCTR is reclassified from
equity to profit and loss on disposal of the foreign operation.
2.6 Current versus non-current classification
The Group classifies assets and liabilities in the statement of financial
position as current or non-current.
Deferred tax assets and liabilities, and all assets and liabilities which are
not ‘current’ (as discussed in the below paragraphs) are classified as
non-current assets and liabilities.
An asset is classified as current when it is expected to be realised or
intended to be sold or consumed in the Group’s normal operating
cycle, held primarily for the purpose of trading, expected to be
realised within 12 months after the reporting period, is a cash or
cash equivalent unless restricted from being exchanged or is used
to settle a liability for at least 12 months after the reporting period.
A liability is classified as current when it is expected to be settled in the
Group’s 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, or the Group does not have the unconditional right to defer
the settlement of the liability for at least 12 months after the
reporting period.
2.7 Property, plant and equipment (PPE) and capital
work-in-progress (CWIP)
The cost of an item of property, plant and equipment is recognised as
an asset if, and only if, it is probable that the future economic benefits
associated with the item will flow to the Group and its cost can be
measured reliably.
PPE is initially recognised at cost. The initial cost of PPE comprises its
purchase price (including non-refundable duties and taxes and after
deducting trade discounts and rebates), and any directly attributable
cost of bringing the asset to its working condition and location of its
intended use. Further, it includes assets installed on the premises of
customers where the associated risks, rewards and control remain
with the Group.
Subsequent to initial recognition, PPE is stated at cost less
accumulated depreciation and any impairment losses. When
significant parts of PPE are required to be replaced at regular intervals,
the Group recognises such parts as a separate component of each
asset. When an item of PPE is replaced, its carrying amount is
de-recognised from the statement of financial position and the
cost of the new item of PPE is recognised.
The expenditure incurred after an item of PPE is ready to use, such
as repairs and maintenance, is charged to the profit and loss in the
period in which such costs are incurred. However, in situations
where the expenditure can be measured reliably and it is probable
that future economic benefits associated with it will flow to the Group,
it is included in the asset’s carrying value or as a separate asset,
as appropriate.
Depreciation on PPE is computed using the straight-line method over
the PPE’s estimated useful lives.
180 Airtel Africa plc Annual Report and Accounts 2023
2. Summary of significant accounting
policies continued
Freehold land is not depreciated as it has an unlimited useful life.
The Group has established the estimated range of useful lives for
different categories of PPE as follows:
Categories
Leasehold improvement
Years
Period of lease or
10-20 years, as
applicable, whichever
is less
Buildings
Plant and equipment
Network equipment (including passive
infrastructure)
Computer
Furniture and fixture and office equipment
Vehicles
20
3-25
3-5
1-5
5
The useful lives, residual values and depreciation method of PPE are
reviewed, and adjusted appropriately, at least at each financial year
end so as to ensure that the method and period of depreciation are
consistent with the expected pattern of economic benefits from these
assets. The effect of any change in the estimated useful lives, residual
values and/or depreciation method are accounted for prospectively,
with depreciation calculated over the PPE’s remaining revised useful
life. The cost and the accumulated depreciation for PPE sold, scrapped,
retired, or otherwise disposed of are de-recognised from the statement
of financial position and the resulting gains/(losses) are included in the
profit and loss within other income/other expenses, respectively.
PPE in the course of construction less any accumulated impairment is
carried at cost and presented separately as CWIP (including capital
advances) in the statement of financial position until ready for use at
which point it is transferred to PPE and subsequently depreciated.
Such cost comprises the purchase price (including non-refundable
duties and taxes but excluding any trade discounts and rebates), and
any other directly attributable costs.
2.8 Intangible assets
Identifiable intangible assets are recognised when the Group controls
the asset, it is probable that future economic benefits attributed to
the asset will flow to the Group and the cost of the asset can be
measured reliably.
Goodwill represents the cost of the acquired businesses in excess of
the fair value of identifiable net assets acquired (refer to Note 2.4).
Goodwill is not amortised; however, it is tested for impairment (refer
to Note 2.9) and carried at cost less accumulated impairment losses
if any. The gains/(losses) on the disposal of a cash-generating unit
(group of CGUs) include the carrying amount of goodwill relating to
the group of CGUs sold. In case goodwill has been allocated to a group
of CGUs, allocation of goodwill is determined based on the relative
value of the operations sold in order to compute the gains/(losses).
Intangible assets that are acquired in a business combination are
initially recognised at fair value at the acquisition date. Other intangible
assets are recognised at cost which includes their purchase price
and cash price equivalent of deferred payments beyond normal credit
terms, if any. Intangible assets with definite useful life are carried at
cost less accumulated amortisation and any impairment losses.
Amortisation is computed using the straight-line method over the
expected useful life.
Subsequent expenditure on intangible assets is capitalised only when
it increases the future economic benefits embodied in the specific
asset to which it relates. All other expenditures are recognised in profit
and loss as incurred.
The Group has established the estimated useful lives of different
categories of intangible assets as follows:
• Software
Software is amortised over the software licence period, generally not
exceeding three years.
• Licences (including spectrum)
Acquired licences and spectrum are amortised commencing from
the date when the related network is available for intended use in the
relevant jurisdiction over the relevant licence period. The useful lives
generally range from two to twenty-five years.
In addition, the Group incurs a fee on licences/spectrum that is
calculated based on the revenue of the licensee entity. These fees
are recognised as a expense in profit and loss when incurred.
• Other acquired intangible assets
Other acquired intangible assets include customer relationships which
are amortised over the estimated life of such relationships generally
ranging from one year to five years.
The useful lives and the amortisation method is reviewed and adjusted
appropriately, at least at each financial year end, so as to ensure that
the method and period of amortisation is consistent with the expected
pattern of economic benefits from these assets. The effect of any
change in the estimated useful lives and/or amortisation method
is accounted for prospectively, and accordingly, amortisation is
calculated over the remaining revised useful life.
Further, the cost of intangible assets under development is presented
separately in the statement of financial position and includes
spectrums/licences allotted to the Group and related costs for
which services are yet to be rolled out.
• Internally-generated intangible assets – research and
development expenditure
Expenditure on research activities is recognised as an expense in the
period in which it is incurred.
An internally-generated intangible asset arising from development
(or from the development phase of an internal project) is recognised
if, and only if, all of the following conditions have been met:
• The technical feasibility of completing the intangible asset so that it
will be available for use or sale.
• The intention to complete the intangible asset and use or sell it.
• The ability to use or sell the intangible asset.
• The intangible asset will generate probable future economic
benefits.
• The availability of adequate technical, financial and other resources
to complete the development and to use or sell the intangible asset.
• The ability to measure reliably the expenditure attributable to the
intangible asset during its development.
The amount initially recognised for internally-generated intangible
assets is the sum of the expenditure incurred from the date when
the intangible asset first meets the recognition criteria listed above.
Where no internally-generated intangible asset can be recognised,
development expenditure is recognised in profit and loss in the period
in which it is incurred.
Subsequent to initial recognition, internally-generated intangible assets
are reported at cost less accumulated amortisation and accumulated
impairment losses, if any.
Airtel Africa plc Annual Report and Accounts 2023
181
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
2. Summary of significant accounting
policies continued
2.9 Impairment of non-financial assets
a. Goodwill
Goodwill is tested for impairment, at least annually or earlier, in case
circumstances indicate that the carrying value may exceed the
recoverable amount (higher of fair value less costs to sell and the value
in use). For the purpose of impairment testing, goodwill is allocated
to a cash-generating-unit (CGU) or group of CGUs (CGUs) which
are expected to benefit from the acquisition-related synergies and
represent the lowest level within the entity at which the goodwill is
monitored for internal management purposes, but not higher than
an operating segment. A CGU is the smallest identifiable group of
assets that generates cash inflows that are largely independent of
the cash inflows from other assets or group of assets.
Impairment occurs when the carrying value of a CGU/CGUs, including
goodwill, exceeds the estimated recoverable amount of the CGU/
CGUs. The recoverable amount of a CGU/CGUs is the higher of its fair
value less costs to sell and its value in use. Value in use is the present
value of future cash flows expected to be derived from the CGU/CGUs.
The total impairment loss of a CGU/CGUs is allocated first to reduce
the carrying value of goodwill allocated to that CGU/CGUs and then
to the other assets of that CGU/CGUs – on a pro-rata basis of the
carrying value of each asset.
b. Property, plant and equipment, right-of-use assets,
intangible assets and intangible assets under
development
At each reporting period date, the Group reviews the carrying amounts
of its PPE, right-of-use assets, CWIP and finite-lived intangible assets
to determine whether there is any indication that those assets have
suffered an impairment loss. Intangible assets under development
are tested for impairment, at least annually or earlier, in case
circumstances indicate that it may be impaired.
For the purpose of impairment testing, the recoverable amount (that
is, higher of the fair value less costs to sell and the value in use) is
determined on an individual asset basis, unless the asset does not
generate cash flows that are largely independent of those from other
assets, in which case the recoverable amount is determined at the
CGU level to which the asset belongs. If the recoverable amount of an
asset (or cash-generating unit) is estimated to be less than its carrying
amount, the carrying amount of the asset (or cash-generating unit) is
reduced to its recoverable amount. An impairment loss representing
the excess of recoverable value over the carrying value of the asset/
CGU is recognised immediately in profit and loss.
c. Reversal of impairment losses
Impairment loss in respect of goodwill is not reversed. For assets
excluding goodwill, an assessment is made at each reporting date to
determine whether there is an indication that previously recognised
impairment losses no longer exist or have decreased. If such indication
exists, the Group estimates the asset’s or CGU’s recoverable amount.
A previously recognised impairment loss is reversed only if there has
been a change in the assumptions used to determine the asset’s
recoverable amount since the last impairment loss was recognised.
The reversal is limited so that the carrying amount of the asset
does not exceed its recoverable amount, nor exceed the carrying
amount that would have been determined, net of depreciation,
had no impairment loss been recognised for the asset in prior years.
Such reversal is recognised in the profit and loss.
2.10 Financial instruments
a. Recognition, classification and presentation
Financial instruments are recognised in the statement of financial
position when the Group becomes a party to the contractual
provisions of the financial instrument.
The Group determines the classification of its financial instruments at
initial recognition.
The Group classifies its financial assets into the following categories:
• those to be measured subsequently at fair value (either through
other comprehensive income, or through profit or loss); and
• those to be measured at amortised cost.
The classification depends on the entity’s business model for
managing the financial assets and the contractual terms of the
cash flows.
The Group’s business model for managing financial assets refers to
how it manages its financial assets in order to generate cash flows.
The business model determines whether cash flows will result from
collecting contractual cash flows, selling the financial assets, or both.
Financial assets classified and measured at amortised cost are held
within a business model with the objective to hold financial assets in
order to collect contractual cash flows while financial assets classified
and measured at fair value through OCI are held within a business
model with the objective of both holding to collect contractual cash
flows and selling. The Group does not have any financial instruments
classified as fair value through other comprehensive income.
The Group has classified all non-derivative financial liabilities as
measured at amortised cost.
Financial assets with embedded derivatives are considered in their
entirety for determining the contractual terms of the cash flow and
accordingly, embedded derivatives are not separated. However,
derivatives embedded in non-financial instrument/financial liability
(measured at amortised cost) host contracts are classified as separate
derivatives if their economic characteristics and risks are not closely
related to those of the host contracts.
Financial assets and liabilities arising from different transactions are
offset against each other and the resultant net amount is presented
in the statement of financial position if, and only when, the Group
currently has a legally enforceable right to set off the related
recognised amounts and intends either to settle on a net basis or
to realise the assets and settle the liabilities simultaneously.
The amounts held by electronic account holders in their mobile
money wallets are presented separately in the balance sheet as
‘mobile money wallet balance’. The amounts held in bank on behalf of
such electronic account holders are restricted for use by the Group
and are presented as ‘balance held under mobile money trust’.
b. Measurement – non-derivative financial instruments
I. Initial measurement
Financial assets and financial liabilities are initially measured at fair
value, except for trade receivables that do not have a significant
financing component which are measured at transaction price.
Transaction costs that are directly attributable to the acquisition or
issue of financial assets and financial liabilities (other than financial
assets and financial liabilities at fair value through profit or loss) are
added to or deducted from the fair value of the financial assets or
financial liabilities, as appropriate, on initial recognition. Transaction
costs directly attributable to the acquisition of financial assets or
financial liabilities at fair value through profit or loss are recognised
immediately in profit or loss.
182 Airtel Africa plc Annual Report and Accounts 2023
2. Summary of significant accounting
policies continued
The transaction price is generally the best evidence of the financial
instrument’s initial fair value. However, it is possible for an entity to
determine that the instrument’s fair value is not the transaction price.
The difference between the transaction amount and the fair value
(if any) is accounted for as follows:
• The difference is recognised as a gain or loss in the profit and loss
only if fair value is evidenced by a quoted price in an active market
for an identical asset or liability (that is, a Level 1 input) or based on
a valuation technique that uses only data from observable markets.
• In all other cases, an entity recognises the instrument at fair value
and defers the difference between the fair value at initial recognition
and the transaction price in the Statement of Financial Position.
II. Subsequent measurement – financial assets
The subsequent measurement of non-derivative financial assets
depends on their classification as follows:
• Financial assets measured at amortised cost
Assets that are held for the collection of contractual cash flows where
those cash flows represent solely payments of principal and interest
are measured at amortised cost using the effective interest rate
(EIR) method (if the impact of discounting/any transaction costs is
significant). Interest income from these financial assets is included in
finance income.
EIR is the rate that exactly discounts the estimated future cash receipts
or payments (including all fees and transaction costs that form an
integral part of the effective interest rate) over the expected life of the
financial instrument or a shorter period, where appropriate, to the
gross carrying amount of the financial asset or to the amortised cost
of a financial liability.
• Financial assets at fair value through profit or loss (FVTPL)
All equity instruments and financial assets that do not meet the criteria
for amortised cost or fair value through other comprehensive income
(FVTOCI) are measured at FVTPL. Interest (based on the EIR method)
and dividend income from financial assets at FVTPL is recognised in
profit and loss within finance income/finance costs separately from
the other gains/losses arising from changes in the fair value.
Impairment
The company assesses on a forward-looking basis the expected credit
losses associated with its assets carried at amortised cost and debt
instruments carried at FVTOCI. The impairment methodology applied
depends on whether there has been a significant increase in credit risk
since initial recognition. If credit risk has not increased significantly,
12-month expected credit loss (ECL) is used to provide for impairment
loss, otherwise, lifetime ECL is used.
However, in case of trade receivables and contract assets, the Group
applies the simplified approach which requires expected lifetime losses
to be recognised from initial recognition of the receivables.
III. Subsequent measurement – financial liabilities
Financial liabilities are subsequently measured at amortised cost using
the EIR method (if the impact of discounting/any transaction costs
is significant).
c. Measurement – derivative financial instruments
Derivative financial instruments, including separated embedded
derivatives, that are not designated as hedging instruments in a
hedging relationship are classified as financial instruments at fair value
through profit or loss. Such derivative financial instruments are initially
recognised at fair value. They are subsequently measured at their fair
value, with changes in fair value being recognised in profit and loss
within finance income/finance costs.
In cases, where the initial fair value is evidenced neither by a quoted
price in an active market for an identical asset or liability nor based on
observable inputs, on subsequent measurement, the difference
between initial fair value and transaction price is recognised in profit
and loss on an appropriate basis (e.g., straight-line) over the life of the
instrument but no later than when the valuation is wholly supported
by observable market data or the transaction is closed out.
d. Hedging activities
I. Fair value hedge
Some of the Group’s entities may use derivative financial instruments
(e.g., interest rate swaps) to manage/mitigate their exposure to the risk
of change in the fair value of borrowings. The Group may designate
certain interest swaps to hedge the risk of changes in fair value of
recognised borrowings attributable to the hedged interest rate risk.
The effective and ineffective portion of changes in the fair value of
derivatives that are designated and qualify as fair value hedges are
recorded in profit and loss within finance income/finance costs,
together with any changes in the fair value of the hedged liability that
is attributable to the hedged risk. If the hedge no longer meets the
criteria for hedge accounting, the adjustment to the carrying amount
of the hedged item is amortised to profit and loss over the period of
the remaining maturity of the hedged item. The amortisation is based
on the recalculated effective interest rate.
II. Cash flow hedge
Some of the Group’s entities may use derivative financial instruments
(e.g., foreign currency forwards, options, swaps) to manage their
exposure to foreign exchange and price risk. Further, the Group may
designate certain derivative financial instruments (or its components)
as hedging instruments for hedging the exchange rate risk attributable
to either a recognised item or a highly probable forecast transaction
(cash flow hedge). The effective portion of changes in the fair value
of derivative financial instruments (or its components) that are
designated and qualify as cash flow hedges, are recognised in other
comprehensive income and is held within the cash flow hedge reserve
(CFHR) – within other components of equity. Any gains/(losses)
relating to the ineffective portion are recognised immediately in
profit and loss within finance income/finance costs. The amounts
accumulated in cash flow hedge reserve are accounted for, depending
on the nature of the underlying hedged transaction. If the hedged
transaction subsequently results in the recognition of a non-financial
item, the amount accumulated in equity is removed from the separate
component of equity and included in the initial cost or other carrying
amount of the hedged asset or liability. This is not a reclassification
adjustment and will not be recognised in OCI for the period.
For any other cash flow hedges, the amount accumulated in OCI (in
CFHR) is reclassified to profit and loss as a reclassification adjustment
in the same period or periods during which the hedged cash flows
affect profit and loss.
If cash flow hedge accounting is discontinued, the amount that has
been accumulated in OCI (in CFHR) remains in accumulated OCI
(in CFHR) if the hedged future cash flows are still expected to occur.
Otherwise, the amount will be immediately reclassified to profit and
loss as a reclassification adjustment.
After discontinuation, once the hedged cash flow occurs, any
amount remaining in accumulated OCI (in CFHR) must be accounted
for depending on the nature of the underlying transaction as
described above.
Airtel Africa plc Annual Report and Accounts 2023
183
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
2. Summary of significant accounting
policies continued
III. Net investment hedge
The Group may hedge its net investment in certain foreign
subsidiaries. On doing so, any foreign exchange differences on the
hedging instrument (e.g., borrowings) relating to the effective portion
of the hedge is recognised in other comprehensive income within the
foreign currency translation reserve (FCTR) – within other components
of equity, so as to offset the change in the value of the net investment
being hedged. The ineffective portion of the gain or loss on these
hedges is immediately recognised in profit and loss. The amounts
accumulated in equity are reclassified to profit and loss when the
foreign operation is disposed.
Derecognition
A financial asset (or, where applicable, a part of a financial asset or
part of a group of similar financial assets) is primarily derecognised
(i.e., removed from the Group’s consolidated statement of financial
position) when:
• The rights to receive cash flows from the asset have expired; or
• The Group has transferred its rights to receive cash flows from the
asset or has assumed an obligation to pay the received cash flows
in full without material delay to a third party under a pass-through
arrangement; and either (a) the Group has transferred substantially
all the risks and rewards of the asset, or (b) the Group has neither
transferred nor retained substantially all the risks and rewards of the
asset, but has transferred control of the asset.
When the Group has transferred its rights to receive cash flows
from an asset or has entered into a pass-through arrangement, it
evaluates if, and to what extent, it has retained the risks and rewards of
ownership. When it has neither transferred nor retained substantially
all of the risks and rewards of the asset, nor transferred control of the
asset, the Group continues to recognise the transferred asset to the
extent of its continuing involvement. In that case, the Group also
recognises an associated liability. The transferred asset and the
associated liability are measured on a basis that reflects the rights
and obligations that the Group has retained.
A financial liability is derecognised when the obligation under the
liability is discharged or cancelled or expires. When an existing financial
liability is replaced by another from the same lender on substantially
different terms, or the terms of an existing liability are substantially
modified, such an exchange or modification is treated as the
derecognition of the original liability and the recognition of a new
liability. The difference in the respective carrying amounts is
recognised in profit and loss.
2.11 Leases
At inception of a contract, the Group assesses a contract as, or
containing, a lease if the contract conveys the right to control the use
of an identified asset for a period of time in exchange for consideration.
To assess whether a contract conveys the right to control the use of
an identified asset, the Group assesses whether the contract involves
the use of an identified asset, the Group has the right to obtain
substantially all of the economic benefits from use of the asset
throughout the period of use, and the Group has the right to direct
the use of the asset.
a. Group as a lessee
The Group recognises a right-of-use asset and a corresponding lease
liability with respect to all lease agreements in which it is the lessee,
in the statement of financial position. The lease liability is initially
measured at the present value of the lease payments that are not paid
at the commencement date, discounted by using the rate implicit in
the lease. If this rate cannot be readily determined, the Group uses its
incremental borrowing rate. Lease liabilities include the net present
value of fixed payments (including in-substance fixed payments),
variable lease payments that are based on consumer price index (CPI),
184 Airtel Africa plc Annual Report and Accounts 2023
the exercise price of a purchase option if the lessee is reasonably
certain to exercise that option, and payments of penalties for
terminating the lease if the lease term reflects the lessee exercising
that option.
Subsequently, the lease liability is measured at amortised cost using
the effective interest rate method. It is remeasured when there is a
change in future lease payments, including changes in CPI or if the
Group changes its assessment of whether it will exercise a purchase,
extension or termination option or when the lease contract is modified
and the lease modification is not accounted for as a separate lease.
The corresponding adjustment is made to the carrying amount of
the right-of-use asset, or is recorded in profit and loss if the carrying
amount of the related right-of-use asset has been reduced to zero.
Right-of-use assets are measured at cost comprising the amount
of the initial measurement of the lease liability, any lease payments
made at or before the commencement date less any lease incentives
received, any initial direct costs, and restoration costs.
Subsequent to initial recognition, right-of-use assets are stated at
cost less accumulated depreciation and any impairment losses and
adjusted for certain remeasurements of the lease liability. Depreciation
is computed using the straight-line method from the commencement
date to the end of the useful life of the underlying asset or the end of
the lease term, whichever is shorter. The estimated useful lives of
right-of-use assets are determined on the same basis as those of the
underlying asset.
In the statement of financial position, the right-of-use assets and lease
liabilities are presented separately.
When a contract includes lease and non-lease components, the Group
allocates the consideration in the contract on the basis of the relative
stand-alone prices of each lease component and the aggregate
stand-alone price of the non-lease components.
Short-term leases
The Group has elected not to recognise right-of-use assets and lease
liabilities for short-term leases that have a lease term of 12 months or
less. The Group recognises the lease payments associated with these
leases as an expense on a straight-line basis over the lease term.
Sale and leaseback
In sale and leaseback transactions, the Group first considers whether
the initial transfer of the underlying asset to the buyer-lessor is a sale
by applying the requirements of IFRS 15. If the transfer qualifies as a
sale and the transaction is on market terms, the Group derecognises
the asset, recognises a right-of-use asset (and lease liabilities) and
recognises a portion of the total gain or loss on the sale in the profit
and loss. The right-of-use asset is recognised at the proportion of the
previous carrying amount of the asset that relates to the right of use
retained by the seller-lessee. The amount recognised is calculated by
splitting the total gain or loss into:
• an amount recognised in the profit and loss relating to the buyer-
lessor’s rights in the underlying asset, and
• an unrecognised amount relating to the rights retained by the
seller-lessee which is deferred by way of reducing the right-of-use
assets initially recognised.
b. Group as a lessor
Whenever the terms of the lease transfer substantially all the risks
and rewards of ownership to the lessee, the contract is classified as
a finance lease. All other leases are classified as operating leases.
Rental income from operating leases is recognised on a straight-line
basis over the term of the relevant lease. Initial direct costs incurred
in negotiating and arranging an operating lease are added to the
carrying amount of the leased asset and recognised on a straight-line
basis over the lease term.
When a contract includes lease and non-lease components, the Group
applies IFRS 15 to allocate the consideration under the contract to
each component.
2. Summary of significant accounting
policies continued
The Group enters into ‘indefeasible right to use’ (IRU) arrangements
wherein the right to use the assets is given over the substantial part
of the asset life. However, as the title to the assets and the significant
risks associated with the operation and maintenance of these assets
remains with the Group, such arrangements are recognised as an
operating lease. The contracted price is recognised as revenue during
the tenure of the agreement. Unearned IRU revenue received in
advance is presented as deferred revenue within liabilities in the
statement of financial position.
2.12 Taxes
The income tax expense comprises current and deferred income tax.
Income tax is recognised in the profit and loss, except to the extent
that it relates to items recognised outside profit and loss, in other
comprehensive income or directly in equity, in which case the related
income tax is also recognised accordingly within other comprehensive
income or directly in equity.
a. Current tax
Current tax is calculated on the basis of the tax rates, laws and
regulations, which have been enacted or substantively enacted as at
the reporting date in the respective countries where the Group entities
operate and generate taxable income. The payments made in excess/
(shortfall) of the respective Group entities’ income tax obligation for
the respective periods are recognised in the statement of financial
position under income tax assets/income tax liabilities, respectively.
Any interest relating to accrued liabilities for potential tax assessments
is not included in the income tax charge or (credit), but is recognised
within finance costs.
A provision is recognised for those matters for which the tax
determination is uncertain but it is considered probable that there will
be a future outflow of funds to a tax authority. These provisions are
measured at the best estimate of the amount expected to become
payable or based on the expected value approach, as applicable and
are presented within current tax liabilities. The assessment is based on
the judgement of tax professionals within the company supported by
previous experience in respect of such activities and in certain cases
based on specialist independent tax advice.
Current tax assets and tax liabilities are offset where the entity has a
legally enforceable right to offset and intends either to settle on a net
basis, or to realise the asset and settle the liability simultaneously.
b. Deferred tax
Deferred tax is recognised, using the liability method, on temporary
differences arising between the tax bases of assets and liabilities and
their carrying values in the financial statements. However, deferred tax
is not recognised if it arises from initial recognition of an asset or liability
in a transaction other than a business combination that at the time of
the transaction affects neither accounting profit nor taxable profit (tax
loss). Further, deferred tax liabilities are not recognised if they arise
from the initial recognition of goodwill.
Deferred tax assets are recognised only to the extent that it is probable
that future taxable profit will be available against which the temporary
differences, tax losses and tax credits can be utilised. To assess such
probability, the Group considers profit generation capability of the
taxable entity based on historical trends as well as forecast profitability
for the foreseeable future. When it is probable that there will be
future taxable profits, an evaluation is performed to assess the
availability of sufficient deductible temporary differences during the
foreseeable future, relating to the same taxation authority and in the
same taxable entity.
Deferred tax is recognised on temporary differences arising on
investments in subsidiaries, associate and joint venture unless the
timing of the reversal of the temporary difference can be controlled
and it is probable that the temporary difference will not reverse in the
foreseeable future.
Deferred tax assets, recognised and unrecognised, are reviewed at
each reporting date and assessed for recoverability based on best
estimates of taxable profits for the foreseeable future.
Deferred tax is determined using tax rates (and laws) that have been
enacted or substantively enacted by the reporting date and are
expected to apply when the related deferred tax asset is realised or
the deferred tax liability is settled.
Deferred tax assets and liabilities are offset where there is a legally
enforceable right to offset current tax assets and liabilities and where
the deferred tax balances relate to the same taxation authority.
2.13 Inventories
Group’s inventories include handsets, modems and related
accessories.
Inventories are stated at the lower of cost (determined using the
first-in-first-out method) and net realisable value. The costs comprise
its purchase price and any directly attributable cost of bringing it to its
present location and condition. Net realisable value is the estimated
selling price in the ordinary course of business, less the estimated
costs of completion and the estimated variable costs necessary to
make the sale.
2.14 Cash and cash equivalents
Cash and cash equivalents include cash in hand, wallet balances, bank
balances, cheques in hand and any deposits with original maturities
of three months or less (i.e., that are readily convertible to known
amounts of cash and cash equivalents, and subject to an insignificant
risk of a change in value). However, for the purpose of the statement of
cash flows, in addition to the above items, any bank overdrafts that are
an integral part of the Group’s cash management and balances held
under mobile money trust are also included as a component of cash
and cash equivalents.
Term deposits with an original maturity of more than three months are
presented within other bank balances.
2.15 Non-current assets (or disposal groups) held for sale
Non-current assets (or disposal groups) are classified as assets-held-
for-sale when their carrying amount is to be recovered principally
through a sale transaction and a sale is considered highly probable.
The sale is considered highly probable only when the asset or disposal
group is available for immediate sale in its present condition, it is
unlikely that the sale will be withdrawn and the sale is expected to
complete within one year from the date of classification as held for
sale. Disposal groups classified as held for sale are stated at the lower
of carrying amount and fair value less costs to sell, except for assets
such as deferred tax assets (measured in accordance with IAS 12) and
financial assets which are measured at fair value in accordance with
IFRS 9. Non-current assets are not depreciated or amortised while they
are classified as held for sale.
Assets and liabilities classified as held for sale are presented separately
in the statement of financial position.
A loss is recognised for any initial or subsequent write-down of the
asset (or disposal group) to fair value less costs to sell. A gain is
recognised for any subsequent increases in fair value less costs to sell
of an asset (or disposal group), but not in excess of any cumulative loss
previously recognised.
If the criteria for held for sale are no longer met, it ceases to be
classified as held for sale and is measured at the lower of (i) its carrying
amount before the asset was classified as held for sale, adjusted for
any depreciation/amortisation that would have been recognised had
that asset not been classified as held for sale, and (ii) its recoverable
amount at the date when the disposal group ceases to be classified
as held for sale.
Airtel Africa plc Annual Report and Accounts 2023
185
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
2. Summary of significant accounting
policies continued
• Share-based payments
Refer to Note below.
2.16 Share capital/share premium
Ordinary shares are classified as equity when the Group has an
unconditional right to avoid delivery of cash or another financial asset,
that is, when the dividend and repayment of capital are at the sole and
absolute discretion of the Group and there is no contractual obligation
whatsoever to that effect. The share premium account is used to
record the premium on issue of shares.
2.17 Employee benefits
The Group’s employee benefits mainly include wages, salaries,
bonuses, defined contribution plans, defined benefit plans, other
long-term benefits, including compensated absences and share-
based payments. The employee benefits are recognised in the year in
which the associated services are rendered by the Group employees.
Short-term employee benefits are recognised in profit and loss at
undiscounted amounts during the period in which the related
services are rendered. Details of long-term employee benefits are
provided below:
• Defined contribution plans
The contributions to defined contribution plans are recognised in
profit and loss as and when the services are rendered by employees.
The Group has no further obligations under these plans beyond its
periodic contributions.
• Defined benefit plans
2.18 Share-based payments
The Group operates equity-settled and cash-settled compensation
plans under which the Group receives services from employees as
consideration for equity shares/cash-settled units.
The Group measures the fair value of the services received from
employees by reference to the fair value of the equity instruments
granted. The grant-date fair value of equity-settled share-based
payment arrangements is generally recognised as an expense on a
straight-line basis, with a corresponding increase in equity (reserves),
over the vesting period of the awards.
At each reporting date, the Group estimates the number of equity
instruments expected to eventually vest as a result of the effect of
non-market-based vesting conditions. The impact of the revision of the
original estimates of the number of equity instruments expected to
vest, if any, is recognised in profit and loss such that the cumulative
expense reflects the revised estimate, with a corresponding
adjustment to reserves.
The fair value of the amount payable to employees in respect of
share-based payments which are settled in cash is recognised as
an expense on a straight-line basis with a corresponding increase
in liabilities, over the period during which the employees become
unconditionally entitled to payment. The liability is remeasured at
each reporting date and at settlement date based on the fair value
of such instruments. Any changes in the liability are recognised in
profit and loss.
The Group has defined benefit plans in the form of ‘retirement
benefits’ and ‘severance pay’ wherein the cost of providing benefits
is determined using the projected unit credit method, with actuarial
valuations being carried out at the end of each interim reporting
period. The obligation towards these benefits is recognised in the
statement of financial position under provisions, at the present value of
the defined benefit obligations. The present value of these obligations
is determined by discounting the estimated future cash outflows,
using an appropriate discount rate.
As at each reporting date, the Group estimates the number of awards
that are expected to eventually vest. It recognises the impact of any
revision to original estimates in the period of change. Accordingly, no
expense is recognised for awards that do not ultimately vest, except
for where vesting is conditional upon a market performance/non-
vesting condition. These are treated as vesting irrespective of whether
or not the market/non-vesting condition is satisfied, provided that
service conditions and all other non-market performance conditions
are satisfied.
Defined benefit costs are split into the following categories:
• service costs, which includes current service cost, past service cost
and gains and losses on curtailments and settlements;
• interest expense; and
• remeasurements.
The Group recognises service costs within profit and loss as employee
benefit expenses. Past service cost is recognised in profit and loss
when the plan amendment or curtailment occurs. Gains or losses
on settlement of a defined benefit plan are recognised when the
settlement occurs. Interest cost is calculated by applying a discount
rate to the defined benefit liability and is recognised within finance
costs. Remeasurements comprising actuarial gains and losses are
recognised immediately as a charge or credit to other comprehensive
income in the period in which they occur. Remeasurements recognised
in other comprehensive income are subsequently not reclassified to
profit and loss.
• Other long-term employee benefits
The employees of the Group are entitled to compensated absences
as well as other long-term benefits. Compensated absences benefit
comprises encashment and the availing of leave balances that were
earned by the employees over the period of past employment.
The Group provides for the liability (presented under provisions)
towards these benefits on the basis of actuarial valuations carried out
quarterly as at the reporting date, by an independent qualified actuary
using the projected-unit-credit method. The related re-measurements
are recognised in the profit and loss in the period in which they arise.
Where the terms of an award are modified, in addition to the expense
pertaining to the original award, an incremental expense is recognised
for any modification that results in additional fair value, or is otherwise
beneficial to the employee as measured at the date of modification.
For further details of equity-settled and cash-settled compensation
plans refer to Note 7.
• Treasury shares
The company is the sponsoring entity of an Employee Benefit Trust
(EBT) which is controlled by the Group. The company provides funds
to the EBT to enable it to satisfy its objectives. The company’s equity
instruments held by the EBT are accounted for as if they were the
company’s own equity and are treated as treasury shares. Such
treasury shares are recorded at cost and deducted from equity.
Refer to Note 26.1 for details of treasury shares held by the EBT.
2.19 Provisions
a. General
Provisions are recognised when the Group has a present obligation
(legal or constructive) as a result of a past event, it is probable that an
outflow of resources will be required to settle the obligation, and the
amount of the obligation can be reliably estimated.
Provisions are measured at the present value of the expenditures
expected to be required to settle the relevant obligation, using a
pre-tax rate that reflects current market assessments of the time
value of money (if the impact of discounting is significant) and the
risks specific to the obligation. The increase in the provision due to
un-winding of the discounting due to the passage of time is recognised
within finance costs.
186 Airtel Africa plc Annual Report and Accounts 2023
2. Summary of significant accounting
policies continued
b. Provision for legal, tax and regulatory matters
The Group is involved in various legal, tax and regulatory matters, the
outcome of which may not be favourable to the Group. Management,
in consultation with legal, tax and other advisers where required,
assesses the likelihood that a pending claim will succeed against the
Group. The Group recognises a provision in cases where it is probable
that an outflow of resources embodying economic benefits will be
required to settle the obligations arising from such claims.
c. Asset Retirement Obligation (ARO)
AROs are recognised for those lease arrangements where the Group
has an obligation at the end of the lease period to restore the leased
premises to a condition similar to that at inception of the lease. AROs
are provided at the present value of expected costs to settle the
obligation and are recognised as part of the cost of that particular
asset. The estimated future costs of decommissioning are reviewed
annually and any change in the estimated future costs or in the
discount rate applied are adjusted against the cost of the asset.
2.20 Contingencies
A disclosure for a contingent liability is made when there is a possible
obligation or a present obligation that may, but probably will not,
require an outflow of resources. When there is a possible obligation
or a present obligation in respect of which the likelihood of outflow of
resources is remote, no provision or disclosure is made. Contingent
assets are not recognised unless virtually certain and disclosed only
where an inflow of economic benefits is probable.
2.21 Revenue
Revenue is recognised upon the transfer of control of promised
products or services to the customer at the consideration which
the Group has received or expects to receive in exchange for those
products or services, net of any taxes/duties and discounts. When
determining the consideration to which the Group is entitled for
providing promised products or services via intermediaries, the
Group assesses whether the intermediary is a principal or agent
in the onward sale to the end customer. To the extent that the
intermediary is considered a principal, the consideration to which
the Group is entitled is determined to be that receivable from the
intermediary. To the extent that the intermediary is considered to
be an agent, the consideration to which the Group is entitled is
determined to be the amount receivable from the ultimate customer.
Any upfront discount or commission provided to the intermediary is
recognised as a cost of sale in such a case.
The Group has entered into certain multiple-element revenue
arrangements, which involve the delivery or performance of multiple
products, services or right-of-use assets. At the inception of the
arrangement, all the deliverables within the contract are evaluated to
determine whether they represent distinct performance obligations,
and if so, they are accounted for separately.
Total consideration related to the multiple element arrangements is
allocated to each performance obligation based on their relative
standalone selling prices. The stand-alone selling prices are the prices
at which the Group would sell a promised good or service separately
to a customer.
Revenue is recognised when, or as, each distinct performance
obligation is satisfied. The main categories of revenue and the basis
of recognition are as follows:
• Service revenue
Service revenue is derived from the provision of telecommunications
and mobile money services to customers. The majority of the Group’s
customers subscribe to services on a pre-paid basis.
Telecommunications service revenue mainly pertains to usage,
subscription charges for voice, data, messaging and value-added
services and customer onboarding charges.
Telecommunications services are considered to represent a single
performance obligation as all are provided over the Group’s network
and transmitted as data representing a digital signal on the network.
The transmission consumes network bandwidth and therefore,
irrespective of the nature of the communication, the customer
ultimately receives access to the network and the right to consume
network bandwidth.
Customers primarily pay in advance for services of the Group. These
cash amounts are recognised in deferred income in the consolidated
statement of financial position and transferred to the profit and loss
when the service obligation has been performed/when the usage of
services becomes remote.
The Group recognises revenue from these services over time as they
are provided. Revenue is recognised over time based on actual units
of telecommunications services provided during the reporting period
as a proportion of the total units of telecommunications services to
be provided.
Subscription charges are recognised over the subscription pack
validity period.
Revenue recognised in excess of amounts invoiced are classified as
unbilled revenue. If amounts invoiced/collected from a customer are
in excess of revenue recognised, a deferred revenue/advance income
is recognised.
Service revenue also includes revenue from interconnection/roaming
charges for use of the Group’s network by other operators for voice,
data, messaging and signalling services.
Revenue from long distance operations comprise voice services and
bandwidth services (including installation), which are recognised on
the provision of services, provided over the period of the respective
arrangements.
The Group has interconnect agreements with local and foreign
operators. This allows customers from either network to originate or
terminate calls to each other’s network. Revenue is earned and
recognised as per bilateral agreements when other operators’ calls are
terminated to the Group’s network, i.e., when the service is rendered.
As part of the mobile money services, the Group earns commission
from merchants for facilitating recharges, bill payments and other
merchant payments. It also earns commissions on the transfer of
money from one customer wallet to another. Such commission is
recognised as revenue at a point in time on fulfilment of these services
by the Group.
Sale of products
Equipment sales mainly pertain to sale of telecommunications
equipment and related accessories for which revenue is recognised
when the control of equipment is transferred to the customer, i.e.,
transferred at a point in time.
Costs to obtain or fulfil a contract with a customer
The Group defers costs to obtain or fulfil a contract with a customer
over expected average customer life determined based on churn rate
specific to such contracts.
2.22 Borrowing costs
Borrowing costs consist of interest and other costs that the Group
incurs in connection with the borrowing of funds. Borrowing costs
which are not directly attributable to the acquisition, construction or
production of an asset (that necessarily takes a substantial period of
time to get ready for its intended use or sale) are expensed in the
period they occur.
Airtel Africa plc Annual Report and Accounts 2023
187
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
2. Summary of significant accounting
policies continued
2.23 Operating profit
Operating profit is stated as revenue less operating expenditure,
including depreciation and amortisation and operating exceptional
items. Operating profit excludes finance income, finance costs, other
non-operating income and share of profit of the associate and joint
venture accounted for using equity method.
2.24 Exceptional items – Alternative performance
measures (APMs)
Management exercises judgement in determining the adjustments to
apply to IFRS measurements in order to derive APMs, which provide
additional useful information on the underlying trends, performance
and position of the Group. This assessment covers the nature of the
item being one-off or non-routine and the significance of the impact
of that item on reported performance in accordance with the Group’s
exceptional items policy.
To monitor performance, the Group uses the following APMs:
• ‘Underlying profit before tax’ representing profit before tax for the
period, excluding the impact of exceptional items.
• ‘Underlying profit after tax’ representing profit after tax for the
period, excluding the impact of exceptional items and tax on
exceptional items.
Exceptional items refer to items of income or expense within the
consolidated statement of comprehensive income, which are of such
size, nature or incidence that their exclusion is considered necessary to
explain the performance of the Group and improve the comparability
between periods. Reversals of previous exceptional items are also
considered as exceptional items. When applicable, these items include
network modernisation, share issue expenses, loan prepayment costs,
the settlement of legal and regulatory cases, restructuring costs,
impairments, gain on sale of tower assets and initial recognition of
deferred tax assets. A breakdown of the exceptional items included
in the profit and loss is disclosed in Note 11.
For other APMs, refer pages 240-245.
2.25 Dividends
Dividends to shareholders of the company are deducted from retained
earnings and recognised as a liability, in the year in which the dividends
are approved by the shareholders. Interim dividends are deducted
from the retained earnings when they are paid.
2.26 Earnings per share (EPS)
The Group presents the basic and diluted EPS data. Basic EPS is
computed by dividing the profit for the period attributable to the
owners of the company by the weighted average number of shares
net of any treasury shares outstanding during the period.
Diluted earnings per share adjusts the figures used in the
determination of basic earnings per share to take into account:
• the after-income tax effect of interest and other financing costs
associated with dilutive potential ordinary shares, and
• the weighted average number of additional ordinary shares that
would have been outstanding assuming the conversion of all
dilutive potential ordinary shares.
3. Critical accounting estimates,
assumptions and judgements
The estimates and judgements used in the preparation of these
financial statements are continuously evaluated by the Group, and
are based on historical experience and various other assumptions
and factors (including expectations of future events), that the Group
believes to be reasonable under the existing circumstances. These
estimates and judgements are based on the facts and events that
existed as at the reporting date, or that occurred after that date but
provide additional evidence about conditions existing as at the
reporting date.
Although the Group regularly assesses these estimates, actual results
could differ materially from these estimates (even if the assumptions
underlying such estimates were reasonable when made), if these
results differ from historical experience or other assumptions do not
turn out to be substantially accurate. The changes in estimates are
recognised in the financial statements in the year in which they
become known.
3.1 Key sources of estimation uncertainty
The estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying values of assets and liabilities
within the next financial year are discussed below:
• Uncertain tax treatments
Uncertainties exist with respect to the interpretation of complex
tax regulations. Given the wide range of international business
relationships and the long-term nature and complexity of existing
contractual agreements, differences arising between the actual results
and the assumptions made, or future changes to such assumptions,
could necessitate future adjustments to tax income and expense
already recorded. The Group establishes provisions/contingencies,
based on reasonable estimates, for potential audits by the tax
authorities in the respective countries in which it operates as well
as where the probability of tax authorities accepting the Group’s
treatment is in doubt. The amount of direct tax provisions carried as
part of current tax liabilities amounted to $15m and contingencies
amounted to $16m (refer to Note 29). Reflecting the complexities of
tax regulations and international business relationships, as described
above, the Group receives, from time to time, demands from tax
authorities. The Group assesses these demands and estimates
whether a provision should be recorded or a contingent liability
should be disclosed or whether the matter is considered to be remote.
These estimates are based on various factors, such as experience
from previous tax audits and the Group’s interpretation of tax
regulations by the taxable entity and the relevant tax authority.
For those demands where the Group believes there is a low likelihood
of the demand being successful against the Group, no provision is
recorded nor a contingent liability is disclosed. However, these
estimates may be subject to a material change within the next
financial year which could lead to the recognition of additional material
provisions or the disclosure of additional material contingent liabilities.
• Contingent liabilities and provisions
The Group is involved in various legal, indirect tax and regulatory
matters, the outcome of which may not be favourable to the Group.
Management, in consultation with legal, indirect tax and other advisers
where required, assesses the likelihood that a pending claim will
succeed. The Group has applied its judgement and has recognised
liabilities based on whether additional amounts will be payable and has
included contingent liabilities where economic outflows are considered
possible but not probable. The Group carried provisions amounting to
188 Airtel Africa plc Annual Report and Accounts 2023
3. Critical accounting estimates,
assumptions and judgements continued
$30m in respect of indirect tax, legal and regulatory matters and
discloses contingencies amounting to $116m. In recording or
disclosing these amounts, the Group has estimated which claims are
probable and consequently has recorded a provision for those. For
the claims which are possible, the Group has disclosed a contingent
liability. For claims which are considered to be remote, no recording or
disclosure has been made. However, given the nature of these matters
and size of such claims there may be a risk of a material change
within the next financial year, including the recognition of additional
provisions, should the Group not be successful in defending the cases
where contingent liabilities are disclosed. For further details, refer to
Notes 25 and 29, respectively.
3.2 Critical judgements in applying the Group’s accounting
policies
There were no critical accounting judgments that would have
a significant effect on the amount recognised in the Group’s
financial statements.
4. New accounting pronouncements to be
adopted on or after 1 April 2023
The following pronouncements issued by the IASB are relevant to
the Group and effective for annual periods beginning on or after
1 January 2023. The Group’s financial statements will be presented in
accordance with these requirements, which are being evaluated but
are not expected to have a material impact on the consolidated results,
financial position or cash flows of the Group. These pronouncements
have been issued by IASB but have not yet been adopted by UKEB for
use in the UK.
• Amendments to IFRS 16 in relation to Sale and leaseback
accounting.
• Amendments to IAS 1 in relation to ‘classification of liabilities as
current and non-current’.
• Amendments to IAS 12 in relation to ‘deferred tax related to assets
and liabilities arising from a single transaction’.
• Amendments to IAS 8 in relation to Accounting Estimates.
• Amendments to IAS 1 in relation to disclosure of accounting policies.
5. Significant transactions/new
developments
a) The directors recommended and shareholders approved a final
dividend of 3 cents per ordinary share for the year ended 31 March
2022, which was paid on 22 July 2022 to the holders of ordinary
shares on the register of members at the close of business on
24 June 2022.
An interim dividend of 2.18 cents per share was also approved
by the Board on 26 October 2022, which has been paid on
08 December 2022.
b) In April 2022, one of the Airtel Mobile Commerce B.V.’s (AMC B.V.)
subsidiaries, SmartCash Payment Service Bank Limited
(‘SmartCash’), received the final approval from the Central Bank
of Nigeria for a full Payment Service Bank licence affording it the
opportunity to deliver a full suite of mobile money services in Nigeria.
Later in August 2022, in line with the directions of the Central Bank
of Nigeria, SmartCash was transferred to Airtel Networks Limited (a
subsidiary of Airtel Africa Group, outside the perimeter of AMC B.V.
Group). Airtel Africa Group has agreed with non-controlling investors
to compensate them for their respective potential loss of value by
way of transferring additional AMC B.V. shares equivalent to the
value of SmartCash on the prescribed trigger event date (subject
to a cap of 5% of the value of AMC B.V. Group), which will only be
payable in the event that SmartCash does not again form part of
the AMC B.V. Group perimeter or the non-controlling investors do
not own a direct shareholding in SmartCash based on regulatory
approvals, by the prescribed trigger event date.
Given that the proposal to compensate the non-controlling
investors is agreed, for their economic value loss due to exclusion
of SmartCash (which they were entitled to before the transfer of
SmartCash to Airtel Nigeria Limited) based on the future fair value of
SmartCash on the prescribed trigger event date, Airtel Africa Group
continues to recognise non-controlling interest with respect to net
assets of SmartCash.
c) In June 2022, the Group announced the acquisition by Airtel Congo
RDC S.A, a subsidiary of the Group, of 58 MHz of additional
spectrum spread across the 900, 1800, 2100, and 2600 MHz bands
for a gross consideration of $42m. An amount of $20m pertaining
to the 900, 1800 and 2100 MHz bands has been capitalized as an
intangible asset and $22m pertaining to the 2600 MHz bands is
carried as intangible asset under development since these bands
are not yet available for use (expected to be available for use by
June 2023).
d) On 7 July 2022, Bharti Airtel International (Netherlands) B.V., one of
the Group’s subsidiaries, completed the early redemption of $450m
of its $1bn of 5.35% guaranteed senior notes due in 2024 for a
consideration of $463m. The consideration included accrued
interest up to the date of redemption and early redemption cost.
e) In July 2022, the Group announced the acquisition by Airtel Kenya,
a subsidiary of the Group, of 60 MHz of additional spectrum in the
2600 MHz band from the Communications Authority of Kenya, for a
gross consideration of $40m. The spectrum is valid from July 2022
for a period of 15 years. This cost has been capitalised as an
intangible asset.
f) In October 2022, the Group announced the acquisition by Airtel
Tanzania, a subsidiary of the Group, of 110 MHz of additional
spectrum spread across the 2600 MHz (two blocks of 2x15 MHz)
and 3500 MHz bands from the Tanzania Communications
Regulatory Authority (TCRA) for a gross consideration of $60m.
The spectrum is being carried as an intangible under development,
since it is not available for use yet (expected to be available for use
by August 2023).
g) In October 2022, the Group announced the acquisition by Airtel
Zambia, a subsidiary of the Group, of 60 MHz of additional spectrum
spread across the 800 MHz and 2600 MHz bands from the Zambia
Information and Communications Technology Authority (ZICTA),
for a gross consideration of $29m which has been capitalised as an
intangible asset.
h) In December 2022, the Group paid $317m (in Nigerian naira) to
acquire 100 MHz of spectrum in the 3500 MHz band and 2x5 MHz
of 2600 MHz band from the Nigerian Communications Commission
(NCC). The 2600 MHz and 3500 MHz spectrum licences are valid
for a period of 10 years from January and July 2023, respectively.
The spectrum has been carried as an intangible under development,
since it is not yet available for use (expected to be available for use
by July 2023).
i) During the year, Airtel Nigeria, a subsidiary of the Group, was
offered renewal of 2100 MHz spectrum license by Nigerian
Communications Commission (NCC) for a gross consideration
of $127m, which was accepted by Airtel Nigeria. This cost was
capitalised as an intangible asset and is being amortised over the
useful life of the spectrum of 15 years. A corresponding liability was
created for the amount payable for the renewal which has been
subsequently paid in April 2023.
Airtel Africa plc Annual Report and Accounts 2023
189
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
6. Revenue
Service revenue
Sale of products
For the year ended
31 March 2023
31 March 2022
5,245
10
5,255
4,703
11
4,714
Transaction price allocated to the remaining performance obligations
Performance obligations that are unsatisfied (or partially unsatisfied) amounting to $183m as of 31 March 2023 and $162m as as of 31 March
2022 will be satisfied, respectively, within a period of the next year.
Revenue recognised that was included in the deferred revenue balance at the beginning of the year:
Revenue recognised that was included in the deferred revenue balance at the beginning of the year
Significant changes in the unbilled revenue and deferred revenue balances during the year are as follows:
For the year ended
31 March 2023
31 March 2022
162
135
Revenue recognised that was included in the deferred revenue balance at the
beginning of the year
Increases due to cash received, excluding amounts recognised as revenue
during the year
Transfers from unbilled revenue recognised at the beginning of the period to
receivables
Reconciliation of costs to obtain or fulfil a contract with a customer
Costs to obtain or fulfil a contract with customer
Opening balance
Costs incurred and deferred
Less: cost amortised
Foreign currency translation impact
Closing balance
For the year ended
31 March 2023
31 March 2022
Unbilled
revenue
Deferred
revenue
Unbilled
revenue
Deferred
revenue
–
–
53
162
183
–
–
–
43
135
162
–
For the year ended
31 March 2023
31 March 2022
55
171
(95)
(7)
124
44
88
(77)
(0)
55
6.1 Segmental information
The Group’s segment information is provided on the basis of geographical clusters and products to the chief executive officer (chief operating
decision maker – ‘CODM’) for the purposes of resource allocation and assessment of performance.
The Group’s reporting segments till 31 March 2022 were as follows:
Nigeria – comprising operations in Nigeria.
East Africa – comprising operations in Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.
Francophone Africa – comprising operations in Chad, Gabon, Democratic Republic of the Congo, Madagascar, Niger, Rebublic of the Congo and
the Seychelles.
Owing to significant growth in the Group’s mobile money business and a corresponding change in the organisation structure combined with
changes in information provided to the CODM for the allocation of resources and the assessment of performance, with effect from April 2022,
the Group has identified mobile money as a new operating and reportable segment. Thus, the segments for the Group are now as follows:
Nigeria mobile services – comprising of mobile service operations in Nigeria.
East Africa mobile services – comprising of mobile service operations in Kenya, Malawi, Rwanda, Tanzania, Uganda and Zambia.
Francophone Africa mobile services – comprising of mobile service operations in Chad, Gabon, Democratic Republic of the Congo,
Madagascar, Niger, Rebublic of the Congo and the Seychelles.
Mobile money – comprising of mobile money services across the Group, including the recently launched payment service bank in Nigeria.
* Mobile money segment consolidates the results of mobile money operations from all operating entities within the Group. Airtel Money Commerce B.V. (AMC B.V.) is the
holding company for all mobile money services for the Group, and as of 31 March 2023, it consolidates mobile money operations from eleven OpCos, currently excluding
operations in Nigeria, Tanzania, and Republic of the Congo. It is management’s intention to continue work to transfer all these remaining mobile money services operations
into AMC B.V., subject to local regulatory requirements.
190 Airtel Africa plc Annual Report and Accounts 2023
6. Revenue continued
Each segment derives revenue from the respective services housed within each segment, as described above. Expenses, assets and liabilities
primarily related to the corporate headquarters and centralised functions of the Group are presented as unallocated items.
The amounts reported to the chief operational decision-maker (‘CODM’) are based on the accounting principles used in the preparation of the
financial statements. Each segment’s performance is evaluated based on segment revenue and segment result.
The segment result is Underlying EBITDA (i.e., earnings before interest, tax, depreciation and amortisation before exceptional items). This is
the measure reported to the CODM for the purpose of resource allocation and assessment of segment performance. During the year ended
31 March 2023, EBITDA is equal to underlying EBITDA since there are no exceptional items pertaining to EBITDA.
Consequent to the change in reportable segments during the period, comparative information has also been restated in line with the
revised segments.
Inter-segment pricing and terms are reviewed and changed by the management to reflect changes in market conditions and changes to such
terms are reflected in the period in which the changes occur.
The ‘Eliminations’ column comprises inter-segment revenues eliminated upon consolidation.
Segment assets and segment liabilities comprise those assets and liabilities directly managed by each segment. Segment assets primarily
include receivables, property, plant and equipment, capital work in progress, right-of-use assets, intangibles assets, inventories and cash and
cash equivalents. Segment liabilities primarily include operating liabilities. Segment capital expenditure comprises investment in property,
plant and equipment, capital work in progress, intangible assets (excluding licences) and capital advances.
Investment elimination upon consolidation and resulting goodwill impacts are reflected in the ‘Eliminations’ column.
Summary of the segmental information and disaggregation of revenue for the year ended and as of 31 March 2023 is as follows:
Mobile
money
Others
(unallocated)
Eliminations
Total
Revenue from external customers
Voice revenue
Data revenue
Mobile money revenue1
Other revenue2
Inter-segment revenue
Total revenue
Underlying EBITDA
Less:
Nigeria
mobile
services
East Africa
mobile
services
Francophone
Africa
mobile
services
1,052
884
–
189
2,125
3
2,128
1,099
835
537
–
124
1,496
12
1,508
753
604
366
–
114
1,084
6
1,090
476
–
–
540
–
540
152
692
344
–
–
–
10
10
4
14
(97)
Depreciation and amortisation
344
260
190
17
7
–
–
–
–
–
(177)
(177)
–
–
2,491
1,787
540
437
5,255
–
5,255
2,575
818
752
(29)
(0)
1,034
293
256
151
33
15
–
748
2,634
2,193
2,255
2,393
1,599
2,359
945
742
25,485
(21,752)
11,166
12,839
(13,168)
7,358
Investment accounted for using equity
method (included in segment assets above)
–
–
4
–
–
–
4
1 Mobile money revenue is net of inter-segment elimination of $152m mainly for commission on sale of airtime. It includes $103m pertaining to East Africa mobile services
and balance $49m pertaining to Francophone Africa mobile services.
2 Other revenue includes messaging, value-added services, enterprise, site sharing and handset sale revenue.
Airtel Africa plc Annual Report and Accounts 2023
191
Finance costs
Finance income
Share of profit of associate and joint venture
accounted for using equity method
Profit before tax
Other segment items
Capital expenditure
As of 31 March 2023
Segment assets
Segment liabilities
2,358
1,525
424
407
4,714
–
4,714
2,311
744
441
(19)
(111)
(0)
32
1,224
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
6. Revenue continued
Summary of the segmental information and disaggregation of revenue for the year ended and as of 31 March 2022 is as follows:
Revenue from external customers
Voice revenue
Data revenue
Mobile money revenue1
Other revenue2
Inter-segment revenue
Total revenue
Underlying EBITDA
Less:
Nigeria
mobile
services
East Africa
mobile
services
Francophone
Africa
mobile
services
984
734
–
157
1,875
3
1,878
1,043
782
457
–
146
1,385
10
1,395
672
592
334
–
104
1,030
3
1,033
425
Mobile
money
Others
(unallocated)
Eliminations
Total
–
–
424
–
424
129
553
281
–
–
–
–
–
–
–
(110)
–
–
–
–
–
(145)
(145)
–
–
Depreciation and amortisation
268
230
199
14
33
Finance costs
Finance income
Non-operating income (net)
Share of profit of associate and joint venture
accounted for using equity method
Exceptional items pertaining to
operating profit
Profit before tax
Other segment items
Capital expenditure
As of 31 March 2022
Segment assets
Segment liabilities
–
32
–
–
–
–
249
259
114
25
9
–
656
2,247
1,438
1,886
2,450
1,485
2,358
776
588
27,396
14,458
(23,426)
(14,577)
10,364
6,715
Investment accounted for using equity
method (included in segment assets above)
–
–
6
–
–
–
6
1 Mobile money revenue is net of inter-segment elimination of $129m mainly for commission on sale of airtime. It includes $85m pertaining to East Africa mobile services and
balance $44m pertaining to Francophone Africa mobile services.
2 Other revenue includes messaging, value-added services, enterprise, site sharing and handset sale revenue.
Geographical information disclosure based on location of statutory entity of non-current assets (PPE, CWIP, ROU, intangible assets, including
goodwill and intangible assets under development):
United Kingdom
Nigeria
Netherlands (including goodwill)
Others
Total
As of
31 March 2023
31 March 2022
0
2,379
3,464
2,889
8,732
1
1,670
3,773
2,529
7,973
192 Airtel Africa plc Annual Report and Accounts 2023
7. Employee benefits expense
Salaries and bonuses
Defined contribution plan cost
Defined benefit plan cost/(income)
Staff welfare expenses
Others
For the year ended
31 March 2023
31 March 2022
243
12
5
18
9
287
258
14
(2)
17
10
297
Employee benefit expenses includes directors’ remuneration. For further information about the remuneration of individual directors, refer to
pages 145 to 163 of the directors’ remuneration report.
Details of year end and monthly average number of people employed by the Group during the year:
Nigeria
East Africa
Francophone Africa
Corporate and others
Total
For the year ended
31 March 2023
31 March 2022
Year end
Average
Year end
Average
779
1,250
1,144
827
4,000
728
1,252
1,148
779
3,907
706
1,251
1,149
651
3,757
686
1,230
1,151
596
3,663
7.1 Share-based payment plans
The following table provides an overview of all existing equity-settled and cash-settled plans of the company:
Scheme
Plans
Equity settled plans
Replacement stock awards1
IPO Awards1
IPO share options3
IPO executive share options3
Performance share awards1
Restricted share awards2
One-off awards3
Replacement awards3
Deferred bonus shares3
Cash settled plans
Shadow stock plan1
1 Vesting is subject to service, total shareholder return and financial performance conditions.
2 Vesting is subject to service and financial performance conditions.
3 Vesting is subject to service conditions only.
The following table exhibits the net compensation expenses under the schemes:
Expenses arising from equity and cash settled share based payment transactions
Vesting period
(years)
Contractual
term (years)
1–2
1–3
1–3
1–3
3
3
1–3
1–2
2
1–2
2
3
10
10
3
3
3
2
2
2
For the year ended
31 March 2023
31 March 2022
1
2
Airtel Africa plc Annual Report and Accounts 2023
193
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
7. Employee benefits expense continued
The following table provides an overview of all existing share option and cash-settled plans of the company. Details of share options outstanding
during the year are as follows:
31 March 2023
31 March 2022
Number of
share options
(in ‘000)
Weighted
average
exercise price
per share
(in US$)
Number of
share options
(in ‘000)
Weighted
average exercise
price per share
(in US$)
–
–
–
–
–
–
–
–
–
–
1
–
–
1
1
1
–
–
1
1
–
–
–
–
–
–
751
–
–
751
751
299
135
(434)
–
–
566
63
(511)
(38)
80
–
80
53
(133)
–
–
–
3,132
–
(2,381)
751
250
10,594
(717)
(1,035)
8,842
2,815
8,842
(2,187)
(265)
6,390
6,390
Replacement stock awards
Outstanding at beginning of year
Granted during the year1
Exercised during the year2
Outstanding at the end of the year
Exercisable at the end of the year
IPO Awards
Outstanding at beginning of year
Additions during the year based on performance1
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
IPO share options
Outstanding at beginning of year
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
IPO executive share options
Outstanding at beginning of year
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
Shadow stock plan
Outstanding at beginning of year
Additions during the year based on performance1
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
Performance share awards
Outstanding at beginning of year
Granted during the year1
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
Restricted share awards
Outstanding at beginning of year
Granted during the year1
Exercised during the year2
Forfeited during the year3
Outstanding at the end of the year
Exercisable at the end of the year
One-off award
Outstanding at beginning of year
Granted during the year1
Exercised during the year2
Outstanding at the end of the year
Exercisable at the end of the year
Replacement awards
Outstanding at beginning of year
Granted during the year1
Exercised during the year2
Outstanding at the end of the year
Exercisable at the end of the year
Deferred bonus shares
Outstanding at beginning of year
Granted during the year1
Outstanding at the end of the year
Exercisable at the end of the year
1 Includes additional awards granted based on meeting performance conditions.
2 For share options exercised during the year ended 31 March 2023, the weighted average share price during the year was $1.65 per share (March 2022: $1.46 per share).
3 Represents forfeitures on account of employees not meeting service or performance conditions.
708
356
–
–
1,064
–
1,523
788
–
–
2,311
–
1,373
1,126
(299)
(677)
1,523
–
688
261
(884)
(65)
–
–
633
509
(133)
(301)
708
–
301
–
(60)
241
–
361
–
(60)
301
–
661
–
(330)
331
–
271
271
–
–
661
–
661
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1
–
–
1
1
1
–
–
1
1
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
194 Airtel Africa plc Annual Report and Accounts 2023
7. Employee benefits expense continued
The total carrying value of cash-settled share-based compensation liability is nil and nil as of 31 March 2023 and 2022, respectively.
The fair value of options and awards is measured using the Black-Scholes valuation model. The key inputs used in the measurement of the grant
date fair valuation of equity-settled plans which are granted during the year are given in the below table:
Risk free interest rates
Expected life
Volatility
Dividend yield
Share price on the date of grant
Fair value
31 March 2023
31 March 2022
2.12%
0.08% to 0.16%
2.00 to 3.00
2.00 to 3.00
44.14% to 58.36% 36.22% to 38.10%
2.97%
1.69
3.69%
1.08
1.23 to 1.27
0.70 to 0.75
The expected life of the stock options is based on the company’s expectations and is not necessarily indicative of exercise patterns that may
actually occur. The expected volatility reflects the assumption that the historical volatility over a period to the expected life of the options is
indicative of future trends, which may not necessarily be the actual outcome. Further, the expected volatility is based on the weighted average
volatility of the comparable benchmark companies.
The details of weighted average remaining contractual life for the share options are as follows:
Existing plans
Remaining contractual life for the share options outstanding as of (years)
31 March 2023
31 March 2022
0 to 6
0 to 7
7.2 Employee benefits
The details of significant employee benefits (included within provisions) are as follows (for details on employee benefit plans refer to Note 2.17):
For the year ended 31 March 2023
For the year ended 31 March 2022
Retirement
benefits
Severance
benefits
Compensated
absences
Total
Retirement
benefits
Severance
benefits
Compensated
absences
Total
Obligation:
Balance as at beginning of the year
Current service cost
Interest cost
Benefits paid
Past service cost and gains/(loss)
on settlement
Remeasurements
Exchange differences
Present value of employee
benefit obligation
11
3
1
(1)
–
(0)
(0)
13
Liability recognised in the balance sheet
13
Current portion
Non-current portion
6
7
2
1
1
(1)
–
1
(0)
4
4
0
4
11
2
1
(2)
–
0
(0)
24
5
2
(3)
–
1
(0)
12
29
12
29
4
8
10
19
12
2
1
(0)
(4)
0
(0)
11
11
2
9
2
0
0
(0)
–
0
(0)
2
2
0
2
10
2
1
(3)
0
1
(0)
11
11
4
7
24
4
2
(3)
(4)
1
(0)
24
24
6
18
Amount recognised in other comprehensive income for the above plans
Loss from change in experience assumptions
Loss from change in demographic assumptions
Gain/(loss) from change in financial assumptions
Remeasurements on liability
For the year ended
31 March 2022
31 March 2021
(1)
(0)
1
(0)
(0)
(0)
(0)
(0)
These defined benefit plans expose the Group to actuarial risks, such as longevity risk, currency risk, interest rate risk and market
(investment) risk.
Airtel Africa plc Annual Report and Accounts 2023
195
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
7. Employee benefits expense continued
The financial and demographic assumptions used to determine defined benefit obligations are as follows:
Discount rate
Rate of return on plan assets
Rate of salary increase
Rate of attrition
Retirement age
Mortality rate
As of
31 March 2023
31 March 2022
7.80% to 15.00%
8.00% to 14.00%
NA
NA
4.48% to 7.50%
3.84% to 7.00%
5.40% to 14.75%
5.20% to 13.00%
55 to 65 years
55 to 65 years
CIMA F
CIMA F
The Group regularly assesses these assumptions with the projected long-term plans and prevalent industry standards.
The impact of sensitivity due to changes in the significant actuarial assumptions on the defined benefit obligations is given in the table below:
Discount rate
Salary growth rate
Withdrawal rate
31 March 2023
31 March 2022
Retirement
benefits
Severance
benefits
Total
Retirement
benefits
Severance
benefits
Total
+1.00%
–1.00%
+1.00%
–1.00%
+1.00%
–1.00%
(1)
(1)
(1)
(1)
(1)
(1)
(0)
0
0
(0)
1
(1)
(1)
(1)
(1)
(1)
0
(2)
(0)
0
0
(0)
(0)
0
(0)
0
0
(1)
1
(1)
(1)
0
0
(1)
1
(1)
The above sensitivity analysis is determined based on a method that extrapolates the impact on the net defined benefit obligations, because of
reasonable possible changes in the significant actuarial assumptions. Further, the above sensitivity analysis is based on a reasonably possible
change in a particular underlying actuarial assumption, while assuming all other assumptions to be constant. In practice, it is unlikely to occur as
changes in some of the assumptions may be correlated.
The table below summarises the maturity profile and duration of the defined benefits plan liability (retirement and severance benefits) on an
undiscounted basis:
As of
31 March 2023
31 March 2022
6
6
8
20
40
8
2
7
7
19
35
8
For the year ended
31 March 2023
31 March 2022
292
24
2
243
21
2
Within one year
Within one-three years
Within three-five years
Above five years
Weighted average duration in years
8. Other operating expenses
Other operating expenses mainly include the following:
Cost of sales1
Repairs and maintenaince
Charitable donations
1 Cost of sales mainly includes mobile money distribution and gateway charges.
196 Airtel Africa plc Annual Report and Accounts 2023
8. Other operating expenses continued
8.1 Auditor’s remuneration
The total remuneration of the Group’s auditor, Deloitte and other component audit firms, for services provided to the Group during the years
ended 31 March 2023 and 2022, respectively is analysed below (in US$ thousands):
Fees payable to the company’s auditor and their associates for the audit of the company’s annual accounts1
Fees payable to the company’s auditor and their associates for the audit of the company’s subsidiaries
Total audit fees
Non-audit services
Fees payable to the company’s auditor associates for quarterly assurance services performed by component
teams
Fees payable to company’s auditor and their associates for other assurance services
Fees payable to the company’s auditors for half yearly review procedures performed by Deloitte UK for the
purposes of Airtel Afirca plc
Total non-audit fees
Total fees
1 March 2023 fees includes additional fees of $84,180 arising from the completion of March 2022 audit.
9. Depreciation and amortisation
Depreciation
Amortisation
10. Finance costs and income
Finance costs
Interest on borrowings and other financial liabilities
Interest on lease liabilities
Net exchange loss
Bank charges, corporate guarantee fees and commitment fees
Net loss on derivative financial instruments
Other finance charges
Finance income
Interest income on deposits
For the year ended
31 March 2023
31 March 2022
2,407
2,011
4,418
1,099
488
342
1,929
2,654
1,805
4,459
1,027
386
353
1,766
6,347
6,225
For the year ended
31 March 2023
31 March 2022
715
103
818
629
115
744
For the year ended
31 March 2023
31 March 2022
168
194
259
20
79
32
752
29
29
162
148
81
23
12
15
441
19
19
Airtel Africa plc Annual Report and Accounts 2023
197
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
11. Exceptional items
Underlying profit before tax excludes the following exceptional items:
Profit before tax
Add: exceptional items
– Gain on sale of tower assets1
– Spectrum fee agreement cost2
– Bond prepayment cost3
– Provision for settlement of contractual dispute4
Underlying profit before tax
For the year ended
31 March 2023
31 March 2022
1,034
1,224
–
–
–
–
–
(111)
20
19
12
(60)
1,034
1,164
1 Represents the gain on the sale of telecommunication tower assets during the year ended 31 March 2022 in the Group’s subsidiaries in Malawi, Madagascar, Tanzania and
Rwanda as part of the Group’s strategic asset monetisation programme recognised in other non-operating income.
2 Represents cost of agreeing historic spectrum fees during the year ended 31 March 2022 in one of the Group’s subsidiaries recognised in license fees and spectrum usage
charges.
3 Comprises cost of prepaying $505m bonds during the year ended 31 March 2022 with original maturity of March 2023 recognised in finance costs.
4 Represents provision for expected settlement of a contractual dispute recognised during the year ended 31 March 2022, in which one of the Group’s subsidiaries is a party
recognised in other operating expenses.
Underlying profit after tax excludes the following exceptional items:
Profit after tax
– Exceptional items (as above)
– Tax on above exceptional items
– Deferred tax asset recognition1
Underlying profit after tax
For the year ended
31 March 2023
31 March 2022
750
–
–
(161)
(161)
589
755
(60)
(2)
–
(62)
693
1 During the year ended 31 March 2023, the Group has recognised new deferred tax assets in Airtel Kenya. Airtel Kenya had carried forward losses and temporary
differences on which deferred tax was not previously recognised. Considering Airtel Kenya’s profitability trends, that tax losses have recently been utilised and on the
|basis of forecast future taxable profits, the Group has determined that it is now probable that taxable profits will be available against which the tax losses and temporary
differences can be utilised. Consequently, the deferred tax asset recognition criteria are met, leading to the recognition of an additional deferred tax asset of $117m during
the year ended 31 March 2023 in Airtel Kenya. Additionally, the Group has also trued up deferred tax assets in Airtel Tanzania and Airtel DRC amounting to $19m and
$25m, respectively on deductible temporary differences based on updated probability of future taxable profits in these subsidiaries.
Profit attributable to non-controlling interests include benefit of $10m and $33m during the years ended 31 March 2023 and 31 March 2022,
respectively, relating to the above exceptional items.
198 Airtel Africa plc Annual Report and Accounts 2023
12. Income tax
The major components of the income tax expense are:
Current income tax
– For the year
– Adjustments for prior periods
Deferred tax
– Origination and reversal of temporary differences
– Recognition of deferred tax on tax losses and temporary differences
– Write down of deferred tax due to inadequate future taxable profits
– Adjustments for prior periods
Income tax expense
For the year ended
31 March 2023
31 March 2022
407
1
408
(10)
(119)
–
5
(124)
284
343
4
347
141
(17)
3
(5)
122
469
Factors affecting the tax expense for the year
The table below explains the differences between the expected tax expenses, being the aggregate of the Group’s geographical split of profits/
(loss) multiplied by the relevant local tax rates and the Group’s total tax expense for each year:
Profit before tax as shown in the consolidated income statement
Blended tax rate1
Tax expense at the Group’s blended tax rate
Effect of:
Tax on dividend and undistributed retained earnings of subsidiaries
Deferred tax triggered during the year2
Deferred tax recognised on projected profitability3
Irrecoverable withholding taxes
Adjustment in respect of previous years
Settlement of various disputes
Expenses (net) not taxable/deductible
Losses for which no deferred tax asset recognised
Other tax
Income tax expense
For the year ended
31 March 2023
31 March 2022
1,034
32.3%
334
1,224
34.2%
418
51
(119)
(33)
20
5
0
(5)
25
6
56
–
(17)
14
(6)
5
4
(3)
(2)
284
469
1 Blended tax rate has been derived by applying the following formula:
Profit/(loss) before tax for each entity *Respective statutory tax rate/consolidated profit before tax.
For effective tax rate, refer to alternative performance measures on pages 87-89.
2 For the year ended 31 March 2023, $119m of deferred tax asset (DTA) was recognised on brought forward tax losses and temporary differences for Airtel Kenya for the
first time due to continued improvement in profitability. Out of $119m of deferred tax, $117m was recognised under exceptional items for the initial recognition of DTA
based on forecasted profitability.
3 Deferred tax asset (net) recognised during 2022/23 of $19m in the Democratic Republic of Congo and $14m in Tanzania. During 2022/23, this majorly includes deferred
tax asset recognised for $10m and $9m in the Democratic Republic of Congo and Niger, respectively, based on forecasted profitability.
Airtel Africa plc Annual Report and Accounts 2023
199
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
12. Income tax continued
The analysis of deferred tax assets and liabilities is as follows:
Deferred tax assets and liabilities are consolidated jurisdiction wise at component level. The breakdown of deferred tax assets and net deferred
tax liabilities is summarised below.
Deferred tax in jurisdictions with net deferred tax assets is comprised of:
As of
31 March 2023
31 March 2022
127
68
99
28
11
8
3
3
2
(9)
(3)
337
144
105
31
17
12
8
3
–
5
(103)
–
222
As of
31 March 2023
31 March 2022
(54)
(213)
(0)
(5)
10
76
68
2
2
3
3
(74)
(58)
(1)
(6)
13
–
4
5
–
–
3
(108)
(114)
As of
31 March 2023
31 March 2022
337
(108)
229
222
(114)
108
Deferred tax assets (net)
a) Deferred tax asset arising out of
Carried forward losses
Fair valuation of financial instruments and exchange differences
Depreciation/amortisation on PPE/intangible assets
Provision for impairment of trade receivables/advances
Deferred tax asset on fair valuation of PPE/intangible
Employee benefits
Provision for inventories
Deferred revenue
Others
b) Deferred tax liability due to
Depreciation/amortisation on PPE/intangible assets
Others
Deferred tax in jurisdictions with net deferred tax liabilities is comprised of:
Deferred tax liabilities (net)
a) Deferred tax liability due to
Deferred tax liability on retained earnings
Depreciation/amortisation on PPE/intangible assets
Fair valuation of financial instruments and exchange differences
Others
b) Deferred tax asset arising out of
Provision for impairment of trade receivables/advances
Carried forward losses
Fair valuation of financial instruments and exchange differences
Deferred revenue
Employee benefits
Provision for inventories
Others
Net deferred tax asset/(liability) reflected in the statement of financial position is as follows:
Deferred tax assets
Deferred tax liabilities
Net
200 Airtel Africa plc Annual Report and Accounts 2023
12. Income tax continued
Movement reflected in profit and loss for each of the temporary differences and tax losses carry forward is as follows:
Deferred tax expenses/(benefit)
Carried forward losses
Depreciation/amortisation on PPE/intangible assets
Undistributed retained earnings
Fair valuation of financial instruments and exchange differences
Provision for impairment of trade receivables/advances
Deferred revenue
Deferred tax on fair valuation of PPE/Intangible
Employee benefits
Provision for inventories
Others
The movement in net balance of deferred tax asset and liabilities from prior year end is as follows:
Opening balance
Tax (expense)/credit recognised in statement of profit and loss
Translation adjustment recognised in other comprehensive loss and others
Closing balance
As of
31 March 2023
31 March 2022
(58)
(12)
(16)
(28)
(10)
(0)
0
(2)
(2)
4
84
54
27
(22)
(9)
(5)
(6)
(1)
2
(2)
(124)
122
As of
31 March 2023
31 March 2022
108
124
(3)
229
233
(122)
(3)
108
Deferred tax assets are recognised to the extent that it is probable that taxable profits will be available against which the deductible temporary
differences and carry forward tax losses/credits can be utilised. Accordingly, the Group has not recognised deferred tax assets in respect of
deductible temporary differences and carry-forward tax losses of $927m and $1,593m as of 31 March 2023 and 31 March 2022, respectively,
as it is not currently probable that relevant taxable profits will be available in future. The applicable tax rates for the same vary from 20% to 33%,
depending on the tax jurisdiction in which the respective Group entity operates.
Unused tax losses and deductible temporary differences for which no deferred tax assets is recognised:
Expiring within 5 years
Expiring beyond 5 years
Unlimited
Unused tax losses and deductible temporary differences for which deferred tax assets is recognised:
Expiring within 5 years
Expiring beyond 5 years
Unlimited
As of
31 March 2023
31 March 2022
222
20
685
927
389
428
776
1,593
As of
31 March 2023
31 March 2022
–
–
1,100
1,100
–
–
708
708
The Group has not recognised deferred tax liability with respect to unremitted retained earnings and associated foreign currency translation
reserve with respect to certain of its subsidiaries where the Group is in a position to control the timing of the distribution of profits and it is
probable that the subsidiaries will not distribute the profits in the foreseeable future. The taxable temporary difference associated with respect
to unremitted retained earnings is $29m and $76m as of 31 March 2023 and 31 March 2022, respectively. The distribution of the unremitted
retained earnings is expected to attract a tax in range of 5% to 20% depending on the tax rate applicable as of 31 March 2023 in the jurisdiction
in which the respective Group entity operates. Also, the Group does not recognise deferred tax liability on the unremitted retained earnings
of its subsidiaries wherever it believes that it would avail the tax credit for the dividend distribution tax payable by the subsidiaries on its
dividend distribution.
Airtel Africa plc Annual Report and Accounts 2023
201
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
12. Income tax continued
Factors affecting the tax charge in future years
a) The Group’s future tax charge and effective tax rate, could be affected by the following factors:
• Change in income tax rate in any of the jurisdictions in which Group operates
• Overall profit mix between profit and loss making entities
• Withholding tax on distributed and undistributed retained earnings of subsidiaries
• Recognition of deferred tax assets in any of the Group entities
b) The Group is routinely subjected to audit by tax authorities in the jurisdictions in which the Group operates. The Group recognises tax
provisions based on reasonable estimates for those matters where determination of tax is uncertain but it is considered probable that there will
be a future outflow of funds to tax authorities. The amount of these provisions is based on various factors, such as experience of previous tax
audits and different interpretations of tax regulations by the tax authority in jurisdictions in which the Group operates; the amount ultimately
paid for these uncertain tax cases may differ materially and could, therefore, affect the Group’s overall profitability and cash flows in the future.
c) The tax impact of a transaction disclosed as contingent liability can also be uncertain until a conclusion is reached with the relevant tax
authority or through a legal process. Refer to Note 29 for details of the contingencies pertaining to income tax.
13. Earnings per share (EPS)
The details used in the computation of basic EPS:
Profit for the year attributable to owners of the company
Weighted average ordinary shares outstanding for basic EPS1
Basic EPS
The details used in the computation of diluted EPS:
Profit for the year attributable to owners of the company
Weighted average ordinary shares outstanding for diluted EPS1 2
Diluted EPS
For the year ended
31 March 2023
31 March 2022
663
631
3,751,665,898
3,754,179,962
17.7 cents
16.8 cents
For the year ended
31 March 2023
31 March 2022
663
631
3,756,867,853
3,760,109,303
17.7 cents
16.8 cents
1 Deferred shares have not been considered for EPS computation as they do not have a right to participate in profits.
2 The difference between the basic and diluted number of shares at the end of March 2023 being 5,201,955 (March 2022: 5,929,341) relates to awards committed but not
yet issued under the Group’s share-based payment schemes.
202 Airtel Africa plc Annual Report and Accounts 2023
14. Property, plant and equipment (PPE)
The following table presents the reconciliation of changes in the carrying value of PPE for the years ended 31 March 2023 and 31 March 2022:
Leasehold
improvements
Building
Land
Plant and
equipment2
Furniture
and fixture
Vehicles
equipment Computer
Total
Office
Capital
work in
progress3
Gross carrying value
Balance as of 1 April 2021
Additions/capitalisation
Disposals/adjustments1
Foreign currency
translation impact
Balance as of
31 March 2022
Additions/capitalisation
Disposals/adjustments1
Foreign currency
translation impact
Balance as of
31 March 2023
Accumulated depreciation
Balance as of 1 April 2021
Charge
Disposals/adjustments1
Foreign currency
translation impact
Balance as of
31 March 2022
Charge
Disposals/adjustments1
Foreign currency
translation impact
Balance as of
31 March 2023
Net carrying value
As of 1 April 2021
As of 31 March 2022
As of 31 March 2023
50
1
(0)
(2)
49
3
0
46
0
(0)
1
47
–
–
27
2
(2)
2,858
543
(285)
37
28
(2)
(1)
(71)
(1)
26
3,045
0
–
614
(20)
62
17
(3)
24
0
(2)
(0)
22
0
(0)
45
14
(4)
676
3,763
38
(1)
626
(296)
166
653
(627)
0
(10)
(84)
(3)
55
15
(3)
703
4,009
51
(5)
700
(31)
189
735
(700)
(3)
(4)
(1)
(390)
(6)
(0)
(6)
(53)
(463)
(12)
49
43
25
3,249
70
22
61
696
4,215
212
44
1
0
(1)
44
1
(0)
17
3
(0)
0
20
2
–
1
0
(1)
(0)
0
–
–
936
364
(241)
(56)
1,003
374
(18)
15
10
(2)
(0)
23
13
(3)
22
0
(2)
(0)
20
0
(0)
27
9
(3)
635
1,697
31
(3)
418
(252)
(1)
(10)
(68)
32
13
(1)
653
1,795
32
(5)
435
(27)
(3)
(3)
(0)
(222)
(3)
(0)
(5)
(47)
(283)
42
19
–
1,137
30
20
39
633
1,920
–
–
–
–
–
–
–
–
–
6
5
7
29
27
24
26
26
25
1,922
2,042
2,112
22
39
40
2
2
2
18
23
22
41
50
63
2,066
2,214
2,295
166
189
212
1 Related to the reversal of gross carrying value and accumulated depreciation on retirement of PPE and reclassification from one category of asset to another.
2 Includes PPE secured against the Group’s Borrowings outstanding of $44m and $50m as of 31 March 2023 and 31 March 2022, respectively. For details of the security,
refer to Note 22.2.
3 The carrying value of capital work-in-progress as of 31 March 2023 and 2022 mainly pertains to plant and equipment.
Airtel Africa plc Annual Report and Accounts 2023
203
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
15. Intangible assets
The following table presents the reconciliation of changes in the carrying value of goodwill and other intangible assets for the years ended
31 March 2023 and 31 March 2022:
Other intangible assets
Goodwill
Software
Licences
(including
spectrum)2
Others
Total
Intangibles
under
development
Gross carrying value
Balance as of 1 April 2021
Additions/capitalisation
Disposals/adjustments1
Foreign currency translation impact
Balance as of 31 March 2022
Additions/capitalisation
Disposals/adjustments1
Foreign currency translation impact
Balance as of 31 March 2023
Accumulated amortisation
Balance as of 1 April 2021
Charge
Disposals/adjustments1
Foreign currency translation impact
Balance as of 31 March 2022
Charge
Disposals/adjustments1
Foreign currency translation impact
Balance as of 31 March 2023
Net carrying value
As of 1 April 2021
As of 31 March 2022
As of 31 March 2023
3,835
–
–
(8)
3,827
–
–
(311)
3,516
–
–
–
–
–
–
–
–
–
3,835
3,827
3,516
3
–
–
–
3
–
–
–
3
3
–
–
–
3
–
–
–
3
–
–
–
936
187
(53)
(28)
1,042
322
(41)
(106)
1,217
379
113
(52)
(24)
416
99
(41)
(60)
414
557
626
803
24
7
(0)
(1)
30
9
–
(2)
37
23
2
(0)
(1)
24
4
0
(1)
27
1
6
10
963
194
(53)
(29)
1,075
331
(41)
(108)
1,257
405
115
(52)
(25)
443
103
(41)
(61)
444
558
632
813
177
21
(194)
(2)
2
738
(331)
(10)
399
–
–
–
–
–
–
–
–
–
177
2
399
1 Mainly consists of reversal of gross carrying value and accumulated depreciation on retirement of intangibles and reclassification from one category of asset to another.
Also includes movement from intangible asset under development on capitalisation.
2 The Group capitalises deferred spectrum license payments, for which the Group is under an obligation for payment till the expiry of the licence period. Consequently,
intangible assets are recognised at the present value of such payments with a corresponding liability.
The weighted average remaining amortisation period of the Group’s licences as of 31 March 2023 and 2022 is 10.35 years and 9.47 years,
respectively.
Impairment review
As disclosed in Note 6.1, during the year, the Group re-assessed its operating segments which resulted in mobile money becoming a new
operating segment of the Group. In line with this change, for the purposes of impairment testing, mobile money was identified as an additional
new group of CGUs. The new group of CGUs for impairment testing purposes are Nigeria mobile services, East Africa mobile services,
Francophone Africa mobile services and mobile money (previously Nigeria, East Africa and Francophone Africa). Goodwill was reallocated to
the four groups of CGUs based on the relative values of each group of CGUs, which resulted in goodwill being reallocated from Nigeria mobile
services, East Africa mobile services and Francophone Africa mobile services to the mobile money group of CGUs. Consequently, as of 1 April
2022, goodwill of $1,295m was reallocated to the new group of CGUs, i.e. mobile money.
The carrying amount of goodwill is attributed to the following groups of CGUs:
Nigeria – mobile services
East Africa – mobile services
Franchophone Africa – mobile services
Mobile money
204 Airtel Africa plc Annual Report and Accounts 2023
As of
31 March 2023
31 March 2022
900
927
503
1,186
3,516
1,275
1,835
717
–
3,827
15. Intangible assets continued
The Group tests goodwill for impairment annually on 31 December. The carrying value of goodwill as of 31 December 2022 was $901m,
$951m, $497m and $1,200m for Nigeria mobile services, East Africa mobile services and Francophone Africa mobile services and mobile
money services, respectively. The recoverable amounts of the above group of CGUs are based on value-in-use, which are determined based
on ten-year business plans that have been approved by the Board.
Whilst the Board performed a long-term viability assessment over a three-year period, for the purposes of assessing liquidity (refer to long-term
viability statement on pages 98-99), the Group has adopted a ten-year plan for the purpose of impairment testing due to the following reasons:
• The Group operates in emerging markets where the telecommunications and mobile money markets are underpenetrated when compared to
developed markets. In these emerging markets, short-term plans (for example, five years) are not indicative of the long-term future prospects
and performance of the Group.
• The life of the Group’s regulatory telecom licences and network assets are at an average of ten years, the spectrum renewals happen for a
period of ten years or more and in general the replacement of technology happens after a similar duration, and
• The potential opportunities of the emerging African telecom and mobile money sectors, which is mostly a two-to-three player market with
lower smartphone penetration.
Accordingly, the Board approved that this planning horizon reflects the assumptions for medium- to long-term market developments,
appropriately covers market dynamics of emerging markets and better reflects the expected performance in the markets in which the
Group operates.
While using the ten-year plan, the Group also considers external market data to support the assumptions used in such plans, which is generally
available only for the first five years. Considering the degree of availability of external market data beyond year five, the Group has performed
sensitivity analysis to assess the impact on impairment of using a five-year plan. The results of this sensitivity analysis demonstrate that the initial
five-year plan with appropriate changes, including long-term growth rates applied at the end of this period does not result in any impairment and
does not impact the headroom by more than 6% in any of the group of CGUs as compared to the headroom using the ten-year plan. Further,
the Group is confident that projections for years six to ten are reliable and can demonstrate its ability, based on past experience, to forecast
cash flows accurately over a longer period. Accordingly, the Board has approved and the Group continues to follow a consistent policy of using
an initial forecast period of ten years for the purpose of impairment testing.
In assessing the Group’s prospects, the directors considered 5G cellular network potential in the markets in which the Group operates
The Group’s first endeavour is to secure spectrum for 5G launch and roll out 5G network in key markets. During the financial year, the Group
secured 5G spectrum in Nigeria, Kenya, Zambia and Tanzania and will selectively launch 5G services in these markets. Given the relatively low
4G customer penetration in the countries where it operates, the Group will continue to focus on its strategy to expand its data services and
increase data customer penetration by leveraging and expanding its leading 4G network.
The nominal cash flows used in the impairment tests reflect the Group’s current assessment of the impact of climate change and associated
commitments the Group has made (refer to climate change disclosures on pages 56-61). Based on the analysis conducted so far, the Group is
satisfied that the impact of climate change does not lead to an impairment as of 31 December 2022 and is adequately covered as part of the
sensitivities disclosed below.
The nominal cash flows beyond the planning period are extrapolated using appropriate long-term terminal growth rates. The long-term terminal
growth rates used do not exceed the long-term average growth rates of the respective industry and country in which the entity operates and are
consistent with internal/external sources of information.
The inputs used in performing the impairment assessment as of 31 December 2022 were as follows:
Assumptions
Pre-tax discount rate
Capital expenditure (as a percentage of revenue)
Long term growth rate
Nigeria
mobile
services
33.38%
6-23%
7.64%
East Africa
mobile
services
23.01%
8-20%
7.30%
Francophone
Africa
mobile
services
21.07%
9-26%
7.35%
Mobile money
26.10%
1-5%
7.47%
As of 31 December 2022, the impairment testing did not result in any impairment in the carrying amount of goodwill in any group of CGUs.
The key assumptions in performing the impairment assessment are as follows:
Assumptions
Discount rate
Capital expenditures
Growth rates
Basis of assumptions
Nominal discount rate reflects the market assessment of the risks specific to the group of CGUs and estimated
based on the weighted average cost of capital for respective CGUs.
The cash flow forecasts of capital expenditure are based on experience after considering the capital expenditure
required to meet coverage and capacity requirements relating to voice, data and mobile money services.
The growth rates into perpetuity used are in line with the nominal long-term average growth rates of the
respective industry and country in which the entity operates and are consistent with the internal/external
sources of information.
As of 31 December 2022, the impairment testing did not result in any impairment in the carrying amount of goodwill in any group of CGUs. The
results of the impairment tests using these rates show that the recoverable amount exceeds the carrying amount by $1,342m for Nigeria mobile
services (54%), $1,593m for East Africa mobile services (66%), $1,512m for Francophone Africa mobile services (105%) and $2,688m for mobile
money (198%), respectively. The Group, therefore, concluded that no impairment was required to the goodwill held against each group of CGUs.
Airtel Africa plc Annual Report and Accounts 2023
205
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
15. Intangible assets continued
Sensitivity in discount rate and capital expenditure
Management believes that no reasonably possible change in any of the key assumptions would cause the difference between the carrying value
and recoverable amount for any cash-generating unit to be materially different from the recoverable value in the base case. The table below
sets out the breakeven pre-tax discount rate for each group of CGUs, which will result in the recoverable amount being equal with the carrying
amount for each group of CGUs:
Pre-tax discount rate
Nigeria
mobile
services
East Africa
mobile
services
Francophone
Africa
mobile
services
Mobile money
46.89%
32.34%
33.37%
55.00%
The table below presents the increase in isolation in absolute capital expenditure as a percentage of revenue (across all years of the impairment
review) which will result in equating the recoverable amount with the carrying amount for each group of CGUs:
Capital expenditure (as a percentage of revenue)
Nigeria
mobile
services
6.21%
East Africa
mobile
services
Francophone
Africa
mobile
services
Mobile money
8.15%
8.89%
20.24%
No reasonably possible change in the terminal growth rate would cause the carrying amount to exceed the recoverable amount.
Impairment assessment for the year ended 31 March 2022:
The inputs used in performing the impairment assessment at 31 December 2021 were as follows:
Assumptions
Discount rate
Capital expenditures
Growth rates
Basis of assumptions
Discount rate reflects the market assessment of the risks specific to the group of CGUs and estimated based on
the weighted average cost of capital for each respective group of CGUs.
The cash flow forecasts of capital expenditure are based on experience after considering the capital expenditure
required to meet coverage and capacity requirements relating to voice, data and mobile money services.
The growth rates used are in line with the long-term average growth rates of the respective industry and country
in which the entity operates and are consistent with internal/external sources of information.
The key assumptions in performing the impairment assessment are as follows:
Assumptions
Pre-tax discount rate
Capital expenditure (as a percentage of revenue)
Long term growth rate
Nigeria
East Africa
24.35%
8-15%
2.65%
16.17%
7-15%
5.31%
Francophone
Africa
15.43%
7-12%
5.46%
As of 31 December 2021, the impairment testing did not result in any impairment in the carrying amount of goodwill in any group of CGUs. The
results of the impairment tests using these rates show that the recoverable amount exceeds the carrying amount by $5,579m for East Africa
(173%) and $2,559m for Francophone Africa (160%). For Nigeria, the recoverable amount exceeds the carrying amount by $2,842m (104%),
including the cash flows of the PSB licence which was received after the impairment testing date. Excluding such cash flows did not result in any
impairment in Nigeria. The Group, therefore, concluded that no impairment was required to the goodwill held against each group of CGUs.
Sensitivity in discount rate and capital expenditure
Management believes that no reasonably possible change in any of the key assumptions would cause the difference between the carrying value
and recoverable amount for any cash-generating unit to be materially different from the recoverable value in the base case. The table below
sets out the breakeven pre-tax discount rate for each group of CGUs, which will result in the recoverable amount being equal with the carrying
amount for each group of CGUs:
Pre-tax discount rate
Nigeria
East Africa
Francophone
Africa
43.70%
34.34%
32.63%
The table below presents the increase in isolation in absolute capital expenditure as a percentage of revenue (across all years of the impairment
review) which will result in equating the recoverable amount with the carrying amount for each group of CGUs:
Capital expenditure (as a percentage of revenue)
Nigeria
East Africa
Francophone
Africa
9.64%
13.99%
11.06%
No reasonably possible change in the terminal growth rate would cause the carrying amount to exceed the recoverable amount.
206 Airtel Africa plc Annual Report and Accounts 2023
16. Investments accounted for using equity method
The Group’s interests in associate and joint venture are accounted for using the equity method. The details (principal place of operation/country
of incorporation, principal activities and percentage of ownership interest and voting power (direct/indirect) held by the Group) of associate/JV
are set out in Note 34.
The amounts recognised in the statement of financial position are as follows:
Investment in associate1
Investment in joint venture2
As of
31 March 2023
4
0
4
31 March 2022
6
–
6
1 Adjusted for dividend received during the year from associate amounting to $2m (2022: Nil).
2 On 22 March 2023 the Group entered into a joint venture in the Democratic Republic of Congo. The joint venture is yet to commence its operations.
The amounts recognised in the profit or loss are as follows:
Share of profit of associate
Share of profit of joint venture
The amount recognised in other comprehensive income is as follows:
Share of other comprehensive income of associate
Share of other comprehensive income of joint venture
17. Derivative financial instruments
Assets
Currency swaps, forward and option contracts
Interest swaps
Liabilities
Currency swaps, forward and option contracts
Embedded derivatives
Non-current derivative financial assets
Current derivative financial assets
Non-current derivative financial liabilities
Current derivative financial liabilities
For the year ended
31 March 2023
0
–
0
31 March 2022
0
–
0
For the year ended
31 March 2023
31 March 2022
–
–
–
1
–
1
As of
31 March 2023
31 March 2022
4
9
13
48
0
48
9
4
(43)
(5)
(35)
3
3
6
8
1
9
3
3
–
(9)
(3)
The Group holds derivatives which are accounted for as FVTPL. In some of these derivatives, on recognition, since the fair value of these
derivatives could neither be evidenced by a quoted price in an active market nor data from any observable markets was available, the difference
between the fair value at initial recognition and the transaction price is deferred and recognised on a straight-line basis over the tenure of such
derivatives. The fair value of the derivatives are determined based on a valuation report by the derivative issuer.
A reconciliation of day one aggregate difference not recognised at the beginning and end of the period of changes in the balance of this
difference is as follows:
Opening balance
Difference between fair value on initial recognition and transaction price
Less: aggregate difference recognised in profit and loss
Closing balance
For the year ended
31 March 2023
1
30
(10)
21
31 March 2022
4
–
(3)
1
Airtel Africa plc Annual Report and Accounts 2023
207
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
18. Other non-financial assets
Non-current
Advances (net)1
Prepayments2
Cost to obtain or fulfil a contract with a customer
Others
As of
31 March 2023
31 March 2022
37
80
34
–
151
28
85
10
11
134
1 Advances (net) mainly includes payments made to various government authorities under protest, for tax, legal and regulatory sub judice matters and are net of allowance
recognised as part of the Group’s recoverability assessment of $13m and $11m as of 31 March 2023 and 2022, respectively.
2 Prepayments mainly include advance payments in respect of capacity indefeasible right to use (IRUs) and lease contracts for which leases are yet to commence.
Current
Prepayments1
Taxes recoverable2
Advances to suppliers (net)3
Cost to obtain or fulfil a contract with a customer
Others4
As of
31 March 2023
31 March 2022
70
69
24
90
6
69
37
20
44
45
259
215
1 Prepayments mainly include advance payment in respect of capacity indefeasible right to use (IRU), network costs and advance payments for lease contracts for which
leases are yet to commence.
2 Taxes recoverable include customs duty, sales tax and value-added tax.
3 Advance to suppliers (net) are disclosed net of provision of $7m and $8m as of 31 March 2023 and 2022, respectively.
4 Others mainly includes claims receivable from vendors based on contractual arrangements and employee advances net of related provision of $5m and $5m as of
31 March 2023 and 2022, respectively. The balance as of 31 March 2022 included a reimbursement asset amounting to $25m pertaining to a probable obligation
in relation to a deed of support. Based on an agreement between the parties to this arrangement entered during the year, the outstanding amount of $10m as of
31 March 2023 has been reclassified to other current financial assets.
19. Trade receivables
Trade receivable1
Less: allowance for impairment of trade receivables
1 Refer to Note 32 for credit risk.
The movement in allowances for doubtful debts is as follows:
Opening balance
Additions
Reversal
Net charges/(reversal)
Closing balance
As of
31 March 2023
31 March 2022
329
(184)
145
303
(180)
123
For the year ended
31 March 2023
31 March 2022
180
38
(34)
4
184
184
21
(25)
(4)
180
There has been no change in the estimation techniques or significant assumptions made in calculating the provision.
208 Airtel Africa plc Annual Report and Accounts 2023
20. Cash and bank balances
Cash and cash equivalents
Balances with banks
– On current accounts
– Bank deposits with original maturity of three months or less
Cheques on hand
Balance held in wallets
Cash on hand
Other bank balances
Term deposits with banks with original maturity of more than three months but less than 12 months
Margin money deposits1
Unpaid dividend
As of
31 March 2023
31 March 2022
248
272
1
64
1
586
267
281
–
89
1
638
As of
31 March 2023
31 March 2022
117
14
0
131
220
158
0
378
1 Margin money deposits represent amount given as collateral for legal cases and/or bank guarantees for disputed matters and deposit against derivative contracts.
As of 31 March 2022 these also included deposits given against borrowings in one of the Group’s subsidiaries.
For the purpose of the statement of cash flows, cash and cash equivalents are as follows:
Cash and cash equivalents as per statement of financial position
Balance held under mobile money trust
Bank overdraft
21. Financial assets – others
Current
Unbilled revenue
Claims recoverable1
Interest accrued on investments/deposits
Others2
As of
31 March 2023
31 March 2022
586
616
(361)
841
638
513
(304)
847
As of
31 March 2023
31 March 2022
59
41
3
39
142
53
42
2
27
124
1 As of 31 March 2023, this primarily includes receivables under the Group’s tower sale agreements.
2 As of 31 March 2023, this primarily relates to advances given for currency swaps, a reimbursement asset pertaining to a deed of support (refer to Note 18) and an amount
receivable from minority shareholders on account of issue of share capital in one of the subsidiaries. As of 31 March 2022, it also included an advance for payment service
bank licence in Nigeria.
Airtel Africa plc Annual Report and Accounts 2023
209
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
22. Borrowings
Non-current
Secured
Term loans
Less: current portion (A)
Unsecured
Term loans2
Non-convertible bonds1 2
Less: current portion (B)
Current
Secured
Term loans
Unsecured
Term loans2
Bank overdraft
Current maturities of long-term borrowings (A + B)
1 Includes impact of fair value hedges (refer to Note 32).
2 Includes debt origination costs.
As of
31 March 2023
31 March 2022
43
(8)
35
964
554
1,518
(320)
1,198
50
(50)
–
655
1,015
1,670
(184)
1,486
1,233
1,486
As of
31 March 2023
31 March 2022
1
1
255
361
616
328
945
–
–
248
304
552
234
786
22.1 Analysis of borrowings
The details given in Notes 22.1.1, 22.1.2 and 22.2 are based on contractual cash flows before adjusting for debt origination cost and fair valuation
adjustments pertaining to Group’s fair value hedges.
22.1.1 Repayment terms of borrowings
The table below summarises the maturity profile of the Group’s borrowings:
As of
31 March 2023
31 March 2022
945
826
345
62
2,178
786
339
1,136
–
2,261
Within one year
Between one and two years
Between two and five years
Over five years
210 Airtel Africa plc Annual Report and Accounts 2023
22. Borrowings continued
22.1.2 Currency of borrowings
USD
Euro
UGX
KES
XAF
XOF
Others
31 March 2023
USD
Euro
UGX
KES
XAF
XOF
Others
31 March 2022
Total
borrowings
Floating rate
borrowings
Fixed rate
borrowings
1,430
70
136
128
141
77
196
2,178
713
70
116
89
–
–
137
1,125
717
–
20
39
141
77
59
1,053
1,773
500
1,273
72
73
77
117
91
58
2,261
72
48
33
–
–
35
688
–
25
44
117
91
23
1,573
22.2 Security details
The Group has taken borrowings in certain subsidiaries. The details of security provided against such borrowings are as follows:
Entity
Airtel Networks Limited
Airtel Tanzania plc
Outstanding loan amount
Relation
31 March 2023
31 March 2022
security detail
Subsidiary
Subsidiary
1
43
50 Pledge of all fixed and floating assets
– First Pari-Passu security in the form of fixed
and floating charge over all assets, with
certain agreed exclusions, for the outstanding
amount with a maximum amount of up to
125% of the facility.
The $550m USD bonds maturing in 2024 contain a negative pledge covenant whereby Bharti Airtel Limited and certain of its significant
subsidiaries are not permitted to create any security interest to secure any indebtedness for borrowed money or obligations evidenced by bonds,
debentures or notes (among other things, and subject to certain exceptions), without at the same time granting security equally and ratably to
the holders of these bonds.
These bonds also contain an event of default clause which gets triggered if Bharti Airtel Limited (intermediate parent entity) ceases to control,
directly or indirectly, at least 51% of the voting power of the voting stock of Bharti Airtel International (Netherlands) B.V. (a subsidiary of the Group)
in addition to other events of default which are usual and customary to such bonds.
These bonds are guaranteed by Bharti Airtel Limited (intermediate parent entity), for detail refer to Note 32. Such guarantee is considered an
integral part of the bonds and, therefore, accounted for as part of the same unit of account.
22.3 Unused lines of credit1
The below table provides details of undrawn credit facilities that are available to the Group.
Un-drawn credit facilities
1 Excluding non-fund-based facilities such as bank guarantees.
As of
31 March 2023
31 March 2022
859
749
For updated details around the committed facilities available to the Group as of the date of authorisation of financial statements, refer to Note 2.2
on going concern.
Airtel Africa plc Annual Report and Accounts 2023
211
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
23. Financial liabilities – others
Non-current
Deferred payment liability
Payable against capital expediture
Security deposits
Others
Current
Payable against capital expenditure
Interest accrued but not due
Security deposit1
Deferred payment liability
Dividend payable to NCI
Others2
As of
31 March 2023
31 March 2022
142
–
3
2
147
79
5
2
2
88
As of
31 March 2023
31 March 2022
377
26
13
40
13
64
247
29
12
15
37
36
533
376
1 This pertains to deposits received from customers/channel partners, which are repayable on demand after adjusting the outstanding from such customers/channel
partners.
2 This mainly pertains to amount payable to related parties and interest received on trust bank accounts.
24. Other non-financial liabilities
Non-current
Income received in advance
Current
Taxes payable1
Income received in advance
1 Taxes payable includes value-added tax, excise, withholding taxes and other taxes payable.
25. Provisions
Non-current
Provision for defined benefit obligations
Provision for other long- term employee benefits
Asset retirement obligations1
Total
212 Airtel Africa plc Annual Report and Accounts 2023
As of
31 March 2023
31 March 2022
13
13
18
18
As of
31 March 2023
31 March 2022
187
5
192
171
5
176
As of
31 March 2023
31 March 2022
11
8
2
21
11
7
2
20
25. Provisions continued
Current
Provision for short-term employee benefits payable
Provision for sub-judice matters2
Provision for defined benefit obligations
Provision for other long- term employee benefits
Total
As of
31 March 2023
31 March 2022
43
30
6
4
83
52
63
2
4
121
1 The amount of future cash outflows to meet the asset retirement obligations are subject to inherent uncertainties due to limited availability of information on the amount
of cost to be incurred in future.
2 As of 31 March 2022, this included a probable obligation in relation to a deed of support against which the Group carries a back to back indemnity. Based on an
agreement between the parties to this arrangement entered during the year, the outstanding amount of $10m, as of 31 March 2023, has been reclassified to other
current financial liabilities.
The movement of provision for sub-judice matters is as given below:
Opening balance
Additions during the year
Reversal during the year
Utilisation/settlement during the year1
Closing balance
1 Refer footnote 2 above.
Opening balance
Additions during the year
Reversal during the year
Utilisation during the year
Closing balance
For details of contingent liabilities, refer to Note 29.
26. Share capital
Authorised shares
3,758,151,504 ordinary shares of $0.50 each (March 2022: 3,758,151,504)
3,081,744,577 deferred shares of $0.50 each (March 2022:3,081,744,577)
Issued, subscribed and fully paid-up shares
3,758,151,504 ordinary shares of $0.50 each (March 2022: 3,758,151,504)
3,081,744,577 deferred shares of $0.50 each (March 2022: 3,081,744,577)
For the year ended 31 March 2023
Indirect
tax cases
Legal and
regulatory
cases
12
5
(3)
(3)
11
51
2
(12)
(22)
19
For the year ended 31 March 2022
Indirect
tax cases
Legal and
regulatory
cases
40
15
(29)
(14)
12
19
41
(2)
(7)
51
Total
63
7
(15)
(25)
30
Total
59
56
(31)
(21)
63
As of
31 March 2023
31 March 2022
1,879
1,879
1,541
3,420
1,541
3,420
1,879
1,541
3,420
1,879
1,541
3,420
Airtel Africa plc Annual Report and Accounts 2023
213
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
26. Share capital continued
26.1 Treasury shares
Details of movement in treasury shares:
Opening balance
Purchased during the year
Excercised during the year
Closing balance
Terms/rights attached to equity shares
The company has following two classes of ordinary shares:
For the year ended
31 March 2023
31 March 2022
Number
of shares
(in ‘000)
4,932,206
6,327,804
(3,933,952)
7,326,058
Number
of shares
(in ‘000)
3,699,614
3,741,747
(2,509,155)
4,932,206
Amount
7
11
(6)
12
Amount
4
6
(3)
7
• Ordinary shares having par value of $0.50 per share. Each holder of equity shares is entitled to cast one vote per share and carry a right
to dividends.
• Deferred shares of $0.50 each. These deferred shares are not listed and are intended to be cancelled in due course. No share certificates
are to be issued in respect of the deferred shares. These are not freely transferable and would not affect the net assets of the company. The
deferred shareholders shall have no right to receive any dividend or other distribution or return whether of capital or income. On a return of
capital in a liquidation, the deferred shareholders shall have the right to receive the nominal amount of each deferred share held, but only after
the holder of each ‘Other’ share (i.e., shares other than the deferred shares) in the capital of the company shall have received the amount paid
up on each such ‘Other’ share held and the payment in cash or in specie of £100,000 (or its equivalent in any other currency) on each such
‘Other’ shares held. The company shall have an irrevocable authority from each holder of the deferred shares at any time to purchase all or any
of the deferred shares without obtaining the consent of the deferred shareholders in consideration of the payment of an amount not exceeding
one US$ cent in respect of all of the deferred shares then being purchased.
27. Other equity
a. Retained earnings
Retained earnings represent the amount of accumulated earnings of the company and gains/(losses) on common control transactions.
The company’s distributable reserves are equal to the balance of its retained earnings of $689m (as presented on page 237 in the company only
financial statements). The majority of the distributable reserves are held in investment and operating subsidiaries. Management continuously
monitors the level of distributable reserves in each company in the Group, ensuring adequate reserves are available for upcoming dividend
payments and that the company has access to these reserves.
b. Share premium
The aggregate difference between the par value of shares and the subscription amount is recognised as share premium.
c. Other components of equity
Foreign
currency
translation
reserve
(2,399)
(4)
(8)
–
–
(1)
(2,412)
(2,412)
(341)
–
–
(2,753)
Share
stablisation
reserve
Share based
payment
reserve
Treasury
shares
7
–
–
–
–
–
7
7
–
–
–
7
0
–
–
1
–
–
1
1
–
0
–
1
(4)
–
–
3
(6)
–
(7)
(7)
–
6
(11)
(12)
Total
(2,396)
(4)
(8)
3
(6)
(1)
(2,412)
(2,412)
(341)
6
(11)
(2,758)
As of 1 April 2021
Net losses due to foreign currency translation differences
Net losses on net investments hedge
Employee share-based payment reserve
Purchase of own shares
Transaction with NCI
As of 31 March 2022
As of 1 April 2022
Net losses due to foreign currency translation differences
Employee share-based payment reserve
Purchase of own shares
As of 31 March 2023
214 Airtel Africa plc Annual Report and Accounts 2023
27. Other equity continued
27.1 Dividends
Distributions to equity holders in the year:
Final dividend for the year ended 31 March 2022 of 3 cents (2021: 2.5 cents) per share
Interim dividend for the year ended 31 March 2023 of 2.18 cents (2022: 2 cents) per share
For the year ended
31 March 2023
31 March 2022
113
82
195
94
75
169
Proposed dividend for the year ended 31 March 2023 of 3.27 cents (2022: 3 cents) per share
123
113
The proposed final dividend is subject to approval by shareholders at the Annual General Meeting (AGM) and has not been included as a liability
in these financial statements. The proposed dividend is payable to all ordinary shareholders on the register of members on 23 June 2023.
The payment of this dividend will not have any tax consequences for the Group.
28. Investments in subsidiaries
The details (principal place of operation/country of incorporation, principal activities and percentage ownership interest and voting power
(direct/indirect) held by the Group) of subsidiaries are set out in Note 34.
Summarised financial information of the principal subsidiaries having material non-controlling interests is as follows:
A. Airtel Tanzania Public Limited Company
Summarised financial position
Assets
Non-current assets
Current assets
Liabilities
Non-current liabilities
Current liabilities
Equity
Percentage of ownership interest held by NCI
Accumulated NCI1
1 Includes share of goodwill of $21m (March 2022: $21m).
Summarised income statement
Revenue
Net profit
Other comprehensive loss
Total comprehensive income
Profit allocated to NCI
Summarised cash flows
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash outflow from financing activities
Net cash inflow/(outflow)
Dividend paid to NCI during the year (included in cash flow from financing activities)
As of
31 March 2023
31 March 2022
518
182
225
318
157
49%
98
375
194
162
307
100
49%
70
For the year ended
31 March 2023
31 March 2022
337
70
(0)
70
34
308
150
(19)
131
74
For the year ended
31 March 2023
31 March 2022
103
(66)
(25)
12
36
124
(87)
(51)
(14)
31
Airtel Africa plc Annual Report and Accounts 2023
215
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
28. Investments in subsidiaries continued
B. Airtel Malawi plc
Summarised financial position
Assets
Non-current assets
Current assets
Liabilities
Non-current liabilities
Current liabilities
Equity
Percentage of ownership interest held by NCI
Accumulated NCI1
1 Includes share of goodwill of $33m (March 2022: $42m).
Summarised income statement
Revenue
Net profit
Other comprehensive (loss)/income
Total comprehensive income
Profit allocated to NCI
Summarised cash flows
Net cash inflow from operating activities
Net cash (outflow)/inflow from investing activities
Net cash outflow from financing activities
Net cash inflow
Dividend paid to NCI during the year (included in cash flow from financing activities)
C. Airtel Mobile Commerce B.V. sub-group (i.e., including subsidiaries)
Summarised financial position
Assets
Non-current assets
Current assets
Liabilities
Non-current liabilities
Current liabilities
Equity
Percentage of ownership interest held by NCI
Accumulated NCI1
As of
31 March 2023
31 March 2022
123
79
38
122
42
20%
42
126
67
72
72
49
20%
52
For the year ended
31 March 2023
31 March 2022
164
34
(9)
25
7
170
34
3
37
7
For the year ended
31 March 2023
31 March 2022
82
(5)
(56)
21
6
31
3
(18)
16
6
As of
31 March 2023
31 March 2022
42
757
20
592
187
26%
48
27
616
21
456
166
26%
43
1 In addition, NCI was increased by $3m, i.e., NCI’s proportionate share of the consideration for transfer of SmartCash Payment Service Bank (PSB) Limited from the control
of AMC B.V. to Airtel Networks Limited. For details, refer to note 5(b).
216 Airtel Africa plc Annual Report and Accounts 2023
28. Investments in subsidiaries continued
Summarised income statement
Revenue
Net profit
Other comprehensive loss
Total comprehensive income
Profit allocated to NCI
Summarised cash flows
Net cash inflow from operating activities
Net cash outflow from investing activities
Net cash (outflow)/inflow from financing activities
Net cash inflow
Dividend paid to NCI during the year(included in cash flow from financing activities)
29. Contingent liabilities and commitments
(i) Contingent liabilities
(a) Taxes, duties and other demands (under adjudication/appeal/dispute)
– Income tax
– Value-added tax1
– Customs duty and excise duty
– Other miscellaneous demands
(b) Claims under legal and regulatory cases, including arbitration matters2 3
For the year ended
31 March 2023
31 March 2022
584
183
(9)
174
47
308
93
(2)
91
21
For the year ended
31 March 2023
31 March 2022
220
(42)
(151)
27
31
110
(75)
1
36
–
As of
31 March 2023
31 March 2022
16
20
9
5
82
132
18
30
9
6
82
145
There are uncertainties in the legal, regulatory and tax environments in the countries in which the Group operates and there is a risk of demands,
which may be raised based on current or past business operations. Such demands have in the past been challenged and contested on merits
with the relevant authorities and appropriate settlements agreed.
The reduction of $13m in contingent liabilities during the year ended 31 March 2023 is primarily due to a change in the likelihood of outflow of
resources from possible to remote related to the 2016 VAT matter on the sale of towers.
The company and its subsidiaries are currently and may become, from time to time, involved in a number of legal proceedings, including inquiries
from, or discussions with, governmental authorities that are incidental to their operations. As of 31 March 2023, the Group’s key contingent
liabilities include the following:
1. Value-added tax (VAT)
VAT Audit 2016
In July 2016, one of the subsidiaries in the mobile services business made a payment to another subsidiary engaged in passive infrastructure
services for all invoices raised since 2013 for rendering tower services. The subsidiary claimed the input VAT charged on these invoices.
During the desktop VAT audit conducted by the tax authorities for 2016, the above-mentioned VAT credit was denied alleging that the VAT
credit was time-barred. Based on the VAT rules, the mobile services subsidiary is of the view that the time limitation for claiming input VAT
starts from the year in which payment is made against the invoice. Since the payment was made in 2016, the time limit for claiming input credit
(by 31 December of following year) had not lapsed.
In October 2016, the mobile services subsidiary received a notice of recovery and proceeded to make the 10% deposit in order to initiate
litigation. The subsidiary submitted a comprehensive letter to the authorities in October 2017, for which a response is awaited from the tax
authorities. An amount of $8m is included within contingent liabilities in respect of this matter. No provision has been created against this claim.
Airtel Africa plc Annual Report and Accounts 2023
217
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
29. Contingent liabilities and commitments continued
Claims under legal and regulatory cases, including arbitration matters
2. One of the subsidiaries of the Group is involved in a dispute with one of its vendors, with respect to invoices for services provided to a
subsidiary under a service contract. The original order under the contract was issued by the subsidiary for a total amount of Central African
franc (CFA) 473,800,000 (approx. $1m). In 2014, the vendor-initiated arbitration proceedings claiming a sum of approximately CFA 1.9bn
(approx. $3m). In mid-May 2019, the lower courts imposed a penalty of CFA 35bn (approx. $59m), based on which certain banks of the
subsidiary were summoned to release the funds. The subsidiary immediately lodged an appeal in the Supreme Court for a stay of execution
which was granted. Subsequently, the vendor filed an appeal before the Common Court of Justice and Arbitration (CCJA). Quite unexpectedly,
in April 2020, the CCJA lifted the Supreme Court stay of execution. In May 2021, the Commercial Division of the High Court maintained new
seizures carried out by the vendor. The subsidiary appealed and the Court of Appeal determination on the seizures is pending as of April 2022.
In March 2022 the CCJA interpreted its judgment of March 2019 to indicate that the daily penalty could not be maintained after its ruling
dated 18 November 2018.
Separately, in December 2020 the subsidiary initiated criminal proceedings against the vendor for fraud and deceitful conduct. In February
2021, the investigating judge issued an order to cease the investigation which was appealed by the subsidiary. In March 2022, the Court
Appeal quashed the investigative judge order and allowed the investigation into the vendor to resume. Testimony in the criminal investigation
case happened on 26 April 2022 in front of the Criminal Court of Appeal where the honorable judge has further re-examined the facts from
the representatives of the subsidiary against this case. The court will provide a further update on the upcoming proceedings in due course.
As per the law no civil action can be initiated against the subsidiary while criminal proceedings are ongoing. On 30 November 2022 subsidiary
was notified that the plaintiff has appealed in the court of cassation against the stay of execution dated 30 May 2022. Subsidiary has filed its
response on 26 January 2023. The Group still awaits the Supreme Court ruling on the merits of the case, and until that time has disclosed this
matter as a contingent liability for $59m (included in the closing contingent liability). No provision has been made against this claim.
3. One of the subsidiaries of the Group is involved in a dispute with one of its distributors, with respect to alleged unpaid commissions, bonuses
and benefits, totalling approximately $11m, over a period of around 11 years of its business relationship with the subsidiary. In March 2012, the
distributor filed a claim against the subsidiary in the High Court. On 4 October 2016, the High Court ruled against the subsidiary and ordered
to pay the claimed amount of approximately $11m to the distributor. On 5 October 2016, the subsidiary filed an appeal in the Court of Appeal
against the order of the High Court, which on 24 July 2020 was ruled against the subsidiary. On 7 August 2020, the subsidiary filed an appeal
against the decision of the Court of Appeal, in the Supreme Court. Record of appeal has been transmitted to the Supreme Court and briefs of
argument are currently being prepared.
Despite the strength of the subsidiary’s line of defence, as both the High Court and Court of Appeal have ruled against the subsidiary, it is
appropriate to disclose this matter as contingent liability for $11m, pending the decision of the Supreme Court. No provision has been made
against this claim.
In addition to the individual matters disclosed above, in the ordinary course of business, the Group is a defendant or co-defendant in various
litigations and claims which are immaterial individually.
Guarantees:
Guarantees outstanding as of 31 March 2023 and 31 March 2022 amounting to $9m and $8m, respectively, have been issued by banks and
financial institutions on behalf of the Group. These guarantees include certain financial bank guarantees which have been given for sub judice
matters and the amounts with respect to these have been disclosed under capital commitments, contingencies and liabilities, as applicable,
in compliance with the applicable accounting standards.
(ii) Commitments
Capital commitments
The Group has contractual commitments towards capital expenditure (net of related advances paid) of $313m and $295m as of 31 March 2023
and 31 March 2022, respectively.
30. Leases
(a) As a lessee
Right-of-use assets
2022/23
Balance as of 1 April 2022
Additions (net)
Depreciation charge for the year
Foreign currency translation impact
Balance as of 31 March 2023
218 Airtel Africa plc Annual Report and Accounts 2023
Plant and
equipment
1,034
738
(267)
(108)
1,397
Others
75
45
(13)
(7)
100
Total
1,109
783
(280)
(115)
1,497
30. Leases continued
2021/22
Balance as of 1 April 2021
Additions (net)
Depreciation charge for the year
Foreign currency translation impact
Balance as of 31 March 2022
Lease liabilities
Maturity analysis:
Less than one year
Later than one year but not later than two years
Later than two years but not later than five years
Later than five years but not later than nine years
Later than nine years
Total undiscounted lease liabilities
Lease liabilities included in the statement of financial position
Amounts recognised in profit or loss
Interest on lease liabilities
Plant and
equipment
724
524
(199)
(15)
1,034
Others
75
15
(12)
(3)
75
Total
799
539
(211)
(18)
1,109
As of
31 March 2023
31 March 2022
572
545
912
468
38
2,535
2,047
456
412
762
453
64
2,147
1,660
For the year ended
31 March 2023
31 March 2022
194
148
i. Plant and equipment
The Group leases passive infrastructure for providing telecommunications services under composite contracts which include lease of passive
infrastructure and land on which the passive infrastructure is built as well as maintenance, security, provision of energy and other services. These
leases typically run for a period of 3-15 years. Some leases include an option to renew the lease mainly for an additional period of 3-10 years after
the end of initial contract term based on renegotiation of lease rentals. Considering this, the Group has only considered the original lease period
for lease term determination. A portion of certain lease payments change on account of changes in consumer price indices (CPI). Such payment
terms are common in lease agreements in the countries where the Group operates. Lease terms are negotiated on an individual basis and
contain a wide range of different terms and conditions.
ii. Other leases
The Group’s other leases comprise lease of offices, shops, showrooms, guest houses, warehouses, data centers, vehicles and Indefeasible right
of use (IRU).
(b) As a lessor
The Group’s lease arrangements as a lessor mainly pertain to passive infrastructure (plant and equipment). Lease income from such
arrangements is presented as revenue in the statement of comprehensive income.
Operating lease
Lease income recognised in profit or loss
For the year ended
31 March 2023
31 March 2022
5
27
The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the
reporting date:
Less than one year
One to two years
Two to three years
Three to four years
Four to five years
More than five years
Total
For the year ended
31 March 2023
31 March 2022
2
1
1
1
1
2
8
4
2
1
1
1
3
12
Airtel Africa plc Annual Report and Accounts 2023
219
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
31. Related party disclosure
(a) List of related parties
i. Parent company
Airtel Africa Mauritius Limited
ii. Intermediate parent entities
Network i2i Limited
Bharti Airtel Limited
Bharti Telecom Limited
iii. Ultimate controlling entity
Bharti Enterprises (Holding) Private Limited. It is held by private trusts
of Bharti family, with Mr. Sunil Bharti Mittal’s family trust effectively
controlling the company.
iv. For list of subsidiaries, associate and joint venture refer
to Note 34
v. Other entities with whom transactions have taken place
during the reporting period
a. Fellow subsidiaries
Nxtra Data Limited
Bharti Airtel Services Limited
Bharti International (Singapore) Pte Ltd
Bharti Airtel (UK) Limited
Bharti Airtel (France) SAS
Bharti Airtel Lanka (Private) Limited
Bharti Hexacom Limited
b. Other related parties
Airtel Ghana Limited (till October 2021)
Singapore Telecommunications Limited
vi. Key management personnel (KMP)
a. Executive directors
Olusegun Ogunsanya (since October 2021)
Raghunath Venkateswarlu Mandava (till September 2021)
Jaideep Paul (since June 2021)
b. Non-executive directors
Sunil Bharti Mittal
Awuneba Ajumogobia
Douglas Baillie
John Danilovich
Andrew Green
Akhil Gupta
Shravin Bharti Mittal
Annika Poutiainen
Ravi Rajagopal
Kelly Bayer Rosmarin
Tsega Gebreyes (since October 2021)
c. Others
Olusegun Ogunsanya (till September 2021)
Jaideep Paul (till May 2021)
Ian Ferrao
Michael Foley
Razvan Ungureanu
Luc Serviant
Daddy Mukadi
Neelesh Singh (till December 2022)
Ramakrishna Lella
Olivier Pognon (till October 2021)
Edgard Maidou (since October 2021)
Rogany Ramiah
Stephen Nthenge
Vimal Kumar Ambat (till October 2022)
Ashish Malhotra (till June 2022)
Vinny Puri
C Surendran (from August 2021 to December 2022)
Olubayo Augustus Adekanmbi (from December 2021 to
November 2022)
Anthony Shiner (since May 2022)
Apoorva Mehrotra (since October 2022)
In the ordinary course of business, there are certain transactions among the Group entities and all these transactions are on arm’s length
basis. However, the intra-group transactions and balances, and the income and expenses arising from such transactions, are eliminated
on consolidation. The transactions with remaining related parties for the years ended 31 March 2023 and 31 March 2022 respectively,
are described below:
The summary of transactions with the above-mentioned parties is as follows:
31 March 2023
March 31, 2022
For the year ended
Parent
company
Intermediate
parent entity
Fellow
subsidiaries
Joint
venture Associates
Other
related
parties
Parent
company
Intermediate
parent entity
Fellow
subsidiaries
Joint
venture Associates
Other
related
parties
Relationship
Sale/rendering
of services
Purchase/
receiving of
services
Rent and other
charges
Guarantee
and collateral
fee paid
Purchase of
assets
–
–
–
–
–
Dividend paid
109
Dividend
received
–
13
77
16
59
1
3
3
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
0
–
–
–
–
2
–
–
–
–
–
–
–
–
–
–
–
95
–
13
59
19
54
1
6
–
–
–
–
–
2
–
–
–
–
–
–
–
–
–
–
0
0
–
–
–
–
–
0
–
–
–
–
–
220 Airtel Africa plc Annual Report and Accounts 2023
31. Related party disclosure continued
The outstanding balance of the above-mentioned related parties are as follows:
Relationship
As of 31 March 2023
Trade payables
Trade receivables
Corporate gurantee fee payable
Guarantees and collaterals taken (including
performance guarantees)1
Reimbursement asset (refer to Note 21)
As of 31 March 2022
Trade payables
Trade receivables
Corporate gurantee fee payable
Guarantees and collaterals taken (including
performance guarantees)
Reimbursement asset (refer to Note 18)
Parent
company
Intermediate
parent entity
Fellow
subsidiaries
Joint venture
Associate
Other related
parties
–
–
–
–
–
–
–
–
–
–
12
4
1
2,000
10
10
5
3
2,000
25
31
46
–
–
–
33
36
–
–
–
–
–
–
–
–
–
–
–
–
–
1
–
–
–
–
0
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 This guarantee (200% of the bond amount) relates to the $1bn USD non-convertible bonds (refer to Note 22) with original maturity of 2024. The Group has prepaid a
portion of these bonds and the outstanding amount as on 31 March 2023 is $550m (31 March 2022: $1,000m). In accordance with the legal and regulatory requirements
pertaining to these bonds, the guarantee amount can be reduced only once these are paid in full and thus the full guarantee amount (based on issued value of guarantee)
is disclosed.
Key management compensation (KMP)
KMP are those persons having authority and responsibility for planning, directing and controlling the activities of the Group, directly or indirectly,
including any director, whether executive or otherwise. For the Group, these include Executive Committee members. Fuller disclosures on
directors’ remuneration are set out in the directors’ remuneration report on pages 145 to 163. Remuneration to KMP were as follows:
Short-term employee benefits
Performance linked incentive
Share-based payment
Other long term benefits
Other benefits
For the year ended
31 March 2023
31 March 2022
10
4
1
2
1
18
10
3
2
2
1
18
32. Financial risk management
The Group has liabilities in the form of borrowings, guarantees, trade and other payables as well as receivables in the form of loans, cash,
deposits, trade and other receivables. These arise as a part of the business activities and operations of the Group.
The business activities of the Group expose it to a variety of financial risks, namely market risks (that is, foreign exchange risk, interest rate risk
and price risk), credit risk and liquidity risk. Further, the Group uses certain derivative financial instruments to mitigate some of these risk
exposures. The Group’s senior management oversees the management of these risks. The senior professionals working to manage the financial
risks and the appropriate financial risk governance framework for the Group are accountable to the Board of directors and the Audit and Risk
Committee. The Group’s Finance Committee is primarily responsible for matters, including framing of policies and execution procedures as well
as laying down the risk framework mechanisms for the treasury function that will help the company to achieve its strategic financial goals,
balancing opportunity, prudence and initiative with risk control measures. This provides assurance to the Group that the Group’s financial
risk-taking activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in
accordance with Group policies and Group risk appetite. All derivative activities for risk management purposes are carried out by specialist
teams that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes
shall be undertaken.
Airtel Africa plc Annual Report and Accounts 2023
221
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
32. Financial risk management continued
Details of key risks applicable to the Group are summarised below:
• Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market
prices comprise three types of risk – currency rate risk, interest rate risk and other price risks, such as equity risk. Financial instruments affected
by market risk include loans and borrowings, deposits, investments, and derivative financial instruments.
The Group’s activities expose it to a variety of financial risks, including the effects of changes in foreign currency exchange rates and interest
rates. The Group may use derivative financial instruments such as foreign exchange forward contracts, options, currency swaps and interest rate
swaps and options to manage its exposures to foreign exchange fluctuations and interest rates.
• Foreign exchange risk
Foreign exchange risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in foreign
exchange rates. The Group has foreign currency loans and foreign currency trade payables and receivables and is, therefore, exposed to foreign
exchange risk. Further, the Group derives revenue and incurs costs in local currencies where it operates, but it also incurs costs in foreign
currencies, mainly from buying equipment and services from manufacturers and technology service providers. That means adverse movements
in exchange rates between the currencies in the Group’s OpCos and the US dollar could have a negative effect on Group’s liquidity and financial
condition. In some markets, the Group faces instances of limited supply of foreign currency within the local monetary system. This not only
constrains Group’s ability to fully benefit at Group level from strong cash generation by those OpCos but also impacts its ability to make timely
foreign currency payments to our international suppliers.
The Group may use risk management products such as foreign exchange options, currency swaps or forward contracts towards hedging risk
resulting from changes and fluctuations in foreign currency exchange rate. These foreign exchange contracts, carried at fair value, may have
varying maturities depending upon the primary host contract requirement and risk management strategy of the Group. The Group manages its
foreign currency risk by hedging its foreign currency exposure as per business needs and as approved by Board in accordance with established
risk management policy. The Group also continues to mitigate foreign exchange risk by minimising cash held in local currency in its various
OpCos where possible through such risk management products.
Given the severity of this risk, specifically in some of Group’s OpCos, Group management continuously monitors the potential impact of this risk
of exchange rate fluctuations based on the following methodology:
a) Comparing the average devaluation of each currency in the markets in which the Group operates against US dollar on 3-year and 5-year
historic basis and onshore forward exchange rates over a 1-year period.
b) If either of the above devaluations is higher than 5% per annum, management selects the highest of these exchange rates.
c) Management then uses this exchange rate to monitor the potential impact of using such rate on the Group’s income statement so that the
Group can actively monitor and assess the impact on the Group’s financials due to exchange rate fluctuations.
Based on the above-mentioned methodology, the weighted average yearly potential devaluation of the basket of currencies in which the Group
is exposed is estimated to be in the range of 7% to 8% in the subsidiaries meeting the above criteria.
With respect to currency devaluation sensitivity, on a 12-month basis, a 1% currency devaluation across all currencies in our OpCos would have
a negative impact of $51m on revenues, $31m on EBITDA and $23m on finance costs (excluding derivatives). Our largest exposure is to the
Nigerian naira, for which a 1% devaluation would have a negative impact of $22m on revenues, $12m on EBITDA and $7m on finance costs
(excluding derivatives).
This does not represent any guidance and is being used solely to illustrate the potential impact of further currency devaluation on the Group for
the purpose of exchange rate risk management. The accounting under IFRS is based on exchange rates in line with the requirements of IAS 21
‘The Effect of Changes in Foreign Exchange’ and does not factor in the above-mentioned devaluation.
Based on above-mentioned specific methodology, for the identified OpCos, management evaluates specific mitigation actions based on
available mechanisms in each of the geographies. For further details on such mitigation action refer to the risk section of the Annual Report.
This net investment hedge accounting relationship as of the end of each year, and its impacts, is as follows:
Net investment hedge
Currency exchange risk hedged
Nominal amount hedged as of the end of the year
Nominal amount hedged during the year
Maturity date
Nominal value of hedging instruments (borrowings)
Change in fair value during the year
Hedged item
Hedging instrument
FCTR gain for continuing hedge (cumulative)
Hedging (loss)/gain recognised during the year1
As of
31 March 2023
31 March 2022
–
–
–
–
–
–
–
–
–
Euro to US$
Nil
Euro 160m
May 2021
195
8
(8)
402
(8)
1 The net investment hedge accounting has been discontinued with effect from 18 May 2021 due to repayment of the hedging instrument (EUR borrowings).
222 Airtel Africa plc Annual Report and Accounts 2023
32. Financial risk management continued
Foreign currency sensitivity
The following table demonstrates the sensitivity in the US$ account balances to the functional currency of the respective entities as of 31 March
2023 and 31 March 2022, with all other variables held constant. The impact on the Group’s profit before tax is due to changes in the amount of
monetary assets and liabilities due to the impact of change in foreign exchange rates, including foreign currency derivatives. The impact on the
Group’s equity is due to a change in the fair value of intra-group monetary items that form part of the net investment in foreign operation and
other foreign currency monetary items designated as a hedge of the net investment in foreign operations or our cash flow hedges.
For the year ended 31 March 2023
US dollars
For the year ended 31 March 2022
US dollars
Change in
currency
exchange rate1
Effect on
profit
before tax2
Effect on
equity
(OCI)2
+5%
–5%
+5%
–5%
109
(109)
97
(97)
22
(22)
34
(34)
1 ‘+’ represents appreciation and ‘-’ represents depreciation in US$ against respective functional currencies of subsidiaries.
2 Represents losses/(gains) arising from conversion/translation.
• Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest
rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s interest-bearing debt obligations with
floating interest rates. Further, the Group engages in financing activities which are dependent on market rates and any changes in the interest
rates environment may impact future rates of borrowing. The Group monitors the interest rate movement and manages the interest rate risk
based on its risk management policies, which inter alia include entering into interest swaps contracts as considered appropriate and whenever
necessary. The Group also maintains a portfolio mix of floating and fixed rate debt. As of 31 March 2023 after taking into account the effect of
interest rate swaps, approx. 48% of the Group’s borrowings are at a fixed rate of interest (31 March 2022: 70%).
The Group had applied fair value hedge accounting in the past which was discontinued in the year ended 31 March 2020. In accordance with
the Group’s accounting policy, the adjustment to the carrying amount of the hedged item is being amortised to profit or loss over the period to
remaining maturity of the hedged item, i.e., borrowings. The unamortised portion of such fair value hedge adjustments as on 31 March 2023 is
deferred gain of $5m (31 March 2022: deferred gain of $16m).
Interest rate sensitivity of borrowings
With all other variables held constant, the following table demonstrates the sensitivity to a reasonably possible change in interest rates on
floating rate portion of loans and borrowings after considering the impact of interest rate swaps, wherever applicable, based on the outstanding
amount of such borrowings as of 31 March 2023 and 31 March 2022.
Interest rate sensitivity
For the year ended 31 March 2023
US dollar – borrowings
Other currency – borrowings
For the year ended 31 March 2022
US dollar – borrowings
Other currency – borrowings
Increase ‘+’/
decrease ‘-’
in basis points
Effect on
profit
before tax1
+100
–100
+100
–100
+100
–100
+100
–100
7
(7)
4
(4)
5
(5)
2
(2)
1 Represents losses/(gains) arising from increase/decrease of interest rates.
The assumed movement in basis points for interest rate sensitivity analysis is based on the movements in the interest rates historically and
prevailing market environment.
Airtel Africa plc Annual Report and Accounts 2023
223
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
32. Financial risk management continued
• Credit risk
Credit risk is the risk that a counter party will not meet its obligations under a financial instrument or customer contract, leading to a financial loss.
The Group is exposed to credit risk from its operating activities, primarily from trade receivables but also from cash, other banks balances,
derivative financial instruments and other financial receivables.
Trade receivables
Trade receivables are typically non-interest bearing unsecured and derived from sales made to a large number of independent customers.
As the customer base is widely distributed both economically and geographically, there is no concentration of credit risk.
As independent credit ratings of customers is not available. The Group reviews the creditworthiness of its customers based on their financial
position, past experience, ageing and other factors.
Credit risk related to trade receivables is managed/mitigated by each business unit in accordance with the policies and procedures established
by the Group, by setting appropriate payment terms and credit period, and by setting and monitoring internal limits on exposure to individual
customers. The credit period provided by the Group to its customers generally ranges from 14-30 days.
The Group uses an age-based provision policy to measure the expected credit loss of trade receivables, which comprise a very large numbers of
small balances. Refer to Note 19 for details on the impairment of trade receivables.
Based on the industry practices and the business environment in which the Group operates, management considers trade receivables are
credit impaired if the payments are more than 270 days past due in case of interconnect customers and 90 days past due in other cases since
probability of default in such cases is considered to be 100% except amounts due from related parties. In determining the amount of impairment,
management considers the collateral against such receivables and any amount payable to such customers.
The following table details the risk profile of gross trade receivables based on the Group’s provision policy:
Not past due
30 days 31 to 60 days 61 to 90 days 91 to 270 days
Less than
Past due
Trade receivables as of 31 March 2023
Trade receivables as of 31 March 2022
13
15
25
28
14
8
40
4
51
48
Above
270 days
186
200
Total
329
303
The gross carrying amount of the trade receivable is written off (either partially or in full) to the extent that there is no realistic prospect of
recovery. This is generally the case when the Group determines that the debtor does not have assets or sources of income that could generate
sufficient cash flows to repay the amount due. Where the trade receivable has been written off, the Group continues to engage in enforcement
activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in profit and loss.
Other financial instruments and cash deposits
The Group’s treasury, in accordance with the Board approved policy, maintains its cash and cash equivalents and deposits and enters into
derivative financial instruments – with banks, financial and other institutions, having a good reputation and past track record which are
considered to carry a low credit risk. Similarly, counterparties of the Group’s other receivables carry either negligible or very low credit risk.
Further, the Group reviews the creditworthiness of the counter-parties (on the basis of its ratings, credit spreads and financial strength) of
all the above assets on an ongoing basis, and if required, takes necessary mitigation measures.
• Liquidity risk
Liquidity risk is the risk that the Group may not be able to meet its present and future obligations as and when due, without incurring
unacceptable losses. The Group’s liquidity risk management objective is to, at all times, maintain adequate levels of liquidity to meet its
requirements. The Group closely monitors its liquidity position, expected cash flows and deploys a robust cash management and planning
exercise. It maintains adequate sources of financing, including term loans, short-term loans and overdraft from both domestic and international
banks at an optimised cost. It has also implemented all necessary steps to enjoy strong access to international capital markets if and when
required. For details on borrowings and going concern, refer to Notes 22 and 2.2, respectively.
224 Airtel Africa plc Annual Report and Accounts 2023
32. Financial risk management continued
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted payments:
As of 31 March 2023
Less than
6 months
6 to
12 months
1 to 2 years
> 2 years
Interest bearing borrowings1
Lease liabilities2
Put option liability
Other financial liabilities
Trade payables
Mobile money wallet balance
Gross settled derivatives
– Outflow
– Inflow
Interest bearing borrowings1
Lease liabilities2
Put option liability
Other financial liabilities
Trade payables
Mobile money wallet balance
Gross settled derivatives
– Outflow
– Inflow
Carrying
amount
2,204
2,047
569
654
460
582
43
–
On demand
361
–
–
–
–
582
–
–
Carrying
amount
2,301
1,660
579
435
404
496
–
7
–
On demand
256
–
–
–
–
496
–
–
–
569
306
–
483
460
–
256
(246)
542
244
–
338
404
–
–
271
(262)
153
266
–
34
–
–
51
(45)
459
890
545
–
25
–
–
219
(208)
1,471
534
1,418
584
190
–
–
25
(25)
2,726
108
212
–
16
–
–
–
50
(48)
338
418
412
–
21
–
–
–
–
–
1,164
1,279
600
109
–
–
–
–
–
Total
2,507
2,535
584
732
460
582
551
(524)
7,427
Total
2,488
2,147
600
484
404
496
–
321
(310)
6,559
943
1,828
As of 31 March 2022
Less than
6 months
6 to
12 months
1 to 2 years
> 2 years
5,882
752
1,537
851
3,152
6,630
1 Includes contractual interest payment based on interest rate prevailing at the end of the reporting period after adjustment for the impact of interest rate swaps, over the
tenor of the borrowings.
2 Maturity analysis is based on undiscounted lease payments.
Reconciliation of liabilities whose cash flow movements are disclosed as part of financing activities in the statement
of cash flows:
Statement of cash flow line
items
1 April
2022 Cash flow
Non-cash movements
Interest
and other
finance
charges
Dividend
declared
for NCI
during
the year
Lease
liability
additions
Fair value
changes
Foreign
currency
translation
reserve
Others
31 March
2023
Borrowings1
Lease liability
Derivative
assets net
Proceeds/repayment
of borrowings
Repayment of lease
laibility
Outflow on maturity of
derivatives (net)
Interest accrued
but not due
Interest and other finance
charges paid
Dividend payable
to NCI
Dividend paid to non-
controlling interests
1,968
(112)
–
1,660
(473)
194
3
(49)
–
29
(206)
200
–
–
–
–
37
(75)
–
52
–
(11)
(27)
(1)
1,817
776
–
(110)
–
2,047
–
–
–
79
–
–
2
3
(1)
–
–
–
35
26
13
Airtel Africa plc Annual Report and Accounts 2023
225
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
32. Financial risk management continued
Non-cash movements
Interest
and other
finance
charges
Foreign
exchange
loss
Dividend
declared
for NCI
during
the year
Lease
liability
additions
Fair value
changes
Foreign
currency
translation
reserve
1 April
2021 Cash flow
Others
31 March
2022
Borrowings1
Statement of cash flow line items
Proceeds/repayment of
borrowings
3,089
(1,142)
–
Lease liability
Repayment of lease laibility
1,277
(405)
148
Derivative
assets net
Proceeds/repayment
of borrowings
Interest accrued
but not due
Interest and other finance
charges paid
Dividend payable
to NCI
Dividend paid to
non-controlling interests
1 This does not include bank overdraft.
• Capital management
0
(9)
–
50
(215)
181
3
(48)
–
28
–
–
–
–
–
–
–
–
81
–
651
(5)
–
(2)
(11)
(0)
1,968
–
1,660
–
–
–
12
1
–
–
13
(0)
–
–
–
3
29
37
Capital includes equity attributable to the equity holders of the company. The primary objective of the Group’s capital management is to ensure
that it maintains an efficient capital structure and healthy capital ratios in order to support its business and maximise shareholder value.
The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions or its business requirements.
To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue
new shares.
No changes were made in the objectives, policies or processes during the years ended 31 March 2023 and 31 March 2022.
The Group monitors capital using a leverage ratio, which is net debt divided by underlying EBITDA. Net debt is calculated as total of borrowings
and lease liabilities less cash and cash equivalents, term deposits with banks, processing costs related to borrowings and fair value hedge
adjustments. Also refer to alternative performance measures on pages 240-245.
Long-term borrowings, net of current portion
Short-term borrowings and current portion of long term borrowings
Lease liabilities
Adjusted for:
Cash and cash equivalents (refer to Note 20)
Term deposits with banks (refer to Note 20)
Margin money deposits (refer to Note 20)
Processing costs related to borrowings
Fair value hedge adjustment (refer to Note 32)
Net debt
Underlying EBITDA
Underlying EBITDA
Leverage ratio
For the year ended
31 March 2023
31 March 2022
1,233
945
2,047
(586)
(117)
–
7
(5)
1,486
786
1,660
(638)
(220)
(122)
5
(16)
3,524
2,941
2,575
2,575
2,311
2,311
1.4
1.3
226 Airtel Africa plc Annual Report and Accounts 2023
33. Fair value of financial assets and liabilities
The category wise details as to the carrying value, fair value and the level of fair value measurement hierarchy of the Group’s financial instruments
are as follows:
Carrying value as of
Fair value as of
31 March 2023
31 March 2022
31 March 2023
31 March 2022
Financial assets
FVTPL
Derivatives
– Forward and option contracts
– Currency swaps and interest rate swaps
– Cross currency swaps
Other bank balances
Investments
Amortised cost
Trade receivables
Cash and cash equivalents
Other bank balances
Balance held under mobile money trust
Other financial assets
Financial liabilities
FVTPL
Derivatives
– Forward and option contracts
– Currency swaps and interest rate swaps
– Cross currency swaps
– Embedded derivatives
Amortised cost
Long term borrowings – fixed rate
Long term borrowings – fixed rate
Long term borrowings – floating rate
Short term borrowings
Put option liability
Trade payables
Mobile money wallet balance
Other financial liabilities
Level 2
Level 2
Level 3
Level 2
Level 2
Level 2
Level 2
Level 3
Level 2
Level 1
Level 2
Level 3
4
9
–
4
0
145
586
127
616
176
2
3
1
16
0
123
638
362
513
131
4
9
–
4
0
145
586
127
616
176
2
3
1
16
0
123
638
362
513
131
1,667
1,789
1,667
1,789
5
0
43
0
554
227
452
945
569
460
582
680
2
0
7
1
1,015
267
204
786
579
404
496
464
5
0
43
0
540
210
452
945
569
460
582
680
2
0
7
1
1,016
264
204
786
579
404
496
464
4,517
4,225
4,486
4,223
Airtel Africa plc Annual Report and Accounts 2023
227
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
33. Fair Value of financial assets and liabilities continued
The following methods/assumptions were used to estimate the fair values:
• The carrying value of bank deposits, trade receivables, trade payables, short-term borrowings, other current financial assets and liabilities
approximate their fair value mainly due to the short-term maturities of these instruments.
• Fair value of quoted financial instruments is based on quoted market price at the reporting date.
• The fair value of non-current financial assets, long-term borrowings and other financial liabilities is estimated by discounting future cash flows
using current rates applicable to instruments with similar terms, currency, credit risk and remaining maturities.
• The fair values of derivatives are estimated by using pricing models, wherein the inputs to those models are based on readily observable
market parameters. The valuation models used by the Group reflect the contractual terms of the derivatives (including the period to
maturity), and market-based parameters such as interest rates, foreign exchange rates, volatility etc. These models do not contain a high
level of subjectivity as the valuation techniques used do not require significant judgement and inputs thereto are readily observable.
• The fair value of the put option liability to buy back the stake held by non-controlling interest in AMC B.V. is measured at the present value of
the redemption amount (i.e., expected cash outflows). Since the liability will be based on fair value of the equity shares of AMC B.V. (subject to
a cap) at the end of 48 months, the expected cash flows are estimated by determining the projected equity valuation of the AMC B.V. at the
end of 48 months and applying a cap thereon.
During the years ended 31 March 2023 and 31 March 2022, there were no transfers between Level 1 and Level 2 fair value measurements,
and no transfer into or out of Level 3 fair value measurements.
The following table describes the key inputs used in the valuation (basis discounted cash flow technique) of the Level 2 financial assets/liabilities
as of 31 March 2023 and 31 March 2022:
Financial assets/liabilities
Inputs used
– Currency swaps, forward and option contracts, and other bank balances
Forward foreign currency exchange rates, interest rates
– Interest rate swaps
– Embedded derivatives
Prevailing/forward interest rates in market, interest rates
Prevailing interest rates in market, inflation rates
– Other financial assets/fixed rate borrowings/other financial liabilities
Prevailing interest rates in market, future payouts, interest rates
Reconciliation of fair value measurements categorised within Level 3 of the fair value hierarchy – financial assets/
(liabilities) (net)
• Cross currency swaps (CCS)
Opening balance
Recognised in finance costs in profit and loss (unrealised)1
Derivative settled during the period
Closing balance
For the year ended
31 March 2023
31 March 2022
(6)
(67)
30
(43)
(3)
(3)
–
(6)
1 These amounts represent the amounts recognised in the financial statements during the year, excluding the initial recognition deferment impact.
• Put option liability
Opening balance
Liability recognised by debiting transaction with NCI reserve
Liability derecognised by crediting transaction with NCI reserve following dividend payment to put option holders
Recognised in finance costs in profit and loss (unrealised)
Closing balance
For the year ended
31 March 2023
31 March 2022
579
–
(16)
6
569
–
575
–
4
579
228 Airtel Africa plc Annual Report and Accounts 2023
34. Companies in the Group, associate and joint venture
Information on the Group’s directly and indirectly held subsidiaries, associate and joint venture is as follows:
Details of subsidiaries:
Proportion of ownership
interest1
Percentage as of
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
Airtel Mobile
Commerce Services
Limited
LR 209/11880, 4th Floor, Parkside
Towers, Mombasa Road, P.O. Box
962-00100, Nairobi, Kenya
Airtel (Seychelles)
Limited
Airtel Congo RDC
S.A.
Airtel Congo S.A.
Airtel Gabon S.A.
Airtel House, Josephine Cafrine Road,
Perseverance, P.O. Box 1358, Victoria,
Mahe, Seychelles
3ème étage, 130 b, Avenue Kwango,
Gombe, B.P. 1201, Kinshasa 1,
République Démocratique du Congo
2ème Etage de L’Immeuble SCI Monte
Cristo, Rond-Point de la Gare, Croisement
de l’Avenue Orsy et de Boulevard Denis
Sassou Nguesso, Centre Ville, B.P. 1038,
Brazzaville, Congo
Immeuble Libreville, Business Square,
Rue Pecqueur, Centre-Ville, B.P. 9259
Libreville, Gabon
Support services
Ordinary
74.23
74.23
Telecommunication services
Ordinary
100
100
Telecommunication services
Ordinary
98.50
98.50
Telecommunication services
Ordinary
90
90
Telecommunication services
Ordinary
100
100
Airtel International
LLP4
Plot No. 5, Sector 34, Gurugram, Haryana
122001, India
Support services
Ordinary
100
100
Airtel Madagascar
S.A.
Immeuble S, lot II J 1 AA, Morarano
Alarobia, 101 Antananarivo, Madagascar Telecommunication services
Airtel Malawi Public
Limited Company
Airtel Complex, Off Convention Drive,
City Centre, P.O. Box 57, Lilongwe, Malawi Telecommunication services
Ordinary
100
100
Ordinary
80
80
Airtel Mobile
Commerce (Kenya)
Limited
LR 209/11880, 7th Floor, Parkside
Towers, Mombasa Road, P.O. Box
73146-00200, Nairobi, Kenya
Mobile commerce services
Ordinary
74.23
74.23
Airtel Mobile
Commerce Rwanda
Ltd
Airtel Mobile
Commerce
(Seychelles) B.V.
Airtel Building, Remera, KG 17 Ave, Kigali,
Rwanda
Mobile commerce services
Ordinary
74.23
74.23
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Investment Company
Ordinary
74.23
74.23
Airtel Mobile
Commerce
(Seychelles) Limited
Airtel House, Josephine Cafrine Road,
Perseverance, P.O. Box 1358, Victoria,
Mahe, Seychelles
Airtel Mobile
Commerce
(Tanzania) Limited
Airtel House, Block 41, Corner of Ali
Hassan Mwinyi Road and Kawawa Road,
Kinondoni District PO Box 9623, Dar es
Salaam, Tanzania
Airtel Mobile
Commerce B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Mobile
Commerce Congo
B.V.
Airtel Mobile
Commerce Holdings
B.V.
Airtel Mobile
Commerce Kenya
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Mobile commerce services
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Airtel Mobile
Commerce Limited
Airtel Complex, Off Convention Drive,
City Centre, P.O. Box 57, Lilongwe, Malawi Mobile commerce services
Ordinary
74.23
74.23
Airtel Africa plc Annual Report and Accounts 2023
229
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
34. Companies in the Group, associate and joint venture continued
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Proportion of ownership
interest1
Percentage as of
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
Airtel Mobile
Commerce
Madagascar B.V.
Airtel Mobile
Commerce
Madagascar S.A.
Airtel Mobile
Commerce Malawi
B.V.
Airtel Mobile
Commerce Nigeria
B.V.
Airtel Mobile
Commerce Nigeria
Limited
Airtel Mobile
Commerce Rwanda
B.V.
Airtel Mobile
Commerce Tchad
B.V.
Airtel Mobile
Commerce Tchad
S.A.
Airtel Mobile
Commerce Uganda
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Immeuble S, lot II J 1 AA, Morarano
Alarobia – 101 Antananarivo –
Madagascar
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Investment Company
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Plot L2, 401 Close, Banana Island, Ikoyi,
Lagos, Nigeria
Mobile commerce services
Ordinary
99.96
99.96
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Avenue Charles de Gaulle, Immeuble
Pierre Brock, B.P. 5665, N’Djaména,
Tchad
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Mobile
Commerce Uganda
Limited
Airtel Towers, Plot 16-A, Clement Hill
Road, Nakasero, P.O. Box 6771, Kampala,
Uganda
Airtel Mobile
Commerce Zambia
B.V.
Airtel Mobile
Commerce Zambia
Limited
Airtel Money RDC
S.A.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel House, Stand 2375, Addis Ababa
Drive, Lusaka, Zambia
6ième étage, 130 b, Avenue Kwango,
Gombe, B.P. 1201, Kinshasa 1,
République Démocratique du Congo
Airtel Money Niger
S.A.
2054 Route de l’Aéroport, B.P. 11 922,
Niamey, Niger
Airtel Money S.A.
Airtel Money
Tanzania Limited
124, Avenue Bouët B.P. 23 899, Libreville,
Gabon
Airtel House, Block 41, Corner of Ali
Hassan Mwinyi Road and Kawawa Road,
Kinondoni District, P.O. Box 9623, Dar es
Salaam,Tanzania
Airtel Money Transfer
Limited
Airtel Networks
Kenya Limited
LR 209/11880, 7th Floor, Parkside
Towers, Mombasa Road, P.O. Box
73146-00200, Nairobi, Kenya
LR 209/11880, 7th Floor, Parkside
Towers, Mombasa Road, P.O. Box
73146-00200, Nairobi, Kenya
Airtel Networks
Limited
Plot L2, 401 Close, Banana Island, Ikoyi,
Lagos, Nigeria
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
66.81
66.81
Mobile commerce services
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
51
51
Mobile commerce services
Ordinary
100
100
Telecommunication services
Ordinary
and
Preference
100
100
Telecommunication services
Ordinary
99.96
99.96
230 Airtel Africa plc Annual Report and Accounts 2023
34. Companies in the Group, associate and joint venture continued
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Proportion of ownership
interest1
Percentage as of
38
39
40
Airtel Networks
Zambia plc
Airtel Rwanda
Limited
Airtel Tanzania Public
Limited Company
41
Airtel Tchad S.A.
Airtel House, Stand 2375, Addis Ababa
Drive, Lusaka, Zambia
Airtel Building, Remera, KG 17 Ave, Kigali,
Rwanda
Airtel House, Block 41, Corner of Ali
Hassan Mwinyi Road and Kawawa Road,
Kinondoni District, P.O. Box 9623, Dar es
Salaam, Tanzania
Rue du Commandant Galyam Négal,
Immeuble du Cinéma Etoile, B.P. 5665,
N’Djaména, Tchad
42
Airtel Uganda Limited Airtel Towers, Plot 16 –A, Clement Hill
Road, Nakasero, P.O. Box 6771, Kampala,
Uganda
Bharti Airtel Africa
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Chad
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Congo
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel
Developers Forum
Limited
Stand No. 2375, Corner of Great East/
Addis Ababa Road, Lusaka, Zambia
Bharti Airtel Gabon
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel
International
(Netherlands) B.V.4
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Kenya
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Kenya
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel
Madagascar
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Malawi
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Mali
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Niger
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Nigeria
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Nigeria
Holdings II B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel RDC
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Telecommunication services
Ordinary
96.36
96.36
Telecommunication services
Ordinary
100
100
Telecommunication services
Ordinary
51
51
Telecommunication services
Ordinary
100
100
Telecommunication services
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
96.36
96.36
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Bharti Airtel Rwanda
Holdings Limited
C/o Ocorian Corporate Services
(Mauritius) Limited, 6th Floor, Tower A,
1 Cybercity, Ebene, 72201, Republic of
Mauritius
Bharti Airtel Services
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Airtel Africa plc Annual Report and Accounts 2023
231
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
34. Companies in the Group, associate and joint venture continued
Proportion of ownership
interest1
Percentage as of
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
Bharti Airtel Tanzania
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Uganda
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Bharti Airtel Zambia
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Celtel (Mauritius)
Holdings Limited
Celtel Niger S.A.
C/o Ocorian Corporate Services
(Mauritius) Limited, 6th Floor, Tower A, 1
Cybercity, Ebene, 72201, Republic of
Mauritius
2054 Route de l’Aéroport, B.P. 11 922,
Niamey, Niger
Channel Sea
Management
Company (Mauritius)
Limited
C/o Ocorian Corporate Services
(Mauritius) Limited, 6th Floor, Tower A, 1
Cybercity, Ebene, 72201 Republic of
Mauritius
Congo RDC Towers
S.A.
Gabon Towers S.A.2
6ème étage, 130 b, Avenue Kwango,
Gombe, B.P. 1201, Kinshasa 1,
République Démocratique du Congo
124 Avenue Bouët, B.P. 9259, Libreville,
Gabon
Indian Ocean
Telecom Limited
28 Esplanade, St. Helier, Jersey JE2 3QA,
Channel Islands
Mobile Commerce
Congo S.A.
Montana
International3
2ème Etage de L’Immeuble SCI Monte
Cristo, Rond-Point de la Gare, Croisement
de l’Avenue Orsy et de Boulevard Denis
Sassou Nguesso, Centre Ville, B.P. 1038,
Brazzaville, Congo
C/o Ocorian Corporate Services
(Mauritius) Limited, 6th Floor, Tower A, 1
Cybercity, Ebene, 72201, Republic of
Mauritius
Partnership
Investments Sarlu
130 b, Avenue Kwango, Gombe, B.P.
1201, Kinshasa 1, République
Démocratique du Congo
Société Malgache de
Téléphone Cellulaire
S.A.3
C/o Ocorian Corporate Services
(Mauritius) Limited, 6th Floor, Tower A, 1
Cybercity, Ebene, 72201, Republic of
Mauritius
Airtel Africa Services
(UK) Limited4
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
Airtel Digital Services
Holdings B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Mobile
Commerce DRC B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Mobile
Commerce Gabon
B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Mobile
Commerce Niger B.V.
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
Airtel Money Kenya
Limited
LR 209/11880, 7th Floor, Parkside
Towers, Mombasa Road, P.O. Box
73146-00200, Nairobi, Kenya
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Telecommunication services
Ordinary
90
90
Investment Company
Ordinary
100
100
Infrastructure sharing services
Ordinary
100
100
Infrastructure sharing services
Ordinary
100
100
Investment Company
Ordinary
100
100
Mobile commerce services
Ordinary
74.23
74.23
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
100
100
Support services
Ordinary
100
100
Investment Company
Ordinary
100
100
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Investment Company
Ordinary
74.23
74.23
Mobile commerce services
Ordinary
74.23
74.23
232 Airtel Africa plc Annual Report and Accounts 2023
34. Companies in the Group, associate and joint venture continued
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Proportion of ownership
interest1
Percentage as of
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
Smartcash Payment
Service Bank Limited
Plot L2, 401 Close, Banana Island, Ikoyi,
Lagos, Nigeria
Airtel Africa Telesonic
Holdings Limited4
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
Airtel Money Trust
Fund
Airtel Towers, Plot 16-A, Clement Hill
Road, Nakasero, P.O. Box 6771, Kampala,
Uganda
Airtel Africa Telesonic
Limited
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
The Registered
Trustees of Airtel
Money Trust Fund
Airtel House, Block 41, Corner of Ali
Hassan Mwinyi Road and Kawawa Road,
Kinondoni District, P.O. Box 9623, Dar es
Salaam, Tanzania
Mobile commerce services
Ordinary
99.96
74.23
Investment Company
Ordinary
100
100
Mobile commerce services
Ordinary
74.23
74.23
Support services
Ordinary
100
100
Mobile commerce services
Ordinary
51
51
Airtel Mobile
Commerce Tanzania
B.V.
Airtel Congo
Telesonic Holdings
(UK) Limited
Airtel DRC Telesonic
Holdings (UK)
Limited
Airtel Gabon
Telesonic Holdings
(UK) Limited
Airtel Kenya
Telesonic Holdings
(UK) Limited
Airtel Madagascar
Telesonic Holdings
(UK) Limited
Airtel (M) Telesonic
Holdings (UK)
Limited
Airtel Niger Telesonic
Holdings (UK)
Limited
Airtel Nigeria
Telesonic Holdings
(UK) Limited
Airtel Rwanda
Telesonic Holdings
(UK) Limited
Airtel Seychelles
Telesonic Holdings
(UK) Limited
Airtel Tanzania
Telesonic Holdings
(UK) Limited
Airtel Uganda
Telesonic Holdings
(UK) Limited
Overschiestraat 65, 1062 XD
Amsterdam, The Netherlands
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
Investment Company
Ordinary
74.23
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
–
–
–
–
–
–
–
–
–
–
–
–
–
Airtel Africa plc Annual Report and Accounts 2023
233
FINANCIAL STATEMENTS
Notes to consolidated financial statements continued
(All amounts are in US$ millions unless stated otherwise)
34. Companies in the Group, associate and joint venture continued
S. no.
Name of subsidiary
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Proportion of ownership
interest1
Percentage as of
Airtel (M) Telesonic
Limited
Airtel Complex, Off Convention Drive,
City Centre, P.O. Box 57, Lilongwe, Malawi Telecommunication services
Ordinary
Telecommunication services
Ordinary
Airtel Zambia
Telesonic Holdings
(UK) Limited
Airtel Tchad Telesonic
Holdings (UK)
Limited
Airtel Kenya
Telesonic Limited
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
LR 209/11880, 7th Floor, Parkside
Towers, Mombasa Road, P.O. Box
73146-00200, Nairobi, Kenya
Airtel Nigeria
Telesonic Limited
Airtel Rwanda
Telesonic Limited
Airtel (Seychelles)
Telesonic Limited
Airtel Telesonic
Uganda Limited
Airtel Zambia
Telesonic Limited
Nxtra Africa Data
Holdings Limited4
Nxtra Nigeria Data
Holdings (UK)
Limited
Nxtra Kenya Data
Holdings (UK)
Limited
Nxtra DRC Data
Holdings (UK)
Limited
Nxtra Gabon Data
Holdings (UK)
Limited
Nxtra Congo Data
Holdings (UK)
Limited
Airtel Congo RDC
Telesonic S.A.U.
Plot L2, 401 Close, Banana Island, Ikoyi,
Lagos, Nigeria
Remera, Gasabo, Umujyi wa Kigali,
Rwanda
Airtel House, Josephine Cafrine Road,
Perseverance, P.O. Box 1358, Victoria,
Mahe, Seychelles
Airtel Towers, Plot 16-A, Clement Hill
Road, Nakasero, P.O. Box 6771, Kampala,
Uganda
P.O Box 320001, Showgrounds, Lusaka,
Lusaka Province, Zambia
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
First Floor, 53/54 Grosvenor Street,
London W1K 3HU, United Kingdom
3ème étage, 130 b, Avenue Kwango,
Gombe, B.P. 1201, Kinshasa 1,
République Démocratique du Congo
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
Investment Company
Ordinary
100
Investment Company
Ordinary
100
100
100
100
100
Telecommunication services
Ordinary
Telecommunication services
Ordinary
Telecommunication services
Ordinary
100
Telecommunication services
Ordinary
Telecommunication services
Ordinary
Investment Company
Ordinary
100
100
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Investment Company
Ordinary
100
Nxtra Africa Data
(Nigeria) Limited
Plot L2, 401 Close, Banana Island, Ikoyi,
Lagos, Nigeria
Telecommunication services
Ordinary
Telecommunication services
Ordinary
100
100
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
1 Companies’ proportion of voting power held is same as proportion of ownership interest held.
2 Under dissolution as of 31 March 2023.
3 Under removal from the register of RoC.
4 Direct subsidiary to the company.
234 Airtel Africa plc Annual Report and Accounts 2023
34. Companies in the Group, associate and joint venture continued
Details of associate:
S. no.
Name of subsidiary
1
Seychelles Cable
Systems Company
Limited
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Caravelle House, 3rd Floor, Victoria,
Mahe, Seychelles
Submarine cable system
Ordinary
26
26
Proportion of ownership
interest1
Percentage as of
1 Companies’ proportion of voting power held is same as proportion of ownership interest held.
Details of joint venture:
Proportion of ownership
interest1
Percentage as of
S. no.
Name of subsidiary
1
Mawezi RDC S.A.
Principal place of business and registered
office address
Principal activities
Holding
31 March
2023
31 March
2022
Avenue des Huileries NO 7, Commune of
Lingwala,Ville de Kinshasa, République
Démocratique du Congo
The construction and
operation of a landing station
Ordinary
49.25
–
1 Companies’ proportion of voting power held is same as proportion of ownership interest held.
35. Events after the balance sheet date
No material subsequent events or transactions have occurred since the date of statement of financial position except as disclosed below:
• The Board recommended a final dividend of 3.27 cents per share on 10 May 2023.
Airtel Africa plc Annual Report and Accounts 2023
235
FINANCIAL STATEMENTS
Company Statement of Financial Position
(All amounts are in US$ thousands)
Assets
Non-current assets
Property, plant and equipment
Capital work-in-progress
Right of use assets
Investment in subsidiary undertakings
Financial assets
– Loan receivables
– Others
Other non-current assets
Current assets
Financial assets
– Cash and cash equivalents
– Other bank balances
– Others
Other current assets
Total assets
Liabilities
Current liabilities
Financial liabilities
– Lease liabilities
– Trade and other payables
– Others
Net current assets
Non-current liabilities
Financial liabilities
– Lease liabilities
– Others
Total liabilities
Net assets
Equity
Share capital
Reserves and surplus1
Total equity
As of
Note
31 March 2023
31 March 2022
4
5
6
6
7
169
63
206
163
51
396
3,533,231
3,533,231
310,864
412,689
16
204
16
371
3,844,753
3,946,917
134,159
101,000
29,660
1,773
31,028
100,000
5,300
849
266,592
137,177
4,111,345
4,084,094
222
1,816
2,818
4,856
307
4,387
1,159
5,853
261,736
131,324
17
43
60
4,916
165
–
165
6,018
4,106,429
4,078,076
8
3,419,948
3,419,948
686,481
658,128
4,106,429
4,078,076
1 The profit for the financial year dealt with in the financial statements of the company is $229,299,000 (March 2022: loss of $7,344,000).
The company only financial statements of Airtel Africa plc (company registration number: 11462215) were approved by the Board of directors
and authorised for issue on 10 May 2023. They were signed on its behalf by:
Olusegun Ogunsanya
Chief executive officer
10 May 2023
236 Airtel Africa plc Annual Report and Accounts 2023
Company Statements of Changes in Equity
(All amounts are in US$ thousands, unless stated otherwise)
As of 1 April 2021
Loss for the year
Other comprehensive income
Total comprehensive loss
Employee share-based payment reserve
Purchase of own shares
Dividend to owners to the company1
As of 31 March 2022
Profit for the year
Other comprehensive income
Total comprehensive income
Employee share-based payment reserve
Purchase of own shares
Dividend to owners to the company1
Share capital
Reserves and surplus
No of shares2
Amount
Retained
earnings
Shared-based
payment
reserve
Others3
Total
Total
equity
6,839,896,081
3,419,948
833,836
258
3,179
837,273
4,257,221
–
–
–
–
–
–
–
–
–
–
–
(7,344)
–
(7,344)
(878)
–
(169,117)
–
–
–
–
–
–
–
–
–
3,876
(5,682)
(7,344)
(7,344)
–
(7,344)
2,998
(5,682)
–
(7,344)
2,998
(5,682)
–
(169,117)
(169,117)
6,839,896,081
3,419,948
656,497
258
1,373
658,128
4,078,076
–
–
–
–
–
–
–
–
–
–
–
–
229,299
–
229,299
(1,663)
–
(194,676)
–
–
–
–
–
–
–
–
–
229,299
229,299
–
–
229,299
229,299
6,202
4,539
4,539
(10,809)
(10,809)
(10,809)
–
(194,676)
(194,676)
As of 31 March 2023
6,839,896,081
3,419,948
689,457
258
(3,235)
686,481
4,106,429
1 Refer to Note 5a of consolidated financial statements.
2 Includes ordinary and deferred shares, refer to Note 27 of the consolidated financial statements.
3 Includes share stabilisation reserve and treasury shares.
Airtel Africa plc Annual Report and Accounts 2023
237
FINANCIAL STATEMENTS
Notes to company only financial statements
(All amounts are in US$ millions unless stated otherwise)
1. Summary of significant accounting
policies
Basis of preparation
The company only financial statements are presented as required
by the Companies Act 2006. The company meets the definition of a
qualifying entity under FRS 100 ‘Application of Financial Reporting
Requirements’ issued by the FRC. Accordingly, the company has
prepared financial statements as per FRS 101 ‘Reduced Disclosure
Framework.
Airtel Africa plc is the parent of the smallest group for which
consolidated financial statements are prepared and of which the
company is a member. The largest group to consolidate the results
of the company is Bharti Airtel Limited, which is registered in India.
The Bharti Airtel Limited Group financial statements are publically
available and can be obtained at www.airtel.in.
All the amounts included in the Company only financial statements
are reported in United States dollars (the functional currency of the
company), with all values rounded to the nearest thousand (USD
thousand) except when otherwise indicated. Further, amounts which
are less than half a thousand are appearing as ‘0’.
As permitted by Section 408(3) of the Companies Act 2006, no profit
and loss account of the company is presented.
As permitted by FRS 101, the company has taken advantage of the
disclosure exemptions available in relation to:
• The requirements of IFRS 7 Financial Instruments: disclosures.
• The requirements of IAS 7 Statement of cash flows.
• The statement of compliance with adopted IFRSs.
• The effects of new but not yet effective IFRSs.
• The requirements in IAS 24 ‘Related party disclosure’ to disclose
related-party transactions entered into between two or more
members of a group.
• Disclosures in respect of capital management; and
• Paragraphs 45(b) and 46 to 52 of IFRS 2, ‘Share-based payment’
(details of the number and weighted-average exercise prices of
share options).
Where required, equivalent disclosures are given in the consolidated
financial statements. The company financial statements have been
prepared on a going concern and historical cost basis. The principal
accounting policies adopted are the same as those set out in Note 2 of
the consolidated financial statements except the following additional
policies which are relevant to the company only financial statements:
• Investment in subsidiary undertakings are accounted for at cost.
• Dividend income from investments is recognised when the
shareholders’ rights to receive payment have been established
(provided that it is probable that the economic benefits will flow to
the company and the amount of revenue can be measured reliably).
2. Critical accounting judgements and key
sources of estimation uncertainty
In the application of the company’s accounting policies, which are
described in Note 1, the directors are required to make judgements,
estimates and assumptions about the carrying amounts of assets
and liabilities that are not readily apparent from other sources.
The estimates and associated assumptions are based on historical
experience and other factors that are considered to be relevant.
Actual results may differ from these 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. There are no critical
accounting judgments or key sources of estimation uncertainty
that would have a significant effect on the amount recognised in
the company financial statements.
3. Employee expenses
The average monthly number of employees during the year was six (March 2022: eight).
Salaries
Bonuses
Others
4. Investment in subsidiary undertakings
Cost
Opening balance
Additions
Carrying cost at 31 March
Bharti Airtel International (Netherlands) B.V.
Airtel International LLP
Airtel Africa services (UK) Limited
Airtel Africa Telesonic Holdings Limited
For details of subsidiary undertakings, refer to Note 34 of consolidated financial statements.
238 Airtel Africa plc Annual Report and Accounts 2023
For the year ended
31 March 2023
31 March 2022
1,074
438
135
1,647
1,658
276
156
2,090
As of
31 March 2023
31 March 2022
3,533,231
3,533,231
–
0
3,533,231
3,533,231
3,532,758
3,532,758
473
0
0
473
0
0
5. Loan receivables
Opening balance
Additions
Repayment
Balance at 31 March
Bharti Airtel International (Netherlands) B.V.1
Airtel Africa services (UK) Limited2
Airtel Africa Telesonic Holdings Limited3
As of
31 March 2023
31 March 2022
412,689
14,129
420,870
1,426,384
(522,695)
(1,027,824)
310,864
239,905
70,706
253
412,689
386,600
26,089
–
1 The loan is unsecured, bears interest at the rate of three months LIBOR+ 2.25% per annum with a maturity date of 25 March 2027. The credit facility is denominated in US$.
2 The loan is unsecured, bears interest at the rate of three months LIBOR+ 2% per annum with a maturity date of 31 December 2026. The credit facility is denominated
in US$.
3 The loan is unsecured, bears interest at the rate of three months SOFR+ 2% per annum with a maturity date of 31 December 2026. The credit facility is denominated
in US$.
6. Cash and bank balances
Cash and cash equivalents
Cash at bank in current accounts
Bank deposits with original maturity of three months or less
Other bank balances
Term deposits with banks with original maturity of more than three months but less than 12 months
7. Trade and other payables
Legal and professional expenses payable1
Employees bonuses payable
Dividend payable
Administrative and other payable
As of
31 March 2023
31 March 2022
36,159
98,000
31,028
–
134,159
31,028
As of
31 March 2023
31 March 2022
101,000
101,000
100,000
100,000
As of
31 March 2023
31 March 2022
1,071
330
46
369
4,034
255
24
74
1,816
4,387
1 The auditor’s remuneration for the current year in respect of audit and audit-related services was $42,000 (March 2022: $46,000).
8. Share capital
Refer to Note 26 of consolidated financial statements.
9. Related-party disclosure
Refer to Note 31 of consolidated financial statements.
10. Guarantees
Guarantees outstanding as at 31 March 2023 and 31 March 2022 amounting to $163m and $160m, respectively, have been issued for external
loans taken by the Group’s subsidiaries.
11. Events after the balance sheet date
There are no subsequent events other than disclosed in Note 35 to the consolidated financial statements.
Airtel Africa plc Annual Report and Accounts 2023
239
FINANCIAL STATEMENTS
Alternative performance measures (APMs)
Introduction
In the reporting of financial information, the directors have adopted various APMs. These measures are not defined by International Financial
Reporting Standards (IFRS) and therefore may not be directly comparable with other companies APMs, including those in the Group’s industry.
APMs should be considered in addition to, and are not intended to be a substitute for, or superior to, IFRS measurements.
Purpose
The directors believe that these APMs assist in providing additional useful information on the underlying trends, performance and position of
the Group.
APMs are also used to enhance the comparability of information between reporting periods and geographical units (such as like-for-like sales),
by adjusting for non-recurring or uncontrollable factors which affect IFRS measures, to aid users in understanding the Group’s performance.
Consequently, APMs are used by the directors and management for performance analysis, planning, reporting and incentive-setting purposes.
The directors believe the following metrics to be the APMs used by the Group to help evaluate growth trends, establish budgets and assess
operational performance and efficiencies. These measures provide an enhanced understanding of the Group’s results and related trends,
therefore increasing transparency and clarity into the core results of the business.
Definition and purpose
The Group defines underlying EBITDA as operating profit/
(loss) for the period before depreciation and amortisation
and adjusted for exceptional items.
The Group defines underlying EBITDA margin as underlying
EBITDA divided by revenue.
Underlying EBITDA and margin are measures used by the
directors to assess the trading performance of the business
and are therefore the measure of segment profit that the
Group presents under IFRS. Underlying EBITDA and margin
are also presented on a consolidated basis because the
directors believe it is important to consider profitability
on a basis consistent with that of the Group’s operating
segments. When presented on a consolidated basis,
underlying EBITDA and margin are APMs.
Depreciation and amortisation is a non-cash item which
fluctuates depending on the timing of capital investment and
useful economic life. Directors believe that a measure which
removes this volatility improves comparability of the Group’s
results period on period and hence is adjusted to arrive at
underlying EBITDA and margin.
Exceptional items are additional specific items that because
of their size, nature or incidence in the results, are considered
to hinder comparison of the Group’s performance on a
period-to-period basis and could distort the understanding
of our performance for the period and the comparability
between periods and hence are adjusted to arrive at
underlying EBITDA and margin.
The Group defines underlying profit/(loss) before tax as
profit/(loss) before tax adjusted for exceptional items.
The directors view underlying profit/(loss) before tax to be
a meaningful measure to analyse the Group’s profitability.
Exceptional items are additional specific items that because
of their size, nature or incidence in the results, are considered
to hinder comparison of the Group’s performance on a
period-to-period basis and could distort the understanding
of our performance for the period and the comparability
between periods and hence are adjusted to arrive at
underlying profit/(loss) before tax.
The following metrics are useful in evaluating the Group’s operating performance:
APM
Underlying
EBITDA and
margin
Closest equivalent
IFRS measure
Adjustments to reconcile
to IFRS measure
Operating profit
• Depreciation and
amortisation
• Exceptional items
Table
reference1
Table A
Underlying
profit/(loss)
before tax
Profit/(loss)
before tax
• Exceptional items
Table B
240 Airtel Africa plc Annual Report and Accounts 2023
APM
Effective tax
rate
Closest equivalent
IFRS measure
Adjustments to reconcile
to IFRS measure
Reported tax rate • Exceptional items
Table
reference1
Table C
• Foreign exchange rate
movements
• One-off tax impact of
prior period, tax litigation
settlement and impact
of tax on permanent
differences
Underlying
profit/(loss)
after tax
Profit/(loss) for
the period
• Exceptional items
Table D
EPS
• Exceptional items
Table E
Earnings per
share before
exceptional
items
Operating free
cash flow
Cash generated
from operating
activities
• Income tax paid
Table F
• Changes in working
capital
• Other non-cash items
• Non-operating income
• Exceptional items
• Capital expenditures
Definition and purpose
The Group defines effective tax rate as reported tax rate
(reported tax charge divided by reported profit before tax)
adjusted for exceptional items, foreign exchange rate
movements and one-off tax items of prior period adjustment,
tax settlements and impact of permanent differences on tax.
This provides an indication of the current on-going tax rate
across the Group.
Exceptional tax items or any tax arising on exceptional
items are additional specific items that because of their size,
nature or incidence in the results, are considered to hinder
comparison of the Group’s performance on a period-to-
period basis and could distort the understanding of our
performance for the period and the comparability between
periods and hence are adjusted to arrive at effective tax rate.
Foreign exchange rate movements are specific items that
are non-tax deductible in a few of the entities which are loss
making and/or where DTA is not yet triggered and hence are
considered to hinder comparison of the Group’s effective tax
rate on a period-to-period basis and therefore excluded to
arrive at effective tax rate.
One-off tax impact on account of prior period adjustment,
any tax litigation settlement and tax impact on permanent
differences are additional specific items that because of their
size and frequency in the results, are considered to hinder
comparison of the Group’s effective tax rate on a period-to-
period basis.
The Group defines underlying profit/(loss) after tax as profit/
(loss) for the period adjusted for exceptional items.
The directors view underlying profit/(loss) after tax to be a
meaningful measure to analyse the Group’s profitability.
Exceptional items are additional specific items that because
of their size, nature or incidence in the results, are considered
to hinder comparison of the Group’s performance on a
period-to-period basis and could distort the understanding
of our performance for the period and the comparability
between periods and hence are adjusted to arrive at
underlying profit/(loss) after tax.
The Group defines earnings per share before exceptional
items as profit/(loss) for the period before exceptional items
attributable to owners of the company divided by the
weighted average number of ordinary shares in issue
during the financial period.
This measure reflects the earnings per share before
exceptional items for each share unit of the company.
Exceptional items are additional specific items that because
of their size, nature or incidence in the results, are considered
to hinder comparison of the Group’s performance on a
period-to-period basis and could distort the understanding
of our performance for the period and the comparability
between periods and hence are adjusted to arrive at
earnings for the purpose of earnings per share before
exceptional items.
The Group defines operating free cash flow as net cash
generated from operating activities before income tax paid,
changes in working capital, other non-cash items, non-
operating income, exceptional items, and after capital
expenditures. The Group views operating free cash flow
as a key liquidity measure, as it indicates the cash available
to pay dividends, repay debt or make further investments
in the Group.
Airtel Africa plc Annual Report and Accounts 2023
241
FINANCIAL STATEMENTS
Alternative performance measures (APMs) continued
APM
Net debt and
leverage ratio
Return on
capital
employed
Closest equivalent
IFRS measure
Adjustments to reconcile
to IFRS measure
Borrowings
• Lease liabilities
Table
reference1
Table G
• Cash and cash
equivalent
• Term deposits with
banks
• Deposits given against
borrowings/non-
derivative financial
instruments
• Fair value hedges
Definition and purpose
The Group defines net debt as borrowings, including lease
liabilities less cash and cash equivalents, term deposits with
banks, deposits given against borrowings/non-derivative
financial instruments, processing costs related to borrowings
and fair value hedge adjustments.
The Group defines leverage ratio as net debt divided by
underlying EBITDA for the preceding 12 months.
The directors view net debt and the leverage ratio to be
meaningful measures to monitor the Group’s ability to cover
its debt through its earnings.
No direct
equivalent
• Exceptional items to
Table H
arrive at underlying EBIT
The Group defines return on capital employed (‘ROCE’) as
underlying EBIT divided by average capital employed.
The directors view ROCE as a financial ratio that measures
the Group’s profitability and the efficiency with which its
capital is being utilised.
The Group defines underlying EBIT as operating profit/(loss)
for the period adjusted for exceptional items.
Exceptional items are additional specific items that because
of their size, nature or incidence in the results, are considered
to hinder comparison of the Group’s performance on a
period-to-period basis and could distort the understanding
of our performance for the period and the comparability
between periods and hence are adjusted to arrive at
underlying EBIT.
Capital employed is defined as sum of equity attributable to
owners of the company (grossed up for put option provided
to minority shareholders to provide them liquidity as part of
the sale agreements executed with them during year ended
31 March 2022), non-controlling interests and net debt.
Average capital employed is average of capital employed
at the closing and beginning of the relevant period.
For quarterly computations, ROCE is calculated by dividing
underlying EBIT for the preceding 12 months by the average
capital employed (being the average of the capital employed
averages for the preceding four quarters).
1 Refer to ‘Reconciliation between GAAP and Alternative Performance Measures’ for respective table.
Some of the Group’s IFRS measures and APMs are translated at constant currency exchange rates to measure the organic performance of the
Group. In determining the percentage change in constant currency terms, both current and previous financial reporting period’s results have
been converted using exchange rates prevailing as on 31 March 2022. Reported currency percentage change is derived on the basis of the
average actual periodic exchange rates for that financial period. Variances between constant currency and reported currency percentages are
due to exchange rate movements between the previous financial reporting period and the current period. The constant currency numbers only
reflect the retranslation of reported numbers into exchange rates as at 31 March 2022 and are not intended to represent the wider impact that
currency changes has on the business.
Changes to APMs
• Underlying revenue: the underlying revenue has not been defined as an APM due to the absence of any exceptional items during the period.
• Return on capital employed (ROCE): the Group has revised the computation of ROCE by grossing up the ‘equity attributable to owners of the
company’ for put option provided to minority shareholders based on the fact that this liability was created through reserves and the Group
believes that it should not impact the computation of return on capital employed. The previous period ROCE has also been restated for
this change.
242 Airtel Africa plc Annual Report and Accounts 2023
Reconciliation between GAAP and Alternative Performance Measures
Table A: Underlying EBITDA and margin
Description
Operating profit
Add:
Depreciation and amortisation
Exceptional items
Underlying EBITDA
Revenue
Underlying EBITDA margin (%)
Table B: Underlying profit/(loss) before tax
Description
Profit/(loss) before tax
Exceptional items (net)
Underlying profit/(loss) before tax
Table C: Effective tax rate
Description
Reported effective tax rate
Adjusted for:
Exceptional items (provided below)
Foreign exchange rate movement for loss making
entities and/or non-DTA operating companies and
holding companies
One-off adjustment and tax on permanent differences
Effective tax rate
Exceptional items
1. Deferred tax asset recognition
2. Gain on sale of tower assets
3. Bonds prepayment cost
4. Provision for settlement of contractual dispute
5. Spectrum fee agreement cost
Total
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
$m
$m
%
1,757
1,535
818
–
2,575
5,255
49.0%
744
32
2,311
4,714
49.0%
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
1,034
–
1,034
1,224
(60)
1,164
Year ended
March 2023
March 2022
Unit of
measure
Profit
before
taxation
Income tax
expense
Tax rate
%
Profit before
taxation
Income tax
expense
Tax rate
%
$m
1,034
284
27.4%
1,224
469
38.3%
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
–
161
(60)
2
106
4
–
(1)
50
(12)
–
(2)
1,144
444
38.8%
1,202
469
39.0%
–
–
–
–
–
–
161
–
–
–
–
161
–
(111)
19
12
20
(60)
–
0
–
2
–
2
Table D: Underlying profit/(loss) after tax
Description
Profit/(loss) after tax
Exceptional items
Underlying profit/(loss) after tax
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
750
(161)
589
755
(62)
693
Airtel Africa plc Annual Report and Accounts 2023
243
FINANCIAL STATEMENTS
Reconciliation between GAAP and Alternative Performance Measures continued
Table E: Earnings per share before exceptional items
Description
Profit for the period attributable to owners of the company
Operating and non-operating exceptional items
Tax exceptional items
Non-controlling interest exceptional items
Profit for the period attributable to owners of the company – before exceptional items
Weighted average number of ordinary shares in issue during the financial period
Earnings per share before exceptional items
Table F: Operating free cash flow
Description
Net cash generated from operating activities
Add: income tax paid
Net cash generation from operation before tax
Less: changes in working capital
Increase in trade receivables
Increase/(decrease) in inventories
Increase in trade payables
Increase in mobile money wallet balance
Decrease/(increase) in provisions
Increase in deferred revenue
Increase in other financial and non-financial liabilities
Increase in other financial and non-financial assets
Operating cash flow before changes in working capital
Other non-cash adjustments
Operating exceptional items
Underlying EBITDA
Less: capital expenditure
Operating free cash flow
Table G: Net debt and leverage
Description
Long term borrowing, net of current portion
Short-term borrowings and current portion of long-term borrowing
Add: processing costs related to borrowings
Add/(less): fair value hedge adjustment
Less: cash and cash equivalents
Less: term deposits with banks
Less: deposits given against borrowings/non-derivative financial instruments
Add: lease liabilities
Net debt
Underlying EBITDA
Leverage
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
$m
$m
Million
Cents
663
–
(161)
10
512
3,752
13.6
631
(60)
(2)
33
602
3,754
16.0
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
2,208
397
2,605
45
13
(9)
(120)
32
(37)
(92)
140
2,577
(2)
–
2,575
(748)
1,827
2,011
293
2,304
18
(4)
(34)
(64)
(14)
(27)
(50)
144
2,273
6
32
2,311
(656)
1,655
Unit of measure
March 2023
March 2022
As at
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
times
1,233
945
7
(5)
(586)
(117)
–
2,047
3,524
2,575
1.4x
1,486
786
5
(16)
(638)
(220)
(122)
1,660
2,941
2,311
1.3x
244 Airtel Africa plc Annual Report and Accounts 2023
Table H: Return on capital employed
Description
Operating profit
Add:
Operating exceptional items
Underlying EBIT
Equity attributable to owners of the company
Add: put option given to minority shareholders1
Gross equity attributable to owners of the company1
Non-controlling interests (NCI)
Net debt (refer Table G)
Capital employed
Average capital employed2
Return on capital employed
Unit of measure
March 2023
March 2022
Year ended
$m
$m
$m
$m
$m
$m
$m
$m
$m
$m
%
1,757
1,535
–
1,757
3,635
569
4,204
173
3,524
7,901
7,536
32
1,567
3,502
579
4,081
147
2,941
7,169
7,026
23.3%
22.3%
1 Refer changes to APMs in Alternative performance measure (APMs) section.
2 Average capital employed is calculated as average of capital employed at closing and opening of relevant period. Capital employed at the beginning of year ended
31 March 2023 and 2022 is $ 7,169m and $ 6,883m respectively.
Airtel Africa plc Annual Report and Accounts 2023
245
FINANCIAL STATEMENTS
Forward-looking statements
This document contains certain forward-looking
statements regarding our intentions, beliefs or current
expectations concerning, amongst other things, our
results of operations, financial condition, liquidity,
prospects, growth, strategies and the economic and
business circumstances occurring from time to time in
the countries and markets in which the Group operates.
Past performance is no guide to future performance and persons
needing advice should consult an independent financial adviser.
The forward-looking statements contained in this document reflect
the knowledge and information available to Airtel Africa at the date
of preparation of this document and Airtel Africa undertakes no
obligation to update or revise these forward-looking statements,
whether as a result of new information, future events or otherwise.
Readers are cautioned not to place undue reliance on such forward-
looking statements.
No statement in this communication is intended to be, nor should be
construed as, a profit forecast or a profit estimate and no statement
in this communication should be interpreted to mean that earnings
per share of Airtel Africa plc for the current or any future financial
periods would necessarily match, exceed or be lower than the
historical published earnings per share of Airtel Africa plc.
Financial data included in this document are presented in US dollars
rounded to the nearest million. Therefore, discrepancies in the tables
between totals and the sums of the amounts listed may occur due to
such rounding. The percentages included in the tables throughout the
document are based on numbers calculated to the nearest $1,000
and therefore minor rounding differences may result in the tables.
Growth metrics are provided on a constant currency basis unless
otherwise stated. The Group has presented certain financial
information on a constant currency basis. This is calculated by
translating the results for the current financial year and prior financial
year at a fixed ‘constant currency’ exchange rate, which is done to
measure the organic performance of the Group. Growth rates for
business and product segments are provided in constant currency
as this better represents the underlying performance of the business.
These statements are often, but not always, made through the use of
words or phrases such as ‘believe,’ ‘anticipate,’ ‘could,’ ‘may,’ ‘would,’
‘should,’ ‘intend,’ ‘plan,’ ‘potential,’ ‘predict,’ ‘will,’ ‘expect,’ ‘estimate,’
‘project,’ ‘positioned,’ ‘strategy,’ ‘outlook’, ‘target’ and similar
expressions.
It is believed that the expectations reflected in this document are
reasonable, but they may be affected by a wide range of variables
that could cause actual results to differ materially from those
currently anticipated.
All such forward-looking statements involve estimates and
assumptions that are subject to risks, uncertainties and other factors
that could cause actual future financial condition, performance and
results to differ materially from the plans, goals, expectations and
results expressed in the forward-looking statements and other
financial and/or statistical data within this communication.
Among the key factors that could cause actual results to differ
materially from those projected in the forward-looking statements are
uncertainties related to the following: the impact of competition from
illicit trade; the impact of adverse domestic or international legislation
and regulation; changes in domestic or international tax laws and
rates; adverse litigation and dispute outcomes and the effect of such
outcomes on Airtel Africa’s financial condition; changes or differences
in domestic or international economic or political conditions; the
ability to obtain price increases and the impact of price increases on
consumer affordability thresholds; adverse decisions by domestic or
international regulatory bodies; the impact of market size reduction
and consumer down-trading; translational and transactional foreign
exchange rate exposure; the impact of serious injury, illness or death
in the workplace; the ability to maintain credit ratings; the ability to
develop, produce or market new alternative products and to do so
profitably; the ability to effectively implement strategic initiatives and
actions taken to increase sales growth; the ability to enhance cash
generation and pay dividends and changes in the market position,
businesses, financial condition, results of operations or prospects
of Airtel Africa.
246 Airtel Africa plc Annual Report and Accounts 2023
Glossary
Technical and industry terms
Company-related
4G data customer
Airtel Money
Airtel Money ARPU
(mobile money ARPU)
Airtel Money customer base
(mobile money customer base)
Airtel money customer
penetration (mobile money
customer penetration)
Airtel Money transaction value
(mobile money transaction value)
Airtel money transaction value
per customer per month (mobile
money transaction value per
customer per month)
ARPU
Average customers
Broadband base stations
Bundle penetration
Capital expenditure
Constant currency
Customer
Customer base
Data ARPU
Data customer base
Data customer penetration
Data usage per customer
Digitalisation
Diluted earnings per share
A customer having a 4G handset and who has used at least 1 MB of data on the Group network using any
of GPRS, 3G and 4G in the last 30 days.
Airtel Money is the brand name for Airtel Africa’s mobile money products and services. The term is used
interchangeably with ‘mobile money’ when referring to our mobile money business, finance, operations
and activities.
Mobile money average revenue per user. This is derived by dividing total mobile money revenue during
the relevant period by the average number of active mobile money customers and dividing the result by
the number of months in the relevant period.
Total number of active subscribers who have enacted any mobile money usage event in the last 30 days.
The proportion of total Airtel Africa active mobile customers who use mobile money services. This is
calculated by dividing the mobile money customer base by the Group’s total customer base.
The sum of all financial transactions performed on Airtel Africa’s mobile money platform for the
relevant period.
Calculated by dividing the total mobile money transaction value on the Group’s mobile money platform
during the relevant period by the average number of active mobile money customers and dividing the
result by the number of months in the relevant period.
Average revenue per user per month. This is derived by dividing total revenue during the relevant period
by the average number of customers during the period and dividing the result by the number of months
in the relevant period.
The average number of active customers for a period. This is derived from the monthly averages during
the relevant period. Monthly averages are calculated using the number of active customers at the
beginning and the end of each month.
Base stations that carry either 3G and/or 4G capability across all technologies and spectrum bands.
The proportion of revenue contributed by bundled products as a percentage of the total revenue
generated by the service.
An alternative performance measure (non-GAAP). This is defined as investment in gross fixed assets
(both tangible and intangible but excluding spectrum and licences) plus capital work in progress (CWIP),
excluding provisions on CWIP for the period.
The Group has presented certain financial information that is calculated by translating the results for the
current financial year and prior financial years at a fixed ‘constant currency’ exchange rate, which is used to
measure the organic performance of the Group. Growth rates for business and product segments are in
constant currency as it better represents the underlying performance of the business. Constant currency
growth rates for prior years are calculated using closing exchange rate as at the end of the prior year.
Defined as a unique active subscriber with a unique mobile telephone number who has used any of
Airtel’s services in the last 30 days.
The total number of active subscribers that have used any of our services (voice calls, SMS, data usage or
mobile money transactions in the last 30 days.
Data ARPU is derived by dividing total data revenue during the relevant period by the average number of
data customers and dividing the result by the number of months in the relevant period.
The total number of subscribers who have consumed at least 1 MB of data on the Group network using
any of GPRS, 3G or 4G in the last 30 days.
The proportion of customers using data services. Calculated by dividing the data customer base by the
total customer base.
This is calculated by dividing the total MBs consumed on the Group’s network during the relevant period
by the average data customer base over the same period and dividing the result by the number of
months in the relevant period.
We use the term digitalisation in its broadest sense to encompass both digitisation actions and processes
that convert analogue information into a digital form and thereby bring customers into the digital
environment, and the broader digitalisation processes of controlling, connecting and planning processes
digitally; the processes that affect digital transformation of our business, and of industry, economics
and society as a whole through bringing about new business models, socio-economic structures and
organisational patterns.
Diluted EPS is calculated by adjusting the profit for the year attributable to the shareholders and the
weighted average number of shares considered for deriving basic EPS, for the effects of all the shares that
could have been issued upon conversion of all dilutive potential shares. The dilutive potential shares are
adjusted for the proceeds receivable had the shares actually been issued at fair value. Further, the dilutive
potential shares are deemed converted as at beginning of the period, unless issued at a later date during
the period.
Airtel Africa plc Annual Report and Accounts 2023
247
FINANCIAL STATEMENTS
Glossary continued
Company-related
Earnings per share (EPS)
Environment, Social and
Governance (ESG)
Foreign exchange rate movements
for non-DTA operating companies
and holding companies
GSMA
Information and communication
technologies (ICT)
IRU
Lease liability
Leverage
Mini-AMB
Minutes of usage
Mobile services
Mobile transaction rates (MTR)
Net debt
Net debt to underlying EBITDA
Net revenue
Network towers or ‘sites’
Operating company (OpCo)
Operating free cash flow
Operating leverage
Operating profit
Other revenue
Reported currency
Smartphone
Smartphone penetration
Total MBs on network
Underlying EBIT
EPS is calculated by dividing the profit for the period attributable to the owners of the company by the
weighted average number of ordinary shares outstanding during the period.
ESG is a framework designed to be embedded into an organisation’s strategy that considers the needs
and ways in which to generate value for all organisational stakeholders.
Foreign exchange rate movements are specific items that are non-tax deductible in a few of our operating
entities; hence these hinder a like-for-like comparison of the Group’s effective tax rate on a period-to-
period basis and are therefore excluded when calculating the effective tax rate.
A global organisation representing mobile operators and organisations across the mobile ecosystem and
adjacent industries.
ICT refers to all communication technologies, including the internet, wireless networks, cell phones,
computers, software, middleware, video-conferencing, social networking, and other media applications
and services.
Indefeasible Right of Use – a contractual agreement for a portion of the capacity/fiber of any fibre route.
Lease liability represents the present value of future lease payment obligations.
An alternative performance measure (non-GAAP). Leverage (or leverage ratio) is calculated by dividing
net debt at the end of the relevant period by the underlying EBITDA for the preceding 12 months.
A compact outlet that offers the services of an Airtel Money Branch, currently being trialled in Zambia.
Minutes of usage refer to the duration in minutes for which customers use the Group’s network for
making and receiving voice calls. It is typically expressed over a period of one month. It includes all
incoming and outgoing call minutes, including roaming calls.
Mobile services are our core telecom services, mainly voice and data services, but also including revenue
from tower operation services provided by the Group and excluding mobile money services.
Mobile transaction rates are the charges paid to the telecom operator on whose network a call is
terminated.
An alternative performance measure (non-GAAP). The Group defines net debt as borrowings, including
lease liabilities less cash and cash equivalents, term deposits with banks, processing costs related to
borrowings and fair value hedge adjustments.
An alternative performance measure (non-GAAP). Calculated by dividing net debt as at the end of the
relevant period by underlying EBITDA for the last 12 months (LTM), from the end of the relevant period.
This is also referred to as the leverage ratio.
An alternative performance measure (non-GAAP). Defined as total revenue adjusted for MTR (mobile
transaction rates), cost of goods sold and mobile money commissions.
Physical network infrastructure comprising a base transmission system (BTS) which holds the radio
transceivers (TRXs) that define a cell and coordinates the radio link protocols with the mobile device.
It includes all ground-based, roof top and in-building solutions.
Operating company (or OpCo) is a defined corporate business unit, providing telecoms services and
mobile money services in the Group’s footprint.
An alternative performance measure (non-GAAP). Calculated by subtracting capital expenditure from
underlying EBITDA.
An alternative performance measure (non-GAAP). Operating leverage is a measure of the operating
efficiency of the business. It is calculated by dividing operating expenditure (excluding regulatory charges)
by total revenue.
Operating profit is a GAAP measure of profitability. Calculated as revenue less operating expenditure
(including depreciation and amortisation, and operating exceptional items).
Other revenue includes revenues from messaging, value added services (VAS), enterprise, site sharing
and handset sale revenue.
Our reported currency is US dollars. Accordingly, actual periodic exchange rates are used to translate the
local currency financial statements of OpCos into US dollars. Under reported currency the assets and
liabilities are translated into US dollars at the exchange rates prevailing at the reporting date whereas
the statements of profit and loss are translated into US dollars at monthly average exchange rates.
A smartphone is defined as a mobile phone with an interactive touch screen that allows the user to
access the internet and additional data applications, providing additional functionality to that of a basic
‘feature’ phone which is used only for making voice calls and sending and receiving text messages.
Calculated by dividing the number of smartphone devices in use by the total number of customers.
Total MBs of data consumed (uploaded and downloaded) by customers on the Group network using
any of GPRS, 3G and 4G during the relevant period.
An alternative performance measure (non-GAAP). Defined as operating profit before exceptional items.
248 Airtel Africa plc Annual Report and Accounts 2023
Company-related
Underlying EBITDA
Underlying EBITDA margin
Unique subscriber penetration
Unstructured Supplementary
Service Data
Voice minutes of usage per
customer per month
Weighted average number
of shares
An alternative performance measure (non-GAAP). Defined as operating profit before depreciation,
amortisation, CSR cost and exceptional items.
An alternative performance measure (non-GAAP). Calculated by dividing underlying EBITDA for the
relevant period by underlying revenue for the relevant period.
The number of individual mobile subscribers as a proportion of the total population. This metric adjusts for
the use of multiple SIM cards by customers, to identify the degree of uptake of mobile services by individuals.
Unstructured Supplementary Service Data (USSD), also known as ‘quick codes’ or ‘feature codes’, is a
communications protocol for GSM mobile operators, similar to SMS messaging. It has a variety of uses
such as WAP browsing, prepaid callback services, mobile-money services, location-based content
services, menu-based information services, and for configuring phones on the network.
Calculated by dividing the total number of voice minutes of usage on the Group’s network during the
relevant period by the average number of customers and dividing the result by the number of months
in the relevant period.
The weighted average number of shares is calculated by multiplying the number of outstanding shares by
the portion of the reporting period those shares covered, doing this for each portion, and then summing
the total.
Airtel Africa plc Annual Report and Accounts 2023
249
FINANCIAL STATEMENTS
Glossary continued
Abbreviations
2G
3G
4G
AAML
ARPU
bps
bn
CAGR
Capex
CDP
CRO
CSR
DQI
EBIT
EBITDA
EPS
ERC
FPPP
GAAP
GB
GDP
HoldCo
IAS
ICT
ICT (Hub)
IFRS
IMF
IPO
KPIs
KYC
LTE
LSE
LTM
m
MB
MI
NGO
NGX
OpCo
P2P
PAYG
ppts
QoS
RAN
SIM
Single RAN
SMS
SPOC
TB
TCFD
Telecoms
UoM
USSD
VQI
Second-generation mobile technology
Third-generation mobile technology
Fourth-generation mobile technology
Airtel Africa Mauritius Limited
Average revenue per user
Basis points
Billion
Compound annual growth rate
Capital expenditure
Climate disclosure project
Climate related risks and opportunities
Corporate social responsibility
Data quality index
Earnings before interest and tax
Earnings before interest, tax, depreciation and amortisation
Earnings per share
Executive Risk Committee
Financial position and prospects procedures
Generally accepted accounting principles
Gigabyte
Gross domestic product
Holding company
International accounting standards
Information and communication technologies
Information communication technology (Hub) IFRS
International financial reporting standards
International monetary fund
Initial public offering
Key performance indicators
Know your customer
Long-term evolution (4G technology)
London Stock Exchange
Last 12 months
Million
Megabyte
Minority interest (non-controlling interest)
Non-governmental organisation
Nigerian Exchange Limited
Operating company
Person to person
Pay-as-you-go
Percentage points
Quality of service
Radio access network
Subscriber identification module
Single radio access network
Short messaging service
Single point of contact (vendor SPOC: a designated person of the vendor who interacts with Airtel Africa’s
teams on a regular basis for various requirements)
Terabyte
Taskforce for climate-related financial disclosure
Telecommunications
Unit of measure
Unstructured supplementary service data
Voice quality index
250 Airtel Africa plc Annual Report and Accounts 2023
General shareholders’ information
Annual General Meeting (AGM)
4 July 2023
Date
Day
Time
Venue
Tuesday
11am BST
53/54 Grosvenor Street, London W1K 3HU, United Kingdom
Dividend
Ex-dividend date for final dividend
Record date for final dividend
AGM
22 June 2023
23 June 2023
4 July 2023
Final dividend payment
3.27 cents per ordinary share
Financial calendar
Financial year: 1 April to 31 March.
Airtel Africa plc share price
Airtel Africa’s ordinary shares have a premium listing on the London Stock Exchange’s main market for listed securities and are listed under the
symbol AAF. Current and historical share price information is available on our website: www.airtel.africa.
Shareholders as of 31 March 2022
Number of accounts
Number of ordinary shares held
1-1,000
1,001-5,000
5,001-50,000
50,001-100,000
100,001-500,000
More than 500,000
Totals
31
58
125
43
122
151
530
Shares
14,117
164,994
3,009,561
3,097,974
30,531,705
3,721,333,153
3,758,151,504
% of total issued shares
0.00
0.01
0.08
0.08
0.81
99.02
100%
Warning to shareholders (‘boiler room’ scams)
In recent years, many companies have become aware that their shareholders have received unsolicited calls or correspondence concerning
investment matters. These callers typically make claims of highly profitable opportunities in UK investments which turn out to be worthless or
simply do not exist. These approaches are usually made by unauthorised companies and individuals and are commonly known as ‘boiler room’
scams. Airtel Africa plc shareholders are advised to be extremely wary of such approaches and advised to only deal with firms authorised by
FCA. See the FCA website at fca.org.uk/scamsmart for more detailed information about this or similar activities.
Registrar and transfer agent
All the work related to share registry, both in physical and electronic form, is handled by the company’s registrar and transfer agent at the address
mentioned in the communication addresses section.
Communication addresses
Contact
For corporate governance and
other secretarial-related matters
Simon O’Hara
Group company secretary
Email
Address
investor.relations@africa.airtel.com First Floor, 53/54 Grosvenor Street,
London, W1K 3HU, United Kingdom
Tel: +44 207 493 9315
For queries relating to financial
statements and corporate
communication matters
Pier Falcione
Deputy CFO and
Head of investor relations
investor.relations@africa.airtel.com First Floor, 53/54 Grosvenor Street,
London, W1K 3HU, United Kingdom
Tel: +44 207 493 9315
Registrar and transfer agent
Computershare Investor
Services PLC
webqueries@computershare.co.uk
The Pavilions, Bridgwater Road,
Bristol, BS99 6ZY, United Kingdom
Coronation Registrars
Limited
Website:
www.coronationregistrars.com
9 Amodu Ojikutu Street,
Victoria Island, Lagos, Nigeria
Tel: +234 1 271 4566-7
Airtel Africa plc Annual Report and Accounts 2023
251
FINANCIAL STATEMENTS
Auditor’s ESEF Assurance statement
Independent auditor’s reasonable assurance report on the compliance
of Airtel Africa plc’s European Single Electronic Format (ESEF)
prepared Annual Financial Report with the European Single Electronic
Format Regulatory Technical Standard (‘ESEF RTS’) as required by
the Financial Conduct Authority (FCA) Disclosure Guidance and
Transparency Rule (DTR) 4.1.14R
To the Members of Airtel Africa plc
Report on compliance with the requirements for iXBRL mark up
(‘tagging’) of consolidated financial statements included in the
ESEF-prepared Annual Financial Report
We have undertaken a reasonable assurance engagement on the
iXBRL mark up of consolidated financial statements for the year ended
31 March 2023 of Airtel Africa plc (the “company”) included in the
ESEF-prepared Annual Financial Report prepared by the company.
Opinion
In our opinion, the consolidated financial statements for the year
ended 31 March 2023 of the company included in the ESEF-prepared
Annual Financial Report, are marked up, in all material respects, in
compliance with the ESEF RTS.
The directors’ responsibility for the ESEF-prepared Annual Financial
Report prepared in compliance with the ESEF RTS
The directors are responsible for preparing the ESEF-prepared Annual
Financial Report. This responsibility includes:
• the selection and application of appropriate iXBRL tags using
judgement where necessary;
• ensuring consistency between digitised information and the
consolidated financial statements presented in human-readable
format; and
• the design, implementation and maintenance of internal control
relevant to the application of the ESEF RTS.
Our independence and quality control
We have complied with the independence and other ethical
requirements of Financial Reporting Council’s (the ‘FRC’s’) Ethical
Standard as applied to listed public interest entities, and we have
fulfilled our other ethical responsibilities in accordance with these
requirements.
We apply International Standard on Quality Control 1 and, accordingly,
maintain a comprehensive system of quality control including
documented policies and procedures regarding compliance with
ethical requirements, professional standards and applicable legal
and regulatory requirements.
Our responsibility
Our responsibility is to express an opinion on whether the electronic
mark up of consolidated financial statements complies in all material
respects with the ESEF RTS based on the evidence we have obtained.
We conducted our reasonable assurance engagement in accordance
with International Standard on Assurance Engagements (UK) 3000,
Assurance Engagements Other than Audits or Reviews of Historical
Financial Information (‘ISAE (UK) 3000’) issued by the FRC.
A reasonable assurance engagement in accordance with ISAE (UK)
3000 involves performing procedures to obtain reasonable assurance
about the compliance of the mark up of the consolidated financial
statements with the ESEF RTS. The nature, timing and extent of
procedures selected depend on the practitioner’s judgement,
including the assessment of the risks of material departures from the
requirements set out in the ESEF RTS, whether due to fraud or error.
Our reasonable assurance engagement consisted primarily of:
• obtaining an understanding of the ESEF RTS mark up process,
including internal control over the mark up process relevant to
the engagement;
• reconciling the marked up data with the audited consolidated
financial statements of the company dated 31 March 2023;
• evaluating the appropriateness of the company’s mark up of the
consolidated financial statements using the XBRL mark-up
language;
• evaluating the appropriateness of the company’s use of iXBRL
elements selected from a permitted taxonomy and the creation of
extension elements where no suitable element in the permitted
taxonomy has been identified; and
• evaluating the use of anchoring in relation to the extension
elements.
In this report we do not express an audit opinion, review conclusion
or any other assurance conclusion on the consolidated financial
statements. Our audit opinion relating to the consolidated financial
statements of the company for the year ended 31 March 2023 is set
out in our Independent Auditor’s Report dated 10 May 2023.
Use of our report
Our report is made solely to the company’s members, as a body, in
accordance with ISAE (UK) 3000. Our work has been undertaken so
that we might state to the company those matters we are required
to state to them in this report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to
anyone other than the company and the company’s members as a
body for our work, this report, or for the conclusions we have formed.
Daryl Winstone FCA (Senior statutory auditor)
For and on behalf of Deloitte LLP
Statutory Auditor
London, United Kingdom
7 June 2023
252 Airtel Africa plc Annual Report and Accounts 2023
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Airtel Africa plc
53/54 Grosvenor Street
London W1K 3HU
England
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