Financials

Safaricom PLC Annual Report and Financial Statements 2022 About Safaricom Who Message from
our report at a glance we are the chairman
FINANCIAL
STATEMENTS
Report of the Directors 170
Statement of Directors’ responsibilities 180
Directors’ Remuneration Report 181
Report of the independent auditor 184
Financial statements 188
168
Message from Our strategic The value The commercial The social value How we Financial
the CEO approach we embed value we deliver CFO’s review we contribute safeguard value statements
169
FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022
Report of the Directors
This Report of the Directors is submitted an inclusive business that meets the needs of our customers and
protects the planet for the present and the future.
together with the audited financial
We achieve this purpose by placing the customer at the at the heart
statements for the year ended of our business priorities. Through innovation, we continue to enhance
31 March 2022 which disclose the the digital lifestyle of our customers. Our various products and
services, including voice, data, financial services and enterprise
state of affairs of Safaricom PLC solutions serve to support the needs, aspirations and hopes of our
(the “Company” or “Safaricom”) and customers. Our commitment and promise to our customers is to serve
them in a Simple, Transparent and Honest manner.
its subsidiaries (together, the “Group”). Our corporate strategy is guided by four transformative pillars namely:
Strengthening the Core; To be a financial services provider; Win in
Business review select digital ecosystems; and Achieve cost leadership..
Safaricom’s purpose is to Transform Lives, which continues to reaffirm Our business continues to record impressive growth over the years,
our commitment to positively impact social, governance and as evidenced by the trend below on our five-year KPIs.
environmental change, unlock our next growth phase, and support
our transition from a telco to a purpose-led technology company.
We remain committed to our sustainability agenda, covering key
issues such as addressing our impact on the climate and building
Five-year KPIs
300
250
200
150
100
50
0
FY2018 FY2019 FY2020 FY2021 FY2022
Service revenue EBIT Net income Free cashflow
FY2018 FY2019 FY2020 FY2021 FY2022

Service revenue 225 240 251 250 281
EBIT 79 89 101 96 109
Net income 55 62 74 69 67
Free cash flow 55 63 70 65 64
Service revenue grew by 12.3% to KShs 281.1 billion driven Fixed service and wholesale transit revenue grew 18.3% YoY to
predominantly by increased usage of non-voice services mainly KShs 11.24 billion driven by increased activity and penetration of
M-PESA, fixed service and mobile data. Fibre to the Home (FTTH) and growth in Enterprise fixed data
revenue. The growth was supported by 16.9% increase in Enterprise
Overall M-PESA revenue now stands at 38.3% of service revenue. revenue to KShs 7.05 billion as well as 20.6% growth in Consumer
This is an increase from 33.0% reported in the same period last revenue to KShs 4.19 billion. FTTH customers grew 20.8% YoY to
financial year. M-PESA revenue recorded a growth of 30.3% to 166.98k. Fixed Enterprise customers grew 24.1% YoY to 48.31k,
KShs 107.7 billion driven by resumption of charges for person to of which 58.9% account for LTE customers and grew 33.2% YoY to
Person (P2P) transfers which had been waived on the onset of 28.47k. FTTH penetration now stands at 52.9%, homes connected
COVID-19 pandemic. The growth in revenue is also supported by stood at 193.1k while homes passed were 364.98k as at
increase in one-month customers which grew by 7.8% YoY to 31 March 2022.
30.53 million.
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Business review continued

Mobile data revenue, which accounts for 17.2% of our service ICT industry/Sector statistics
revenue, grew at 8.1% to KShs 48.4 billion.
Mobile (SIM) subscriptions
Distinct data bundle users grew 5.3% YoY to 17.60 million.
Mobile Data ARPU increased by 10.4% to close at KShs 205.7. As at 31 March 2022, the number of active1 mobile (SIM)
One-month active mobile data customers grew 6.1% YoY to close subscriptions stood at 64.9 million compared to the 65.1 million
at 25.22 million. subscriptions recorded by the end of 31 December 2021
representing a marginal decline of 0.2%. The decline in SIM
Operating profit (EBIT) increased by 13.5% attributed to increase in subscriptions is partly attributed to the ongoing SIM registration
service revenue as explained above as well as decline in impairment exercise during which a number of SIM cards have been
for financial assets which declined by 21.5% due to improved and deactivated.
prudent management of debt. Included in calculation of EBIT is
KShs 5.1 billion relating to costs incurred by Safaricom Ethiopia
Telecommunication, Global Partnership of Ethiopia and Vodafamily
Ethiopia (Note 23).
Trends in mobile subscriptions and penetration

80 134.0
64.9 133.6 133.2
70 62.0 64.4 64.9
65.1 132.4
60 130.3
133.3
132.2 131.6
50 131.4
130.8
40 130.0
30 129.2
128.4
20
127.6
10 126.8
0 126.0
Mar 2021 Jun 2021 Sep 2021 Dec 2021 Mar 2022
Mobile subscriptions (millions) Mobile subscriptions (%)
Safaricom PLC active mobile subscriptions declined by 1.02% as indicated the below table:
63,669,387 1,291,644
Prepaid Postpaid
subscriptions subscriptions
98.0% of total mobile subscriptions 20.0% of total mobile subscriptions
Jamli Telecom 254,314 Telkom Kenya 44,607
Finserve (Equitel) 1,394,049 Airtel Network 87,275
Telkom Kenya 4,099,086 Safaricom PLS 1,159,762
Airtel Network 16,641,322
Safaricom PLC 41,280,616
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Report of the Directors continued
Market shares in domestic mobile traffic

During the third quarter of the FY2021/2022 (January – March 2022), Safaricom PLC recorded the highest market share in domestic voice and
SMS traffic at 67.8% and 89.5% respectively.
100
considerations are not separate from our core business but have an
80 impact on our overall commercial sustainability and success.
As part of our commitment to the Sustainable Development Goals

60 (SDGs) we are committed to maximising our positive impact while
mitigating our negative ones. We aim to achieve this through the
continued alignment of our strategy and operations with our nine
40
SDGs by:
20 i) Leveraging our mobile technologies to transform lives by

improving access to quality and affordable health care services
and by promoting well-being for all through product partnerships
0
such as M-Tiba and through our corporate social investments
Safaricom Plc Airtel TKL Finserve JTL
under our Safaricom and M-PESA Foundations. (SDG 3)
Market Shares in Domestic Voice (%)
Market Shares in Domestic SMS (%) ii) Expanding access to education through innovative solutions,
our network and through partnerships such as Shupavu 291,
connectivity for schools and our various programmes under the
Safaricom PLC Airtel TKL Finserve JTL Elimu pillar of our Safaricom and M-PESA Foundations. (SDG 4)
Voice 67.8 30.0 2.0 0.1 0
iii) Transitioning to use of clean energy at our sites and leveraging
SMS 89.5 10.0 0.5 0.0 0 technology to provide clean energy solutions, including payment
solutions for local and renewable energy solutions. To this end,
Safaricom continues to transition from a telecommunication service we have committed to be a Net-Zero emitting company by
provider to a technology company in line with our vision to become 2050. (SDG 7)
a purpose-led technology company by 2025. We leverage on the
power of mobile technology and innovation to transform lives by iv) Providing decent work within Safaricom and its broader
connecting Kenyans to opportunities, knowledge and the world. ecosystem, including enforcing effective health and safety
We recognise the power that technology has to support Kenya’s practices both internally and by suppliers while at the same time
economic growth as well as solve society’s problems. contributing to the local and national economy through innovative
solutions to increase employment and facilitate economic activity
As we focus on the next phase of our journey, we remain committed amongst suppliers and customers. (SDG 8)
to our purpose of transforming lives by accelerating new growth
areas for our business to serve our customers need while delivering v) Delivering connectivity and innovative products and services,
superior customer experience. We will continue to deliver a wide that will provide unmatched solutions to meet the needs of
range of products and services designed to present sustainable Kenyans. (SDG 9)
solutions to some of society’s most pressing challenges through being
vi) Reducing inequalities by enabling equal access to opportunities
a digital-first and insights-led organisation. We will also continue to
to everyone, especially to vulnerable groups, using Safaricom
support the growth of SMEs and Micro-SMEs, which are the lifeblood
leadership, network, solutions and technology. (SDG 10)
of economic growth in our country, by offering enhanced financial
services and connectivity solutions. vii) Managing our operations responsibly, decreasing our
environmental impact and promoting responsible behaviours
We remain committed to sustainable community investments through
among all our stakeholders. We have committed to eliminate
both our Foundations. We transform lives through investing in
single use plastics in our operations by 2025 and recycle/
communities, leveraging on technology and strategic partnerships in
repurpose 100% of our waste. Further, we will embed circular
areas of health, education and economic empowerment.
economy principles in our purchases (product lifecycle and
The period under review was still challenging as businesses and disposal) for all applicable contracts. (SDG 12)
society pushed ahead on the recovery from the effects of COVID-19
viii) Managing our operations responsibly and ethically and fighting
crisis. Supporting our stakeholders build back better as we emerge
corruption in all its forms. (SDG 16)
from the economic crisis brought about by the pandemic remains one
of our key priorities.
We remain focused on our sustainability agenda on key issues such

as climate action and the impact our business has on the environment
as well as social factors. We recognise that environmental and social
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Market shares in domestic mobile traffic continued

ix) Partnering and building collective capacity of people, Our risk management framework that is aligned to the ISO 31000
organisations and nations to promote and advance the SDGs. Risk Management Standard, allows us to identify, measure, manage
(SDG 17) and monitor strategic and operational risks across the business. The
framework provides our management with a clear line of sight over
The focus areas during the year included: risk to enable informed decision-making.
• Net zero commitment by 2050 – so far, we have planted over
one million trees as part of our commitment to grow five million
Our approach
trees in five years. We also committed to transitioning to We believe that great risk management starts with the right
renewable sources of powering our network. Our target is to conversations to drive better business decisions. Our focus is to
transition 90% of our sites to renewable energy in five years. identify and embed mitigation actions for material risks that could
• Refreshed Social Contract to define Safaricom’s purpose journey impact our current or future performance, and/or our reputation.
through the development of a companywide purpose strategy Our approach is holistic and integrated, bringing together risk
that defines our ”why“ and outlines the resulting impact in the management, internal controls and business integrity, ensuring that our
community we operate in through innovative products and activities across this agenda focus on the risks that could have the
services; our commitment to manage our environmental impact; greatest impact. We regularly review and refresh our principal risks,
our commitment to our employees and stakeholders in our our risk appetite and our approach to risk management.
ecosystem and how we conduct business responsibly. Our approach is also structured to ensure that all reasonable steps
are taken to mitigate, but not to eliminate, our principal risks in
• Advocacy to influence policy and convening as a thought leader
this context.
on emerging sustainability issues like climate action and
implementation of the Sustainable Development Goals through We continuously review our risk management framework which
regional and global partnerships with organisations such as provides the foundation and organisational arrangements for
United Nations Global Compact (UNGC), United Nations identifying, treating, reporting, monitoring, reviewing and continually
International Children’s Emergency Fund (UNICEF), Shared Value improving risk management throughout the organisation.
Africa Initiative.
• ISO 14001:2015 by British Standards Institute which we use to Our Risk Appetite Statement
measure our performance against the requirements of the
Safaricom faces a broad range of risks while carrying out its business
Environment Management Standards.
operations. We recognise that risk is an integral part of creating and
• Compliance – ensuring compliance with the relevant preserving value, as such we have developed detailed processes to
environmental regulations in order to secure licence for 5G. ensure all critical and major risks are proactively managed.
Our bold pledge has focused our thinking and efforts across the We recognise that it is not possible to eliminate all the risks inherent
entire business, ranging from improving energy efficiencies and in our operations and acceptance of some of the risks is necessary to
reducing the energy consumed across our network and facilities to foster innovation, development of a sustainable business and for
deploying renewable energy solutions and exploring carbon offset maximising shareholders’ value.
projects within our establishments across the country.
Our risk philosophy is aligned to best risk management practices and
is aimed at supporting attainment of our purpose, vision and mission
Our risk management by effectively balancing risk and reward.
framework
Our principal risks and what we are doing
Managing uncertainty in our business about them
Managing risks and uncertainty is an integral part of successfully Our risk identification and mitigation processes have been designed
delivering on our strategic objectives. We have embedded robust risk to be responsive to the ever-changing environment that we operate in.
management framework and practices as an integral part of good
management. This is demonstrated by the top-down approach with We identify the key risks through our Enterprise Risk Management
the Board taking overall responsibility of managing risk. Appropriate Framework, which provides the Executive Committee and Board with
support towards risk management is given, driving a positive risk a robust assessment of the principal risks facing the Company.
culture across the organisation. An embedded enterprise risk management process supports the
identification of these principal risks. The risk appetite for each
principal risk is reviewed and approved by the Board to enable
informed risk-based decision-making.
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Our risk management framework continued
Our principal risks and what we are doing about them continued
The following are the principal risks and related mitigation strategies that receive close management attention:
1. REGULATORY AND POLICY ENVIRONMENT
Opportunity
Enhanced collaboration with our regulators to ease some regulatory pressures while ensuring that satisfactory measures are taken to safeguard
our customers and other stakeholders’ interests.
Context Mitigation
We operate in a complex and heavily regulated environment and our We continue to build and maintain proactive and constructive
business can be adversely affected by changes in laws or regulatory relationships with the regulators and government, informed by a
policies. A breach of these regulatory requirements could expose shared understanding of the need for inclusive economic
Safaricom to significant financial implications, reputational damage development.
and/or suspension of our licence.
Participating in industry forums and other policy forums as well as
The nature of products and services provided require compliance with contributing to discussions on emerging legislation and regulations as
a wide range of rules and laws from our regulators namely we prepare to comply with the same.
Communications Authority of Kenya (CA), Competition Authority of
Kenya (CAK) and Central Bank of Kenya (CBK). Our products and services are carefully and continuously monitored to
ensure they do not contravene any regulations.
Strengthened focus placed on ensuring robust governance processes

and strong management of regulatory compliance in place.
2. CYBER THREATS
Opportunity
Providing our customers with secure products and services, while creating digital trust as we remain a trusted provider to both consumer and
enterprise customers.
Context Mitigation
Cybersecurity incidents, and other tactics designed to gain access to Cyber security remains one of our critical business considerations,
and exploit sensitive information by breaching critical systems are and we ensure that information security remains an integral and
evolving and have been increasing in both sophistication and critical business defence tool.
occurrence in recent years.
We conduct regular reviews of the most significant security risks
Such cyber-attack, insider threat or supplier breach (malicious or affecting our business and develop strategies to detect, prevent and
accidental) could lead to theft, loss and misappropriation of critical respond to them. Our cyber security approach focuses on minimising
assets and/or personal data and disruption to core business the risk of cyber incidents that affect our networks and services.
operations. As such we have implemented robust cyber security controls,
next-generation security technologies complemented by our
24X7 Cyber Defense Center.
As a business, we have adopted a culture that prioritises customer

privacy and security by raising employee awareness about security
risks and our mitigation measures.
Our networks and infrastructure are built with security in mind with
layers of security control applied to all applications and infrastructure.
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3. DATA PRIVACY RISKS
Opportunity
Protecting our customers personal data that is crucial to being a trusted provider and supporting our enterprise customers by providing managed
security services to safeguard their business operations.
Context Mitigation
We are subject to a wide variety of laws and regulations regarding To provide the best customer experience, we are committed to
protection of personal data and any failure or perceived failure by us creating products and services that do not compromise the privacy
may result in significant fines, which could have a material adverse and security of our customers’ personal information.
effect on our business, operating results or reputation.
We clearly define how we secure and manage the creation, usage,
Implementation of the General Data Protection Regulations (GDPR) in storage and disposal of information that we manage. As a business,
2018 as well as enactment of the Kenya Data protection Act 2019 we have adopted a privacy and security by design culture that
continues to raise the bar on data protection. prioritises customer privacy and security by raising employee and
partner awareness about security risks and our mitigation measures.
There are strong obligations placed on data controllers and processors
requiring them to abide by principles of meaningful user consent, All our business operations that include processing of personal data
collection limitation, purpose limitation, data minimisation and must comply with our internal controls, codes of conduct, and data
data security. privacy policies.
4. MARKET DISRUPTION AND AN EVOLVING COMPETITIVE LANDSCAPE
Opportunities
The competitive and disruptive environment has yielded innovations that are setting us apart, allows us to be agile and drive partnerships while
providing our customers with world-class experience.
Context Mitigation
In our shift from a more conventional telco to a digital services Our strategies to manage competition and the prevailing market
provider, we are facing strengthened competition both for customer disruptions focus on growing and retaining our customers by:
and for digital talent from various non-traditional sources.
• Adoption of Agile operating model to enable faster route
Competition in the telecommunication industry is on the rise in terms of to market.
product and service offerings. • Focus on Customer Obsession to provide our customers with
world-class experience.
Dynamic market needs, ever-changing consumer trends, entrance of
new players in the market coupled with speed of new disruptive • Developing insights using big data into our customer’s needs,
technologies have also intensified the competition with customer value wants and behaviours and provide propositions to lead in
proposition being the competitive edge. chosen segments.
• Offering quality services and leveraging on strategic partnerships
We face increased competition from a variety of new technology
within different sectors to ensure we provide our customers with
platforms, which aim to build alternative communication, which could
relevant products and services.
potentially affect our customer relationships.
• Embedding a purpose-led culture that drives innovation
and partnership.
• We continue to be innovative and adopt an agile operating
model to be able to respond rapidly to the ever-changing
customers’ needs.
• 4G acceleration to provide our customers with quality service.
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5. SLOWED ECONOMIC GROWTH AND CHALLENGING MACROECONOMIC CONTEXT
Opportunity
The push for business reinvention to combat the challenging economic environment has resulted in positive innovations that not only cushion
customers against the economic shocks but also creates products that meet their needs, enhanced service offering to our customers and new
market ventures.
Context Mitigation
The Kenyan economy has shown considerable resilience to the We continue to proactively monitor these factors, implement measures
enormous shock of the pandemic. However, this has been to mitigate the effects and cushion the business from adverse effects.
accompanied with prolonged negative impact of COVID-19,
inflationary pressures, high commodity prices, and the subdued Enhanced value propositions to cater for reduced purchasing power
agricultural production continue to characterise our economic and providing the customer with ability to only spend what they have.
environment.
We include contingencies in our business plans to provide for the
There are still uncertainties regarding the extent to which business negative operational impacts that could arise from lower economic
activities will return to the pre-pandemic levels. growth and changes in interest, inflation and exchange rates.
6. SERVICE DISRUPTION AND OPERATIONAL RESILIENCE
Opportunity
Extensive investment in a robust network architecture driven by customer need to ensure we meet customer expectations all the time. In addition,
we have strong technology redundancies to minimise technology failures.
Context Mitigation
Our customer value proposition is based on the reliable availability of Invest in maintaining and upgrading our network on an ongoing
our high-quality network. basis, with comprehensive business continuity and disaster recovery
plans in place.
We have an increasingly complex information/network technology
infrastructure, which we constantly expand and upgrade to ensure the Investments to ensure adequate redundancy capabilities and
best customer experience and consolidate our technology leadership. elimination of any single point of failure.
A major failure in critical network or information technology assets for

example, through natural disasters, insufficient preventative
maintenance, or malicious attack would have a profound impact on
our customers.
7. POLITICAL UNCERTAINTIES
Opportunity
Having a solid business strategy that is focused on customer propositions, value and is resilient to withstand political headwinds.
Context Mitigation
The political environment in Kenya remain fluid with increased activities Proactive monitoring of the ongoing political activities and dynamics
gearing towards 2022 general elections. This comes with increased and advising the business accordingly.
tensions in the community as a result of shifting political alliances and
divisions, exploitation of socio-economic grievances and prevalence of Agile organisation with a solid strategic plan and guided by
misinformation. mission philosophy.
There is a risk exposure due to possible use of our services to share Ensuring service availability, engagements with stakeholders and
deepfakes, hate messages and spamming. reputation management.
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8. GEO-POLITICAL RISK
Opportunity
The Ethiopian market presents a great opportunity for us to offer differentiated products and services to a market that has for a long time operated
under a closed market. Further, the support accorded by the Ethiopian Government creates an enabling business environment.
Context Mitigation
Our expansion into Ethiopia following Government of Ethiopia’s Robust business case for the investment in Ethiopia that is supported by
commitment to liberalise the telecommunications sector has opened new the Ethiopia’s Government commitment to liberalise the
markets which bring on various risks such as: insecurity and possible telecommunications sector via the award of the licence.
conflict in the region.
We are monitoring the global conflicts, trade sanctions and supply
Disruption to the supply chain due to geo-political exposures, conflicts, chain disruptions and revising our business continuity plans accordingly
global supply chain challenges that could mean that we are unable to to minimise impact to our operations.
execute our strategic plans, resulting in increased cost of operations
and delays in provision of services/products.
9. HEALTH AND SAFETY EXPOSURES
Opportunity
Keeping our people safe is one of the most important responsibilities we hold as an employer. Our ongoing focus is to create a safe working
environment for everyone working for and on behalf of Safaricom and the communities in which we operate. We want everyone working with
Safaricom to return home safely every day.
Context Mitigation
The nature of our operations expose the business to health and safety We have recently implemented a Safaricom Zero Harm Culture and
risks through inherent exposure to our staff, contractors and other mission strategy that is supported by “Safaricom Absolute Rules”.
stakeholders. These rules focus on risks that present the greatest potential for harm for
anyone working for or on behalf of Safaricom.
We focus our initiatives on our top health and safety risks, which
continue to account for the majority of reported incidents and remain a The Absolute Rules are clear and underpinned by a Zero Harm culture
focus area globally: occupational road risk; falls from height; working and zero-tolerance approach to unsafe behaviours in our business
with electricity; and fibre operations. operations. The Absolute Rules must be followed by all Safaricom
employees and contractors, as well as our suppliers’ employees
and contractors.
We have instituted management commitment and stakeholder

engagement, education and training, while implementing technical
mitigations to eliminate the risk.
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10. MONEY LAUNDERING AND TERROR FINANCING
Opportunities
It is our social responsibility to ensure that the products and platforms we offer are not misused and involved in conducting illegal activities.
We provide policies, procedures and tools that ensure screening of activities conducted on our platforms as a safety measure.
Context Mitigation
We are exposed to money laundering and terror financing risks due to We have a robust AML/TF program that focuses on ensuring compliance
the use of our services such as M-PESA and International Money to AML/TF regulatory obligations with key controls around:
Transfer.
• Continuous training, awareness and education.
We work with partners (IMT partners, agents, dealers, merchants and • Know your customer (KYC) and Know your partner (KYP).
pay bill partners) who must comply with Know your customer (KYC)
• Watchlist Screening & Transaction Monitoring Close collaboration
regulations. A failure to comply with regulatory obligations could expose
with Financial Reporting Center (FRC).
our M-PESA offering to Money laundering/Terror financing risks.
• Regular risk assessments.
These controls are supported by a banking grade AML system and use
of machine learning models to detect outlier behaviours which enables
early detection and investigation of suspicious activities.
Results and dividend

The profit for the year is KShs 67,496 million (2021: KShs 68,676 million) and has been added to retained earnings.
During the year, an interim dividend of KShs 0.64 per ordinary share amounting to KShs 25.64 billion (2021: KShs 18.03 billion) was
declared. At the Annual General Meeting (AGM )to be held on 29 July 2022, a final dividend in respect of the year ended 31 March 2022 of
KShs 0.75 per ordinary share amounting to a total of KShs 30.04 billion is to be proposed for approval. This brings the total dividend for the
year to KShs 55.69 billion (2021: KShs 54.89 billion) which represents KShs 1.39 per share in respect of the year ended 31 March 2022
(2021: KShs 1.37 per share).
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Directors
The Directors who held office during the year and to the date of this report were:
Name Position Nationality Date of Appointment

Michael Joseph Chairman and Non-Executive Director Kenyan and 1 August 2020 (as Chairman)
American
Peter Ndegwa Chief Executive Officer (CEO) and Executive Director Kenyan 1 April 2020
Dilip Pal Chief Financial Officer and alternate to the CEO Indian 1 November 2020
Cabinet Secretary (CS), Non-Executive Director Kenyan 10 February 2021
National Treasury and Planning
Christopher Kirigua Alternate to CS, National Treasury and Planning Kenyan 10 February 2021
Francesco Bianco Non-Executive Director Italian 20 March 2020
Linda Muriuki Non-Executive Director Kenyan 31 August 2017
Mohamed Shameel Joosub Non-Executive Director South African 31 August 2017
Sitholizwe Mdlalose Non-Executive Director British 29 July 2020
Raisibe Morathi Non-Executive Director South African 1 November 2020
Bitange Ndemo Independent Director Kenyan 2 March 2017
Rose Ogega Independent Director Kenyan 12 February 2019
Winnie Ouko Independent Director Kenyan 10 February 2021
As part of the annual assessment of the Independent Directors as provided for in the Capital Markets Authority Code of Corporate Governance
Practices for the Issuers of Securities to the Public 2015, we had regular consultations with the Authority and as at the date of approval of the
financial statements, 11 May 2022, our Directors were assessed as independent.
Statement as to disclosure to the Group’s and Company’s auditor

With respect to each Director at the time this report was approved:
a) There is, so far as the Director is aware, no relevant audit information of which the Group’s and Company’s auditor is unaware; and
b) The Director has taken all steps that the Director ought to have taken as a Director to be aware of any relevant audit information and to
establish that the Group’s and Company’s auditor is aware of that information.
Terms of appointment of the auditor

During the AGM of the Company that was held on 30 July 2021, the shareholders resolved to re-appoint Messrs Ernst and Young LLP, as the
Company’s Auditors in accordance with the provisions of section 721 of the Kenyan Companies Act, 2015.
The Directors monitor the effectiveness, objectivity and independence of the auditor. The Directors also approve the annual audit engagement
contract which sets out the terms of the auditor’s appointment and the related fees.
By order of the Board
Ms Kathryne Maundu
Company Secretary
11 May 2022
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Statement of Directors’ responsibilities

The Kenyan Companies Act, 2015 requires the Directors to prepare financial statements for each financial year that give a true and fair view of
the financial position of the Group and Company as at the end of the financial year and of their profit or loss for that year. It also requires the
Directors to ensure that the Group and Company keeps proper accounting records that: (a) show and explain the transactions of the Group and
Company; (b) disclose, with reasonable accuracy, the financial position of the Group and Company; and (c) enable the Directors to ensure that
every financial statement required to be prepared complies with the requirements of the Kenyan Companies Act, 2015. They are also responsible
for safeguarding the assets of the Group and the Company, and for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
The Directors accept responsibility for the preparation and presentation of these consolidated and Separate Financial Statements in accordance
with International Financial Reporting Standards and in the manner required by the Kenyan Companies Act, 2015. They also accept
responsibility for:
i) Designing, implementing and maintaining internal control as they determine necessary to enable the preparation of financial statements that
are free from material misstatements, whether due to fraud or error;
ii) Selecting suitable accounting policies and then applying them consistently; and
iii) Making judgements and accounting estimates that are reasonable in the circumstances.
Having made an assessment of the Group’s and Company’s ability to continue as a going concern, the Directors are not aware of any material
uncertainties related to events or conditions that may cast doubt upon the Group’s and Company’s ability to continue as a going concern.
The Directors acknowledge that the independent audit of the financial statements does not relieve them of their responsibility.
Approved by the Board of Directors on 11 May 2022 and signed on its behalf by:
Michael Joseph Peter Ndegwa

Chairman Chief Executive Officer
180
Directors’ Remuneration Report
Information not subject to audit

The Company’s Board composition as at 31 March 2022 is as below:
Name Position Nationality Date of appointment
a) Seven Non-Executive Directors
Michael Joseph (as Chairman) Chairman and Non-Executive Director Kenyan and 1 August 2020
American
Cabinet Secretary (CS), Non-Executive Director Kenyan 10 February 2021
National Treasury and
Planning
Francesco Bianco Non-Executive Director Italian 20 March 2020
Linda Muriuki Non-Executive Director Kenyan 31 August 2017
Mohamed Shameel Joosub Non-Executive Director South African 31 August 2017
Sitholizwe Mdlalose Non-Executive Director British 29 July 2020
Raisibe Morathi Non-Executive Director South African 1 November 2020
b) Three independent Directors
Bitange Ndemo Independent Director Kenyan 2 March 2017

Rose Ogega Independent Director Kenyan 12 February 2019
Winnie Ouko Independent Director Kenyan 10 February 2021
c) One Executive Director
Peter Ndegwa Chief Executive Officer (CEO) and Executive Director Kenyan 1 April 2020
d) Two alternate Directors
Christopher Kirigua Alternate to CS, National Treasury and Planning Kenyan 10 February 2021
Dilip Pal Chief Finance Officer and alternate to the CEO Indian 1 November 2020
Non-executive Directors’ remuneration

The Board establishes and approves transparent and competitive remuneration policies for the non-executive Board members. These policies
clearly stipulate remuneration elements such as Directors’ annual fees, sitting allowances per meeting attended and other benefits that are based
on proper benchmarking and taking into consideration the prevailing market conditions.
Safaricom PLC seeks to remunerate Non-Executive Directors at least at the 75th percentile. The current remuneration structure is based on a survey
commissioned by the Board through its Board Nominations and Remuneration Committee and carried out by PricewaterhouseCoopers (PwC)
across peer organisations comparable with Safaricom. Remuneration for Non-Executive Directors is reviewed every two years.
The current agreed fees and allowances structure is as follows:
• Annual Directors fees paid to the Chairman of the Safaricom PLC Board agreed KShs 14,350,000 (2021: KShs 5,700,000 per annum)
• Annual Directors fees paid to each Non-Executive Director agreed at KShs 3,000,000 per annum (2021: KShs 2,200,000)
• Sitting allowance payable to the Chairman of the Board agreed at KShs 230,000 per meeting (2021: KShs 85,000)
• Sitting allowance payable to the Chairperson of a Committee agreed at KShs 125,000 per meeting (2021: KShs 74,150)
• Sitting allowance payable to each Non-Executive Director agreed at KShs 110,000 per meeting (2021: KShs 60,000)
• Sitting allowance payable to the Chairman of the Boards of Vodafamily Ethiopia Holding Ltd (SPV) and Global Partnership of Ethiopia (GPE)
agreed at KShs 172,500 per meeting (2021: KShs 0)
• Sitting allowance payable to each Non-Executive Director of Vodafamily Ethiopia Holding Ltd (SPV) and Global Partnership of Ethiopia
agreed at KShs 93,750 per meeting (2021: KShs 0)
The annual retainer fee for the Director representing the National Treasury is paid directly to the National Treasury.
The annual Directors’ fees for the Directors representing Vodafone Kenya Limited are paid directly to Vodafone/Vodacom Group.
The Board members are also entitled to telephone and internet usage allowance.
181
Directors’ Remuneration Report continued
Information not subject to audit continued

Non-executive Directors’ remuneration continued
Executive Director’s remuneration

The Executive Director’s remuneration is as per the negotiated employment contract and are employed on a fixed-term basis.
Besides the basic salary, the Executive Director is entitled to an annual performance-based bonus, EPSAP shares, residential accommodation,
utility bills payment, children’s school fees and club membership.
Changes to Directors’ remuneration

During the year, there were changes in Non-Executive Directors remuneration fees and allowances as shown above.
Statement of voting on the Directors’ Remuneration Report at the previous AGM

During the AGM held on 30 July 2021, voting was done by the ballot to approve the Directors’ Remuneration Report.
The results of the vote were as below:
As a percentage of the
Agenda Vote Total votes total votes cast
Directors’ Remuneration report For 32,940,975,693 98.893%
Against 4,303,138 0.013%
Spoilt Votes – –
Withheld 364,400,809 1.094%
Total 33,309,679,640 100%
At the AGM scheduled to be held on 29 July 2022, the Directors Remuneration Report for the year ended 31 March 2022 will be presented to
the shareholders for approval.
Information subject to audit

The following table shows a single figure remuneration for the Executive and Non-Executive Directors in respect of qualifying services for the
financial year ended 31 March 2022 and comparative figures for the year ended 31 March 2021.The aggregate Directors’ emoluments are
shown in note 31(iii).
Directors’ remuneration for the year ended 31 March 2022

Executive Directors
Non-cash
Salary Directors’ fees Bonus benefits EPSAP* Total
Name KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Peter Ndegwa 88.89 – 178.88 21.16 – 288.93
Dilip Pal 54.05 – 13.77 19.91 – 87.73
Total 142.94 – 192.65 41.07 – 376.66
Non-Executive Directors
Michael Joseph – 24.93 – 0.27 – 25.20
Bitange Ndemo – 7.42 – 0.01 – 7.43
Rose Ogega – 10.76 – 0.22 – 10.98
Linda Muriuki – 7.79 – 0.14 – 7.93
Mohamed Shameel Joosub – 6.16 – – – 6.16
Francesco Bianco – 5.50 – – – 5.50
Christopher Kirigua – 5.85 – 1.65 – 7.50
National Treasury – 2.80 – – – 2.80
Winnie Ouko – 8.52 – 0.18 8.70
Sitholizwe Mdlalose – 5.89 – – – 5.89
Raisibe Morathi – 6.79 – – – 6.79
Total 92.41 – 2.47 – 94.88
Grand total 142.94 92.41 192.65 43.54 – 471.54
182
Information subject to audit continued

Directors’ remuneration for the year ended 31 March 2021
Executive Directors
Non-cash
Salary Directors’ fees Bonus benefits EPSAP* Total
Name KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Peter Ndegwa 102.30 – 90.00 9.24 – 201.54
Sateesh Kamath 31.23 – 5.61 6.89 2.79 46.52
Michael Joseph – – 127.57 – – 127.57
Dilip Pal 29.19 – 20.00 5.75 – 54.94
Total 162.72 – 243.18 21.88 2.79 430.57
Non-Executive Directors
Nicholas Nganga – 5.20 – 0.05 – 5.25
Michael Joseph – 6.17 – 0.13 – 6.30
Bitange Ndemo – 4.06 – 0.01 – 4.07
Rose Ogega – 5.64 – 0.15 – 5.79
Linda Muriuki – 3.85 – 0.05 – 3.90
Mohamed Shameel Joosub – 3.22 – – – 3.22
Esther Koimett – 1.08 – 0.05 – 1.13
National Treasury – 2.20 – – – 2.20
Till Streichert – 1.28 – – – 1.28
Francesco Bianco – 3.22 – – – 3.22
Dulacha Galgalo Barako – 0.60 – – – 0.60
Christopher Kirigua – 0.06 – 0.02 – 0.08
Winnie Ouko – – – – – –
Sitholizwe Mdlalose – 1.70 – – – 1.70
Raisibe Morathi – 0.43 – – – 0.43
Total – 38.71 – 0.46 – 39.17
Grand total 162.72 38.71 243.18 22.34 2.79 469.74
* EPSAP – Employee Performance Share Award Plan.
On behalf of the Board
Ms. Winnie Ouko

Chairperson, Board Nominations and Remuneration Committee
11 May 2022
183
Report of the Independent Auditor

To the shareholders of Safaricom Plc
Report on the Audit of the Consolidated We are independent of the Group and the Company in accordance
with the International Ethics Standards Board for Accountants’ Code
and Separate Financial Statements
for Ethics for Professional Accountants (IESBA Code) and other
Opinion independence requirements applicable to performing audits of
financial statements of the Group and the Company and in Kenya.
We have audited the accompanying consolidated and Separate
We have fulfilled our other ethical responsibilities in accordance with
Financial Statements of Safaricom PLC (the ‘‘Company’’) and its
the IESBA Code and in accordance with other ethical requirements
subsidiaries (together, the ‘’Group’’) set out on pages 188 to 266,
applicable to performing audits of the Group and the Company and
which comprise the consolidated and separate statements of financial
in Kenya. We believe that the audit evidence we have obtained is
position as at 31 March 2022 and the consolidated and separate
sufficient and appropriate to provide a basis for our opinion.
statements of profit or loss and other comprehensive income, the
consolidated and separate statements of changes in equity and the Key Audit Matters
consolidated and separate statements of cash flows for the year then
ended, and notes to the consolidated and Separate Financial Key audit matters are those matters that, in our professional
Statements, including a summary of significant accounting policies. judgement, were of most significance in our audit of the Consolidated
and Separate Financial Statements of the current period. These
In our opinion, the consolidated and Separate Financial Statements matters were addressed in the context of our audit of the
present fairly, in all material respects, the consolidated and separate Consolidated and Separate Financial Statements as a whole, and in
financial position of Safaricom PLC as at 31 March 2022, and its forming our opinion thereon, and we do not provide a separate
consolidated and separate financial performance and consolidated opinion on these matters. For each matter below, our description of
and separate cash flows for the year then ended in accordance with how our audit addressed the matter is provided in that context.
International Financial Reporting Standards and the requirements of
the Kenyan Companies Act, 2015. We have fulfilled the responsibilities described in the Auditor’s
Responsibilities for the Audit of the Consolidated and Separate
Basis for opinion Financial Statements section of our report, including in relation to
these matters. Accordingly, our audit included the performance of
We conducted our audit in accordance with International Standards
procedures designed to respond to our assessment of the risks of
on Auditing (ISAs). Our responsibilities under those standards are
material misstatement of the Consolidated and Separate Financial
further described in the Auditor’s Responsibilities for the Audit of the
Statements. The results of our audit procedures, including the
Consolidated and Separate Financial Statements section of
procedures performed to address the matters below, provide the basis
our report.
for our audit opinion on the accompanying Consolidated and
Separate Financial Statements.
The Key Audit Matters apply equally to the audit of the consolidated and Separate Financial Statements.
KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Revenue recognition – occurrence, completeness and measurement • We understood and tested the design and operating effectiveness
of recorded revenue given the complexity of products, systems and of management’s controls over the transfer of revenue information
IFRS 15: Revenue from contracts with customers. between the multiple systems involved in recording revenue;
• We tested the controls in place over the authorisation of rate
The occurrence and accuracy of amounts recorded as revenue is an
changes and a review of the new products recorded in the billing
inherent industry risk due to the complexity of the billing systems arising
systems;
from changes in products and plans – including multiple element
arrangements, the number of products sold and the tariff structure • We involved our internal IT audit specialists to test the IT general
changes during the year. controls of the rating and billing environments, as well as assessed
the completeness of the relevant revenue reports utilised for audit
The application of the revenue recognition accounting standard purposes;
IFRS 15: Revenue from contracts with customers, requires the use of
• We tested the end-to-end reconciliation from rating and billing
complex rating, billing and accounting systems. The complexity is
systems to the journals processed in the general ledger;
compounded by the significant number of revenue transactions that
are accounted for on an annual basis.
We therefore considered revenue recognition to be a matter of most

significance to our current year audit.
184
The Key Audit Matters apply equally to the audit of the consolidated and Separate Financial Statements.
KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
The significant accounting policies and detailed disclosures on revenue • We performed analytical review procedures over significant
recognition are included in Note 2(e) – Revenue recognition, revenue streams by identifying the drivers that resulted in changes
Note 5(a) – Revenue from contracts with customers and Note 29(b) – YoY to establish detailed monthly and annual expectations. Where
Contract liabilities disclosures. movement were outside our precision level set, we performed
substantive audit procedures;
• We performed a three-way correlation between revenue, deferred
revenue, trade receivables and cash;
• We reviewed the reconciliation of the aggregate of the prepaid
and hybrid customers per the charging system to the deferred
revenue balance;
• We selected and tested a sample of enterprise revenue contracts
and assessed, in line with the requirements of IFRS 15: Revenue
from contracts with customers, that contracts with customers were
valid, that performance obligations were agreed by both parties
and that revenue was appropriately recognised;
• We tested the stand-alone selling prices as input into the system
and agreed the logic behind the stand-alone selling prices to the
relevant IFRS 15: Revenue from contracts with customers
requirements;
• We tested management reconciliations for interconnect/roaming
revenue to third party confirmations;
• We tested a sample of journal entries, processed in relation to
non-standard revenue including manual ERP journals by reviewing
supporting documentation to ensure that the journals were
supported by an underlying business rationale, were accounted for
correctly, in the correct period and appropriately authorised; and
• We examined and assessed the accounting policies applied and
disclosures in terms of the recognition of revenue for compliance with
IFRS 15: Revenue from contracts with customers and industry guidance.
Investment in subsidiary – Safaricom Telecommunications • We reviewed the Shareholders Agreement and assessed in line
Ethiopia PLC with IFRS10: Consolidated financial statements, that Safaricom has
control over the subsidiary and meets the requirements for the
Safaricom-led consortium was granted a nationwide full-service Unified preparation and presentation of Consolidated Financial
Telecommunications Service Licence by the Ethiopian Communications Statements.
Authority (ECA). The licence was effective from 9 July 2021, valid for
• We reviewed and tested a sample of the transactions accounted
a term of 15 years from the effective date, and renewable for
for under investment in subsidiary in the Separate Financial
additional terms of 15 years subject to fulfilment of all licence
Statements for compliance with recognition criteria.
obligations.
• We reviewed the Unified Telecommunications Service Licence
The operation of the licence will be carried through Safaricom issued by the Ethiopian Communications Authority (ECA) and
Telecommunications Ethiopia PLC, a company incorporated and assessed that the transaction meets the recognition criteria and is
registered in Ethiopia. appropriately accounted for.
Safaricom PLC owns a majority stake in the consortium. Other partners • We tested controls in place over transactions with related parties.
in the consortium are Vodacom Group, British Development Finance • We evaluated the adequacy of the financial statement disclosures
Agency, CDC Group, and Japan’s Sumitomo Corporation with the in accordance with International Financial Reporting Standards.
respective shareholding into the company being Vodafamily Ethiopia
holding 61.9% (Safaricom PLC 55.71%, Vodacom Group 6.19%),
Sumitomo Corporation 27.2% and CDC Group PLC 10.9%.
The consortium won the licence with a bid of USD850 million.
We have considered this as a Key Audit Matter due to the materiality

of the transaction and the complexity of the shareholding structure.
The significant accounting policies and detailed disclosures are

included in Note 2(b) Consolidation – subsidiaries, Note 21 –
Intangible assets – Network licences Note 23(a) – Investment in
subsidiaries and Note 31- Related party transactions.
185
Report of the independent auditor continued

To the shareholders of Safaricom Plc continued
Other information Auditor’s Responsibilities for the Audit of the

The Directors are responsible for the other information. The other Consolidated and Separate Financial Statements
information comprises Report of the Directors, Statement of Directors’ Our objectives are to obtain reasonable assurance about whether the
Responsibilities, Directors’ remuneration report and the appendices consolidated and Separate Financial Statements as a whole are free
(Principal shareholders and Mobile money services performance) from material misstatement, whether due to fraud or error, and to issue
which we obtained prior to the date of this report, and the rest of the an Auditor’s Report that includes our opinion. Reasonable assurance
other information in the Annual Report which are expected to be is a high level of assurance, but is not a guarantee that an audit
made available to us after that date. Other information does not conducted in accordance with ISAs will always detect a material
include the consolidated or the Separate Financial Statements and misstatement when it exists. Misstatements can arise from fraud or
our Auditor’s Report thereon. error and are considered material if, individually or in the aggregate,
they could reasonably be expected to influence the economic
Our opinion on the consolidated and Separate Financial Statements decisions of users taken on the basis of these consolidated and
does not cover the other information and we do not express an audit Separate Financial Statements.
opinion or any form of assurance conclusion thereon, other than that
prescribed by the Kenyan Companies Act, 2015, as set out below. As part of an audit in accordance with ISAs, we exercise professional
judgement and maintain professional scepticism throughout the audit.
In connection with our audit of the consolidated and Separate We also:
Financial Statements, our responsibility is to read the other information
identified above and, in doing so, consider whether the other • Identify and assess the risks of material misstatement of the
information is materially inconsistent with the consolidated and consolidated and Separate Financial Statements, whether due to
Separate Financial Statements or our knowledge obtained in the fraud or error, design and perform audit procedures responsive to
audit, or otherwise appears to be materially misstated. If, based on those risks, and obtain audit evidence that is sufficient and
the work we have performed on the other information obtained prior appropriate to provide a basis for our opinion. The risk of not
to the date of this Auditor’s Report, we conclude that there is a detecting a material misstatement resulting from fraud is higher
material misstatement of this other information, we are required to than for one resulting from error, as fraud may involve collusion,
report that fact. We have nothing to report in this regard. forgery, intentional omissions, misrepresentations, or the override
of internal control.
Responsibilities of the Directors for the Consolidated
• Obtain an understanding of internal control relevant to the audit
and Separate Financial Statements in order to design audit procedures that are appropriate in the
The Directors are responsible for the preparation and fair presentation circumstances, but not for the purpose of expressing an opinion
of the consolidated and Separate Financial Statements in accordance on the effectiveness of the Group and Company’s internal control.
with International Financial Reporting Standards and the requirements • Evaluate the appropriateness of accounting policies used and the
of the Kenyan Companies Act, 2015, and for such internal control as reasonableness of accounting estimates and related disclosures
the Directors determine is necessary to enable the preparation of made by the Directors.
consolidated and Separate Financial Statements that are free from
material misstatement, whether due to fraud or error. • Conclude on the appropriateness of the Directors’ use of the
going concern basis of accounting and based on the audit
In preparing the consolidated and Separate Financial Statements, evidence obtained, whether a material uncertainty exists related
the Directors are responsible for assessing the Group and Company’s to events or conditions that may cast significant doubt on the
ability to continue as a going concern, disclosing, as applicable, Group and Company’s ability to continue as a going concern.
matters related to going concern and using the going concern basis If we conclude that a material uncertainty exists, we are required
of accounting unless the Directors either intend to liquidate the Group to draw attention in our Auditor’s Report to the related disclosures
and Company or to cease operations, or have no realistic alternative in the consolidated and Separate Financial Statements or, if such
but to do so. disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the
date of our Auditor’s Report. However, future events or conditions
may cause the Group and/or the Company to cease to continue
as a going concern.
186
Auditor’s Responsibilities for the Audit of the Report on other matters prescribed by the Kenyan
Consolidated and Separate Financial Statements Companies Act, 2015
(continued) As required by the Kenyan Companies Act, 2015 we report to you,
• Evaluate the overall presentation, structure and content of the based on our audit, that:
consolidated and Separate Financial Statements, including the
disclosures, and whether the consolidated and Separate i) in our opinion, the information given in the Report of the Directors
Financial Statements represent the underlying transactions and on pages 170 to 179 is consistent with the consolidated and
events in a manner that achieves fair presentation. Separate Financial Statements.
• Obtain sufficient appropriate audit evidence regarding the ii) in our opinion, the auditable part of Directors’ Remuneration
financial information of the entities or business activities within the Report on page 181 to 183 has been properly prepared in
Group to express an opinion on the consolidated and Separate accordance with the Kenyan Companies Act, 2015.
Financial Statements. We are responsible for the direction,
supervision and performance of the Group audit. We remain The engagement partner responsible for the audit resulting in this
solely responsible for our audit opinion. independent Auditor’s Report is CPA Allan Gichuhi practicing
certificate number 1899.
We communicate with the Directors regarding, among other matters,
the planned scope and timing of the audit and significant audit
findings, including any significant deficiencies in internal control that
we identify during our audit.
We also provide the Directors with a statement that we have For and on behalf of Ernst & Young LLP
complied with relevant ethical requirements regarding independence,
and to communicate with them all relationships and other matters that Certified Public Accountants
may reasonably be thought to bear on our independence, and where Nairobi, Kenya
applicable, actions taken to eliminate threats or related 30 June 2022
safeguards applied.
From the matters communicated with the Directors, we determine

those matters that were of most significance in the audit of the
consolidated and Separate Financial Statements of the current period
and are therefore the key audit matters. We describe these matters in
our Auditor’s Report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances,
we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such
communication.
187
Statements of Profit or Loss and other

Comprehensive Income
GROUP COMPANY
2022 2021 2022 2021

Notes KShs’m KShs’m KShs’m KShs’m
Revenue from contracts with customers 5(a) 295,441.4 261,462.3 292,556.2 259,296.3
Revenue from other sources 5(b) 2,636.5 2,564.2 3,289.7 3,153.4
Total revenue 298,077.9 264,026.5 295,845.9 262,449.7
Direct costs 6(a) (91,467.8) (80,852.8) (90,613.6) (80,334.1)
Expected credit losses on financial assets 6(b) (2,361.2) (3,009.7) (2,602.7) (3,863.7)
Other expenses 7 (55,187.0) (46,034.8) (49,545.5) (45,168.6)
Earnings before interest, taxes, depreciation
and amortisation (EBITDA) 149,061.9 134,129.2 153,084.1 133,083.3
Depreciation of property and equipment 18 (34,145.2) (32,624.5) (33,922.2) (32,570.4)
Amortisation – Indefeasible rights of use (IRUs) 19 (281.3) (406.5) (281.3) (406.5)
Amortisation – Intangible assets 21 (1,850.0) (1,628.5) (1,850.0) (1,628.1)
Amortisation – Right-of-use (RoU) assets 22(a) (3,656.8) (3,304.8) (3,644.2) (3,304.8)
Operating profit 109,128.6 96,164.9 113,386.4 95,173.5
Finance income 8 2,413.4 2,198.4 2,050.1 2,177.0
Finance costs 9 (8,852.6) (4,220.8) (8,895.2) (4,405.5)
Share of loss of associates 23(b) (279.8) (192.9) (279.8) (192.9)
Share of loss of joint venture 23(b) (196.2) (314.1) (196.2) (314.1)
Profit before income tax 102,213.4 93,635.5 106,065.3 92,438.0
Income tax expense 12(a) (34,717.3) (24,959.3) (34,276.0) (24,481.4)
Profit for the year 67,496.1 68,676.2 71,789.3 67,956.6
Attributable to:
Equity holders of the parent 69,648.1 68,676.2 71,789.3 67,956.6
Non-controlling interests (2,152.0) – – –
Other comprehensive loss:
Items that will subsequently be reclassified
to profit or loss
Exchange differences on translation of foreign operations (9,536.3) – – –
Total comprehensive income for year 57,959.8 68,676.2 71,789.3 67,956.6
Attributable to:
Equity holders of the parent 64,335.4 68,676.2 71,789.3 67,956.6
Non-controlling interests (6,375.6) – – –
Total comprehensive income for year 57,959.8 68,676.2 71,789.3 67,956.6
Basic earnings per share (KShs per share) 13 1.74 1.71 1.79 1.70
Diluted earnings per share (KShs per share) 13 1.74 1.71 1.79 1.70
188
Statements of Financial Position

as at 31 March 2022
GROUP COMPANY
2022 2021 2022 2021

Non-current assets
Deferred income tax 17 9,908.8 5,467.2 9,908.7 5,465.8
Property and equipment 18 148,993.0 133,833.7 138,502.6 133,519.3
Right-of-use assets 22(a) 18,301.7 14,762.8 17,177.4 14,762.8
Indefeasible rights of use 19 2,564.3 2,845.6 2,564.3 2,845.6
Investment property 20 845.0 845.0 845.0 845.0
Intangible assets 21 93,647.2 8,475.5 11,349.6 8,471.5
Investment in subsidiaries 23(a) – – 59,057.8 431.3
Investment in associate and joint venture 23(b) 3,982.1 4,458.2 3,982.1 4,458.2
Loan to subsidiaries 31(x) – – 666.1 236.2
Contract costs 29(a) 1,138.7 1,491.2 1,138.7 1,491.2
Restricted cash 26(b) 1,759.9 1,982.0 1,759.9 1,982.0
Deferred restricted cash asset 26(c) 407.9 558.7 407.9 558.7
281,548.6 174,719.9 247,360.1 175,067.6
Current assets
Net cash and cash equivalents 26(a) 30,779.6 26,736.1 25,560.6 26,035.9
Receivables and prepayments 25 25,919.2 22,347.9 22,003.7 20,225.5
Inventories 24 4,306.8 2,487.0 4,147.4 2,441.2
Current income tax 12(b) 7.9 7.2 – –
Loans receivable from related parties 31(x) 1,285.0 1,287.8 1,285.0 1,287.8
Contract costs 29(a) 2,951.5 3,043.4 2,951.5 3,043.4
65,250.0 55,909.4 55,948.2 53,033.8
Total assets 346,798.6 230,629.3 303,308.3 228,101.4
Equity
Share capital 14 2,003.3 2,003.3 2,003.3 2,003.3
Share premium 14 2,200.0 2,200.0 2,200.0 2,200.0
Retained earnings 110,528.9 96,571.8 110,204.0 94,105.6
Translation reserve (5,312.7) – – –
Proposed dividend 15 30,049.1 36,860.2 30,049.1 36,860.2
Equity attributable to equity holders of the parent 139,468.6 137,635.3 144,456.4 135,169.1
Non-controlling interests 23(a) 40,232.3 – – –
Total equity 179,700.9 137,635.3 144,456.4 135,169.1
Non-current liabilities
Borrowings 16 44,910.8 – 44,910.8 –
Contract liabilities 29(b) 1,937.5 2,436.1 1,937.5 2,436.1
Provisions for liabilities 28(b) 3,183.3 3,151.4 3,183.3 3,151.4
Payables and accrued expenses 28(a) 4,330.6 – – –
Financial guarantees liability 31(xi) – – 120.9 –
Lease liability 22(b) 14,584.9 11,954.2 14,079.2 11,954.2
68,947.1 17,541.7 64,231.7 17,541.7
189
Statements of Financial Position continued
GROUP COMPANY
2022 2021 2022 2021

Current liabilities
Payables and accrued expenses 28(a) 41,312.6 34,021.4 38,058.2 34,068.4
Current income tax 12(b) 5,291.2 260.3 5,086.3 151.6
Borrowings 16 20,400.0 14,772.0 20,400.0 14,772.0
Dividend payable 15 12,053.9 8,684.1 12,053.9 8,684.1
Lease liability 22(b) 5,508.5 4,119.5 5,437.4 4,119.5
Provisions for liabilities 28(b) 3,373.8 2,561.5 3,373.8 2,561.5
Contract liabilities 29(b) 10,210.6 11,033.5 10,210.6 11,033.5
98,150.6 75,452.3 94,620.2 75,390.6
Total liabilities 167,097.7 92,994.0 158,851.9 92,932.3
Total equity and liabilities 346,798.6 230,629.3 303,308.3 228,101.4
The presentation structure of the Group and Company statement of financial position has changed from prior year to align with the structure as set
out in IAS 1: Presentation of financial statements, but the change in the structure had no impact on any reported totals or sub-totals presented on
the statement of financial position nor any impact on the reported earnings.
The financial statements on pages 188 to 266 were approved for issue by the Board of Directors on 11 May 2022 and signed on its behalf by:
Michael Joseph Peter Ndegwa

Chairman Chief Executive Officer
190
Consolidated Statement of Changes in Equity
ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT
Non-
Share Share Retained Translation Proposed controlling Total
capital premium earnings reserve dividend Total interests equity
Notes KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Year ended
31 March 2021
At start of year 2,003.3 2,200.0 82,785.2 – 56,091.6 143,080.1 – 143,080.1
Profit for the year – – 68,676.2 – – 68,676.2 – 68,676.2
Transactions with
owners:
Dividend:
–D
eclared final
dividends for 2020 15 – – – – (56,091.6) (56,091.6) – (56,091.6)
– Interim dividend 15 – – (18,029.4) – – (18,029.4) – (18,029.4)
– P roposed final dividend
for 2021 15 – – (36,860.2) – 36,860.2 – – –
– – (54,889.6) – (19,231.4) (74,121.0) – (74,121.0)
At end of year 2,003.3 2,200.0 96,571.8 – 36,860.2 137,635.3 – 137,635.3
Year ended
31 March 2022
At start of year 2,003.3 2,200.0 96,571.8 – 36,860.2 137,635.3 – 137,635.3
Profit for the year – – 69,648.1 – – 69,648.1 (2,152.0) 67,496.1
Other comprehensive loss – – – (5,312.7) – (5,312.7) (4,223.6) (9,536.3)
Total comprehensive
income/(loss) for the year – – 69,648.1 (5,312.7) – 64,335.4 (6,375.6) 57,959.8
Transactions with
owners:
Dividend:
–D
eclared final dividend
for 2021 15 – – – – (36,860.2) (36,860.2) – (36,860.2)
– Interim dividend 15 – – (25,641.9) – – (25,641.9) – (25,641.9)
–C
apital contribution
from NCI
shareholders* – – – – – – – 46,607.9 46,607.9
– P roposed final dividend
for 2022 – – (30,049.1) – 30,049.1 – – –
– – (55,691.0) – (6,811.1) (62,502.1) 46,607.9 (15,894.2)
At end of year 2,003.3 2,200.0 110,528.9 (5,312.7) 30,049.1 139,468.6 40,232.3 179,700.9
* Capital contribution from NCI shareholders relates to the contribution of non-controlling shareholders towards investment in the equity of Safaricom Ethiopia PlC.
191
Company Statement of Changes in Equity
Share Share Retained Proposed Total

capital premium earnings dividend equity
Notes KShs’m KShs’m KShs’m KShs’m KShs’m
Year ended 31 March 2021
At start of year 2,003.3 2,200.0 81,038.6 56,091.6 141,333.5
Profit for the year – – 67,956.6 – 67,956.6
Transactions with owners:
Dividend:
–D
eclared final dividend for 2020 15 – – – (56,091.6) (56,091.6)
– Interim dividend 15 – – (18,029.4) (18,029.4)
– P roposed final dividend for 2021 – – (36,860.2) 36,860.2 –
– – (54,889.6) (19,231.4) (74,121.0)
At end of year 2,003.3 2,200.0 94,105.6 36,860.2 135,169.1
At start of year 2,003.3 2,200.0 94,105.6 36,860.2 135,169.1
Profit for the year – – 71,789.4 – 71,789.4
Transactions with owners:
Dividend:
–D
eclared final dividend for 2021 15 – – – (36,860.2) (36,860.2)
– Interim dividend (25,641.9) – (25,641.9)
– P roposed final dividend for 2022 – – (30,049.1) 30,049.1 –
– – (55,691.0) (6,811.1) (62,502.1)
At end of year 2,003.3 2,200.0 110,204.0 30,049.1 144,456.4
192
Statement of Cash Flows
GROUP COMPANY
2022 2021 2022 2021

Cash flows from operating activities
Cash generated from operations 30(a) 143,574.7 132,551.8 145,801.0 132,866.4
Interest received 1,254.5 1,566.7 1,207.9 1,547.0
Income tax paid 12(b) (34,128.7) (28,921.2) (33,784.2) (28,606.4)
Net cash generated from operating activities1 110,700.5 105,197.3 113,224.7 105,807.0
Cash flows from investing activities
Purchase of property and equipment (41,058.0) (35,568.4) (34,667.6) (35,568.4)
Proceeds from disposal of property and equipment 49.2 84.6 49.2 84.6
Acquisition of intangible assets 21 (96,288.3) (4,077.8) (4,728.1) (4,077.8)
Proceeds from maturity of other financial assets 27 – 188.6 – –
Movement in restricted cash1 352.3 180.1 352.3 180.1
Loans to M-PESA Africa (Joint venture) – (1,288.7) – (1,288.7)
Loans to subsidiaries2 – – (500.0) (240.0)
Investment in subsidiaries – – (58,626.6) –
Investment in associates and joint ventures – (0.1) – (0.1)
Net cash used in investing activities1,2 (136,944.8) (40,481.7) (98,120.8) (40,910.3)
Cash flows from financing activities
Dividend paid 15 (59,132.3) (66,482.0) (59,132.3) (66,482.0)
Repayment of lease liabilities – principal 22(b) (3,806.4) (2,550.6) (3,220.5) (2,550.6)
Repayment of lease liabilities – interest 22(b) (1,347.9) (1,324.0) (1,345.4) (1,324.0)
Interest paid on borrowings (2,477.9) (1,154.6) (2,419.8) (1,135.9)
Proceeds from borrowings 16 120,564.8 44,970.0 120,564.8 44,970.0
Repayments of borrowings 16 (70,026.0) (38,198.0) (70,026.0) (38,198.0)
Capital contribution from NCI shareholders 46,607.9 – – –
Net cash generated/(used in) financing activities2 30,382.2 (64,739.2) (15,579.2) (64,720.5)
Increase/(decrease) in cash and cash equivalents 4,137.9 (23.6) (475.3) 176.2
Movement in cash and cash equivalents
At start of year 26,736.1 26,759.7 26,035.9 25,859.7
Net foreign exchange difference (94.4) – – –
Increase/(decrease) in cash and cash equivalents 4,137.9 (23.6) (475.3) 176.2
At end of year 26(a) 30,779.6 26,736.1 25,560.6 26,035.9
1
The movements in restricted cash has within the current year been reclassified from cash flows from operating activities to cash flows from investing
activities. This reclassification had no impact on any reported earnings nor on any totals presented on the statement of financial position.
2
The loans to subsidiaries has within the current year been reclassified from cash flows from financing activities to cash flows from investing activities.
This reclassification had no impact on any reported earnings nor on any totals presented on the statement of financial position.
193
Notes to the financial statements
1 General information
Safaricom PLC is incorporated in Kenya under the Companies Act as a public limited liability company and is domiciled in Kenya.
The address of the registered office of the Company is:

L.R. No. 13263
Safaricom House, Waiyaki Way
PO Box 66827-00800
Nairobi
The Company’s shares are listed on the Nairobi Securities Exchange.
F or Kenya Companies Act reporting purposes, the balance sheet is represented by the statement of financial position and the profit and
loss account by the statement of profit or loss and other comprehensive income in these financial statements.
2 Summary of significant accounting policies

The principal accounting policies adopted in the preparation of these financial statements are set out below. These policies have been
consistently applied to all years presented, unless otherwise stated.
(a) Basis of preparation

T he financial statements have been prepared on a going concern basis and in compliance with International Financial Reporting Standards
(IFRS) issued by the International Accounting Standards Board. The financial statements are presented in Kenya Shillings (KShs), which is also
the functional currency of the Company, rounded to the nearest million (KShs’million), except where otherwise stated.
T he preparation of the financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires
the management to exercise its judgement in the process of applying the Group’s accounting policies. The areas involving a higher
degree of judgement or complexity, or where assumptions and estimates are significant to the financial statements, are disclosed
in note 3.
Measurement basis
The measurement basis used is the historical cost basis except for investment property that has been measured at fair value.
nder the historical cost basis, assets are recorded at the amount of cash or cash equivalents paid or the fair value of the consideration
U
given to acquire them at the time of their acquisition. Liabilities are recorded at the amount of proceeds received in exchange for the
obligation or, in some cases, at the amounts of cash or cash equivalents expected to be paid to satisfy the liability in the normal course
of business.
New and amended standards

The following amendments became effective during the period:
Effective for annual period

New standards or amendments beginning on or after
Interest Rate Benchmark Reform – Phase 2 – Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 1 January 2021
COVID-19-Related Rent Concessions – Amendments to IFRS 16 1 June 2020
COVID-19-Related Rent Concessions beyond 30 June 2021 – Amendment to IFRS 16 1 April 2021
T hese amendments apply for the first time in the period, but do not have significant impact on the financial statements of the Group
and Company.
194
2 Summary of significant accounting policies continued

(a) Basis of preparation continued
New and amended standards continued

Interest Rate Benchmark Reform – Phase 2: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16
Below are the new standards or amendments which affect the Group and Company:
The amendments provide temporary reliefs which address the financial reporting effects when an interbank offered rate (IBOR) is
replaced with an alternative nearly risk-free interest rate (RFR). The amendments include the following practical expedients:
• A practical expedient to require contractual changes, or changes to cash flows that are directly required by the reform, to be treated
as changes to a floating interest rate, equivalent to a movement in a market rate of interest.
• Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the hedging
relationship being discontinued.
• Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR instrument is designated
as a hedge of a risk component.
The Group and Company had USD denominated facilities priced at Libor. The carrying amount of the borrowing facility is
USD 40 million priced at six-month USD libor. The facility will mature within 12 months from drawdown date. The amendments above
had no significant impact on the annual financial statements of the Group and the Company for the period. There was no amendment to
the original contracts terms specified at the initial recognition nor alteration of the method for calculating the interest rate benchmark nor
existing fallback clauses in the existing contracts. The Group and Company are currently negotiating alternative benchmark rates with
financial institutions and will be transitioning to new benchmark rates by December 2022.
COVID-19-Related Rent Concessions – Amendments to IFRS 16

On 28 May 2020, the IASB issued COVID-19-Related Rent Concessions – amendment to IFRS 16: Leases. The amendments provide
relief to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence
of the COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a COVID-19-Related Rent concession
from a lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the
COVID-19-Related Rent concession the same way it would account for the change under IFRS 16, if the change were not a lease
modification.
The amendment applies to all lease payments originally due on or before 30 June 2021. The amendment applies to annual reporting
periods beginning on or after 1 June 2020.
COVID-19-Related Rent Concessions beyond 30 June 2021 – Amendments to IFRS 16

On 28 May 2020, the IASB issued COVID-19-Related Rent Concessions – amendment to IFRS 16: Leases. The amendments provide relief
to lessees from applying IFRS 16 guidance on lease modification accounting for rent concessions arising as a direct consequence of the
COVID-19 pandemic. As a practical expedient, a lessee may elect not to assess whether a COVID-19-Related Rent concession from a
lessor is a lease modification. A lessee that makes this election accounts for any change in lease payments resulting from the COVID-19-
Related Rent concession the same way it would account for the change under IFRS 16 if the change were not a lease modification.
The amendment was intended to apply until 30 June 2021, but as the impact of the COVID-19-related pandemic is continuing, on
31 March 2021, the IASB extended the period of application of the practical expedient to 30 June 2022.The amendment applies to
annual reporting periods beginning on or after 1 April 2021.
The Group and Company has not received any COVID-19-Related Rent concessions. The Group and Company plans to apply the
practical expedient if it becomes applicable within allowed period of application.
These amendments and interpretations apply for the first time in the period, but do not have an impact on the annual financial statements
of the Group and Company. The Group and Company have not early adopted any standards, interpretations or amendments that have
been issued but are not yet effective.
195
Notes to the financial statements continued

Standards issued but not yet effective

The standards and interpretations that are issued, but not yet effective, up to the date of issuance of the Group and Company’s financial
statements are listed below:
Effective for annual period

New standards or amendments beginning on or after
Reference to the Conceptual Framework (Amendments to IFRS 3) 1 January 2022
Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16) 1 January 2022
Onerous Contracts Cost of Fulfilling a Contract (Amendments to IAS 37) 1 January 2022
AIP IFRS 1: First-time Adoption of International Financial Reporting Standards –
Subsidiary as a first-time adopter 1 January 2022
AIP IFRS 9: Financial Instruments – Fees in the "10 per cent" test for derecognition of financial liabilities 1 January 2022
AIP IAS 41: Agriculture – Taxation in fair value measurements 1 January 2022
IFRS 17: Insurance Contracts 1 January 2023
Classification of liabilities as current or non-current (Amendments to IAS 1) 1 January 2023
Definition of Accounting Estimates – Amendments to IAS 8 1 January 2023
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2 1 January 2023
Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12 1 January 2023
Sale or Contribution of Assets between an Investor and its Associate or Company (Amendments to IFRS 10
and IAS 28) To be determined
Other than the impact assessments disclosed on specific standards and interpretations below, the impact for the adoption of the
remaining standards and interpretations on Group and Company are still being assessed.
The following standards and interpretations are expected to affect the Group’s and Company annual financial statements when they
become effective.
Amendments to IAS 1: Classification of liabilities as current or non-current

In January 2020, the IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify the requirements for classifying liabilities as
current or non-current. The amendments clarify:
• What is meant by a right to defer settlement.

• That a right to defer must exist at the end of the reporting period.
• That classification is unaffected by the likelihood that an entity will exercise its deferral right.
• That only if an embedded derivative in a convertible liability is itself an equity instrument would the terms of a liability not impact
its classification.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and must be applied retrospectively.
The Group is currently assessing the impact the amendments will have on current practice.
196

Standards issued but not yet effective continued

Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16
In May 2020, the IASB issued Property, Plant and Equipment — Proceeds before Intended Use, which prohibits entities deducting from
the cost of an item of property, plant and equipment, any proceeds from selling items produced while bringing that asset to the location
and condition necessary for it to be capable of operating in the manner intended by management. Instead, an entity recognises the
proceeds from selling such items, and the costs of producing those items, in profit or loss.
The amendment is effective for annual reporting periods beginning on or after 1 January 2022 and must be applied retrospectively to
items of property, plant and equipment made available for use on or after the beginning of the earliest period presented when the entity
first applies the amendment.
The amendments are not expected to have a material impact on the Group and Company as there was no items of property and
equipment relevant as defined under the amendments, but management will continue to assess the potential impact of these amendments
up to the point of initial application.
Definition of Accounting Estimates – Amendments to IAS 8

In February 2021, the IASB issued amendments to IAS 8, in which it introduces a definition of "accounting estimates". The amendments
clarify the distinction between changes in accounting estimates and changes in accounting policies and the correction of errors.
Also, they clarify how entities use measurement techniques and inputs to develop accounting estimates.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023 and apply to changes in accounting
policies and changes in accounting estimates that occur on or after the start of that period. Earlier application is permitted as long as this
fact is disclosed. The amendments are not expected to have a material impact on the Group and Company, but management will
continue to assess the impact up to the point of initial application.
Disclosure of Accounting Policies – Amendments to IAS 1 and IFRS Practice Statement 2

In February 2021, the IASB issued amendments to IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements, in which it
provides guidance and examples to help entities apply materiality judgements to accounting policy disclosures. The amendments aim to
help entities provide accounting policy disclosures that are more useful by replacing the requirement for entities to disclose their
"significant" accounting policies with a requirement to disclose their "material" accounting policies and adding guidance on how entities
apply the concept of materiality in making decisions about accounting policy disclosures.
The amendments to IAS 1 are applicable for annual periods beginning on or after 1 January 2023 with earlier application permitted.
Since the amendments to the Practice Statement 2 provide non-mandatory guidance on the application of the definition of material to
accounting policy information, an effective date for these amendments is not necessary.
The Group and Company currently assessing the impact of the amendments to determine the impact they will have on the Group’s
accounting policy disclosures.
Onerous Contracts – Costs of Fulfilling a Contract – Amendments to IAS 37

In May 2020, the IASB issued amendments to IAS 37 to specify which costs an entity needs to include when assessing whether a
contract is onerous or loss-making.
The amendments apply a “directly related cost approach”. The costs that relate directly to a contract to provide goods or services include
both incremental costs and an allocation of costs directly related to contract activities. General and administrative costs do not relate
directly to a contract and are excluded unless they are explicitly chargeable to the counterparty under the contract.
The amendments are effective for annual reporting periods beginning on or after 1 January 2022. The Group and Company currently
does not have any onerous contracts and is currently assessing the impact of these amendments.
197

Standards issued but not yet effective continued

Deferred Tax related to Assets and Liabilities arising from a Single Transaction – Amendments to IAS 12
In May 2021, the Board issued amendments to IAS 12, which narrow the scope of the initial recognition exception under IAS 12,
so that it no longer applies to transactions that give rise to equal taxable and deductible temporary differences.
The amendments clarify that where payments that settle a liability are deductible for tax purposes, it is a matter of judgement (having
considered the applicable tax law) whether such deductions are attributable for tax purposes to the liability recognised in the financial
statements (and interest expense) or to the related asset component (and interest expense). This judgement is important in determining
whether any temporary differences exist on initial recognition of the asset and liability.
Under the amendments, the initial recognition exception does not apply to transactions that, on initial recognition, give rise to equal
taxable and deductible temporary differences. It only applies if the recognition of a lease asset and lease liability (or decommissioning
liability and decommissioning asset component) give rise to taxable and deductible temporary differences that are not equal.
Nevertheless, it is possible that the resulting deferred tax assets and liabilities are not equal (e.g., if the entity is unable to benefit from the
tax deductions or if different tax rates apply to the taxable and deductible temporary differences). In such cases, which the Board expects
to occur infrequently, an entity would need to account for the difference between the deferred tax asset and liability in profit or loss.
The amendments are effective for annual reporting periods beginning on or after 1 January 2023. The Group and Company is currently
assessing the impact of these amendment.
(b) Consolidation
(i) Subsidiaries
The Consolidated Financial Statements comprise the financial statements of the Company and its subsidiaries as at 31 March 2022.
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when it has
power over the investee, when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to
affect those returns through its power to direct the activities of the entity. Subsidiaries are fully consolidated from the date in which control
is transferred to the Group. They are deconsolidated from the date that control ceases.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction.
If the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, non-controlling interest and
other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at
fair value.
Intercompany 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. Accounting policies of subsidiaries
have been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of profit or loss and
other comprehensive income, statement of changes in equity and statement of financial position respectively. When the proportion of the
equity held by non-controlling interests’ changes, the Group adjusts the carrying amounts of the controlling and non-controlling interests to
reflect the changes in their relative interests in the subsidiary. The Group recognises directly in equity any difference between the amount
by which the non-controlling interests are adjusted, and the fair value of the consideration paid or received, and attribute it to the owners
of the parent.
198

(b) Consolidation continued
(ii) Investment in associates

Associates are all entities over which the Group has significant influence but not control or joint control. 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. This is
generally the case where the Group holds between 20% and less than 50% of the voting rights of the entity. In assessing existence of
significant influence, the Group considers among other parameters whether there is:
• Representation on the Board of Directors or equivalent governing body of the investee

• Participation in the policy-making process and material transactions between the investor and the investee
• Interchange of managerial personnel between the investor and the investee
• Provision of essential technical information by the investor to the investee
In certain instances, the requirement that significant influence arises from a 20% or more in investments can be invalidated where an
entity can demonstrate that it does not have significant influence, or there is demonstrable presence of significant influence in an
investment of less than 20% based on the above assessment criteria.
Investments in associates are accounted for using the equity method of accounting. The initial investment is recognised at cost of
acquisition and any share of profit or loss from the investment is reflected as changes in the value of the investment. Goodwill relating
to the associate is included in the carrying amount of the investment and is not tested for impairment separately.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise the Group’s
share of the post-acquisition profits or losses of the investee in profit or loss, and the Group’s share of movements in other comprehensive
income of the investee in other comprehensive income. Dividend received or receivable from associates are recognised as a reduction in
the carrying amount of the investment. In addition, when there has been a change recognised directly in the equity of the associate or
joint venture, the Group recognises its share of any changes, when applicable, in the statement of changes in equity.
When the Group’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the Group does not recognise further losses, unless it has incurred obligations or made payments on
behalf of the other entity.
Unrealised gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in these
entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of equity accounted investees have been changed where necessary to ensure consistency with the policies adopted
by the Group.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of the joint venture recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the
carrying amount of the investment. A gain on bargain purchase – is recognised through statement of profit or loss and other
comprehensive income.
(iii) Investment in joint ventures

The Group assesses its joint arrangements to determine whether they are joint ventures or joint operations. A joint venture arises from
a joint arrangement where the parties that have joint control of the arrangement have rights to the net assets of the arrangement.
The resultant share of operational results, assets and liabilities of joint ventures are incorporated in the consolidated annual financial
statements from the date on which the Group has joint control and derecognised on the date when the Group ceases to have such
control. Upon loss of joint control over the joint venture, the Group measures and recognises any retained investment at its fair value.
Any difference between the carrying amount of the joint venture upon loss of joint control and the fair value of the retained investment
and proceeds from disposal is recognised in profit or loss.
Under the equity method, joint ventures are carried in the consolidated statement of financial position at cost as adjusted for
post-acquisition changes in the Group’s share of the net assets of the joint venture, less any impairment in the value of the investment.
Losses of a joint venture in excess of the Group’s interest in that joint venture are not recognised. Additional losses are provided for,
and a liability is recognised, only to the extent that the Group has incurred legal or constructive obligations or made payments on behalf
of the joint venture.
Any excess of the cost of acquisition over the Group’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities of the joint venture recognised at the date of acquisition is recognised as goodwill. The goodwill is included within the carrying
amount of the investment. A gain on bargain purchase is recognised through statement of profit or loss and other comprehensive income.
199

(b) Consolidation continued
(iv) Separate financial statements

In the Separate Financial Statements, investments in subsidiaries are accounted for at cost less impairment and investment in associates
and joint venture are accounted for using the equity method. Cost is adjusted to reflect changes in consideration arising from contingent
consideration amendments. Cost also includes direct attributable costs of investment.
(c) Segment reporting

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker.
The chief operating decision-maker, who is responsible for allocating resources and assessing performance of the operating segments,
has been identified as the Senior Leadership Team (SLT) that makes strategic decisions.
The SLT consider the Company to be comprised of one operating segment. The financial statements are presented on the basis that risks
and rates of return are related to this one reportable segment. Entity-wide segment information is the same as that presented in these
financial statements. There are no revenues from transactions with a single external customer that amount to 10% or more of the
Group’s revenue.
(d) Foreign currency translation

(i) Functional and presentation currency
Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic
environment in which the entity operates (“the functional currency”). The Consolidated Financial Statements are presented in Kenya
Shillings (KShs), which is the Group’s and Company’s presentation currency. The company’s functional currency is Kenya Shillings.
(ii) Transactions and balances

Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end
exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in profit or loss.
These are recognised in other Comprehensive income (OCI) until the net investment is disposed of, at which time, the cumulative amount
is reclassified to profit or loss. Tax charges and credits attributable to exchange differences on those monetary items are also recognised
in OCI.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the
dates of the initial transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates
at the date when the fair value is determined. The gain or loss arising on translation of non-monetary items measured at fair value is
treated in line with the recognition of the gain or loss on the change in fair value of the item (i.e. translation differences on items whose
fair value gain or loss is recognised in OCI or profit or loss are also recognised in OCI or profit or loss, respectively).
In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the
derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date
on which the Group initially recognises the non-monetary asset or non-monetary liability arising from the advance consideration. If there
are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance
consideration.
(iii) Group companies

On consolidation, the assets and liabilities of foreign operations are translated into Kenya Shillings at the rate of exchange prevailing at
the reporting date and their statements of profit or loss are translated at average exchange rates prevailing in the months of the
transactions. The exchange differences arising on translation for consolidation are recognised in OCI. On disposal of a foreign
operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss.
200

(e) Revenue recognition
Revenue is recognised when or as the Group transfers control of goods or services to a customer at the amount to which the Group
expects to be entitled. Depending on whether certain criteria are met, revenue is recognised:
• Over time, in a manner that best reflects the delivery of the Group’s performance obligations; or
• At a point in time, when control of the goods or services is transferred to the customer.
The Group applies the five-step model as per IFRS 15: Revenue from contracts with customers, to determine when to recognise revenue
and at what amount. The following approach is used:
• Identify the contract with a customer;

• Identify the performance obligations in the contract;
• Determine the transaction price;
• Allocate the transaction price to the performance obligations in the contract; and
• Recognise revenue.
Revenue is measured based on the consideration specified in a contract with a customer and excludes amounts collected on behalf of
third parties.
The Group accounts for a contract with a customer only when:
(i) There is evidence of an arrangement.
(ii) The Group can identify each party’s rights and obligations regarding the goods and services to be transferred.
(iii) The contract has commercial substance and collectability is reasonably assured.
The transaction price is allocated between performance obligations based on relative stand-alone selling prices as determined at
contract inception.
Since the timing and classification of revenue recognised for a contract will often be dependent on the stand-alone selling prices that are
identified for each performance obligation, the determination of stand-alone selling prices is critical.
The stand-alone selling price of a performance obligation is the observable price for which the good or service is sold by the Group in
similar circumstances to similar customers. If a stand-alone selling price is not directly observable, then it is estimated. Estimations consider
all relevant facts and circumstances and maximise the use of observable inputs.
Customers typically pay in advance for prepay mobile services and monthly for other communication services. Customers typically pay
for handsets and other equipment either upfront at the time of sale or over the term of the related service agreement.
The Group’s principal business has been the provision of telecommunication services. The Group is transforming itself to a technology
company. Airtime can be bought as scratch cards or PINless top-ups through dealers and own-retail centres spread across the country.
Customers can also buy airtime through M-PESA, emergency top-up and direct top-up for bulk purchases. Revenue from sale of the
airtime is deferred and recognised as revenue on usage or expiry. Customers can use airtime to make voice calls, send SMS and
browse the internet.
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(e) Revenue recognition continued
Voice and SMS revenue

Voice and SMS services enable both prepay and postpay customers to make calls and send text messages respectively within and
outside the network. Prepay customers top up their phones by either buying prepay cards from dealers, other retail outlets, M-PESA or
borrowing credit through emergency top-up service (Okoa Jahazi). They can also receive airtime from other subscribers through
Sambaza. Postpay customers subscribe to various tariffs and are billed at the end of the month based on a fixed charge or usage.
The headline voice tariff for prepay customers is called Uwezo and Advantage tariff for postpay customers. The on-net and off-net rate is
KShs 4.87 per minute during the peak hours (08:00 to 22:00) and KShs 2.50 per minute during off-peak hours (22:00 to 08:00)
applicable to both prepay and post pay customers. Revenue from prepay voice customers is recognised on usage whereas postpay
revenue is recognised at the end of every month based on a monthly charge.
In the spirit of being Simple, transparent and honest, the Group introduced a non-expiry product named Milele Airtime (Neo).
The customer is awarded 50% bonus on purchases of the product. The customer can use the airtime to either call or SMS at the normal
rates. On purchase, the billed amount is deferred and only revenues recognised when the service is rendered as either voice or SMS.
The Group has in place the Stori Ibambe bonus scheme where the subscribers are required to attain a pre-determined daily target of
usage after which the Group awards 100% bonus airtime valid until midnight daily that can be used for Safaricom to Safaricom Voice
calls and SMS, for which the revenue is recognised based on customers' usage or upon expiry.
The Group has signed interconnect agreements with both local and foreign partners. This allows customers from either network to
originate or terminate calls to each other’s network. Revenue is earned and recognised when partners’ calls are terminated to the Group's
network, i.e. the service is rendered.
The Group has roaming agreements with roaming partners that enable customers to make and receive calls when travelling around the
world. The agreed charges vary per partner. When visitors roam on Safaricom network, revenue is earned by billing the visiting
customers’ network while revenue from Safaricom customers is earned from customer billing for voice, SMS and data usage while
roaming on other networks. Revenue is recognised on billing.
Customers can send messages for KShs 1.20 per SMS on both on-net and off-net. There are also attractive SMS bundles which offer an
effective price per SMS lower than KShs 1.20. Revenue from SMS service is recognised on earlier of usage or expiry of SMS bundle.
Data revenue
Mobile data enables both prepay and postpay customers access the internet. Prepay customers top up their lines by purchasing credit or
bundles in advance whereas postpay customers are availed credit based on the tariff subscribed.
Mobile data has a wide range of propositions available as per customers’ requirements. These include, Pay as you Go, daily bundles,
7-day, 30-day, 90-day bundles and time-based billing.
The data bundles are deferred on purchase and recognised as revenue on the earlier of usage or expiry.
The validity of purchased but unutilised data bundles is extended upon additional purchase of data bundles and the Group prompts the
subscriber in advance before unutilised bundles expire and are consequently unavailable for use. Like voices and SMS, the Group
introduced no expiry data bundles dubbed Neo data, the new data tariff now allows customers to buy data for any amount they wish.
The Group has in place, My Data Manager, a tool that gives subscribers power to control data bundle usage and allows them to restrict
browsing out of bundle which enables them to take control of their browsing and internet usage.
The Group has rolled out its own home fibre to connect both households and businesses through Fibre to the Home (FTTH) and Fibre to
the Building (FTTB) services that enable fast, reliable and unlimited internet access from the comfort of a customer’s home/premises. This
service is open and available to all customers residing within areas that have Safaricom fibre infrastructure ready and have applied to
have their homes/premises connected to the Safaricom fibre grid.
The price charged is based on the bandwidth and speed contracted by the customer. The price is charged upfront for a standard period
of 30 days and the customer can renew the subscription by making a payment. The amount charged is deferred and recognised as
revenue proportionately over the subscription period.
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Integrated bundles
An integrated bundle is a one-stop package that offers subscribers freedom to choose their preferred resources in the form of voice
minutes, SMS bundles and mobile data bundles.
The Group has in place All-in-One monthly bundles, Tunukiwa tariff, BLAZE, FLEX, Songa Music app and Platinum products under this
category.
All-in-One monthly bundles are available to all Safaricom customers (prepay, postpaid and hybrid) and they have a simplified journey
that seeks to offer the consumer the best choice for maximising their purchase, including free WhatsApp access once the customer
exhausts their mobile data bundle and the expiry date has not yet elapsed.
Customers can access these bundles on USSD *544#, *100#, *200# and *456#, select the amount they wish to spend and then
view all data and integrated products and resources at the respective amounts. All in one monthly bundles have a validity of 30 days.
Tunukiwa tariff is a personalised offer that is based on an individual customer usage, network utilisation, capacity availability, device type
and general location. Daily, upon dialling *444# from their Safaricom line, customers access a list of custom-made options being
number and value of voice minutes, SMS bundles and mobile data bundles, to choose from.
Customers are able to purchase multiple options of the personalised package depending on their preferences. The personalised options
are subject to the validity as specified in the USSD (*444#) before purchase.
BLAZE is a platform that empowers the youth using mobile phones and targets the fast growing 18- to 26-year old demographic group.
The platform offers access to custom-made tariffs and product offerings that leverage Safaricom’s extensive mobile network.
Create Your Plan is one of several unique services offered under the BLAZE portfolio that allows users to control how much they spend on
voice, data and SMS each time they purchase airtime.
FLEX product has been designed for the customer who demands the most from their mobility and it allows customers to choose how they
allocate airtime for voice calls, SMS or mobile data services.
Customers are able to subscribe to daily, weekly or monthly packages that offer value beyond typical bundles in order to maximise on
their spend. Customers can roll over any unused FLEX units by renewing their existing FLEX bundles before expiry.
Songa by Safaricom is a music application (App) that enables our Prepay and Postpay subscribers to get in one place and stay
entertained with all genres of their preferred local and international songs. Subscribers opt in by dialing *812# or downloading the App
from Google Play store. There are affordable daily, weekly and monthly propositions available and subscribers will be required to utilise
their mobile data bundle resources to stream and download the songs. Normal mobile data rates will apply.
Safaricom Platinum Plans are value for money mobile packages available to all individual Prepay, Postpay and Hybrid subscribers.
The plan offers integrated data, voice and SMS packages at different price points ranging from KShs 1,000 to KShs 10,000 with a
30-day validity.
Currently the subscribers who opt into the Platinum Plus plan have accessibility to incentivised services from Shell Petrol station, TicketSasa
and Eat Out outlets accessible through the mySafaricom App, "Hot Deals" tab.
The price charged on these bundles is deferred on purchase and recognised as revenue on utilisation by the customers or on expiry in
line with the validity period. Revenue from integrated bundles is recognised under the respective revenue stream i.e. voice, SMS and/or
mobile data revenue streams.
203

M-PESA revenue
M-PESA is a mobile money transaction service allowing customers to deposit, transfer and withdraw money or pay for goods and
services (Lipa na M-PESA) using a mobile phone. M-PESA is available to all Safaricom subscribers (Prepay and Postpay). Registration is
free and available at any M-PESA agent countrywide. The M-PESA application is installed on the SIM-card and works on all makes
of handsets.
Revenue from this service which is earned at point in time is largely from transfer and withdrawal transactions performed by customers.
A graduated tariff depending on the funds being transacted is applied on all transactions which are cumulatively reported as M-PESA
transaction revenue.
In partnership with Kenya lenders, NCBA and KCB Bank, the Group operates Overdraft (OD) facility dubbed "Fuliza", a product that
enables customers to access unsecured line of credit by overdrawing on M-PESA to cover short-term cash-flow shortfalls subject to an
applicable pre-determined limit.
Fuliza is underwritten by Kenyan lenders, NCBA and KCB Bank. Customers who "opt in" on Fuliza are charged a one-off access fee and
daily maintenance fees on unpaid loan amounts based a pre-determined matrix. Safaricom earns a proportion of the fee based on a
pre-determined revenue share matrix. The revenue is recognised at point in time.
The Group in partnership with M-Gas, a subsidiary of Circle Gas UK, launched a revolutionary, prepaid gas service for Kenyan
households. The innovation empowers millions of Kenyan homes to enjoy access to clean, affordable and reliable cooking gas,
providing them with the flexibility of purchasing gas based on their needs and how much they can afford at a time. The Group is
extending its digital and payment capabilities to M-Gas, powering the smart meter technology on each cylinder that enables customers
to have control over how the use and pay for gas. The M-Gas solution has been made possible by Safaricom’s Narrow Band Internet of
Things (NB IoT) network and M-PESA. Powered by Group’s robust 4G network, NB IoT provides a low-power, mobile connectivity to
devices across the country. The revenues is calculated as a percentage of gross sales based on prior year audited financial statements
and is recognised at a point in time.
Safaricom PLC through its fully owned subsidiary, Safaricom Money Transfer Services Limited (SMTSL), operates the remittance services
that allows customers to send and receive money to a beneficiary through registered mobile phone numbers in partnership with third
party International Money Remittance (IMT) Providers. Revenues is earned from transaction fees charged to customers for international
money transfers (inbound and outbound). The revenue is recognised at a point in time.
The partnership is part of Safaricom’s contribution to attainment of the Sustainable Development Goals, particularly goals 3 ,4, 7, 8, 9,
10, 12, 16 and 17.
The Group has in place an M-PESA tariff dubbed "M-PESA Kadogo" where transaction charges for single transaction amounts that are up
to KShs 100 were waived. This allows subscribers to send as little as KShs 1 on the M-PESA platform with nil charges.
Lipa na M-PESA enables merchants to accept cashless payments for goods and services from customers. Revenue is earned on all the
transactions based on a graduated tariff applied on the transacted values. Revenue is recognised at a point in time when the transactions
occur.
In line with the financial inclusion strategy Safaricom has partnered with NCBA and KCB Bank Kenya Limited to offer Mshwari and
KCB-M-PESA services respectively. These services enable customers to save as little as KShs 1 (USD 0.01) and get loans from KShs 50
(USD 0.491) to KShs 1 million (USD 9,900.99). Revenue is shared among the partners on the basis of the facility fee and other charges
to customers based on a pre-determined revenue share matrix. Revenue is recognised at a point in time when the transactions occur.
This has enabled more subscribers to get access to mobile banking services that they did not have before.
There are no application forms, no ledger fees, no limits on the frequency of withdrawal, no minimum operating balance and no charges
for moving money from M-PESA to bank accounts and vice versa.
M-Shwari lock box product enables customers to make fixed deposit savings at a higher interest rate.
Other service revenue

This includes access fees charged on emergency top up service when a customer borrows airtime (Okoa Jahazi) and data bundles
(Okoa Data) with the debt being repayable within five days. It also includes set-up fee charged for codes allocated to premium rate
services providers (PRSPs). The fee charged is deferred and recognised as revenue on the usage of borrowed airtime and data over the
contract period for PRSPs.
204

Loyalty programme
The Groups loyalty programme, "Bonga Points", was introduced in January 2007 for both Prepay and Postpay subscribers. Under this
scheme, subscribers earn one Bonga point for every KShs 10 spent on voice calls, short message service (SMS), data and M-PESA
services. These points can be redeemed for airtime, SMS or merchandise such as phones, modems and tablets at Safaricom retail
outlets.
The Group has in place the "Bonga everywhere" scheme where subscribers can utilise their Bonga points in appointed retail outlets,
e.g. Naivas supermarkets amongst others to purchase goods and services.
Management defers revenue for every point accumulated and recognises the revenue relating to the points earned on redemption either
at point in time (for merchandise or Bonga everywhere) or overtime based on usage of acquired resources. Management also recognises
revenue on the remaining loyalty points for churned SIM-cards at the point when the SIM-cards are churned.
In addition, Enterprise Business customers earn loyalty points upon achievement of their revenue targets and the accumulated amounts are
only redeemable after the maturity of the underlying revenue contracts with the Group. Management defers revenue for amounts
accumulated guided by a pre-determined matrix and recognises the revenue earned upon redemption.
Contract-related costs
Connection commissions paid to dealers and SIM activation costs are recognised as costs to fulfill a contract in the statement of financial
position when the related payment obligation is extinguished through payments.
Deferred SIM costs are incurred prior to connecting customers to the network and are recognised as costs to obtain a contract in the
statement of financial position when the SIM card is sold to the dealer. Contract cost are then amortised over the customer life as
determined by the Group.
Handsets and acquisitions revenue

These includes revenue on sale of mobile phone handsets, decoders, starter packs, SIM swaps and other accessories sold through
dealers and own-retail centres spread across the country. Starter packs consist of a SIM card and information brochures. Handsets,
SIM swaps and accessories have no right of return and revenue is recognised on sale.
However, income from sale of SIM cards is deferred and recognised as revenue over the determined customer life when the customer
activates the line through initial top up.
Construction and managed service contract

The Company has a construction contract for the construction of a national secure communication network and surveillance system for the
National Police Service. A construction contract is a contract specifically negotiated for the construction of an asset or a combination of
assets that are closely interrelated or interdependent in terms of their design, technology and functions, or their ultimate purpose or use.
The Group is responsible for the overall development of the project and identifies various goods and services to be provided, including
design work, procurement of materials, site preparation and foundation pouring, framing and plastering, mechanical and electrical work,
installation of fixtures and finishing work. In such contracts, the Group determined that the goods and services are not distinct and
generally accounts for them as a single performance obligation. As per the terms of construction contract, the Group has determined that
control is transferred over time. As such revenues from construction is recognised over time.
Construction costs incurred are accumulated under inventory work in progress until when they are billed.
Other revenue
This includes, among others, site rentals. Site rental revenue is billed monthly and is based on the number of sites and equipment hosted
per site. Revenue is recognised systematically over the lease period. Please refer to Accounting Policy 2(j) Accounting for leases, for the
Group’s lessor accounting policy in this regard.
Miscellaneous income
Miscellaneous income includes among others cash discounts received from vendors, donations from third parties utilised to fund
Safaricom Foundation activities, and gains on disposal of property and equipment.
205

(f) Property and equipment
All categories of property and equipment are initially recorded at cost. Following initial recognition, property and equipment are carried
at cost, net of accumulated depreciation and accumulated impairment losses, if any. Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable
that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. All other
repairs and maintenance are charged to profit or loss income during the financial period in which they are incurred.
Depreciation is calculated using the straight-line method to write down the cost of each asset to its residual value over its estimated useful
life as follows:
Network infrastructure 5–20 years

Equipment and motor vehicles 4–10 years
Fibre 25 years
Leasehold improvements Shorter of life of lease or useful life of the asset
Network maintenance spares 4–10 years
Spare parts, standby equipment and servicing equipment are recognised as property and equipment when they meet the definition of
property, plant and equipment.
The assets residual values, useful lives and methods of depreciation are reviewed, and adjusted if appropriate, at each period end.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater than its
estimated recoverable amount.
Property, plant and equipment acquired in exchange for non-monetary assets or a combination of monetary and non-monetary assets
are measured at fair value of the new asset. If the fair value of the newly acquired asset cannot be determined reliably, then the newly
acquired asset is measured at the carrying amount of the asset given up.
The carrying amount of an item of property and equipment is derecognised on disposal; or when no future economic benefits are
expected from its use or disposal.
The gain or loss arising from the derecognition of an item of property and equipment is included in profit or loss when the item is
derecognised. The gain or loss from the derecognition is calculated as the net disposal proceeds (usually income from sale of item)
less the carrying amount of the item.
Asset retirement obligations

The Group accounts for the costs associated with dismantling and removing network infrastructure assets and returning a network
infrastructure site to its original condition upon termination of the network infrastructure site.
A restoration provision is recorded based on the best estimate of the average restoration costs (being the future costs relating to
dismantling and removing property and equipment and restoring each site) multiplied by the number of sites for which the Company has
a restoration obligation.
The best estimate of average restoration costs per site is determined using historical and current experience, adjusted where necessary for
known factors which will impact the future. In the absence of such experience, the best estimate is based on quotations obtained from
relevant suppliers or an equally rigorous internal costing process.
206

(f) Property and equipment continued
Upon recognition of a provision, a corresponding amount is recognised as part of the cost of the asset and depreciated over its useful
life, which would normally be the period to the removal of the network infrastructure from the site. This period should not exceed the
remaining lease term.
Where the impact is material, the provision, as originally established, should be discounted using the appropriate pre-tax discount rate.
This discount should be unwound through the finance cost in the statement of profit or loss and other comprehensive income over the
period to the lease termination date.
Provisions are reviewed at the end of each reporting period and adjusted to reflect the current best estimate. If it is no longer probable
that an outflow of resources embodying economic benefits will be required to settle the obligation, the provision is reversed. The changes
and adjustments to the provisions are made directly against the underlying asset to which the provision relates.
(g) Investment property

Investment properties are properties held to earn rentals and/or for capital appreciation (including property under construction for such
purposes). Investment properties are measured initially at cost, including transaction costs. Subsequent to initial recognition, investment
properties are measured at fair value.
Gains and losses arising from changes in the fair value of investment properties are included in profit or loss in the period in which they
arise. The Group reassess the fair value of its investment property annually.
An investment property is de-recognised upon disposal or when the investment property is permanently withdrawn from use and no future
economic benefits are expected from the disposal. Any gain or loss arising on de-recognition of the property (calculated as the difference
between the net disposal proceeds and the carrying amount of the asset) is included in profit or loss and other comprehensive income in
the period in which the property is de-recognised.
(h) Intangible assets – Network licences

Separately acquired trademarks and licences are measured on initial recognition at cost. Following initial recognition, they are carried at
cost, net of accumulated amortisation and accumulated impairment losses, if any. Licences acquired in a business combination are
recognised at fair value at the acquisition date. Licences that have a finite useful life and are carried at cost less accumulated
amortisation. Amortisation is calculated using the straight-line method to allocate the cost of trademarks and licences over their estimated
useful lives of 10 to 15 years.
A telecommunication licence is a requirement of the Communications Authority of Kenya (CA) for mobile telephone companies.
The licence is renewable for an additional period upon its expiry. Currently Safaricom PLC is licenced under the Unified Licence
Framework which is technology and service neutral.
Telecommunication licence fees are capitalised at cost and amortised over the period of the licence using the straight-line method from
commencement of the service of the network.
Safaricom has the following licences:
• Network Facilities Provider licence Tier 1 (NFP) licence

• Applications Services Provider (ASP) licence
• Content Service Provider (CSP) licence
• International Gateway Systems and service (IGSS) licence
The amortisation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of
each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied
in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting
estimates.
There are annual network licence fees associated with these licences which are expensed each year.
The following licences are also in place from subsidiaries:
• Subscription Broadcasting Licence issued by Communication Authority of Kenya on 16 July 2019 to Comtec Integration Systems
Limited valid for 10 years.
• Unified Telecommunications Services Licence issued by Ethiopian Communications Authority(ECA) on 9 July 2021 to Safaricom
Telecommunications Ethiopia PLC valid for 15 years.
207

(i) Impairment of non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists,
or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable
amount is the higher of an asset’s or cash-generating unit fair value less costs of disposal and its value in use. The recoverable amount is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets
or groups of assets. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. An impairment loss is recognised for the amount by which the asset’s
carrying amount exceeds its 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 statement of profit or loss unless the asset
is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase.
Goodwill and intangible assets that have an indefinite useful life are not subject to amortisation but are tested annually for impairment.
Non-financial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting
date. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows
(cash-generating units).
(j) Accounting for leases

The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control
the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value
assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying
assets.
Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease. Right-of-use assets are measured at cost, being the
present value of the lease payments paid or payable, plus any initial direct costs incurred in entering the lease and dismantling and
restoration costs, less any lease incentives received less any accumulated depreciation and impairment losses and adjusted for any
remeasurement of lease liabilities. Right-of-use assets are depreciated on a straight-line basis over of the lease term.
The right-of-use assets are also subject to impairment. Refer to Note 2(i) and Note 22(a).
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be
made over the lease term. Lease payments included in the lease liability include fixed payments and in-substance fixed payments during
the term of the lease less any lease incentives receivable, variable lease payments that depend on an index or a rate, the exercise price
of a purchase option if the lessee is reasonably certain to exercise that option, payments of penalties for terminating the lease, if the
lease term reflects the lessee exercising an option to terminate the lease and amounts expected to be payable by the lessee under
residual value guarantees. In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease
commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount
of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying
amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments.
The Group’s lease liabilities are shown in Note 22(b).
The Group is the lessor – Operating leases

An operating lease is a lease in which substantially all of the risks and rewards of the leased assets remain with the lessor. Where the
Group is the lessor, lease income is recognised on a straight-line basis over the period of the lease unless another systematic basis is
more appropriate. The Group recognises leased assets on the statement of financial position as right-of-use assets.
The Group acts as lessor of sites. These leases have an average life of between five and ten years with renewal options included in the
contracts. There are no restrictions placed upon the lessee by entering into these leases. Rental income recognised by the Group during
the year is KShs 2,193.3 million (2021: KShs 2,043.7 million), Company KShs 2,193.3 million (2021: KShs 2,069.2 million).
208

(j) Accounting for leases continued
The Group is the lessor – Operating leases continued

Future minimum undiscounted lease payments receivable under non-cancellable leases as at 31 March were as follows:
GROUP AND COMPANY
2022 2021
KShs’m KShs’m
Within one year 1,993.7 2,068.3
1 to 5 years 8,771.0 8,667.3
6 to 10 years 1,411.4 3,405.1
Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of sites, shops, facilities and secondees/expatriates
houses (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase
option). It also applies the lease of low-value assets recognition exemption to leases of sites, shops, facilities and secondees/expatriates
houses that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
(k) Financial assets

Initial recognition
Financial instruments are recognised when, and only when, the Group becomes party to the contractual provisions of the instrument.
All financial assets are recognised initially using the trade date accounting which is the date the Group commits itself to the purchase
or sale.
Initial measurement
On initial recognition:
• Trade receivables are measured at their transaction price.

• All other financial assets and financial liabilities are initially measured at the fair value plus or minus transaction costs that are directly
attributable to the acquisition or issue of the instrument, except for financial assets and financial liabilities measured at fair value for
which the directly attributable transaction costs are expensed in profit or loss.
Classification
Financial assets that are held within a business model whose objective is to hold assets in order to collect contractual cash flows, and for
which the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and
interest on the principal amount outstanding, are classified and measured at amortised cost.
Financial assets held during the year were classified as follows:
• Trade and other receivables, loan to subsidiary, loans and receivables due from related parties, cash and cash equivalents were
classified as at amortised cost.
• Restricted cash was classified as at amortised cost.
Subsequent measurement
After initial recognition, financial assets are measured at amortised cost using the effective interest method.
Interest income, dividend income, and exchange gains and losses on monetary items are recognised in profit or loss.
Impairment
The Group recognises a loss allowance for expected credit losses on debt instruments that are measured at amortised cost. The loss
allowance is measured at an amount equal to the lifetime expected credit losses for trade receivables and for financial assets for which:
(a) the credit risk has increased significantly since initial recognition; or (b) there is observable evidence of impairment (a credit-impaired
financial asset). If, at the reporting date, the credit risk on a financial asset other than a trade receivable has not increased significantly
since initial recognition, the loss allowance is measured for that financial instrument at an amount equal to 12-month expected credit
losses. All changes in the loss allowance are recognised in profit or loss as impairment gains or losses.
209

(k) Financial assets continued
Impairment continued
Lifetime expected credit losses represent the expected credit losses that result from all possible default events over the expected life of a
financial instrument. 12-month expected credit losses represent the portion of lifetime expected credit losses that result from default events
on a financial asset that are possible within 12 months after the reporting date.
Expected credit losses are measured in a way that reflects an unbiased and probability-weighted amount determined by evaluating a
range of possible outcomes, the time value of money, and reasonable and supportable information that is available without undue cost or
effort at the reporting date about past events, current conditions and forecasts of future economic conditions.
For receivables, due from related parties and bank balances, the Group and Company applies a simplified approach in calculating
ECLs. Therefore, the Group recognises a loss allowance based on lifetime ECLs at each reporting date. The Group has established a
provision matrix that is based on its historical credit loss experience, and assessed forward-looking factors specific to the debtors, banks
and the economic environment.
The Group considers a financial asset to be in default when contractual payments are 90 days past due. However, in certain cases,
the Group may also consider a financial asset to be in default and credit impaired when internal or external information indicates that
the Group is unlikely to receive the outstanding contractual amounts in full before taking into account any credit enhancements held by
the Group.
Presentation
All financial assets are classified as non-current except those that are held for trading, those with maturities of less than 12 months from
the reporting date, those which management has the express intention of holding for less than 12 months from the reporting date or those
that are required to be sold to raise operating capital, in which case they are classified as current assets.
Derecognition
Financial assets are derecognised when the rights to receive cash flows from the financial asset have expired, when the Group has
transferred substantially all risks and rewards of ownership, or the Group has neither transferred nor retained substantially all the risks and
rewards of the asset, but has transferred control of the asset or when the Group has no reasonable expectations of recovering the asset.
Write-off
A financial asset is written off when there is no reasonable expectation of recovering the contractual cash flows.
(l) Indefeasible rights of use

The Group enters into long-term fibre contracts under which it purchases capacity from fibre networks. The purchase involves making
prepayments to acquire indefeasible right of use (IRU) for a fixed period. The prepayment is amortised and recognised in the profit or loss
on a straight-line basis over the life of the contract.
Provider Inception Contract period

TEAMS 1 May 2011 25 years
KPLC 1 Feb 2010 20 years
SEACOM 1 July 2008 20 years
(m) Inventories
Inventories are stated at the lower of cost and net realisable value. Cost is determined by the weighted average method. The cost
of inventories comprises purchase price and other costs incurred in bringing each product to its present location and condition.
Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated
costs necessary to make the sale.
Provisions for saleable inventories are made based on aged listing for items older than 180 days, damaged and unusable stocks.
210

(n) Payable and accrued expenses
Payables and accrued expenses are obligations to pay for goods or services that have been acquired in the ordinary course of business
from suppliers. Payables and accrued expenses are classified as current liabilities if payment is due within one year or less (or in the
normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.
Payables and accrued expenses are recognised initially at fair value net of directly attributable transaction costs and subsequently
measured at amortised cost using the effective interest method. Payables and accrued expenses are derecognised when the obligation
under the liability is discharged or cancelled or expires or when an existing financial liability is replaced by another from the same lender
on substantially different terms.
(o) Share capital

Ordinary shares are classified as "share capital" in equity. Any premium received over and above the par value (KShs 0.05) of the
shares is classified as "share premium" in equity.
Ordinary shares represent the residual economic value of a Company. They carry rights to distribution of profits through dividend, to the
surplus assets of a Company on a winding up and to votes at general meetings of the Company.
There are no differences in the voting rights of the ordinary shares held by the shareholders of the Company.
(p) Cash and cash equivalents

Cash and cash equivalents include cash in hand, deposits held at call with banks, other short-term highly liquid investments with original
maturities of three months or less.
(q) Restricted cash

Restricted cash and cash equivalent balances are those which meet the definition of cash and cash equivalents but are not available for
use by the Group.
Restricted cash relates to deposits held with Housing Finance Group Limited, NCBA Bank and KCB Bank Kenya Limited. The cash is
used as a backup for the staff mortgage loans and its withdrawal is restricted, up to the point when the mortgage has been repaid.
The restricted cash is initially measured at fair value using discounted cash flow method. The discount rate used is based on 70% of the
Central Bank of Kenya Rate (CBR). Subsequently, the restricted cash is measured at amortised cost. The difference between the actual
cash held as deposits and the determined value (i.e. the deferred restricted cash asset) is amortised over the term of the deposit.
(r) Employees benefits

(i) Retirement benefit obligation
The Group has a defined contribution plan for its employees. The Group and all its employees also contribute to the National Social
Security Fund, which is a defined contribution scheme.
A defined contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no
legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. The contributions are recognised as an employee benefit expense when
they are due.
(ii) Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date, or whenever an
employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits at the earlier of the
following dates: (a) when the Group can no longer withdraw the offer of those benefits; and (b) when the entity recognises costs for a
restructuring that is within the scope of IAS 37 and involves the payment of termination benefits. In the case of an offer made to
encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer.
Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.
(iii) Other entitlements

The estimated monetary liability for employees accrued annual leave entitlement at the statement of financial position date is recognised
as an expense accrual.
211

(s) Share-based payments
The Group operates an Employee Performance Share Award Plan (EPSAP) under which senior management and other qualifying staff are
entitled to receive a predetermined number of shares at a predetermined price, subject to fulfilment of the vesting conditions.
The process of EPSAP includes the Group purchasing shares from the market pro-rata to vesting period and then issuing the same to
eligible employees after a three-year vesting period at no cost. The shares are purchased through a Trust and held until the end of the
vesting period. The cost of purchase is charged to profit or loss.
(t) Current and deferred income tax

The income tax expense for the year comprises current and deferred tax. Income tax is recognised in the statement of profit or loss,
except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the income tax is
also recognised in other comprehensive income or directly in equity respectively.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date.
Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to
interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.
Deferred income tax is recognised on temporary differences arising between the tax bases of assets and liabilities and their carrying
amounts in the consolidated and Separate Financial Statements. However, deferred tax liabilities are not recognised if they arise from the
initial recognition of goodwill. Deferred income tax is not accounted for 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 nor taxable profit or loss.
Deferred income 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 income tax asset is realised or the deferred income tax liability is settled.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that
sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are
re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the
deferred tax asset to be recovered.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which
the temporary differences can be utilised. Deferred income tax assets are recognised on deductible temporary differences arising from
investments in subsidiaries and associates only to the extent that it is probable the temporary difference will reverse in the future and there
is sufficient taxable profit available against which the temporary difference can be utilised.
Deferred income tax liabilities are provided on taxable temporary differences arising from investments in subsidiaries and associates,
except for deferred income tax liability where the timing of the reversal of the temporary difference is controlled by the Group and it is
probable that the temporary difference will not reverse in the foreseeable future. Generally, the Group is unable to control the reversal of
the temporary difference for associates except where there is an agreement in place that gives the Group the ability to control the
reversal of the temporary difference not recognised.
The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets
and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation
authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net
basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax
liabilities or assets are expected to be settled or recovered.
212

(u) Borrowings
Borrowings are recognised initially at fair value net of directly attributable transaction costs and subsequently stated at amortised cost
using the effective interest method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees
or costs that are an integral part of the EIR. Any differences between proceeds (net of transaction costs) and the redemption value is
recognised in profit or loss over the period of the borrowings. Borrowings are derecognised when the obligation under the liability is
discharged or cancelled or expires or when an existing financial liability is replaced by another from the same lender on substantially
different terms.
Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some
or all of the facility will be drawn down. In this case, the fee is deferred until the draw-down occurs. To the extent there is no evidence
that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and
amortised over the period of the facility to which it relates and accounted for as “finance cost within profit or loss". Borrowings are
classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months after
year end.
Capitalisation of borrowing cost

The Group from time to time capitalises borrowing costs as provided under IAS 23. In line with the standard, borrowing costs that are
directly attributable to the acquisition, construction or production of a qualifying asset form part of the cost of that asset and, therefore,
will be capitalised. A qualifying asset is one which necessarily takes more than six months to get ready for its intended use or sale.
A qualifying asset can either be tangible or intangible in nature. Examples of qualifying assets include core network equipment,
transmission and radio equipment for base station sites and computer software development. The rate used to determine the amount of
borrowing costs eligible for capitalisation is the EIR of the specific borrowing. There were no borrowing costs capitalised during the year.
(v) Dividend distribution

Dividend payable to the shareholders are recognised as a liability in the Group’s financial statements in the period in which the dividend
are approved by the Company’s shareholders. Proposed dividend are shown as a separate component of equity until approved.
(w) Provisions
Provisions are recognised when:
• the Group has a present legal or constructive obligation as a result of past events;
• it is probable that an outflow of resources will be required to settle the obligation; and
• the amount has been reliably estimated. Provisions are not recognised for future operating losses.
Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax rate that
reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to
passage of time is recognised as interest expense.
213
3 Critical accounting estimates and judgements

Estimates and judgements are continually evaluated and are based on historical experience and other factors, including experience of
future events that are believed to be reasonable under the circumstances.
(i) Critical accounting estimates and assumptions

The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal
the related actual results.
The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and
liabilities within the next financial year are addressed below.
Income taxes
The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the
final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the income tax
and deferred tax provisions in the period in which such determination is made (Note 12 and 17).
Property and equipment

Critical estimates are made by management in determining depreciation rates and timing of capitalisation of the assets. The depreciation
rates used are set out in Note 2(f) above and PPE Note 18.
IFRS 16: Leases

The key areas where estimates and judgement were applied included the interpretation of the requirements to determine the contracts
containing leases and separating the lease and the non-lease components of a contract, the determination of the incremental rate of
borrowing and the decision to exercise the extension or termination options while determining the lease term. See further details under
note 2(j), note 22(a), and Note 22(b).
Valuation of Bonga points

The price attributed to the awarded Bonga points is determined by historical redemption information. The length of historical period used
to determine the price is set by management and is based on previous redemptions rates on airtime, data, SMS or merchandise.
If the value per point was approximately 2% higher/lower, there would be a decrease/increase in profit before tax of KShs 74.8 million
respectively (2021: KShs 77.8 million). These balances have been included under contract liabilities, Note 29(b).
Provisions
The Group faces exposure to claims and other liabilities arising from normal course of business. These claims and other liabilities
normally take time to be determined and therefore significant judgement is required in assessing the likely outcome and the potential
liability for such matters. Management in consultation with the legal, tax and other advisers estimates a provision based on exposure,
precedents and industry best practice – Note 28(b).
Expected credit losses

The Group considers forward looking information at a customer level based on macroeconomics, microeconomics around the customer
and level of effort utilised to collect the debt. This estimate is therefore based on factors not in control by the Group. Based on forward-
looking economic expectations at the reporting date resulted in the requirement to hold higher credit impairments. The Group has
considered the impact of the COVID-19 pandemic in assessing the expected credit losses and this has been included in the financial
statements Note 6(b).
214
3 Critical accounting estimates and judgements continued

(ii) Critical judgements in applying the entity’s accounting policies
In the process of applying the Group’s accounting policies, management has made judgements in determining:
• The classification of financial assets, contract costs and liabilities;

• Whether assets are impaired;
• The average customer life: Customer life is based on the average churn period of the customers from the network;
• Impact of application of IFRS 16: Leases; and
• Impact of application of IFRS 9: Financial instruments
• Income taxes – Significant judgement is required in determining the Group’s provision for income taxes. There are many transactions
and calculations for which the ultimate tax determination is uncertain during the ordinary course of business.
• Changes in the economic environment – Management assessed the impact of the COVID-19 pandemic on the fair value of the
Group’s financial assets and financial liabilities including any possible impairment of assets. Based on the assessments, management
is not aware of any material uncertainties related to these events or conditions that may affect the fair value Group’s financial assets
and financial liabilities. Refer to note 34 for further COVID-19 pandemic disclosures.
• Assessment of significant influence over an associate – The Group considers that it has significant influence over Circle Gas Limited
though it owns less than 20% of the voting rights of the Company because of the following reasons:
i. The Group has one non-executive Directors’ slot in Circle Gas board where Safaricom PLC has one reserved board seat so long
as a Trademark Licence and Brand Management Co-operation Agreement made remains in force and Safaricom PLC remains a
holder of ordinary shares.
ii. The associate uses Safaricom PLC’s trademarks as per agreement in return for a royalty fee agreement and interchange of
managerial personnel between the entities.
iii. The associate is riding on Safaricom’s network to guarantee connectivity to its smart meters.
(iii) Critical judgement on going concern

The Group’s current liabilities exceed its current assets by KShs 32.9 billion (2021 net current liabilities position: KShs 19.5 billion) at the
statement of financial position. For items that significantly impact the net working capital, refer to Notes 24 to 29.
This net current liability position is expected to remain in the near future as a result of the nature of the Group’s business. A significant portion
of creditors relate to network infrastructure investments rather than on-going trading hence net working capital is typically a negative amount
due to the mismatch of the financing (short term) and the investment (long term). Other significant portion of current liabilities is a result of how
revenue is recognised. The related liabilities are all held in the statement of financial position and are explained below:
• Unused airtime and data bundles by prepaid customers of KShs 2.3 billion (2021: 2.6 billion). Prepaid airtime when sold to
customers is held as a liability in the statement of financial position (deferred revenue) until the customer uses it, at which point
revenue is recognised by reducing the liability and reporting revenue. Based on its nature, there are no expected cash outflow since
its reduction is based on usage rather than actual cash outflow.
• Loyalty points earned by customers (Bonga points) of KShs 4.5 billion (2021: KShs 4.2 billion). Loyalty points are earned when a
customer uses a Safaricom service including use of airtime, data or M-PESA. These points are valued and accumulated into the
customer account until such a time when the customer opts to redeem the points against merchandise (devices including handsets,
accessories and merchandise from appointed Bonga everywhere outlets) or non-merchandise (free airtime and data bundles).
Based on its nature, there are no expected cash outflow since its reduction is based on usage rather than actual cash outflow.
• Unutilised resources by the customers of KShs 2.9 billion (2021: KShs 3.1 billion). The Group applies IFRS 15: Revenue from
Contracts with Customers in accounting for bundled resources. The value of unutilised resources (customer balances) reported as
subscriber liability until the customers use the resources. Based on its nature, there are no expected cash outflow since its reduction is
based on usage rather than actual cash settlement.
These amounts are included under contract liabilities in the statement of financial position. Management has accessed each of the items
above and does not anticipate any cash outflow.
Further, the Group finances its long-term projects with short-term debt and long-term debt. In the year ended 31 March 2022, the Group
borrowed KShs 120.56 billion and repaid KShs 70.03 billion. Of the outstanding loan amount of KShs 65 billion, KShs 20 billion is
short-term working capital loan, due for payment by August 2022.
Dividend payable of KShs 10.2 billion is due for payments in April 2022 while current tax liability of KShs 5.2 billion is payable in July 2022.
Management is confident that sufficient funds will be available and accessible to meet all obligations as they fall due.
Based on this, management has assessed that the Group and Company will continue as a going concern. Refer to Note 34 for further
215
COVID-19 pandemic disclosures.
4 Financial risk management

The Group’s activities expose it to a variety of financial risks, market risk (including foreign exchange risk, interest rate risk, and price risk),
credit risk and liquidity risk.
Financial risk management is carried out by the Treasury section in Finance division under policies approved by the Board of Directors.
The Treasury section identifies, evaluates and manages financial risks.
The Board provides written principles for overall risk management, as well as written policies covering specific areas such as foreign
exchange risk, interest rate risk, credit risk and non-derivative financial instruments and investing excess liquidity.
Financial assets and financial liabilities have been carried at amortised cost.
Market risks
(i) Foreign exchange risk
Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is
not the entity’s functional currency. The Group is exposed to foreign exchange risk arising from various currency exposures, primarily,
with respect to the US Dollar and the Euro. Foreign exchange risk arises from future commercial transactions and recognised assets
and liabilities.
The Group manages foreign exchange risk arising from future commercial transactions by holding adequate foreign currency reserves to
meet future cash flow requirements.
The Group does not have any derivative instruments.
If there was a 10% change in the shilling against the US Dollar during the year, with all other variables held constant, the pre-
and post-tax profit for the year would have been KShs 614.7 million and KShs 430.3 million respectively for company
(2021: KShs 5.9 million and 4.9 million) lower/higher, and Shs 209.5 million and Shs 146.6 million for Group
(2021: KShs 126 million and KShs 88 million) for mainly as a result of US Dollar-denominated cash and bank balances, borrowings,
receivables and payables.
If there was a 10% change in the Shilling against the Euro during the year with all other variables held constant, consolidated pre- and
post-tax profit for the year would have been KShs 211.9 million and KShs 148.4 million (2021: KShs 33 million and KShs 23.8 million,
there is no significant difference between Group and Company Euro sensitivity) lower/higher, and KShs 454.1 million and KShs 317.9
million for Group and Company mainly as a result of increased Euro denominated creditors balances and bank balances.
The Group’s exposure to foreign currency changes for all other currencies is not material.
(ii) Interest rate risk

Interest rate risk arises from bank borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which
is partially offset by cash held at variable rates. The Group regularly monitor financing options available to ensure optimum interest rates
are obtained.
A 100-basis points fluctuation in interest during the year (2021: 100 basis points) would have resulted in a net decrease/increase in
consolidated pre- and post-tax profit of KShs 175.2 million and KShs 122.3 million respectively (2021: KShs 153.2 million and
KShs 107.3 million). This sensitivity is a fair and reasonable reflection of the Group and Company’s pre- and post-tax.
Credit risk
Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, other financial instruments, loans receivable
from related parties, trade receivables, construction contract receivables, related parties’ receivables, loans to subsidiaries and other
receivables. The Group has no significant concentrations of credit risk. The Group assesses the expected credit losses for all financial
assets and all changes in loss allowance are recognised in profit or loss as impairment gains or losses.
216
4 Financial risk management continued

Credit risk continued
Cash at bank, government securities and deposits with financial institutions

For banks and financial institutions, only reputable well-established investment grade financial institutions are used, which are considered
to have a low credit risk. The following table represents the cash and short-term fixed deposits held in financial institutions per category.
Category 1 is made up of counterparties with international presence; Category 2 are counterparties who are subsidiaries of parents that
have an international presence; Category 3 counterparties are local banks that are categorised as tiers 1 and 2 by the Central Bank of
Kenya. These categories are reflective of the credit risks rating of the financial institutions.
GROUP COMPANY
2022 2021 2022 2021

KShs’m KShs’m KShs’m KShs’m
Category 1 12,618.4 15,864.7 12,618.4 15,864.7
Category 2 9,891.1 9,043.7 6,923.9 8,852.9
Category 3 8,284.7 1,832.4 6,029.4 1,321.5
30,794.2 26,740.8 25,571.7 26,039.1
The Group has used the general approach for measuring the loss allowance for cash at bank, government securities and deposits with
financial institutions. No collateral is held on any of the cash at bank, government securities and deposits with financial institutions.
Management has assessed the expected credit losses on cash at bank, government securities and deposits with financial institutions.
The loss allowance as at 31 March 2022 are shown in Note 26(a) The ECL allowance calculated reflects the lifetime losses associated
with events of default that are expected to occur within 12 months of the reporting date (12-month ECL). There has been no significant
increase in credit risk within these financial assets.
Other receivables
Management has assessed the expected credit losses on the other receivables. The loss allowance as at 31 March 2022 are shown in
Note 25.
The Group has used the simplified approach where applicable for measuring the loss allowance for other receivables. The Group has
established a provision matrix that is based on its historical credit loss experience. No collateral is held on any of the other receivables.
The ECL allowance calculated reflects the lifetime losses associated with events of default that are expected to occur over the life of these
receivables from the reporting date.
Due from related parties

The Group has used the simplified approach where applicable for measuring the loss allowance for due from related parties. In the
simplified approach, the Group has established a provision matrix that is based on its historical credit loss experience. The ECL
allowance calculated reflects the lifetime losses associated with events of default that are expected to occur over the life of these
receivables from the reporting date.
No collateral is held on any of the receivables from related parties. The loss allowance as at 31 March 2022 are disclosed in Note 31.
Trade receivables
For trade receivables, depending on the type of customer, the Group Credit Controller assesses the credit quality of each customer,
taking into account its financial position, past experience and other factors including information from credit reference bureau to set
individual risk limits. The utilisation of credit limits is regularly monitored.
Dealers comprise the largest distribution network for the Group. Dealers operate either on a cash basis or on credit following successful
application of the credit facility. All credit limits are supported by a bank guarantee.
Postpay debtors comprise individuals as well as corporate customers. Postpay debtors have a 15-day credit period after which individual
customers must pay within 10 days after due date, while business accounts have up to 30 days. The auto-bar feature ensures that once
the limit has been reached the customer account is barred. This minimises the credit risk associated with these customers.
217
4. Financial risk management continued

Trade receivables continued

The Group has signed international roaming agreements. The roaming strategy targets countries which historically have had the most
visitors to Kenya, including UK, Italy, Spain, Sweden, South Africa, and Kenya’s neighboring countries. Roaming partners have entered
into an agreement with the Group to terminate their calls on the Group’s network for visitors travelling into Kenya. Amounts due from the
roaming partners are settled within 60 days unless a dispute arises. Disputes are handled by Syniverse, a roaming clearing house.
The Group has also signed interconnect agreements with partners to terminate calls to and from other networks on the Group’s network.
Amounts due from interconnect partners are settled within 30 days of invoice unless a dispute arises. Disputes are handled in the first
instance by the Regulatory Department of the Group. The Group’s maximum exposure to credit risk is approximated by the
carrying amounts.
The Group has an elaborate aging system for monitoring its receivables. Dealers’ transactions and credit positions are closely monitored.
Collateral is held for bulk of the trade receivables in the form of bank guarantees and deposits.
The Group applies the simplified approach to determine the expected credit losses (ECLs) for trade receivables. This results in calculating
lifetime ECL for these trade receivables. ECL for trade receivables is calculated using a provision matrix.
The Group segregates the trade receivables based on the aging of the receivables. The Group determines the expected loss rate per the
categories based on a historical 24-month roll over model. The loss rate is computed based on the rate movement of the outstanding
balances between categories and the recovery rate of past debtors for the respective debt categories. The Group has considered
forward-looking information at a customer level based on macroeconomics, microeconomics, including the impact of the COVID-19
pandemic, around the customer and level of effort utilised to collect the debt.
The loss allowance as at year end was determined as shown below for trade receivables:
GROUP
Over 91
0–30 days 31–90 days days Total
At 31 March 2022
Trade receivables 10,551.2 2,126.0 5,696.7 18,373.9
Expected credit loss rate 7.0505% 32.3075% 96.3029% –
Loss allowance 743.9 686.9 5,486.1 6,916.9
Over 91
0–30 days 31–90 days days Total
At 31 March 2021
Loss allowance 378.4 589.9 4,347.4 5,315.7
COMPANY
0–30 days 31–90 days Over 91 days Total

At 31 March 2022 KShs’m KShs’m KShs’m KShs’m
Loss allowance 743.9 686.9 5,299.1 6,729.9
218
4. Financial risk management continued

Trade receivables continued

0–30 days 31–90 days Over 91 days Total
At 31 March 2021
Loss allowance 351.6 583.4 4,225.0 5,160.0
A detailed assessment of the trade receivables as shown below:
Gross Expected Net

carrying credit carrying
amount loss amount
Group KShs’m KShs’m KShs’m
At 31 March 2022
Dealers 165.0 (25.3) 139.7
Postpay 3,333.1 (1,128.9) 2,204.2
Roaming and interconnect 3,838.6 (1,344.5) 2,494.1
Other trade receivables 11,037.2 (4,418.2) 6,619.0
Total trade receivables 18,373.9 (6,916.9) 11,457.0
Gross carrying Expected Net carrying

amount credit loss amount
KShs’m KShs’m KShs’m
At 31 March 2021
Dealers 179.7 (5.7) 174.0
Postpay 3,144.8 (1,078.6) 2,066.2
Gross Expected Net

amount loss amount
Company KShs’m KShs’m KShs’m
At 31 March 2022
Dealers 165.0 (25.3) 139.7
Postpay 3,333.1 (1,128.9) 2,204.2
At 31 March 2021
Dealers 179.7 (5.7) 174.0
Postpay 3,144.8 (1,078.6) 2,066.2
219

Collateral held on the trade receivables as at 31 March 2022 is KShs 195.4 million (2021: KShs 219.2 million). The collaterals relate
to bank guarantees issued by dealers on dealer receivables. There is no concentration risk on trade receivables or revenue.
Maximum credit exposure

The amounts on the statement of financial position represent the maximum credit exposure for financial assets not subject to credit risk and
financial assets that are subject to credit risk. Below is a summary of the maximum credit exposure:
GROUP
Gross Net
carrying Expected carrying
amount credit amount
KShs’m loss KShs’m
At 31 March 2022
Cash at bank, government securities and deposits with financial institutions 30,794.2 (14.6) 30,779.6
Trade receivables 18,373.9 (6,916.9) 11,457.0
Due from related parties 1,801.2 (6.7) 1,794.5
Other receivables 6,059.0 (81.1) 5,977.9
Total 57,028.3 (7,019.3) 50,009.0

At 31 March 2021
Total 49,808.5 (5,368.2) 44,440.3
COMPANY
Gross Expected Net
amount loss amount
At 31 March 2022
Due from related parties 3,834.7 (1,096.3) 2,738.4
Total 52,004.4 (7,918.4) 44,086.0

At 31 March 2021
Total 47,713.8 (6,096.0) 41,617.8
220

Liquidity risk
Cash flow forecasting is performed in the operating entities of the Group and aggregated by Group Finance. Group Finance monitors
rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet its operational needs.
Such forecasting takes into consideration the entity’s debt financing plans (See Note 16 for undrawn bank facilities), covenant
compliance, compliance with internal statement of financial position ratio targets. Surplus cash held by the entity over and above the
amounts required for working capital management are invested in interest bearing current accounts and fixed deposit accounts and
marketable securities.
The Group’s approach when managing liquidity is to ensure, as far as possible, that it will always have sufficient liquidity to meet its
liabilities when due, without incurring unacceptable losses or risking damage to the Group’s reputation.
Prudent liquidity risk management includes maintaining sufficient cash, and the availability of funding from an adequate amount of
committed credit facilities. Due to the dynamic nature of the underlying businesses, Treasury section maintains flexibility in funding by
maintaining availability under committed credit lines. Liquidity position is monitored through daily cash position as well as monthly cash
forecast that monitors debt structure and expected cash position.
The table below analyses the Group’s and the Company’s financial liabilities into relevant maturity groupings based on the remaining
period at the statement of financial position date to the contractual maturity date. The amounts disclosed in the table below are the
contractual undiscounted cash flows. Balances due within 12 months approximate their carrying balances as the impact of discounting is
not significant.
GROUP
Less than Over

1 year 1 year Total
At 31 March 2022
– payables and accrued expenses 36,981.9 4,330.6 41,312.5
– lease liabilities Note 22(c) 5,641.9 21,495.6 27,137.5
– borrowings 20,400.0 44,910.8 65,310.8
Total financial liabilities 63,023.8 70,737.0 133,760.8
At 31 March 2021
– payables and accrued expenses 27,981.8 – 27,981.8
– borrowings 14,772.0 – 14,772.0
COMPANY
Less than Over

1 year 1 year Total
At 31 March 2022
– borrowings 20,400.0 44,910.8 65,310.8
– Financial guarantee liabilities – 139.4 139.4
At 31 March 2021
– lease liabilities note 22(c) 4,252.0 14,661.1 18,913.1
– borrowings 14,772.0 – 14,772.0
221

Liquidity risk continued
Guarantees amounting to KShs 258.9 million (2021: KShs 398.8 million) have been issued by the banks to various suppliers for
services provided to the Group (Note 32).
As at 31 March 2022, the Company had issued parental corporate guarantees to suppliers of KShs 2.3 billion note 31 (xi).
There are also undrawn bank facilities amounting to KShs 21.925 billion (2021: KShs 27.01 billion) that would be utilised to settle its
obligations as they fall due.
Capital management
The Group and Company’s objectives when managing capital are to safeguard its ability to continue as a going concern in order to
provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust
the capital structure, the Group may adjust the amount of dividend paid to shareholders.
The Company has a dividend policy that permits dividend to be paid if the Board of Directors finds that the payments are sustainable,
after taking into account the sufficiency of distributable reserves and liquidity in order to ensure the Group’s operational needs and/or
business growth are not limited by the unavailability of funds, as well as the Company’s known contingencies and compliance with any
funding facility covenants.
The first priority of the Group is to maintain sufficient distributable reserves and liquidity to ensure that operational needs and/or business
growth are not limited by the unavailability of funds and also that facilities are available to cover all known contingencies.
Subject to this, the Group intends to operate a progressive distribution policy based on what it believes to be sustainable levels of
dividend payments.
Whenever possible, it will be the Group’s intention to, at least, maintain annual dividend payments at the level declared in the previous
year. However, past dividend payments should not be taken as an indication of future payments.
The Group’s focus is to minimise funds tied up in working capital, whilst ensuring that it has sufficient financial ability to meet its liabilities
as and when they fall due. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by
total capital. Net debt is calculated as total borrowings less cash and cash equivalents. Total capital is calculated as equity plus
net debt.
The strategy is to maintain gearing at low levels as demonstrated by the position below:
Gearing ratio
GROUP COMPANY
2022 2021 2022 2021

Net debt – Note 30(b) (54,624.6) (4,109.6) (59,266.8) (4,809.8)
Total equity 179,700.9 137,635.3 144,456.4 135,169.1
Total capital 234,325.5 141,744.9 203,723.2 139,978.9
Gearing ratio 23.3% 2.9% 29.1% 3.4%
222

Fair value estimation
Financial instruments measured at fair value are measured using the following levels of fair value measurement hierarchy:
Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices at the reporting date. A market
is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing
service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm’s length basis.
The quoted market price used for financial assets held by the Group is the current bid price. These instruments are included in level 1.
Instruments included in level 1 comprise primarily NSE equity investments classified as trading securities.
Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is
determined by using valuation techniques. These valuation techniques maximise the use of observable market data where it is available
and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are observable, the
instrument is included in level 2.
Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.
The carrying amounts of borrowings, loans to subsidiaries, cash and cash equivalents, trade and other receivables, loans receivable
from related parties, restricted and deferred restricted cash asset, Construction contract receivable, payables and accrued expenses
approximate their fair values due to the nature of these instruments.
5 Revenue
(a) Revenue from contracts with customers
The Group has one reportable operating segment whose revenue is presented below:
31 MARCH 2022 31 MARCH 2021
KShs’m KShs’m
At a point KShs’m KShs’m At a point KShs’m KShs’m
Group in time Over time Total in time Over time Total
Voice revenue – 83,211.8 83,211.8 – 82,552.0 82,552.0
Interconnect revenue from
local partners – 6,840.6 6,840.6 – 6,175.2 6,175.2
Messaging revenue – 10,876.7 10,876.7 – 13,602.4 13,602.4
Mobile data revenue – 48,441.0 48,441.0 – 44,793.2 44,793.2
Fixed data revenue – 11,242.5 11,242.5 – 9,507.2 9,507.2
M-PESA revenue 107,691.8 – 107,691.8 82,647.4 – 82,647.4
Other services revenues* – 9,795.3 9,795.3 – 7,779.2 7,779.2
Mobile incoming – 3,007.6 3,007.6 – 3,295.2 3,295.2
Service revenue 107,691.8 173,415.5 281,107.3 82,647.4 167,704.4 250,351.8
Handset revenue 12,334.7 – 12,334.7 8,511.7 – 8,511.7
Connection revenue – 1,999.4 1,999.4 – 1,761.1 1,761.1
Construction revenue – – – – 837.7 837.7
Total revenue 120,026.5 175,414.9 295,441.4 91,159.1 170,303.2 261,462.3
223
5 Revenue continued
(a) Revenue from contracts with customers continued
The Group has one reportable operating segment whose revenue is presented below:
31 MARCH 2022 31 MARCH 2021
KShs’m KShs’m
At a point KShs’m KShs’m At a point KShs’m KShs’m
Company in time Over time Total in time Over time Total
Voice revenue – 83,211.8 83,211.8 – 82,552.0 82,552.0
Interconnect revenue from
local partners – 6,840.6 6,840.6 – 6,175.2 6,175.2
Messaging revenue – 10,876.7 10,876.7 – 13,602.4 13,602.4
Mobile data revenue – 48,441.0 48,441.0 – 44,793.2 44,793.2
Fixed data revenue – 11,242.5 11,242.5 – 9,507.2 9,507.2
M-PESA revenue 105,218.1 – 105,218.1 80,635.8 – 80,635.8
Other services revenues* – 9,383.8 9,383.8 – 7,624.8 7,624.8
Mobile incoming – 3,007.6 3,007.6 – 3,295.2 3,295.2
Service revenue 105,218.1 173,004.0 278,222.1 80,635.8 167,550.0 248,185.8
Handset revenue 12,334.7 – 12,334.7 8,511.7 – 8,511.7
Connection revenue – 1,999.4 1,999.4 – 1,761.1 1,761.1
Construction revenue – – – – 837.7 837.7
Total revenue 117,552.8 175,003.4 292,556.2 89,147.5 170,148.8 259,296.3
* Other services revenues include Okoa Jahazi fees, roaming revenues, bulk SMS, and digital agriculture revenues.
(b) Revenue from other sources

GROUP COMPANY
2022 2021 2022 2021

KShs’m Shs’m KShs’m Shs’m
Site rental revenue 2,193.3 2,043.7 2,193.3 2,069.2
Other income
– Gain on disposal of property and equipment 47.1 38.0 47.1 38.0
– Miscellaneous income* 396.1 482.5 1,049.3 1,046.2
2,636.5 2,564.2 3,289.7 3,153.4
* Miscellaneous income includes cash discounts received from vendors and donations received from third parties for Safaricom Foundation
activities.
224
6 (a) Direct costs

GROUP COMPANY
2022 2021 2022 2021

M-PESA commissions (32,546.8) (28,205.6) (32,302.5) (28,001.5)
Airtime commissions (9,420.7) (9,674.7) (9,420.7) (9,674.7)
Licence fees (10,463.5) (9,609.2) (10,363.3) (9,538.5)
Interconnect and roaming costs (8,681.3) (7,681.7) (8,681.3) (7,862.7)
Handset costs (12,392.5) (8,624.2) (12,392.5) (8,624.2)
Customer acquisition and retention (10,590.2) (10,057.2) (10,590.2) (10,057.2)
Promotions and value-added services costs (Voice and SMS) (5,210.0) (4,879.4) (5,210.0) (4,879.4)
Other direct costs (2,162.8) (1,283.1) (1,653.1) (858.2)
Construction costs – (837.7) – (837.7)
(91,467.8) (80,852.8) (90,613.6) (80,334.1)
(b) Expected credit losses on financial assets

GROUP COMPANY
2022 2021 2022 2021

Trade and other receivables (2,348.5) (3,004.1) (2,521.8) (3,855.8)
Loan receivables (2.8) (0.9) (73.0) (4.7)
Cash and cash equivalents (9.9) (4.7) (7.9) (3.2)
(2,361.2) (3,009.7) (2,602.7) (3,863.7)
7 Other expenses
GROUP COMPANY
2022 2021 2022 2021

Repairs and maintenance expenditure on property
and equipment (272.3) (323.2) (258.8) (321.9)
Non-lease operating costs – buildings** (107.4) (32.7) (64.6) (32.7)
Non-lease operating costs – sites** (760.1) (604.4) (752.0) (604.4)
Inventory storage costs (325.7) (362.1) (321.6) (362.1)
Employee benefits expense (Note 10) (22,554.1) (18,188.1) (20,118.2) (17,957.9)
Auditor’s remuneration (62.2) (55.4) (51.2) (49.8)
Sales and advertising (4,380.5) (4,083.3) (4,469.5) (4,569.9)
Consultancy including legal fees (3,036.9) (1,197.9) (1,678.9) (1,184.2)
Network operating costs (14,087.7) (13,163.4) (14,050.7) (13,072.4)
Travel and accommodation (803.5) (457.6) (457.6) (432.0)
Computer maintenance (2,670.6) (2,572.4) (2,443.0) (2,546.2)
Office administration (482.0) (481.7) (440.2) (472.3)
Net foreign exchange losses, other than on borrowings
and cash and cash equivalents (434.4) (610.7) (392.3) (648.9)
Other operating expenses* (5,209.6) (3,901.9) (4,046.9) (2,913.9)
(55,187.0) (46,034.8) (49,545.5) (45,168.6)
* Other operating expenses includes Vodafone procurement fees (Note 31(c)), fleet management costs, general staff expenses including training
and welfare costs and innovation costs.
** Relates to non-lease components of the lease, e.g. services charges and VAT disallowed on payments of leases. The cost is excluded from the
225
measurements of the lease liability as provided for in IFRS 16.
8 Finance income
GROUP COMPANY
2022 2021 2022 2021

Interest income* 1,227.6 1,523.6 1,206.0 1,502.7
Foreign exchange gain on cash and borrowings 1,206.4 701.8 864.7 701.3
Amortisation of deferred restricted cash asset (20.6) (27.0) (20.6) (27.0)
2,413.4 2,198.4 2,050.1 2,177.0
* The interest income included within finance income is calculated at effective interest rates.
9 Finance costs
GROUP COMPANY
2022 2021 2022 2021

Interest expense (3,165.4) (1,686.5) (2,986.4) (1,667.8)
Foreign exchange losses on cash and borrowings (2,816.6) (533.2) (2,961.4) (736.6)
Interest on asset retirement obligation (ARO) liability (379.4) (223.2) (379.4) (223.2)
Interest on lease liability (1,802.9) (1,717.9) (1,772.4) (1,717.9)
Financial guarantee – – (120.9) –
Origination fee on credit facilities (724.4) – (710.8) –
Discounting adjustment on construction contract receivables* 36.1 (60.0) 36.1 (60.0)
(8,852.6) (4,220.8) (8,895.2) (4,405.5)
* This adjustment is in relation to discounting of construction contract receivable (due from national government). The interest expense included within
finance costs is calculated at effective interest rates.
10 Employee benefits expense

The following items are included within employee benefits expense:
GROUP COMPANY
2022 2021 2022 2021

Club membership (35.6) (37.1) (34.6) (36.8)
Employee other administrative costs (64.6) (290.5) (64.6) (290.5)
Secondees other administrative costs (803.0) (90.8) (140.3) (90.4)
Employee Performance Share Award Plan (663.4) (713.1) (661.4) (707.5)
Leave provision (77.1) 95.9 (57.5) 101.2
NSSF (12.9) (12.4) (12.6) (12.4)
Pension (743.3) (725.6) (737.7) (718.1)
Salaries (17,110.5) (15,024.2) (16,719.0) (14,813.1)
Secondee salaries (1,237.6) (40.1) 81.5 (40.1)
Staff medical and life insurance (1,806.1) (1,350.2) (1,772.0) (1,350.2)
(22,554.1) (18,188.1) (20,118.2) (17,957.9)
GROUP AND COMPANY
Number of employees 2022 2021

Permanent employees 4,631 4,457
Fixed-term contract employees 1,221 1,192
5,852 5,649
226
11 Employee Performance Share Award Plan

On 1 July 2011, the Group implemented an Employee Performance Share Award Plan (the Trust) where shares are awarded to
qualifying staff based on previous years’ achieved performance ratings. Under the outright grant scheme, shares are purchased from the
market and transferred to eligible staff at no cost after a three-year vesting period. The shares are purchased and held by the Trust until
the end of the vesting period.
During the year, 12.4 million shares were bought by the Trust, at a cost of KShs 489.4 million. Additionally, 15.28 million shares
historically valued at KShs 519.4 million (2021: 16.42 million shares valued at KShs 480.7 million) vested and were exercised by
eligible staff.
The Trust currently holds 11.50 million shares at a total cost of KShs 416.2 million (2021: 15.43 million shares at a cost of
KShs 446.2 million).
The Trust is an "Equity-settled share-based Payment scheme" as described in IFRS 2: Share Based Payments as the Company provides
money to the Trust to purchase shares which will be distributed to the entitled employees on the vesting date.
The Company has accounted for a receivable from the Trust in relation to shares purchased and payables to employees in these
financial statements.
12 (a) Income tax expense

GROUP COMPANY
2022 2021 2022 2021

Current income tax (39,146.8) (29,153.7) (38,706.8) (29,009.8)
Under provision of current income tax in prior years (12.1) (168.1) (12.1) –
Deferred income tax (Note 17) 4,472.0 4,388.2 4,473.4 4,554.1
Under provision of deferred tax in prior years (30.4) (25.7) (30.5) (25.7)
Income tax expense (34,717.3) (24,959.3) (34,276.0) (24,481.4)
Tax calculated at the applicable income tax rate of 30%
(2021: 9 months – 25%, 3 months – 30% (30,664.0) (24,579.3) (31,819.6) (24,265.0)
Tax effect of:
Income not subject to tax 283.2 1,455.1 1,635 1,300.9
Expenses not deductible for tax purposes (4,112.6) (2,098.6) (4,048.8) (2,060.9)
Under provision of deferred tax in prior years (30.4) (25.7) (30.5) (25.7)
Effect of change in tax rate on deferred tax – 585.2 – 569.3
Under provision of current income tax in prior years (181.4) (127.6) – –
Derecognition of prior year deferred tax – (168.1) – –
Under provision of deferred tax in prior years (12.1) – (12.1) –
Minimum tax paid as final tax – (0.3) – –
Income tax expense (34,717.3) (24,959.3) (34,276.0) (24,481.4)
227
12 (b) Current income tax payable

GROUP COMPANY
2022 2021 2022 2021

At 1 April (253.1) 147.5 (151.6) 251.8
Current income tax (39,146.8) (29,153.7) (38,706.8) (29,009.8)
Under provision of current income tax in prior years (12.1) (168.1) (12.1) –
Tax paid during the year 34,128.7 28,921.2 33,784.2 28,606.4
At 31 March (5,283.3) (253.1) (5,086.3) (151.6)
Current asset 7.9 7.2 – –
Current liabilities (5,291.2) (260.3) (5,086.3) (151.6)
(5,283.3) (253.1) (5,086.3) (151.6)
13 Earnings per share

Basic earnings per share are calculated by dividing the profit attributable to equity holders by the weighted average number of ordinary
shares in issue during the year.
GROUP COMPANY
2022 2021 2022 2021

Profit attributable to equity holders of the Group (KShs million) 69,648.1 68,676.2 71,789.3 67,956.6
Weighted average number of ordinary shares in issue (million) 40,065 40,065 40,065 40,065
Basic earnings per share (KShs) 1.74 1.71 1.79 1.70
Diluted earnings per share (KShs) 1.74 1.71 1.79 1.70
There were no potentially dilutive shares outstanding as at 31 March 2021 and 31 March 2022. Diluted earnings per share are
therefore the same as basic earnings per share.
14 Share capital and share premium

Number of Ordinary Share
shares shares premium Total
(million) KShs’m KShs’m KShs’m
As at 31 March 2021 and 31 March 2022 40,065 2,003.3 2,200 4,203.3
The authorised share capital of the Company is KShs 6,000,000,000 divided into 119,999,999,600 ordinary shares of KShs 0.05
each and five non-redeemable preference shares of KShs 4 each.
The issued share capital comprises 40,065,428,000 (2021: 40,065,428,000) ordinary shares with a par value of KShs 0.05 each.
Share premium reserve was established on initial issuance of the Group ordinary shares at premium.
Holders of ordinary shares are entitled to dividend as declared from time to time and are entitled to one vote per share at the general
meetings of the Company.
228
15 Dividend
Proposed dividend are classified as a separate component of equity in the statement of changes in equity through a transfer from
retained earnings. They are transferred to the dividend payable account once approved by shareholders in a general meeting.
During the year, an interim dividend of KShs 0.64 per ordinary share amounting to KShs 25.64 billion (2021: KShs 18.03 billion) was
declared. At the AGM to be held on 29 July 2022, a final dividend in respect of the year ended 31 March 2022 of KShs 0.75 per
ordinary share amounting to a total of KShs 30.05 billion is to be proposed for approval. This brings the total dividend for the year to
KShs 55.69 billion (2021: KShs 54.89 billion) which represents KShs 1.39 per share in respect of the year ended 31 March 2022
(2021: KShs 1.37 per share).
The Company continues to pay out dividend in line with its policy to pay out 80% of net income.
The payment of dividend is subject to withholding tax at the rate of 10% for all non-residents, 5% for Kenyan residents and 0% for
resident Kenyan companies with a shareholding of 12.5% or more in the Company. Total dividend payouts in the year were as follows:
Movement in the year

2022 2021
KShs’m KShs’m
Opening balance – 1 April 8,684.1 1,045.1
Declared during the year 36,860.2 56,091.6
Interim dividend declared 25,641.9 18,029.4
Paid during the period (59,132.3) (66,482.0)
Closing balance – 31 March 12,053.9 8,684.1
16 Borrowings
The Group has a short-term and Long term revolving facility with various financial institutions.
As at 31 March 2022, the Group had undrawn credit facilities with various banks equivalent of KShs 21.925 billion
(2021: KShs 27.01 billion). The borrowings are from different financial institutions with varying interest rates.
The movement in borrowings is as below:
GROUP AND COMPANY
2022 2021
KShs’m KShs’m
Opening balance – 1 April 14,772.0 8,000.0
Additions 120,564.8 44,970.0
Repayments (70,026.0) (38,198.0)
Closing balance – 31 March 65,310.8 14,772.0
Split
2022 2021
KShs’m KShs’m
Short-term loan 20,400.0 14,772.0
Long-term loan 44,910.8 –
At 31 March 65,310.8 14,772.0
Under the terms of the loan facilities, the Group is required to comply with certain covenants. The Group had complied with all
the covenants.
The long-term facility repayment period is seven years for the Kenyan Shilling-denominated loan and five years for Dollar-denominated loan.
229
17 Deferred income tax

(a) Group
The analysis of deferred tax assets and deferred tax liabilities is as follows:
2022 2021
KShs‘m KShs‘m
Deferred tax assets:
– Deferred tax assets to be recovered after 12 months 1,160.5 4,834.6
– Deferred tax assets to be recovered within 12 months 14,447.3 5,367.8
– Deferred tax asset not recognised (454.9) (295.7)
15,152.9 9,906.7
Deferred tax liabilities:
– Deferred tax liability to be realised after 12 months (5,153.3) (4,428.9)
– Deferred tax liability to be realised within 12 months (90.8) (10.6)
(5,244.1) (4,439.5)
Net deferred income tax asset 9,908.8 5,467.2
No provision has been made for deferred tax asset which includes an asset arising from tax losses of subsidiaries amounting to
KShs 454.9 million (2021: KShs 295.7) because it is not expected that the subsidiaries will have taxable profits in the foreseeable future
against which the temporary differences and tax losses can be utilised. There is no expiry date to this unrecognised asset.
Deferred income tax is calculated using the enacted income tax rate of 30% (2021: 30%).
2022 2021
KShs’m KShs’m
At start of year 5,467.2 1,104.7
Credit to statement of profit or loss and other comprehensive income (Note 12) 4,472.0 4,388.2
Under provision of deferred tax in prior years (Note 12) (30.4) (25.7)
At end of year 9,908.8 5,467.2
Consolidated deferred income tax assets and liabilities and deferred income tax credit/(charge) in the statement of profit or loss and
other comprehensive income (SOCI) are attributable to the following items:
Credit/
1 April (charged) 31 March
2021 to SOCI 2022
Year ended 31 March 2022 KShs’m KShs’m KShs’m
Deferred income tax liabilities
Unrealised foreign exchange gains (10.6) (80.2) (90.8)
Right-of-use (4,428.9) (724.4) (5,153.3)
(4,439.5) (804.6) (5,244.1)
Deferred income tax assets
Unrealised foreign exchange losses 30.1 89.4 119.5
Tax losses 242.8 148.7 391.5
Property and equipment 1,350.8 3,388.0 4,738.8
Lease liability 4,822.1 1,032.9 5,855.0
Other temporary differences* 3,756.6 768.6 4,525.2
10,202.4 5,427.6 15,630.0
Deferred tax asset not recognised (295.7) (181.4) (477.1)
Net deferred income tax asset 5,467.2 4,441.6 9,908.8
230
17 Deferred income tax continued

(a) Group continued
Credit/
(charged) 31 March
1 April 2020 to SOCI 2021
Property and equipment (2,219.8) 2,219.8 –
Unrealised foreign exchange gains – (10.6) (10.6)
Right-of-use (4,572.9) 144.0 (4,428.9)
(6,792.7) 2,353.2 (4,439.5)
Unrealised foreign exchange losses 38.6 (8.5) 30.1
Tax losses 130.2 112.6 242.8
Property and equipment – 1,350.8 1,350.8
Unrealised foreign exchange gains 12.1 (12.1) –
Lease liability 4,567.4 254.7 4,822.1
7,897.4 2,305.0 10,202.4
Deferred tax asset not recognised – (295.7) (295.7)
* Other temporary differences mainly relate to deferred tax of expected credit losses on financial assets and provisions.
(b) Company
2022 2021
KShs‘m KShs‘m
Deferred tax assets:
– Deferred tax assets to be recovered after 12 months 1,160.5 1,743.8
– Deferred tax assets to be recovered within 12 months 13,992.4 8,163.0
15,152.9 9,906.8
Deferred tax liabilities:
– Deferred tax liability to be realised after 12 months (5,244.2) (4,428.9)
– Deferred tax liability to be realised within 12 months – (12.1)
(5,244.2) (4,441.0)
Net deferred income tax asset 9,908.7 5,465.8
Deferred income tax is calculated using the enacted income tax rate of 30% (2021: 30%).
2022 2021
KShs‘m KShs‘m
At start of year 5,465.8 937.4
Credit to statement of profit or loss and other comprehensive income (Note 12) 4,473.4 4,554.1
Under provision of deferred tax in prior years (Note 12) (30.5) (25.7)
At end of year 9,908.7 5,465.8
231
17 Deferred income tax continued

(b) Company continued
Company deferred income tax assets and liabilities and deferred income tax charge/(credit) in the statement of profit or loss and other
comprehensive income are attributable to the following items:
Credit/
2021 to SOCI 2022
Unrealised foreign exchange gains (12.1) (78.8) (90.9)
Right-of-use (4,428.9) (724.4) (5,153.3)
(4,441.0) (803.2) (5,244.2)
Unrealised foreign exchange losses 30.1 89.2 119.3
Property and equipment 1,350.4 3,391.2 4,741.6
Lease liability 4,822.1 1,032.9 5,855.0
9,906.8 5,246.1 15,152.9
Credit/
2020 to SOCI 2021
Property and equipment (2,218.4) 2,218.4 –
Unrealised foreign exchange gains – (12.1) (12.1)
Right-of-use (4,572.9) 144.0 (4,428.9)
(6,791.3) 2,350.3 (4,441.0)
Unrealised foreign exchange losses 38.6 (8.5) 30.1
Property and equipment – 1,350.4 1,350.4
Unrealised foreign exchange gains 12.8 (12.8) –
Lease liability 4,567.4 254.7 4,822.1
7,728.7 2,178.1 9,906.8
Net deferred income tax asset 937.4 4,528.4 5,465.8
* Other temporary differences mainly to deferred tax of expected credit losses on financial assets and provisions.
In the opinion of the Directors, the deferred income tax balances are expected to be recoverable against future profits.
232
18 Property and equipment

GROUP
Capital work Network

Network in progress maintenance Leasehold Vehicles and
infrastructure (CWIP)* spares improvements equipment Fibre Total
KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
At 1 April 2020
Cost 228,126.2 10,327.1 1,564.5 7,443.2 104,104.7 30,287.9 381,853.6
Accumulated depreciation (166,126.7) (1,101.1) (6,029.8) (74,905.0) (4,353.8) (252,516.4)
Net book amount 61,999.5 10,327.1 463.4 1,413.4 29,199.7 25,934.1 129,337.2
Opening net book amount 61,999.5 10,327.1 463.4 1,413.4 29,199.7 25,934.1 129,337.2
Additions – 34,935.8 15.8 – 8.6 – 34,960.2
Transfers from CWIP 13,402.7 (36,706.2) – 497.5 19,897.4 2,908.6 –
Disposal – cost (134.3) – – – (43.4) – (177.7)
Asset retirement – cost** – – – – (4,243.3) – (4,243.3)
Asset retirement obligation
(ARO) non-cash adjustments 2,207.4 – – – – – 2,207.4
Depreciation charge (15,649.5) – (141.0) (577.3) (14,946.5) (1,310.2) (32,624.5)
Depreciation reclassification (3.0) – (0.5) 2.0 1.3 0.2 –
Depreciation on disposals 92.2 – – – 38.9 – 131.1
Depreciation on retired
assets** – – – – 4,243.3 – 4,243.3
Closing net book amount 61,915.0 8,556.7 337.7 1,335.6 34,156.0 27,532.7 133,833.7
At 31 March 2021
Cost 243,602.0 8,556.7 1,580.3 7,940.7 119,724.0 33,196.5 414,600.2
Accumulated depreciation (181,687.0) – (1,242.6) (6,605.1) (85,568.0) (5,663.8) (280,766.5)
Net book amount 61,915.0 8,556.7 337.7 1,335.6 34,156.0 27,532.7 133,833.7
* CWIP largely relates to self-constructed assets not yet completed. These mostly include network infrastructure and fibre that had not been brought
into use as at year end.
** During the year ended 31 March 2021, the Company carried out an assessment of the fixed asset register (FAR). From this assessment,
assets worth Shs 4.2 billion were identified to be fully depreciated and not in use. The assets were mainly equipment.
233
18 Property and equipment continued

GROUP
Capital
work Network Lease- Vehicles
Network in mainte- hold and
infrastruc- progress nance improve- equi-
ture (CWIP)* spares ments ment Fibre Total
KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Year ended
31 March 2022
Opening net book
amount 61,915.0 8,556.7 337.7 1,335.6 34,156.0 27,532.7 133,833.7
Additions – 49,168.0 – – 406.3 – 204.3 49,778.6
Transfers from CWIP* 10,428.8 (32,241.7) 150.1 6.5 19,348.7 2,307.6 – –
Disposal – cost (299.5) – – (12.8) (1,104.7) – – (1,417.0)
Asset retirement
obligation (ARO)
non-cash adjustments (286.5) – – – – – – (286.5)
Depreciation charge (15,042.8) (144.0) (127.6) (453.0) (16,976.1) (1,401.7) – (34,145.2)
Depreciation on
disposals 301.4 – – 12.8 1,100.7 – – 1,414.9
Translation reserves
– cost – (157.6) – – (27.9) – – (185.5)
Closing net book
amount 57,016.4 25,181.4 360.2 889.1 36,903.0 28,438.6 204.3 148,993.0
At 31 March 2022
Cost 253,444.8 25,181.4 1,730.4 7,934.4 138,346.4 35,504.1 204.3 462,345.8
Accumulated
depreciation and
impairment (196,428.4) – (1,370.2) (7,045.3) (101,443.4) (7,065.5) – (313,352.8)
Net book amount 57,016.4 25,181.4 360.2 889.1 36,903.0 28,438.6 204.3 148,993.0
* Capital work-in-progress largely relates to self-constructed assets not yet completed. These mostly include network infrastructure and fibre that had
not been brought into use as at year end.
234

COMPANY
Capital work Network

Network in progress maintenance Leasehold Vehicles and
infrastructure (CWIP)* spares improvements equipment Fibre Total
At 1 April 2020
Cost 227,989.6 10,184.2 1,564.5 7,443.2 103,737.8 30,281.8 381,201.1
Net book amount 61,999.4 10,184.2 464.0 1,411.3 28,975.6 25,934.2 128,968.7
Opening net book amount 61,999.4 10,184.2 464.0 1,411.3 28,975.6 25,934.2 128,968.7
Additions – 34,935.8 15.8 – 8.6 – 34,960.2
Transfer from CWIP 13,402.7 (36,706.2) – 497.5 19,897.4 2,908.6 –
Disposal – cost (134.3) – – – (43.4) – (177.7)
Asset retirement – cost** – – – – (4,243.3) – (4,243.3)
Asset retirement obligation
(ARO) non-cash adjustments 2,207.4 – – – – – 2,207.4
Depreciation charge (15,649.5) – (141.0) (577.3) (14,892.4) (1,310.2) (32,570.4)
Depreciation reclassification (3.0) – (0.5) 2.0 1.3 0.2 –
Depreciation on disposals 92.2 – – – 38.9 – 131.1
Depreciation on retired
assets** – – – – 4,243.3 – 4,243.3
Closing net book amount 61,914.9 8,413.8 338.3 1,333.5 33,986.0 27,532.8 133,519.3
At 31 March 2021
Cost 243,465.4 8,413.8 1,580.3 7,940.7 119,357.1 33,190.4 413,947.7
Net book amount 61,914.9 8,413.8 338.3 1,333.5 33,986.0 27,532.8 133,519.3
* CWIP largely relates to self-constructed assets not yet completed. These mostly include network infrastructure and fibre that had not been brought
into use as at year end.
** During the year ended 31 March 2021, the Company carried out an assessment of the fixed asset register (FAR). From this assessment, assets worth
KShs 4.2 billion were identified to be fully depreciated and not in use. The assets were mainly equipment. The assets have been written off.
235

COMPANY
Capital Network Vehicles

Network work in mainte- Leasehold and
infrastruc- progress nance improve- equip- Freehold
ture (CWIP)* spares ments ment Fibre Property Total
KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Year ended
31 March 2022
Opening net
book amount 61,914.9 8,413.8 338.3 1,333.5 33,986.0 27,532.8 – 133,519.3
Additions – 38,583.5 – – 406.3 – 204.3 39,194.1
Transfer from CWIP 10,428.8 (32,078.7) 150.1 6.5 19,185.7 2,307.6 – –
Disposal – cost (299.5) – – (12.8) (1,104.7) – – (1,417.0)
Asset retirement
obligation (ARO)
non-cash adjustments (286.5) – – – – – – (286.5)
Depreciation charge (15,042.8) – (127.6) (453.0) (16,897.1) (1,401.7) – (33,922.2)
Depreciation on
disposals 301.4 – – 12.8 1,100.7 – – 1,414.9
Closing net
book amount 57,016.3 14,918.6 360.8 887.0 36,676.9 28,438.7 204.3 138,502.6
At 31 March 2022
Cost 253,308.2 14,918.6 1,730.4 7,934.4 137,844.4 35,498.0 204.3 451,438.3
Accumulated
depreciation (196,291.9) – (1,369.6) (7,047.4) (101,167.5) (7,059.3) – (312,935.7)
Net book amount 57,016.3 14,918.6 360.8 887.0 36,676.9 28,438.7 204.3 138,502.6
* Capital work-in-progress largely relates to self-constructed assets not yet completed. These mostly include network infrastructure and fibre that had
not been brought into use as at year end.
236
19 Indefeasible rights of use (IRUs)

GROUP
TEAMS SEACOM KPLC ETISALAT TATA EATCL Total

Opening net book amount 1,947.9 766.6 412.4 47.1 78.1 – 3,252.1
Amortisation charge (162.7) (76.7) (41.9) (47.1) (78.1) – (406.5)
Closing net book amount 1,785.2 689.9 370.5 – – – 2,845.6
At 31 March 2021
Cost 3,253.0 1,534.9 838.3 111.3 183.9 91.5 6,012.9
Accumulated amortisation (1,467.8) (845.0) (467.8) (111.3) (183.9) (91.5) (3,167.3)
1,785.2 689.9 370.5 – – – 2,845.6
Opening net book amount 1,785.2 689.9 370.5 – – – 2,845.6
Amortisation charge (162.7) (76.7) (41.9) – – – (281.3)
Closing net book amount 1,622.5 613.2 328.6 – – – 2,564.3
At 31 March 2022
Cost 3,253.0 1,534.9 838.3 111.3 183.9 91.5 6,012.9
Accumulated amortisation (1,630.5) (921.7) (509.7) (111.3) (183.9) (91.5) (3,448.6)
Net book amount 1,622.5 613.2 328.6 – – – 2,564.3
COMPANY
TEAMS SEACOM KPLC ETISALAT TATA Total

KShs’m KShs’m KShs’m KShs’m KShs’m KShs’m
Opening net book amount 1,947.9 766.6 412.4 47.1 78.1 3,252.1
Amortisation charge (162.7) (76.7) (41.9) (47.1) (78.1) (406.5)
Closing net book amount 1,785.2 689.9 370.5 – – 2,845.6
At 31 March 2021
Cost 3,253.0 1,534.9 838.3 111.3 183.9 5,921.4
Accumulated amortisation (1,467.8) (845.0) (467.8) (111.3) (183.9) (3,075.8)
Net book amount 1,785.2 689.9 370.5 – – 2,845.6
Opening net book amount 1,785.2 689.9 370.5 – – 2,845.6
Amortisation charge (162.7) (76.7) (41.9) – – (281.3)
Closing net book amount 1,622.5 613.2 328.6 – – 2,564.3
At 31 March 2022
Cost 3,253.0 1,534.9 838.3 111.3 183.9 5,921.4
Accumulated amortisation (1,630.5) (921.7) (509.7) (111.3) (183.9) (3,357.1)
Net book amount 1,622.5 613.2 328.6 – – 2,564.3
237
20 Investment property
The investment property relates to a vacant open land title No. 164259 and 164260 located in the Nairobi area. This land does not
generate any rental income or direct operating costs. There are no restrictions attached to realisability of the investment property or the
remittance of income and proceeds of disposal.
GROUP AND COMPANY
2022 2021
KShs’m KShs’m
At 1 April 845.0 845.0
Fair value adjustment – –
At 31 March 845.0 845.0
The fair value measurement of the investment property as at 31 March 2022 was performed by registered and independent valuers who
have valuation experience for similar properties in Kenya. They are members of the Institute of Surveyors of Kenya.
The fair value was determined by reference to market evidence of recent transactions for similar properties. In estimating the fair value of
the properties, the highest and best use of those similar properties was assumed. There was no significant change in the previous
valuation and management has opted to retain the existing value.
Details of the Group’s and company’s investment property and information about fair value hierarchy as at 31 March 2022 and
31 March 2021 is as follows:
Fair value
as at
31 March
2022
and
31 March Significant
2021 Fair value Valuation technique(s) unobservable
Non-financial asset KShs’m hierarchy and key inputs inputs
Open market value basis – Recent sale transactions
Investment property 845.0 Level III highest and best use model for similar properties
Sensitivity analysis
If there was a 10% change in the selling prices of similar properties, with all other variables held constant, the fair value of the investment
property would have been KShs 84.5 million lower/higher.
238
21 Intangible assets – Network Licences

GROUP
2022 2021
KShs’m KShs’m
Opening net book amount 8,475.5 6,026.2
Additions 96,288.3 4,077.8
Translation reserves (9,266.6) –
Disposals – cost (5,077.6) –
Disposals – amortisation 5,077.6 –
Amortisation charge (1,850.0) (1,628.5)
– –
Closing net book amount 93,647.2 8,475.5
Cost 105,004.5 23,060.4
Accumulated amortisation (11,357.3) (14,584.9)
Net book amount 93,647.2 8,475.5
COMPANY
2022 2021
KShs’m KShs’m
Opening net book amount 8,471.5 6,021.8
Additions- cost 4,728.1 4,077.8
Disposals – cost (5,077.6) –
Disposals – amortisation 5,077.6 –
Amortisation charge (1,850.0) (1,628.1)
Closing net book amount 11,349.6 8,471.5
Cost 22,688.6 23,038.1
Accumulated amortisation (11,339.0) (14,566.6)
Net book amount 11,349.6 8,471.5
239
22 Leases
(a) Right-of-use (ROU) asset movement schedule
GROUP AND COMPANY
Secondees
Site Collocation Shops Facilities houses Equipment Total
Cost 8,672.7 5,281.2 1,286.6 2,882.8 42.4 – 18,165.7
Accumulated amortisation (1,089.9) (910.2) (252.5) (647.8) (22.4) – (2,922.8)
Closing book cost 7,582.8 4,371.0 1,034.1 2,235.0 20.0 – 15,242.9
Opening cost 7,582.8 4,371.0 1,034.1 2,235.0 20.0 – 15,242.9
Additions 560.8 1,160.3 152.2 1,075.5 28.9 18.2 2,995.9
Reclassification – cost (168.5) 51.5 (37.0) 42.0 7.1 – (104.9)
Termination and revision – cost (144.6) 186.2 12.1 (357.4) – (0.3) (304.0)
Amortisation charge (1,063.0) (1,051.9) (297.0) (866.5) (24.7) (1.7) (3,304.8)
Reclassification – amortisation 94.8 2.8 39.8 (4.6) (27.9) – 104.9
Termination and revision –
amortisation 37.6 (1.1) 11.7 84.6 – – 132.8
Closing net book amount 6,899.9 4,718.8 915.9 2,208.6 3.4 16.2 14,762.8
At 31 March 2021
Cost 8,920.4 6,679.2 1,413.9 3,642.9 78.4 17.9 20,752.7
Accumulated amortisation (2,020.5) (1,960.4) (498.0) (1,434.3) (75.0) (1.7) (5,989.9)
GROUP
Secondees
Opening cost 6,899.9 4,718.8 915.9 2,208.6 3.4 16.2 14,762.8
Additions 1,136.2 4,058.9 170.9 549.5 65.6 (1.6) 5,979.5
Termination and revision – cost 19.8 811.2 (20.7) 237.2 – (0.5) 1,047.0
Amortisation charge (1,041.4) (1,318.4) (259.7) (1,014.4) (16.3) (6.6) (3,656.8)
Translation reserve 1.6 – 0.1 1.8 0.1 – 3.6
Termination – amortisation
and revision 66.5 – 0.2 98.9 – – 165.6
At 31 March 2022
Cost 10,078.0 11,549.3 1,564.2 4,431.4 144.1 15.8 27,782.8
240
22 Leases continued
(a) Right-of-use (ROU) asset movement schedule continued
COMPANY
Secondees
Opening cost 6,899.9 4,718.8 915.9 2,208.6 3.4 16.2 14,762.8
Additions 685.3 4,058.9 135.6 279.7 27.5 (1.6) 5,185.4
Termination and revision
– cost 16.8 811.2 (20.7) (98.8) – (0.5) 708.0
Amortisation charge (1,037.8) (1,318.4) (259.3) (1,008.9) (13.2) (6.6) (3,644.2)
Termination and revision –
amortisation 66.5 – 0.1 98.8 – – 165.4
At 31 March 2022
Cost 9,622.5 11,549.3 1,528.8 3,823.8 105.9 15.8 26,646.1
(b) Lease liability movement schedule

The lease liability balance at the end of the period was as follows:
GROUP AND COMPANY
Secondees
Opening balance (7,330.2) (4,524.1) (971.4) (2,378.3) (20.7) – (15,224.7)
Additions (560.8) (1,160.3) (152.2) (1,075.5) (28.9) (18.2) (2,995.9)
Interest charge (916.6) (382.5) (123.5) (292.8) (2.0) (0.5) (1,717.9)
Payments 1,381.7 1,352.1 337.4 781.7 17.5 4.2 3,874.6
Termination and revisions 137.2 (178.9) (22.6) 272.9 – – 208.6
Forex revaluation (0.7) (214.7) (2.7) – (0.3) – (218.4)
Closing balance (7,289.4) (5,108.4) (935.0) (2,692.0) (34.4) (14.5) (16,073.7)
Current (1,384.0) (1,476.3) (270.6) (968.0) (13.8) (6.8) (4,119.5)
Non-current (5,905.4) (3,632.1) (664.4) (1,724.0) (20.6) (7.7) (11,954.2)
(7,289.4) (5,108.4) (935.0) (2,692.0) (34.4) (14.5) (16,073.7)
241
22 Leases continued
(b) Lease liability movement schedule continued
GROUP
Secondees
Opening balance (7,289.4) (5,108.4) (935.0) (2,692.0) (34.4) (14.5) (16,073.7)
Additions (944.3) (4,294.3) (160.9) (549.6) (32.0) 1.6 (5,979.5)
Interest charge (922.1) (518.9) (100.9) (255.6) (3.7) (1.7) (1,802.9)
Payments 1,773.1 1,719.3 316.8 1,281.9 52.6 10.6 5,154.3
Termination and revisions (51.0) (811.3) 20.4 (335.7) (27.5) 0.3 (1,204.8)
Translation reserves (1.1) – – (1.0) – – (2.1)
Closing balance (7,435.2) (9,195.7) (861.4) (2,552.0) (45.4) (3.7) (20,093.4)
Current (1,527.5) (2,316.3) (270.4) (1,349.8) (40.8) (3.7) (5,508.5)
Non-current (5,907.7) (6,879.4) (591.0) (1,202.2) (4.6) – (14,584.9)
(7,435.2) (9,195.7) (861.4) (2,552.0) (45.4) (3.7) (20,093.4)
COMPANY
Secondees
Opening balance (7,289.4) (5,108.4) (935.0) (2,692.0) (34.4) (14.5) (16,073.7)
Additions (477.5) (4,294.3) (135.5) (279.7) – 1.6 (5,185.4)
Interest charge (904.3) (518.9) (99.8) (245.3) (2.4) (1.7) (1,772.4)
Payments 1,573.3 1,719.3 296.6 946.2 19.9 10.6 4,565.9
Termination and revisions (48.0) (811.3) 20.2 – (27.5) 0.3 (866.3)
Closing balance (7,146.3) (9,195.7) (855.3) (2,270.8) (44.8) (3.7) (19,516.6)
Current (1,489.7) (2,316.3) (270.4) (1,349.8) (7.5) (3.7) (5,437.4)
Non-current (5,656.6) (6,879.4) (584.9) (921.0) (37.3) – (14,079.2)
(7,146.3) (9,195.7) (855.3) (2,270.8) (44.8) (3.7) (19,516.6)
Included in the direct costs and reported in the statement of profit or loss and other comprehensive income in the period is an amount of
KShs 1,828.7 million and KShs 1,725.5 million for Group and Company respectively (2021: KShs 1,726.6 million) relating to
short-term leases of less than one year which were not accounted for under IFRS 16 in the lease liabilities above as one of the expedients
adopted by the Group and Company as provided by IFRS 16.
There were no leases not commenced to which the Group had committed.
242
22 Leases continued
(b) Lease liability movement schedule continued
Payments split
GROUP COMPANY
2022 2021 2022 2021

Repayment of lease liabilities – Principal (3,806.4) (2,550.6) (3,220.5) (2,550.6)
Repayment of lease liabilities – Interest (1,347.9) (1,324.0) (1,345.4) (1,324.0)
Total payments (5,154.3) (3,874.6) (4,565.9) (3,874.6)
(c) Maturity analysis of undiscounted lease liabilities

GROUP COMPANY
2022 2021 2022 2021

Less than 1 year 5,641.9 4,252.0 5,570.6 4,252.0
Greater than 1 year 21,495.6 14,661.1 20,602.7 14,661.1
Total 27,137.5 18,913.1 26,173.3 18,913.1
23 Investments
From time to time the Group invests in various entities in the form of subsidiaries, associates and joint arrangements for strategic reasons
in order to achieve the overall objective of transforming lives.
(a) Investment in subsidiaries

All subsidiaries are unlisted and have the same year end as the Company except for Safaricom Money Transfer Services Limited which
has a 31 December year-end because of Central Bank of Kenya’s reporting guidelines. The investments relate to cost of shares held in
the subsidiaries.
COMPANY
2022 2021
KShs’m KShs’m
At start of year 431.3 431.3
Initial investment (Vodafamily) 58,626.5 –
At end of year 59,057.8 431.3
During the period, Safaricom PLC in partnership with Vodacom Group, Sumitomo and CDC partnered to invest in Ethiopia. Safaricom
PLC and Vodacom Group through the Vodafamily Ethiopia Holding Company Limited (a private limited company incorporated under the
laws of England and Wales, United Kingdom), Sumitomo and CDC incorporated the Global Partnership for Ethiopia (GPE) B.V.
(a private limited company incorporated in the Netherlands), as the investment vehicle to Ethiopia with the respective shareholding into
the Company being Vodafamily Ethiopia Holding 61.9% (Safaricom Plc 55.71%, Vodacom Group 6.19%), Sumitomo Corporation
27.2% and CDC Group Plc 10.9%. The intention was to bid for one of the telecommunications licences in Ethiopia.
243
23 Investments continued
(a) Investment in subsidiaries continued
On 26 April 2021, the Global Partnership for Ethiopia (the “GPE”) submitted a response to the Request for Proposals (the “RFP”) by
the Government of Ethiopia (the “GoE”) that was issued by the Ethiopian Communications Authority (the “ECA”). On 24 May 2021, the
ECA formally notified the GPE of its decision to award it one of the two telecommunication licences that were available in the bid process.
Licence fee paid was USD 850 million to the GOE. In addition, a transaction fees of USD 4 million was paid to the International Finance
corporation (IFC). The total cost was distributed proportionate to each consortium partner shareholding in GPE.
GPE thereafter incorporated a fully-owned subsidiary in Ethiopia – Safaricom Telecommunication Ethiopia Plc (STE) and the certificate of
operation was issued on 6 July 2021 as per the requirements of Ethiopia regulation. The indirect shareholding of Safaricom Plc in STE is
55.71%. STE’s primary purpose is to hold and operate a full-service telecommunications licence granted to GPE by the Federal Republic
of Ethiopia.
The subsidiary was established within the current financial reporting period and has been consolidated in the Group’s 31 March 2022
financial statements.
Below is the contribution for non-controlling interest arising from their ownership in GPE and STE:
Contribution by
NCI Translation Loss allocated Totals
Non-controlling shareholders reverse to NCI non-controlling
Name percentage KShs’m KShs’m KShs’m KShs’m
Vodacom Group Limited 6.19% 6,514.0 (590.3) (300.8) 5,622.9
Sumitomo Corporation 27.2% 28,623.5 (2,593.8) (1,321.6) 24,708.1
CDC Group PLC 10.9% 11,470.4 (1,039.5) (529.6) 9,901.3
Total 44.29% 46,607.9 (4,223.6) (2,152.0) 40,232.3
The summarised financial information of Vodafamily Ethiopia Holding Limited consolidated is provided below. The subsidiary is
incorporated in the Netherlands and the principal place of business is London, United Kingdom. This information is based on amounts
before inter-company eliminations.
As at 31 March 2022, the Company’s interest in its subsidiaries was as follows:
2022 2021
Year end % interest held KShs’m KShs’m
One Communications Limited and its subsidiaries*1 31 March 100 – –
Instaconnect Limited 31 March 100 411.2 411.2
East Africa Tower Company Limited* 31 March 100 – –
DigiFarm Kenya Limited2 31 March 100 0.1 0.1
Safaricom Money Transfer Services Limited 31 December 100 20.0 20.0
Vodafamily Ethiopia Holding Limited 31 March 90 58,626.5 –
59,057.8 431.3
1
Comtec Training Management Service Limited, Comtec Integrations System Limited and Flexible Bandwidth Service Limited.
2
In October 2019, DigiFarm was incorporated as a 100%-owned subsidiary by Safaricom PLC. The nominal share capital of the Company is
KShs 100,000 divided into 1,000 ordinary shares of KShs 100 each. The entity is primarily designed to offer agribusiness tech support services
to Kenyan farmers linking the entire production chain by connecting producers to buyers and cushioning farmers from middlemen. Other
expected value additions to the DigiFarm model will be filling the gaps below:
• Access to financial services – credit and insurance
• Access to quality inputs
• Knowledge on best farming practices through extension services
• Access to market and post-harvest loss management.
* The investment in One Communications Limited and its subsidiaries and East Africa Tower Company Limited were written off in the year ended
31 March 2017.
244
(a) Investment in subsidiaries continued
Vodafamily Ethiopia Holding Limited Consolidated Summarised Statement of Profit or Loss And Other
Comprehensive Income for period ended 31 March
2022
KShs’m
Total expenses (5,109.2)
Loss before interest, tax, depreciation and amortisation (5,109.2)
Depreciation and amortisation (14.3)
Financing costs (75.9)
Finance income 340.6
Income tax expense –
Loss after tax (4,858.8)
Other comprehensive loss
Exchange differences on translation of foreign operations (9,536.3)
Total comprehensive loss (14,395.1)
Attributable to non-controlling interests (5,484.5)
Vodafamily Ethiopia Holding Limited Consolidated Summarised Statement of Financial Position as at 31 March
2022
KShs’m
Equity attributable to:
Equity holders of parent 56,229.6
Non-controlling interest 34,609.8
Non-current liabilities 4,715.3
Total equity and non-current liabilities 95,554.7
Non-current assets 93,672.9
Current assets
Cash and cash equivalents 2,687.6
Other current assets 3,255.9
Total current assets 5,943.5
Current liabilities (4,061.7)
95,554.7
Vodafamily Ethiopia Holding Limited consolidated summarised cashflow information for period ended
31 March
2022
KShs’m
Cash flows from operating activities 148.4
Cash flows from investing activities (102,002.5)
Cash flows from financing activities 104,636.1
Net increase in cash and cash equivalents 2,782.0
Movement in cash and cash equivalents
At start of period –
Net foreign exchange difference (94.4)
Increase 2,782.0
Closing cash and cash equivalents 2,687.6
245
23 Investments
(b) Investment in associates and joint ventures – Group and Company
2022 2021
KShs’m KShs’m
Investment in associates
Circles Gas – 284.8
TEAMS 123.1 118.1
Total investment in associates 123.1 402.9
Investment in joint ventures
M-PESA Africa Limited 3,859.0 4,055.3
Total investment in joint ventures 3,859.0 4,055.3
Total investment in associates and joint ventures 3,982.1 4,458.2
The movement in investment in associates and joint ventures is as follows:
At start of year TEAMS 118.1 211.2
Share of profit/(loss) from TEAMS 5.0 (93.1)
At start of year Circle Gas 284.8 384.6
Share of loss from Circle Gas (284.8) (99.8)
At start of year – M-PESA Africa Limited 4,055.2 4,369.3
Acquisitions – M-PESA Africa Limited – 0.1
Share of (loss)/profit from M-PESA Africa Limited (196.2) (314.1)
At end of year 3,982.1 4,458.2
In December 2019, Safaricom completed a purchase of 18.96% of the issued shares capital of Circle Gas Limited (KShs 385 million),
a company incorporated in England. Principal place of business for Circle Gas is London, United Kingdom. Strategically, the investment
in Circle Gas solution is a digital service offering leveraging Internet of Things (IoT) and M-PESA, that will drive our ambition to be the
leading digital services provider in Kenya whilst driving financial inclusion through technology by offering customers an affordable,
clean energy source for cooking.
Circle Gas has subsequently issued ordinary shares which were used in settlement of debt. This led to a dilution of the Safaricom’s
shareholding to 14.648% (2021:18.39%).
The investments in Circle Gas has been treated as an investment in associate as per IAS 28.7.
Circle Gas has a 31 December year end and derives its revenues from the provision of affordable, clean energy source for cooking.
Changes in the risk and fluctuation of the results of the associate is not expected to have a significant impact on the results of the Group.
As such, the unaudited 12-months results for the associate have been incorporated in the Group’s financial statements.
246
(b) Investment in associates and joint ventures – Group and Company
Circle Gas Summarised Statement of Profit or Loss and other Comprehensive Income for the 12 months ended
31 December
2021 2020
KShs’m KShs’m
Revenue 406.0 30.7
Other income 12.9 29.3
Cost of sales (206.6) (14.2)
Administrative expenses (2,301.6) (588.6)
Total expenses (2,508.2) (602.8)
Loss before tax (2,089.3) (542.8)
Income tax expense – –
Loss after tax (2,089.3) (542.8)
Share of loss before tax (306.0) (99.8)
Share of loss of associate – Reported (284.8) (99.8)
Share of loss of associate – Unrecognised (21.2) –
Circle Gas summarised Statement of Financial Position as at 31 December

2021 2020
KShs’m KShs’m
Total equity (514.1) 898.1
Non-current liabilities 7,435.9 1,506.1
Total equity and non-current liabilities 6,921.8 2,404.2
Non-current assets 4,333.90 1,783.4
Current assets
Cash and cash equivalents 700.2 360.0
Other current assets 1,991.6 353.1
Total current assets 2,691.8 713.1
Current liabilities (103.9) (92.3)
6,921.8 2,404.2
Included in the investment in associate is the investment of 32.5% (2021: 32.5%) of the ordinary shares of The East African Marines
Systems Limited (TEAMS). TEAMS is a private company and there is no quoted market price available for its shares. TEAMS’ place of
business and country of incorporation is Kenya. There are no contingent liabilities relating to the Group’s interest in the associate.
TEAMS has a 30 June year end and derives its revenues from the provision of submarine fibre optic cable system. Changes in the risk
and fluctuation of the results of the associate is not expected to have a significant impact on the results of the Group. As such, the
unaudited nine months’ results for the associate have been incorporated in the Group’s financial statements. Set out below is the
summarised financial information for TEAMS as at 31 March 2022 and 31 March 2021, which is accounted for using the
equity method.
247
(b) Investment in associates and joint ventures continued
TEAMS summarised Statement of Financial Position as at 31 March

2022 2021
KShs’m KShs’m
Total equity 462.2 425.4
Non-current assets 4.3 6.0
Current assets 647.8 530.0
Total current assets 647.8 530.0
Current liabilities (189.9) (110.6)
462.2 425.4
TEAMS summarised Statement of Profit or Loss and other Comprehensive Income for the nine months period
ended 31 March
2022 2021
KShs’m KShs’m
Revenue 218.7 210.5
Other income 12.6 13.8
Operating expenses (175.5) (157.0)
Administrative expenses (27.5) (84.8)
Total expenses (203.0) (241.8)
Profit/(loss) before tax 28.3 (17.5)
Income tax expense (8.1) (9.3)
Profit/(loss) after tax 20.2 (26.8)
Share of profit before tax (32.5%) 6.6 (8.7)
Loss after tax for the 3 months ended 30 June (2021 and 2020 respectively) (1.6) 84.4
Share of profit/(loss) of associate 5.0 (93.1)
The information above reflects the amounts presented in the management accounts of the associate and not Safaricom PLC’s share of
those amounts, adjusted for differences in accounting policies between the Company and associate. The results of TEAMS do not have a
material impact on the Group’s results.
In March 2020, Safaricom PLC and Vodacom Group Limited completed the acquisition of the M-PESA brand, product development and
support services from Vodafone Group PLC through the Joint Venture (JV), M-PESA Africa Limited. The new JV will strategically help
accelerate M-PESA growth in Africa by giving both Safaricom PLC and Vodacom Group Limited full control of the M-PESA brand in
Africa. Safaricom PLC owns 50% of the issued share capital of the JV with Vodacom Group Limited owning the remaining 50%.
The JV is registered in Kenya and has a 100%-owned subsidiary, K2019102008 (South Africa) (Proprietary) Limited registered in
South Africa.
248
(b) Investment in associates and joint ventures continued
The joint venture is accounted for using equity method in these consolidated and Separate Financial Statements. Summarised financial
information in respect of Safaricom PLC investment in joint venture as at year end is set out below:
There are no significant restrictions on the ability of the JV to transfer funds to Safaricom PLC in the form of a cash dividend or repayment
of loans. Decisions by the JV to declare and/or pay any dividend or make any capital distribution to shareholders must have prior written
consent of the existing shareholders.
M-PESA Africa Limited Summarised Statement of Financial Position as at 31 March

2022 2021
KShs’m KShs’m
Total equity 8,756.8 8,937.4
Non-current liabilities
Deferred income tax 2,909.9 2,870.7
Other non-current financial liabilities 3,922.2 –
Total non-current liabilities 6,832.1 2,870.7
Total equity and non-current liabilities 15,588.9 11,808.1
Non-current assets 18,623.5 14,803.1
Current assets
Cash and cash equivalents 2,431.3 883.0
Other current assets 1,015.2 884.5
Total current assets 3,446.5 1,767.5
Current liabilities
Payables and accrued expenses 3,314.3 1,841.0
Other current financial liabilities 3,166.8 2,921.5
Total current liabilities 6,481.1 4,762.5
Net current assets (3,034.6) (2,995.0)
15,588.9 11,808.1
M- PESA Africa Limited Summarised Statement of Profit or Loss and other Comprehensive Income for year
ended 31 March
2022 2021
KShs’m KShs’m
Revenue 4,269.8 3,180.7
Total expenses (2,918.2) (2,585.5)
Profit before interest, tax, depreciation and amortisation 1,351.6 595.2
Depreciation and amortisation (1,477.4) (1,115.7)
Financing costs (125.1) (55.6)
Income tax expense (141.6) (92.0)
Loss after tax (392.5) (668.1)
Share of profit/(loss) before tax (50%) (196.2) (334.1)
Under reported profit from prior year – 20.0
Share of profit/(loss) from joint venture (196.2) (314.1)
249
24 Inventories
GROUP COMPANY
2022 2021 2022 2021

KShs'm KShs’m KShs'm KShs’m
Handsets and accessories 3,402.3 2,135.5 3,402.3 2,135.5
Scratch cards 32.6 43.7 32.6 43.7
Starter packs 733.1 457.2 733.1 457.2
Stationery and other stocks 10.3 6.6 10.3 6.6
Set top boxes 2.0 0.7 2.0 0.7
Less: provision for obsolescence (32.9) (202.5) (32.9) (202.5)
4,147.4 2,441.2 4,147.4 2,441.2
Inventory work-in-progress – – – –
Farm stocks 159.4 45.8 – –
4,306.8 2,487.0 4,147.4 2,441.2
Note: T he cost of inventories recognised as an expense during the period was KShs 14,551.5 million (2021: KShs 10,315.9 million reported under
direct costs (Note. 6)
25 Trade and other receivables

GROUP COMPANY
2022 2021 2022 2021

Current:
Less: Allowance for expected credit losses (6,916.9) (5,315.7) (6,729.9) (5,160.0)
11,457.0 11,189.1 11,447.4 9,666.6
Receivable from related parties (Note 31(viii)) 1,801.2 2,475.4 3,834.7 2,874.3
Less: Allowance for expected credit losses (6.7) (17.4) (1,096.3) (911.7)
1,794.5 2,458.0 2,738.4 1,962.6
Other receivables* 6,059.0 4,087.5 4,420.7 3,973.8
Less: Allowance for expected credit losses (81.1) (30.4) (81.1) (21.1)
5,977.9 4,057.1 4,339.6 3,952.7
Prepayments 6,157.2 3,147.3 2,945.7 3,147.2
Construction and maintenance contract receivable 569.0 1,568.9 569.0 1,568.9
Less: Discounting adjustment on construction contract
receivables (36.4) (72.5) (36.4) (72.5)
Net construction and maintenance contract receivable 532.6 1,496.4 532.6 1,496.4
25,919.2 22,347.9 22,003.7 20,225.5
250
25 Trade and other receivables continued

Movements on the allowance for expected credit losses on trade receivables, other receivables and related parties’ receivables are as
follows:
GROUP COMPANY
2022 2021 2022 2021

At start of year 5,363.5 2,840.4 6,092.8 2,718.0
Provision for expected credit losses for the year
– trade and other receivables 2,822.0 3,547.9 2,717.3 3,505.3
– related parties 9.3 5.7 275.2 900.0
Release of prior year provisions (482.8) (549.5) (470.7) (549.5)
Provision for expected credit losses 2,348.5 3,004.1 2,521.8 3,855.8
Receivables written off during the year as uncollectible (906.6) (481.0) (906.6) (481.0)
Recoveries from third parties 199.3 199.3
Closing allowance for expected credit losses at year end 7,004.7 5,363.5 7,907.3 6,092.8
Provision for trade receivables 6,916.9 5,315.7 6,729.9 5,160.0
Provision for related parties 6.7 17.4 1,096.3 911.7
Provision for other receivables 81.1 30.4 81.1 21.1
Closing allowance for expected credit losses as at year end 7,004.7 5,363.5 7,907.3 6,092.8
* Other receivables include deposit, interest receivable and EPSAP share receivable.
The carrying amounts of the above receivables approximate their fair values.
In connection with the National Police Service contract, bills have been raised for both the construction and maintenance service as
per the contract terms. Total of KShs 1.0 billion were received during the year (2021: KShs Nil) and the outstanding balance at year
end was KShs 569 million. Fair value adjustment of KShs 36.4 million (2021: KShs 72.5 million) has been made in arriving at the
outstanding receivable.
GROUP COMPANY
2022 2021 2022 2021

At start of year 72.5 12.5 72.5 12.5
Discounting adjustments made in the year for construction
and maintenance contract receivable 52.7 60.0 52.7 60.0
Release of prior year provisions (88.8) – (88.8) –
Net impact of discount adjustment on construction and
maintenance contract receivable (36.1) 60.0 (36.1) 60.0
36.4 72.5 36.4 72.5
251
26 Cash and cash equivalents and restricted cash

GROUP COMPANY
2022 2021 2022 2021

a) Cash and cash equivalents

Cash at bank 30,794.2 26,740.8 25,571.7 26,039.1
Allowance for expected credit losses (14.6) (4.7) (11.1) (3.2)
30,779.6 26,736.1 25,560.6 26,035.9
b) Restricted cash
Restricted cash 2,430.8 2,783.1 2,430.8 2,783.1
Discounting adjustment at inception (670.9) (801.1) (670.9) (801.1)
1,759.9 1,982.0 1,759.9 1,982.0
c) Deferred restricted cash asset
Discounting adjustment at inception (Note 26(b)) 670.9 801.1 670.9 801.1
Accumulated amortisation (263.0) (242.4) (263.0) (242.4)
Net deferred restricted cash asset 407.9 558.7 407.9 558.7
d) Restricted cash asset movement
Opening balance 2,540.7 2,747.8 2,540.7 2,747.8
Staff mortgage issued 50.0 197.9 50.0 197.9
Repayments (402.3) (378.0) (402.3) (378.0)
Amortisation of deferred restricted cash asset (20.6) (27.0) (20.6) (27.0)
Net deferred restricted cash asset 2,167.8 2,540.7 2,167.8 2,540.7
Restricted cash relates to deposits held with Housing Finance Group Limited, NCBA Bank and KCB Bank. The cash is used as a backup
to the staff mortgage loans and its withdrawal is restricted.
The restricted cash has a significant timing difference due to the contractual period of the mortgage loans, therefore the fair value of the
restricted cash upon initial recognition includes the effect of discounting taking the impact of time value of money into consideration.
The fair value of the restricted cash on initial recognition was determined using the discounted cash flow method. The difference between
the actual cash held as deposits and the fair value (i.e. the deferred restricted cash asset) is amortised over the term of the deposit.
Subsequently, the restricted cash is carried at amortised cost. The fair value adjustment at inception is amortised over the period of the
staff’s mortgage.
27 Other financial assets

GROUP COMPANY
2022 2021 2022 2021

At 1 April – 188.6 – –
Less: Proceeds from maturity – (188.6) – –
At 31 March – – – –
252
28 (a) Payables and accrued expenses

GROUP COMPANY
2022 2021 2022 2021

Current
Trade payables 6,636.6 5,636.0 7,264.8 5,627.8
Due to related companies (Note 31(ix)) 1,678.5 884.2 630.9 1,179.4
Accrued liabilities
– Network infrastructure 11,312.5 3,678.0 6,711.4 3,656.1
– Inventory 1,892.7 1,197.9 1,817.7 1,197.9
– Other expenses 13,356.4 10,545.8 10,923.1 10,389.3
Other payables
– Indirect and other taxes payable 4,330.7 6,039.5 4,321.9 6,077.5
– M-PESA agent accrual 3,107.1 2,803.4 3,107.1 2,803.4
– Other accrued payables 3,328.7 3,236.6 3,281.3 3,137.0
45,643.2 34,021.4 38,058.2 34,068.4
GROUP COMPANY
2022 2021 2022 2021

Split
Current 41,312.6 34,021.4 38,058.2 34,068.4
Non-current 4,330.6 – – –
At 31 March 45,643.2 34,021.4 38,058.2 34,068.4
28 (b) Provisions for liabilities

GROUP COMPANY
2022 2021 2022 2021

At 1 April 5,712.9 4,462.3 5,712.9 4,462.3
Charge for the year 1,377.4 363.4 1,377.4 363.4
Addition ARO provision (286.5) 2,207.4 (286.5) 2,207.4
Payments and release for the year (246.7) (1,320.2) (246.7) (1,320.2)
At 31 March 6,557.1 5,712.9 6,557.1 5,712.9
Current portion 3,373.8 2,561.5 3,373.8 2,561.5
Non-current portion 3,183.3 3,151.4 3,183.3 3,151.4
6,557.1 5,712.9 6,557.1 5,712.9
Legal contingencies
The Group is currently involved in various legal disputes and has, in consultation with its legal advisors, assessed the possible outcomes
in these cases and has determined that adequate provision has been made in respect of all these cases as at 31 March 2022.
Due to the nature and uncertainty of the outcomes of the various litigation cases, management exercises judgement to determine the
quantum and adequacy of the provision carried. Settlement only happens when a case is closed either through court rulings or out of
court between parties involved. The impact of discounting on the provision is not considered to be material.
253
28 (b) Provisions for liabilities continued

Tax matters
The Group is subjected to regular compliance audits by Kenya Revenue Authority (KRA) mainly around direct and indirect tax, capital
allowances, withholding taxes and transfer pricing. Disputes may arise with tax authorities over the interpretation or application of certain
tax rules to the Group’s business. To address and manage this tax environment uncertainty, good governance is fundamental to the
Group’s business sustainability. The Group employs multiple approaches in tax self-assessment in order to arrive at the final Group’s tax
position. This includes internal reviews and periodic consulting with external tax experts in addition to periodic reviews by our external
auditors. Tax decisions are always subject to review by management and are periodically reported to the Board. The Group has
considered all tax matters, including ongoing tax audits by KRA with the knowledge of management and has accounted for them
appropriately.
Asset restoration provision

The Group accounts for the costs associated with dismantling and removing network infrastructure assets and returning a network
infrastructure site operated under a lease to its original condition upon termination of the network infrastructure site lease. The associated
cash outflows are substantially expected to occur at the dates of decommissioning of the assets.
A restoration provision is recorded based on the best estimate of the average restoration costs (being the future costs relating to
dismantling and removing property and equipment and restoring each site) multiplied by the number of sites for which the Company has
a restoration obligation. This is then discounted to the present value of the obligation using a pre-tax discount rate.
29 (a) Contract costs

GROUP COMPANY
2022 2021 2022 2021

Costs to fulfil a contract:
Dealer connection commissions 2,541.6 2,258.5 2,541.6 2,258.5
SIM activation cost 548.5 766.9 548.5 766.9
3,090.1 3,025.4 3,090.1 3,025.4
Costs to obtain a contract:
Deferred SIM cost 1,000.1 1,509.2 1,000.1 1,509.2
Total contract cost 4,090.2 4,534.6 4,090.2 4,534.6
The movement of the contract costs is as below:
Opening balance – 1 April 4,534.6 3,445.5 4,534.6 3,445.5
Additions in the year 6,066.1 6,320.5 6,066.1 6,320.5
Amortised as costs in the year (6,510.5) (5,231.4) (6,510.5) (5,231.4)
Closing balance – 31 March 4,090.2 4,534.6 4,090.2 4,534.6
Current portion 2,951.5 3,043.4 2,951.5 3,043.4
4,090.2 4,534.6 4,090.2 4,534.6
254
29 (b) Contract liabilities

GROUP COMPANY
2022 2021 2022 2021

Customer loyalty programmes 4,509.1 4,217.0 4,509.1 4,217.0
Deferred airtime revenue 2,335.1 2,601.0 2,335.1 2,601.0
Deferred connection revenue 1,243.3 1,843.8 1,243.3 1,843.8
Deferred integrated products 1,683.3 1,640.1 1,683.3 1,640.1
Deferred fixed data 637.5 605.5 637.5 605.5
Deferred fibre and site rental revenue 274.7 830.8 274.7 830.8
Deferred bulk SMS 128.7 135.4 128.7 135.4
Deferred bundled handset resources 0.4 16.8 0.4 16.8
Deferred ETU access fee 4.4 2.9 4.4 2.9
Deferred PRSP initial set-up fee 2.8 3.1 2.8 3.1
Deferred Neo voice and data 1,138.3 1,202.6 1,138.3 1,202.6
Deferred Visa revenues 189.8 360.7 189.8 360.7
Deferred interest on device financing 0.7 9.9 0.7 9.9
Total contract liabilities 12,148.1 13,469.6 12,148.1 13,469.6
The movement of the contract liabilities is as below:
Opening balance – 1 April 13,469.6 10,394.3 13,469.6 10,359.3
Additions in the year 189,898.3 233,369.2 189,898.3 233,239.6
Recognised as revenue in the year (191,219.8) (230,293.9) (191,219.8) (230,129.3)
Closing balance – 31 March 12,148.1 13,469.6 12,148.1 13,469.6
Current portion 10,210.6 11,033.5 10,210.6 11,033.5
12,148.1 13,469.6 12,148.1 13,469.6
255
30 (a) Cash generated from operations

GROUP COMPANY
2022 2021 2022 2021

Adjustments for:
Interest income (Note 8) (1,227.6) (1,523.6) (1,206.0) (1,502.7)
Interest expense (Note 9) 3,165.4 1,686.5 2,986.4 1,667.8
Depreciation on property and equipment (Note 18) 34,145.2 32,624.5 33,922.2 32,570.4
Amortisation of right-of-use (ROU) asset 3,656.8 3,304.8 3,644.2 3,304.8
Amortisation of intangible assets (Note 21) 1,850.0 1,628.5 1,850.0 1,628.1
Share of loss from associate (Note 23(b)) 279.8 192.9 279.8 192.9
Amortisation of IRUs (Note 19) 281.3 406.5 281.3 406.5
Share of loss of joint venture (M-PESA Africa Limited)
(Note 23(b)) 196.2 314.1 196.2 314.1
Gain on disposal of property and equipment (Note 5 (b)) (47.1) (38.0) (47.1) (38.0)
Amortisation of deferred restricted cash asset (Note 8) 20.6 27.0 20.6 27.0
Expense upon the initial recognition of financial guarantee – – 120.9 –
Discounting adjustment on construction contract receivable (36.1) 60.0 (36.1) 60.0
Interest on ARO liability 379.4 223.2 379.4 223.2
Gain/loss on Lease termination (8.9) (37.4) (7.1) (37.4)
Revaluation of lease liability 184.7 218.4 184.7 218.4
Interest on lease liability 1,802.9 1,717.9 1,772.4 1,717.9
Expected credit loss of receivables 2,351.3 3,005.0 2,594.8 3,860.5
Change in operating assets and liabilities:
– Movement in accrual for other liabilities (Note 28(b)) 751.3 (1,180.0) 751.3 (1,180.0)
– Movement in contract liabilities (1,321.5) 3,075.3 (1,321.5) 3,110.3
– Movement in contract costs 444.4 (1,089.0) 444.4 (1,089.0)
– Movement in receivables and prepayments (5,945.3) (8,264.8) (4,265.5) (7,383.7)
– Movement in inventories (1,819.8) (627.6) (1,706.2) (648.1)
– Movement in payables and accrued expenses 2,258.3 3,192.1 (1,103.4) 3,005.4
Cash generated from operations 143,574.7 132,551.8 145,801.0 132,866.4
30 (b) Net cash/(debt) reconciliation

GROUP COMPANY
2022 2021 2022 2021

Net cash and cash equivalents (Note 26a) 30,779.6 26,736.1 25,560.6 26,035.9
Borrowings (note 16) (65,310.8) (14,772.0) (65,310.8) (14,772.0)
Lease liabilities (Note 22) (20,093.4) (16,073.7) (19,516.6) (16,073.7)
Net debt (54,624.6) (4,109.6) (59,266.8) (4,809.8)
Net cash and cash equivalents (Note 26a) 30,779.6 26,736.1 25,560.6 26,035.9
Gross debt (85,404.2) (30,845.7) (84,827.4) (30,845.7)
Net debt (54,624.6) (4,109.6) (59,266.8) (4,809.8)
256
30 (c) Liabilities from financing activities and net debt

GROUP
Cash and
Lease Sub cash
Borrowings liabilities total equivalents Net debt
KShs’m KShs’m KShs’m KShs’m KShs’m
Net debt as at
1 April 2021 (14,772.0) (16,073.7) (30,845.7) 26,736.1 (4,109.6)
Receipts (120,564.8) – (120,564.8) 4,137.9 (116,426.9)
Payments 70,026.0 5,154.3 75,180.3 – 75,180.3
Acquisitions and revision – 7,183.2 (7,183.2) – (7,183.2)
Interest charged – (1,802.9) (1,802.9) – (1,802.9)
Forex revaluation – (184.7) (184.7) – (184.7)
Translation reserves – (3.2) (3.2) (94.4) (97.6)
31 March 2022 (65,310.8) (20,093.4) (85,404.2) 30,779.6 (54,624.6)
Cash and
Lease Sub cash
Net debt as at
1 April 2020 (8,000.0) (15,224.7) (23,224.7) 26,759.7 3,535.0
Receipts (44,970.0) – (44,970) (23.6) (44,993.6)
Payments 38,198.0 3,874.6 42,072.6 – 42,072.6
Acquisitions and revision – (2,787.3) (2,787.3) – (2,787.3)
31 March 2021 (14,772.0) (16,073.7) (30,845.7) 26,736.1 (4,109.6)
COMPANY
Cash and
Lease Sub cash
Net debt as at
1 April 2021 (14,772.0) (16,073.7) (30,845.7) 26,035.9 (4,809.8)
Receipts (120,564.8) – (120,564.8) (475.3) (121,040.1)
Payments 70,026.0 4,565.9 74,591.9 – 74,591.9
31 March 2022 (65,310.8) (19,516.6) (84,827.4) 25,560.6 (59,266.8)
257
30 (c) Liabilities from financing activities and net debt

COMPANY
Cash and
Lease Sub cash
1 April 2020 (8,000.0) (15,224.7) (23,224.7) 25,859.7 2,635.0
Receipts (44,970.0) – (44,970) 176.2 (44,793.8)
Payments 38,198.0 3,874.6 42,072.6 – 42,072.6
31 March 2021 (14,772.0) (16,073.7) (30,845.7) 26,035.9 (4,809.8)
31 Related party transactions

Vodafone Kenya Limited incorporated in Kenya, whose ultimate parent is Vodafone Group PLC, incorporated in the United Kingdom
(UK), is the largest single shareholder of the Company. There are other companies in the Vodafone Group that are related to the
Company through common shareholdings or common directorships.
The following are the significant arrangements that exist and form the basis of various transactions within the Group:
(a) The Company has interconnection and roaming agreements with Vodafone affiliated companies in many countries around the
world, including the UK.
(b) The Company operates the M-PESA business which offers integrated financial services. M-PESA is an innovative mobile payment
solution that enables users to complete money transfer transactions and pay for goods and services by use of mobile phone for
which the Company earns a commission which is based on the amounts transacted. The Company also uses the M-PESA platform
to sell airtime to M-PESA account holders as well as run the M-Shwari and KCB M-PESA products as detailed out in Note 2(e).
M-PESA Africa Limited is a joint venture between Safaricom PLC and Vodacom Group (SA). The Company has entered into a
managed services agreement with the Safaricom PLC to provide technical and product-based M-PESA solutions against which a fee
is charged monthly. The fee is based on 2% of the M-PESA transaction revenue effective 1 April 2020.
M-PESA Holding Co. Limited acts as the trustee for M-PESA customers and holds all funds from the M-PESA business in trust to ensure
that those funds are safeguarded at all times.
(c) The Company has signed an agreement with Vodafone for participation in the Vodafone procurement company services and other
commercial services support. The agreement is effective from April 2020 to March 2023. Under the agreement, Safaricom PLC will
have access to Vodafone’s support for purposes of procurement, terminals management, Vodafone technical expertise, best practice
systems and processes, Vodafone knowledge bank, benchmarking reports, Vodafone Global Enterprise customers to increase
revenues, Vodafone business assurance and business and consumer products and marketing support.
The contract provides for a fixed participation fee of EUR 6,747,143 payable in two equal installments (six months) in advance
and a variable procurement fee at 6.3% calculated as a percentage of the actual purchase order value.
(d) The Company has employees who are seconded from Vodafone affiliate companies. The payroll cost for the secondees is
managed by Vodafone Group Services Limited and recharged (invoiced) to the Company for payment on a monthly basis.
(e) The Company seconds its staff to other Vodafone affiliate companies. The payroll cost for these secondees is managed by
Vodafone Group Enterprises (VGE) and recharged (invoiced) by the Company for payment on a monthly basis.
258
31 Related party transactions continued

The following relationships exist within Safaricom PLC:
Percentage of interest
held as at
March March
2022 2021
Subsidiaries Held by
One Communications Limited Safaricom PLC 100% 100%
Instaconnect Limited Safaricom PLC 100% 100%
Safaricom Money Transfer Services Limited Safaricom PLC 100% 100%
East Africa Tower Company Limited Safaricom PLC 100% 100%
Safaricom Foundation* Safaricom PLC – –
Flexible Bandwidth Services Limited One Communications Limited 100% 100%
Comtec Training and Management Services Limited One Communications Limited 100% 100%
Comtec Integration Systems Limited One Communications Limited 100% 100%
DigiFarm Kenya Limited Safaricom PLC 100% 100%
Vodafamily Ethiopia Holding Company Limited Safaricom PLC 90%-1share
61.9%
(Safaricom
Vodafamily Ethiopia Holding indirectly owns
Global Partnership for Ethiopia B.V Company Limited 55.71%)
Global 100 %
Partnership for (Safaricom
Ethiopia B.V indirectly owns
Safaricom Telecommunications Ethiopia (STE) (GPE) 55.71%)
Associates
The East African Marines Systems Limited (TEAMS) Safaricom PLC 32.5% 32.5%
Circle Gas Limited Safaricom PLC 14.648% 18.39%
Joint venture
M-PESA Africa Limited Safaricom PLC 50% 50%
* Safaricom Foundation was established by Safaricom PLC as a public charitable trust by a declaration of trust dated 14 August 2003 and is
domiciled in Kenya.
259

The following transactions were carried out with related parties:
(i) Sale of goods and services

GROUP COMPANY
2022 2021 2022 2021

Other related parties
Vodafone Roaming Services S.à r.l 69.5 87.2 69.5 87.2
Vodacom Tanzania Public Limited Company 49.6 46.3 49.6 46.3
M-PESA Holding Co. Limited 96,826.8 73,389.0 96,826.8 73,389.0
Vodacom South Africa Limited 508.7 735.7 508.7 735.7
Vodafone UK 292.9 316.9 292.9 316.9
Vodafone Group Enterprises 95.7 – 95.7 –
Vodacom Business (Kenya) Limited 13.5 6.9 13.5 6.9
Vodafone Egypt Telecom. S.A.E. 10.3 2.9 10.3 2.9
Vodafone Network PTY Limited 0.6 0.3 0.6 0.3
Vodafone Sverige AB 0.4 – 0.4 –
Vodafone Qatar Q.S.C. 0.7 – 0.7 –
Vodafone Group Services Limited – 114.3 – 114.3
Vodafone Ghana 9.2 18.2 9.2 18.2
Vodafone Services LLC Oman – 12.0 – 12.0
Vodafone DRC Congo 0.3 4.6 0.3 4.6
Vodafone Us Inc. 9.2 9.9 9.2 9.9
Vodacom Group Limited 35.7 4.4 35.7 4.4
Joint venture
M-PESA Africa limited 628.0 172.2 628.0 172.2
Subsidiaries
Safaricom Money Transfer Services Limited – – 810.8 786.2
DigiFarm Kenya – – 251.4 113.0
Global Partnership For Ethiopia B.V – – 124.6 –
Safaricom Telecommunication Ethiopia – – 725.7 –
One Communications Limited – – – 119.8
98,551.1 74,920.8 100,463.6 75,939.8
260

(ii) Purchase of goods and services
GROUP COMPANY
2022 2021 2022 2021

Vodafone Sales and Services Limited 2,416.9 2,105.9 2,416.9 2,105.9
Vodafone Group Services Limited – 98.3 – 98.3
Vodafone UK 642.3 34.7 148.1 34.7
Vodafone Sverige AB – 0.2 – 0.2
Vodafone Network PTY Limited 1.6 2.1 1.6 2.1
Vodafone Qatar Q.S.C. 86.8 65.5 86.8 65.5
Vodacom Group Ltd 552.6 117.6 250.7 117.6
Vodacom International – 64.9 – 64.9
Vodafone IDEA Limited – 6.1 – 6.1
Vodafone Innovus S.A. 23.4 19.8 23.4 19.8
Vodacom Business (Kenya) Limited 28.5 58.9 – 3.2
Telecel Vodafone S.A. 1.6 – 1.6 –
Vodafone Hungary Ltd 1.3 – 1.3 –
Vodafone Telekomunikasyon A.S 1.4 – 1.4 –
Vodafone-Panafon Hellenic Tel.Co 3.1 – 3.1 –
Vodafone Daǧıtım 2.3 – 2.3 –
Iot Nxt (Pty) Limited 418.3 – 418.3 –
Sendy Office 15.3 – 15.3 –
Eneza Education Ltd 67.3 – 67.3 –
Vodafone Procurement Company 1,152.6 – – –
The East African Marine System Limited 103.2 – 103.2 –
Sumitomo Corporation Group 179.0 – – –
Joint venture
M-PESA Africa limited 1,956.4 1,466.5 1,956.4 1,466.5
Subsidiary
One Communications Limited – – – 180.9
DigiFarm Kenya Limited – – 4.3 17.3
Comtec Integrated Services Limited – – 4.3 –
8,083.1 4,428.3 6,395.1 4,961.9
261

(iii) Directors’ remuneration
GROUP AND COMPANY
2022 2021
KShs’m KShs’m
Fees for services as Director 92.4 38.7
Salaries 142.9 162.7
Bonuses 192.7 243.2
Value for non-cash benefits 43.5 22.3
Employee Performance Share Award Plan – 2.8
471.5 469.7
iv) Key management compensation

GROUP AND COMPANY
2022 2021
Salaries and other short-term employment benefits KShs’m KShs’m
Employee Performance Share Award Plan 109.8 83.9
Pension contribution 27.0 18.8
Termination benefits 87.0 33.6
223.8 136.3
Key management are those persons having authority and responsibility for planning, directing and controlling the activities of the entity,
directly or indirectly, including any Director (whether executive or otherwise) of the entity.
v) Loans from shareholders

There are no loans from shareholders outstanding as at 31 March 2022 (2021: Nil).
vi) Loans to Directors of the Company

There are no loans to Directors of the Company as at 31 March 2022 (2021: Nil).
262

vii) Donations to Safaricom Foundation
Donations made during the year amounted to KShs 510 million (2021: KShs 510 million).
viii) Outstanding receivable balances arising from sale of goods/services

GROUP COMPANY
2022 2021 2022 2021

Vodafone Roaming Services S.à r.l – 10.4 – 10.4
Vodafone Group Enterprises 45.2 22.7 44.2 22.7
M-PESA Holding Co. Limited 1,160.9 2,292.5 990.4 1,622.3
Vodafone UK 25.7 – 25.7 –
Vodacom Business (Kenya) Limited 8.3 3.5 8.3 3.5
Vodafone Group Services Limited 1.2 1.2 1.2 1.2
Vodafone Ghana 0.4 28.9 0.4 28.9
Vodafone US Inc. 1.6 2.3 1.6 2.3
Vodafone Sverige Ab 0.1 0.1 0.1 0.1
Vodacom Group Limited 37.0 – 37.0 –
Vodafone DRC Congo 0.3 – 0.3 –
Telecel Vodafone S.A. 1.5 – 1.5 –
Joint venture
M-PESA Africa Limited 421.6 29.3 421.6 29.3
Subsidiaries
East African Towers Company Limited – – 16.0 16.0
Instaconnect Limited – – 90.1 88.4
Safaricom Money Transfer Services Limited – – 93.4 116
Safaricom Telecommunication Ethiopia – – 725.7 –
Global Partnership for Ethiopia B.V – – 124.6 –
DigiFarm Kenya Limited – – 1,153 848.7
Safaricom Foundation – – 0.9 –
Vodafamily Ethiopia Holding Company Limited – – 1.3 –
1,801.2 2,475.4 3,834.7 2,874.3
The receivables arise mainly from trading, are unsecured and bear no interest. A provision of KShs 6.7 million and KShs 1,096.3 million
for the Group and Company respectively (2021: KShs 17.4 million and KShs 911.7 million for the Group and Company respectively)
is held against receivables from related parties as indicated in Note 25.
263

ix) Outstanding payable balances arising from purchases of goods/services
GROUP COMPANY
2022 2021 2022 2021

Vodafone Sales and Services Limited 151.6 661.4 151.6 661.4
Vodafone UK 535.2 – 40.9 –
Vodafone Sverige AB 0.3 0.3 0.3 0.3
Vodafone Qatar Q.S.C. 7.9 5.4 7.9 5.4
Vodacom Business (Kenya) Limited 18.8 10.4 – –
MTC Vodafone Bahrain – 0.9 – 0.9
Vodafone India Limited – 0.8 – 0.8
Vodacom Mozambique 0.1 0.1 0.1 0.1
Vodafone Network PTY Ltd 1.1 0.2 1.1 0.2
Vodafone Malta 0.2 – 0.2 –
Vodafone Mobile Services Limited 0.1 – 0.1 –
Vodafone Services LLC Oman 0.2 – 0.2 –
Vodafone Hungary Ltd 1.2 – 1.2 –
Vodafone Telekomunikasyon A.S 1.3 – 1.3 –
Vodafone-Panafon Hellenic Tel.Co 3.0 – 3.0 –
Vodafone Innovus S.A. 17.7 – 17.7 –
Vodacom Group Ltd 652.9 – – –
Sumitomo Corporation Group 179.0 – – –
CDC Group 7.8 – – –
Joint ventures
M-PESA Africa Limited 38.4 185.5 38.4 185.5
Subsidiaries
One Communications Limited – – 299.0 304.3
DigiFarm Kenya Limited – – – 0.6
Comtec Integrated Services Limited – – 4.3 –
1,678.5 884.2 630.9 1,179.4
264

x) Loan to related parties
The Group has a 50% shareholding in M-PESA Africa and owns 100% of DigiFarm Kenya Limited. During the period under review,
the Group issued intragroup loans to the two entities to support their operations as per shareholders agreement and Board approvals.
The DigiFarm Kenya Limited loan will be channelled towards financing both operating and capex activities. The facility has a principal
and interest repayment grace period until the business moves to positive returns and a maximum tenure of five years.
The M-PESA Africa Limited loan facility is used to support the Company’s working capital requirements. The loan is repayable with
interest at the 91 days treasury bill plus a margin of 1.75%.
x(a) Loans receivable from M-PESA Africa Limited

GROUP COMPANY
2022 2021 2022 2021

M-PESA African Limited 1,287.8 1,288.7 1,287.8 1,288.7
Less: Allowance for expected credit losses (2.8) (0.9) (2.8) (0.9)
1,285.0 1,287.8 1,285.0 1,287.8
x(b) Loan to subsidiaries

COMPANY
2022 2021
KShs’m KShs’m
Opening balance 236.2 –
Additions in the year 500.0 240.0
Less: Allowance for expected credit losses (70.1) (3.8)
666.1 236.2
xi) Financial guarantees

The Company has issued parental guarantees to Safaricom Telecommunication Ethiopia Suppliers (Huawei and Nokia) for the supply of
network rollout equipment in Ethiopia on credit terms of up to 24 months from the date of equipment receipt. This enables the parent to
spread the funding requirement to the subsidiary over a longer period of time. The fair value of a financial guarantees contract is
calculated as the present value of the difference between the net contractual cash flows required under a debt instrument, and the
net contractual cash flows that would have been required without the guarantee. The present value is calculated using a risk-free rate
calculated from the average of the last three two-year Kenyan treasury bonds yield. As at 31 March 2022, the Company had
recognised KShs 120.9 million in relation to parental guarantee (2021: Nil). The undiscounted financial guarantee amount is
KShs 139.4 million.
32 Contingent liabilities
The Group has contingent liabilities arising from normal course of business. This includes outstanding matters with Kenya Revenue
Authority and various ongoing legal cases from trade and contractual disputes. As at 31 March 2022, a guarantee of KShs 25 million
(2021: KShs 25 million) had been given to Citibank NA against credit cards for use by senior staff during travel and other ordinary
business function. The Company has also issued a guarantee of KShs 258.9 million (2021: KShs 398.8 million) to various suppliers of
goods and services regularly provided by the Company.
The Directors have assessed the status of the contingent liabilities and as a result do not anticipate any additional material liabilities that
may have a significant impact on these financial statements.
265
33 Commitments
Capital commitments
Capital expenditure contracted for at the statement of financial position date but not recognised in the financial statements is as follows:
GROUP COMPANY
2022 2021 2022 2021

Property and equipment 36,420.4 10,795.7 9,310.9 10,795.7
34 COVID-19 pandemic
The Group is domiciled in Kenya and is in the business of offering a variety of telecommunication enabled solutions to customers.
Since the outbreak of the COVID-19 pandemic in March 2020, the Group has been continuously tracking the developing issues around
COVID-19 including various measures taken by various government to control the spread and impact of the pandemic and has put in
place measures to mitigate the impact of the outbreak to customers, employees, sales force and other stakeholders.
Management and Directors have considered the impact of COVID-19 and evaluated their effects across various lines of business and is
of the opinion they do not create a material uncertainty around continuity of its operations.
Governments continues to encourage and support the vaccination of all citizens with an aim to achieve herd immunity.
The Group expects that customers disposable income (individuals and corporates) will continue the consistent recovery as the economy
recovers from the impact of COVID-19. This has been demonstrated in our financial performance as reported in FY2022 against period
previous year with service revenue growing 12.3% and M-PESA growing 30.3%.
35 Events after the reporting period

The Directors are not aware of any other events (as defined by IAS 10: Events after the Reporting Period) after the reporting date of
31 March 2022 and the date of authorisation of these consolidated and separate annual financial statements.
266
Appendix 1 – principal shareholders

The 10 largest shareholders in the Company (ordinary shares only) and the respective number of shares held as at 31 March 2022 were
as follows:
Name of shareholder
Number of shares
1 VODAFONE KENYA LIMITED 16,000,000,000
2 CABINET SECRETARY TO THE TREASURY 14,022,572,580
3 STANBIC NOMINEES LIMITED A/C NR1031458 340,321,000
4 KENYA COMMERCIAL BANK NOMINEES LIMITED A/C 1019D 324,296,400
5 STANDARD CHARTERED KENYA NOMINEES LIMITED A/C KE19796 269,131,800
6 STANDARD CHARTERED KENYA NOMINEES LIMITED A/C KE004667 216,955,306
7 STANDARD CHARTERED KENYA NOMINEES LIMITED 177,656,727
8 STANBIC NOMINEES LIMITED A/C NR1030824 177,231,400
9 KENYA COMMERCIAL BANK NOMINEES LIMITED A/C 915B KENYA 165,449,886
10 STANDARD CHARTERED NOMINEES RESD A/C KE11401 157,123,317
11 OTHERS 8,214,689,584
Total 40,065,428,000
Distribution of shareholders
Number Number
Range (number of shares) of shareholders of shares %
1–1,000 353,529 209,405,909 0.52%
1,001–10,000 161,642 458,472,440 1.14%
10,001–100,000 17,757 446,497,318 1.11%
100,001–1,000,000 1,597 427,275,695 1.07%
1,000,001–10,000,000 517 1,746,662,915 4.36%
10,000,001–100,000,000 185 4,379,282,975 10.93%
100,000,001–1,000,000,000 13 2,375,258,168 5.93%
1,000,000,001–100,000,000,000 2 30,022,572,580 74.94%
Total 535,242 40,065,428,000 100.00%
267
Appendix 2 – mobile money services performance
GROUP
2022 2021
Kshs’m Kshs’m
Revenue 107,691.3 82,647.4
Cost of sales (52,313.7) (42,639.3)
Gross profit 55,377.6 40,008.1
Other income 7,689.7 7,160.8
Net operating income 63,067.3 47,168.9
Operating expenses
Administration costs (9,609.2) (5,782.1)
Staff costs (3,442.7) (2,312.4)
Total operating expenses (13,051.9) (8,094.5)
Profit before tax 50,015.4 39,074.4
268
269

Financials

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Safaricom PLC Annual Report and Financial Statements 2022 About Safaricom Who Message from

our report at a glance we are the chairman

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Directors

FY2018 FY2019 FY2020 FY2021 FY2022

Business review continued

Trends in mobile subscriptions and penetration

98.0% of total mobile subscriptions 20.0% of total mobile subscriptions

Jamli Telecom 254,314 Telkom Kenya 44,607

Finserve (Equitel) 1,394,049 Airtel Network 87,275

Telkom Kenya 4,099,086 Safaricom PLS 1,159,762

Airtel Network 16,641,322

Safaricom PLC 41,280,616

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Directors continued

Business review continued

Market shares in domestic mobile traffic

As part of our commitment to the Sustainable Development Goals

20 i) Leveraging our mobile technologies to transform lives by

We remain focused on our sustainability agenda on key issues such

Business review continued

Market shares in domestic mobile traffic continued

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Directors continued

Business review continued

1. REGULATORY AND POLICY ENVIRONMENT

Strengthened focus placed on ensuring robust governance processes

As a business, we have adopted a culture that prioritises customer

Business review continued

3. DATA PRIVACY RISKS

4. MARKET DISRUPTION AND AN EVOLVING COMPETITIVE LANDSCAPE

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Directors continued

Business review continued

5. SLOWED ECONOMIC GROWTH AND CHALLENGING MACROECONOMIC CONTEXT

6. SERVICE DISRUPTION AND OPERATIONAL RESILIENCE

A major failure in critical network or information technology assets for

Business review continued

9. HEALTH AND SAFETY EXPOSURES

We have instituted management commitment and stakeholder

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Directors continued

Business review continued

10. MONEY LAUNDERING AND TERROR FINANCING

Results and dividend

Business review continued

Name Position Nationality Date of Appointment

Statement as to disclosure to the Group’s and Company’s auditor

Terms of appointment of the auditor

By order of the Board

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Statement of Directors’ responsibilities

Michael Joseph Peter Ndegwa

Directors’ Remuneration Report

Information not subject to audit

b) Three independent Directors

Bitange Ndemo Independent Director Kenyan 2 March 2017

c) One Executive Director

d) Two alternate Directors

Non-executive Directors’ remuneration

The current agreed fees and allowances structure is as follows:

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Directors’ Remuneration Report continued

Information not subject to audit continued

Executive Director’s remuneration

Changes to Directors’ remuneration

Statement of voting on the Directors’ Remuneration Report at the previous AGM

The results of the vote were as below:

Information subject to audit

Directors’ remuneration for the year ended 31 March 2022

Information subject to audit continued

* EPSAP – Employee Performance Share Award Plan.

On behalf of the Board

Ms. Winnie Ouko

FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 MARCH 2022

Report of the Independent Auditor