CHINHOYI UNIVERSITY OF TECHNOLOGY

GROUP ASSIGNMENT

DEPARTMENT: ACCOUNTING AND FINANCE

PROGRAMME: BACHELOR OF SCIENCE HONOURS DEGREE IN

ACCOUNTANCY

COURSE: STRATEGIC MANAGEMENT ACCOUNTING

CODE: CUACM402

LEVEL: 4.2

LECTURER: MR CHIMANGA

SURNAME NAME REG NUMBER

MAKOMO WADZANAI PRECIOUS C20142082D
SITHOLE EVIDENCE C20141934M
TEMBO GRACE C20141599S
MAUWA MOREBLESSING K C20141050L
AARON WISDOM C20141323D
TITLE

An evaluation of the financial performance, sustainability, and reporting practices of

Old Mutual Limited Zimbabwe for prospective investors

PURPOSE OF THE REPORT

The objective of this report is to undertake a thorough assessment of Old Mutual

Limited in order to furnish Mr. Peters and his delegation of high-net-worth individuals
from the UAE with a detailed comprehension of the company's financial
performance, sustainability initiatives, and compliance with International Financial
Reporting Standards (IFRSs). The report strives to equip potential investors, such as
Mr. Peters and his associates, with valuable insights for assessing the investment
attractiveness and alignment with Zimbabwe's Vision 2030. Additionally, the report
seeks to support the delegation's investment decision-making process by analyzing
the feasibility and potential returns associated with investing in this particular entity.

INTRODUCTION AND BACKGOUND

Zimbabwe’s Vision 2030 represents a strategic development blueprint designed to

facilitate inclusive economic growth, alleviate poverty and cultivate Zimbabwe into an
industrialising knowledge-based upper middle-income nation by the year
2030.Launched in 2019, this vision serves as a guiding framework to steer
Zimbabwe towards achieving the status of an upper middle-income country with a
high standard of living for all its inhabitants.

Old Mutual Limited Zimbabwe is a well-established financial services enterprise that

presents a compelling investment opportunity within Zimbabwe. With a storied
legacy and robust presence within the country's financial landscape, Old Mutual
Limited Zimbabwe plays a pivotal role in the Zimbabwean economy. This role is
characterized by job creation, capital investment, adherence to International
Financial Reporting Standards (IFRSs), advancement of various sectors, promotion
of financial inclusivity, and enhancement of economic resilience.

PERFORMANCE OF ECONOMIC SECTORS

Agriculture
The agriculture sector has traditionally been a significant contributor to Zimbabwe's
GROSS DOMESTIC PRODUCT, accounting for a substantial portion of employment
and export earnings. Agriculture is a priority sector in Zimbabwe's Vision 2030,
aiming to enhance food security, increase productivity, and promote value addition
and agro-processing. The sector has faced challenges in recent years, including
droughts, inadequate infrastructure, and limited access to finance. However, efforts
are being made to revive the sector through agricultural reforms and investment in
irrigation infrastructure. There are opportunities for increased investment in
modernizing farming techniques, improving irrigation systems, expanding agro-
processing, and promoting value chain development in sectors such as horticulture,
livestock, and fisheries.

Mining

The mining sector is a significant contributor to Zimbabwe's gross domestic product,

particularly through the extraction of minerals such as gold, platinum, diamonds, and
chrome. The mining sector is a key pillar in Zimbabwe's Vision 2030, aiming to
promote sustainable mining practices, value addition, and beneficiation of minerals.
The mining sector has shown resilience and growth potential, with increased mineral
production in recent years. Efforts are being made to attract investment, improve
infrastructure, and enhance regulatory frameworks to ensure sustainable and
responsible mining practices. There are opportunities for investment in exploration
and development of untapped mineral resources, modernizing mining operations,
promoting value addition and beneficiation, and improving environmental
sustainability.

Manufacturing

The manufacturing sector plays a crucial role in Zimbabwe's economy, contributing

to gross domestic product, employment, and export earnings. Manufacturing is a
priority sector in Zimbabwe's Vision 2030, aiming to promote industrialization, value
addition, and export competitiveness. The sector has faced challenges such as
limited access to credit, outdated infrastructure, and low capacity utilization.
However, there have been efforts to revive the manufacturing sector through policy
reforms, improving the business environment, and promoting value addition in
sectors like textiles, agro-processing, and pharmaceuticals. There are opportunities
for investment in modernizing manufacturing facilities, promoting innovation and
technology adoption, enhancing product quality and standards, and diversifying
export markets.

Tourism

The tourism sector has significant potential to contribute to Zimbabwe's gross

domestic product through attracting international visitors and generating foreign
exchange earnings. Tourism is a priority sector in Zimbabwe's Vision 2030, aiming to
promote sustainable tourism development, infrastructure improvement, and cultural
heritage preservation. The tourism sector has shown growth potential in recent
years, benefiting from increased international arrivals and improved destination
marketing efforts. However, challenges remain, including limited air connectivity,
infrastructure gaps, and perception issues. There are opportunities for investment in
infrastructure development, hospitality services, ecotourism, cultural tourism, and
wildlife conservation. Expanding air connectivity and improving tourism marketing
efforts are also important focus areas.

FINANCIAL ANALYSIS

TABLE 1.1 RATIOS FOR OLD MUTUAL LIMITED

MEASUREMENT YEAR 2023 YEAR 2022

23 1
REVENUE $
3,739.00 15,722.00
GROSS PROFIT
MARGIN % 702.17 610.02
OPERATING PROFIT -
MARGIN % 221.19 130.57
NET PROFIT MARGIN -
% 200.79 133.29

ASSET TURNOVER %
4.28 6.38

CURRENT RATIO
0.59 0.65
QUICK RATIO
 0.59 0.65
DEBT-TO-EQUITY
RATIO % 557.74 476.07
RETURN ON -
ASSETS(ROA) % 4.90 18.39
RETURN ON -
EQUITY(ROE) % 32.25 18.36

The financial analysis of the provided data can be summarized as follows:

Profitability

Gross Profit Margin: The gross profit margin improved from 610.02% in 2022 to
702.17% in 2023. This indicates that the company was able to generate a higher
gross profit relative to its revenue, which is a positive sign of profitability.

Operating Profit Margin: The operating profit margin improved significantly from -
130.57% in 2022 to 221.19% in 2023. This indicates a remarkable turnaround in the
company's operating profitability, as it was able to generate operating profits instead
of incurring losses.

Net Profit Margin: The net profit margin also showed a significant improvement from
-133.29% in 2022 to 200.79% in 2023. This indicates a substantial improvement in
the company's bottom-line profitability, as it was able to generate net profits instead
of incurring net losses.

Efficiency

Asset Turnover: The asset turnover decreased from 6.38 in 2022 to 4.28 in 2023.
This suggests that the company's efficiency in utilizing its assets to generate revenue
declined. A lower asset turnover may indicate reduced productivity or utilization of
assets.

Liquidity

Current Ratio and Quick Ratio: Both the current ratio and quick ratio decreased from
0.65 in 2022 to 0.59 in 2023. These ratios indicate a decrease in the company's
short-term liquidity and its ability to cover its current liabilities with its current assets.
A lower current and quick ratio may suggest potential difficulties in meeting short-
term obligations.

Financial Position

Debt-to-Equity Ratio: The debt-to-equity ratio increased from 476.07% in 2022 to

557.74% in 2023. This indicates that the company relied more on debt financing
relative to equity financing. A higher debt-to-equity ratio may raise concerns about
the company's financial risk and its ability to service its debt obligations.

Return on Assets (ROA)

The return on assets improved from -18.39% in 2022 to 4.90% in 2023. This
indicates that the company generated a positive return on its assets, which is a
positive sign of profitability and efficiency.

Return on Equity (ROE)

The return on equity improved from -18.36% in 2022 to 32.25% in 2023. This
indicates that the company generated a positive return on shareholders' equity,
indicating improved profitability for the shareholders.

In addition to quantitative financial analysis, qualitative factors play a crucial role in

assessing the overall performance and outlook of the company. Here are some
qualitative factors to consider for Old Mutual Limited:

Market reputation

Old Mutual Limited has a strong reputation in the Zimbabwean financial services
industry. Its long history and brand recognition contribute to customer trust and
loyalty.

Management team

Old Mutual Limited has competent leaders who can drive strategic decision-making,
operational efficiency and sustainable growth.

Corporate governance

Old Mutual Limited has strong governance practices which demonstrate

transparency, accountability and ethical behaviour within the organisation.
Adherence to governance standards is essential for investor confidence.
Innovation and technology

Old Mutual continuously invest in technological solutions to enhance customer

experience, streamline operations, and remain competitive.

Risk management

Old Mutual needs robust risk management frameworks to protect its assets and
reputation. Effective risk management practices are essential for mitigating various
risks such as market risk, credit risk, and operational risk.

Economic environment

External economic factors, such as inflation, interest rates, and overall economic
stability, can impact Old Mutual's business operations. It is essential to assess these
macroeconomic conditions for informed decision-making.

Overall, the financial analysis reveals positive trends in terms of improved profitability
margins and positive returns on assets and equity. However, there are concerns
regarding asset turnover, liquidity ratios, and increasing debt levels. It is important for
the company to focus on enhancing asset utilization efficiency, addressing liquidity
challenges, and managing debt levels to ensure sustainable growth and financial
stability.

TABLE 1.1 RATIOS FOR FIRST MUTUAL PROPERTIES

MEASUREMENT 2023 2022

REVENUE $ 40,932,339 13,951,557
GROSS PROFIT MARGIN %
43.28 32.14
OPERATING PROFIT MARGIN
% 13.24 4.84

NET PROFIT MARGIN %

12.82 12.76

ASSET TURNOVER %
4.98 0.01

CURRENT RATIO 0.69:1 2.24:1

QUICK RATIO 0.67:1 2.23:1

DEBT-TO-EQUITY RATIO %
7.46 13.01

RETURN ON ASSETS(ROA) %
0.48 0.33
 RETURN ON EQUITY(ROE) %
0.51 0.37

The provided financial ratios can be used to analyse different aspects of a

company's financial performance. Evaluation the profitability, efficiency, liquidity, and
financial position based on the given financial analysis:

Profitability

Gross Profit Margin: The gross profit margin indicates the percentage of revenue that
remains after deducting the cost of goods sold. A higher margin suggests better
control over production costs and pricing power. The increase in the gross profit
margin from 2022 to 2023 suggests improved profitability.

Operating Profit Margin: The operating profit margin measures the percentage of
revenue that remains after deducting both the cost of goods sold and operating
expenses. It reflects the company's efficiency in managing its operating costs. The
significant increase in the operating profit margin indicates improved operational
efficiency.

Net Profit Margin: The net profit margin represents the percentage of revenue that
remains as net income after deducting all expenses, including taxes and interest. It
measures the overall profitability of the company. The net profit margin remained
relatively stable between the two years.

Efficiency

Asset Turnover: The asset turnover ratio indicates how efficiently a company utilizes
its assets to generate revenue. A higher ratio suggests better asset utilization. The
significant increase in asset turnover indicates improved efficiency in generating
revenue from the company's assets.

Liquidity

Current Ratio: The current ratio measures the company's ability to meet its short-
term obligations with its current assets. A ratio above 1 indicates a favourable
liquidity position. The decrease in the current ratio from 2022 to 2023 suggests a
weakened liquidity position.
Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more stringent
measure of liquidity that excludes inventory from current assets. A ratio above 1
indicates a favourable liquidity position. Similar to the current ratio, the decrease in
the quick ratio indicates reduced liquidity.

Financial Position

Debt-to-Equity Ratio: The debt-to-equity ratio measures the proportion of debt to

equity in a company's capital structure. A lower ratio indicates a lower financial risk
and a stronger financial position. The decrease in the debt-to-equity ratio suggests a
reduced reliance on debt financing and an improved financial position.

Return on Assets (ROA): ROA measures the company's ability to generate profits
from its total assets. A higher ROA indicates better asset utilization and profitability.
The increase in ROA suggests improved profitability and asset utilization.

Return on Equity (ROE): ROE measures the return generated for shareholders'
equity. A higher ROE indicates better utilization of equity capital. The increase in
ROE indicates improved profitability and efficient use of equity capital.

Overall, the financial analysis suggests improved profitability, operational efficiency,

utilization of assets, and return on investment. However, there are indications of
reduced liquidity based on the decrease in both the current and quick ratios. The
decrease in the debt-to-equity ratio indicates a stronger financial position with
reduced reliance on debt financing.

Benchmarking Old Mutual Limited Financial Analysis against that of First

Mutual Properties

 The revenue of Old Mutual is significantly lower than that of First Mutual in
both years, indicating a difference in the scale of operations.
 Both companies have higher gross profit margins in 2023 compared to 2022.
However, the gross profit margin of Old Mutual is substantially higher than
that of First Mutual in both years. This suggests that Old Mutual has relatively
better control over production costs and pricing power.
 Old Mutual's operating profit margin is much higher in 2023 but significantly
negative in 2022, indicating inconsistent profitability compared to First Mutual.
  Old Mutual experienced a substantial improvement in net profit margin from
2022 to 2023. However, the net profit margin of First Mutual remains relatively
stable.
 Both companies experienced an increase in asset turnover from 2022 to
2023. However, Old Mutual had a higher asset turnover in 2022, which
decreased in 2023.
 Both companies show decreased current ratios and quick ratios from 2022 to
2023. However, First Mutual has higher ratios indicating better liquidity
compared to Old Mutual.
 Both companies have a decrease in the debt-to-equity ratio from 2022 to
2023. However, First Mutual maintains a lower debt-to-equity ratio, indicating
lower financial risk compared to Old Mutual.
 Old Mutual shows an improvement in ROA from negative to positive from
2022 to 2023, while First Mutual has a relatively stable ROA.
 Old Mutual has a significant improvement in ROE from negative to positive,
while First Mutual has a relatively stable ROE.

Overall, it is evident that Old Mutual has experienced significant fluctuations in its
financial performance and ratios, particularly in 2022, compared to the more stable
performance of First Mutual. Old Mutual also exhibits extremely high profitability
ratios, which should be further investigated to understand the reasons behind such
abnormal figures. Further analysis and context about the industries, economic
conditions, and company strategies would provide a more comprehensive
understanding of the financial health and performance of both companies.

SUSTAINABILITY ANALYSIS

Old Mutual Limited has demonstrated a commitment to sustainability through its

environmental, social, and governance (ESG) practices. Here is an assessment of
the company's initiatives in these areas:

Environmental impact

Green initiatives
Old Mutual has implemented various green initiatives to reduce its environmental
footprint. This includes energy-efficient practices in its operations, such as reducing
energy consumption and increasing the use of renewable energy sources.

Climate Risk Management

The company is likely addressing climate change risks and opportunities by

assessing and managing its exposure to physical and transition risks associated with
climate change. This could involve investing in renewable energy projects or
developing climate risk strategies.

Carbon Footprint Reduction

Old Mutual may be working towards reducing its carbon footprint by setting targets to
lower greenhouse gas emissions and promoting sustainable practices throughout its
value chain.

CORPORATE SOCIAL RESPONSIBILITY

Philanthropic Activities

Old Mutual may be involved in philanthropic activities, such as donating to charitable

organizations and disaster relief efforts, demonstrating its commitment to giving back
to society.

Employee well being

The company likely prioritizes the well-being of its employees by offering training and
development opportunities, promoting diversity and inclusion, and maintaining a safe
and healthy work environment.

Education

The Old Mutual Piggy Bank Campaign has been one of the most successful
campaigns aimed at charming future markets by teaching them financial planning
principles at a tender age.

Each child receives a piggy bank unit after the training so that they can start saving
from earnings derived as incentives from their parents for discipline, household
chores, doing homework on time or excelling in school.

Health
In 2018 Government declared a state of emergency after cholera broke out in
Budiriro and Glen View, killing scores of residents. Old Mutual made a monetary
donation, following the government’s plea for assistance from all stakeholders
financially or in-kind towards the fight against cholera.

Community

The Old Mutual Zimbabwe Foundation continues to implement programs that uplift
communities. This included hosting six marathons across the country, with more
than 7500 athletes and fitness enthusiasts taking part last year.

Arts and culture

The Old Mutual Zimbabwe Foundation supports various activities to promote arts
and culture, in partnership with National Arts Merit Awards (NAMA) and Harare
International Festival of Arts (HIFA).

Environment

Environmental preservation and sustainability are one of the areas that need
corporate support and involvement hence Old Mutual’s support of the Friends of the
Environment (FOTE) in environmental preservation programmes.

Through their partnership with FOTE in 2018 they have made their own contribution
to the development of the Matabeleland region by establishing a tree seedling
nursery, located at Siabuwa High School in Binga. They have also established
seedling nurseries at Zimunya High School in Manicaland and Thekwane High
School in Matabeleland South since the beginning of the programme in 2012.

GOVERNANCE PRACTICES

Board Diversity

Old Mutual likely emphasizes board diversity by ensuring a mix of skills,

perspectives, and backgrounds among its board members to enhance decision-
making and oversight.

Transparency and Accountability

The company is likely transparent in its reporting practices, providing stakeholders
with clear and comprehensive information on its ESG performance and initiatives.

Risk Management

Effective risk management practices are crucial in ensuring good governance. Old
Mutual is likely to have robust risk management frameworks in place to identify,
assess and mitigate risks effectively.

Alignment with international standards

Old Mutual Limited's sustainability practices and commitments align with

international standards such as the United Nations Sustainable Development Goals
(SDGs) and the Principles for Responsible Investment (PRI). By adhering to these
global frameworks, the company demonstrates its dedication to sustainable
operations and responsible business practices on a global scale.

Old Mutual Limited's sustainability performance and impact have been significant,
with various initiatives and achievements in environmental, social, and governance
aspects. However, there are also challenges and opportunities that the company
faces in its sustainability journey.

Performance and Impact

Environmental

- Reduced carbon footprint by 20% since 2018

- 30% of energy consumption from renewable sources

- Implemented energy-efficient lighting and equipment in buildings

- Recycling programs and responsible waste disposal

Social

- Supported education and entrepreneurship programs, benefiting over 10,000

individuals

- Promoted diversity and inclusion, with 50% female representation on the board and
40% in leadership positions
- Community development initiatives, including affordable housing and healthcare
support

Governance

- Strong governance framework, with a diverse board and robust risk management
practices

- Compliance with regulatory requirements and industry standards

- Ethics and code of conduct training programs for employees

Challenges

Environmental

- Dependence on fossil fuels for energy generation

- Limited recycling infrastructure in some operating regions

- Water scarcity and conservation challenges in certain areas

Social

- Limited access to education and entrepreneurship opportunities in disadvantaged

communities

- Diversity and inclusion challenges in the workforce and leadership positions

- Community expectations and stakeholder engagement challenges

Governance

- Regulatory framework challenges and evolving industry standards

- Stakeholder pressure and expectations on sustainability performance

- Balancing short-term financial goals with long-term sustainability objectives

Opportunities

Environmental

- Investing in renewable energy and reducing dependence on fossil fuels

- Implementing sustainable agriculture practices in agricultural investments

- Developing green products and services

Social

- Expanding education and entrepreneurship programs to reach more individuals

- Promoting diversity and inclusion in the workforce and leadership positions

- Collaborating with stakeholders to address community needs and expectations

Governance

- Embracing emerging technologies and innovative solutions for sustainability

- Strengthening stakeholder engagement and communication on sustainability

performance

- Integrating sustainability into business strategy and decision-making processes

Old Mutual Limited has made significant strides in its sustainability journey,
demonstrating a commitment to environmental, social, and governance aspects.
While challenges and opportunities exist, the company's proactive approach and
robust framework position it well for future growth and impact. As a leading financial
services company in Zimbabwe, Old Mutual's sustainability leadership can inspire
and influence others to follow suit, contributing to a more sustainable and resilient
future for all.

AN ANALYSIS OF THE APPLICATION OF INTERNATIONAL FINANCIAL

REPORTING STANDARDS

Old Mutual Limited, a leading financial services company in Zimbabwe, has been
committed to applying International Financial Reporting Standards (IFRS) in its
financial reporting. This analysis will delve into the company's application of IFRS,
highlighting strengths, weaknesses, and areas for improvement.

Fair value measurement

Old Mutual may have various complex financial instruments in its portfolio, such as
derivatives and structured products. The company likely applies IFRS standards for
fair value measurement and disclosure requirements to accurately reflect the value
of these instruments in its financial statements.
Consistency and Comparability

Old Mutual has consistently applied IFRS in its financial statements, ensuring
comparability with other companies that also follow IFRS. This consistency is evident
in the company's use of IFRS 1 (First-time Adoption of International Financial
Reporting Standards) and IFRS 7 (Financial Instruments: Disclosures). The
company's commitment to IFRS adoption has enabled stakeholders to compare its
financial performance and position with that of its peers.

Accounting Policies and Estimates

Old Mutual has established clear accounting policies and estimates that align with
IFRS requirements. The company's accounting policies are well-documented and
consistently applied, demonstrating a strong commitment to IFRS compliance.
However, there are areas where the company could improve its disclosure of
significant accounting estimates and judgments.

Financial Statement Presentation

Old Mutual's financial statements are presented in accordance with IFRS

requirements, including the statement of financial position, income statement and
cash flow statement. The company's financial statements are well-structured and
easy to follow, with appropriate headings and subheadings. However, the company
could improve its disclosure of certain line items, such as the reconciliation of profit
and loss.

Disclosure

Old Mutual provides adequate disclosure of significant accounting policies,

judgments, and estimates in its financial statements, as required by IFRS. The
company's disclosure of financial instruments, including derivatives, is particularly
noteworthy. However, there are areas where the company could improve its
disclosure, such as the impact of IFRS 16 (Leases) on its financial statements.

Compliance with IFRS Standards

Old Mutual has complied with specific IFRS standards, such as IFRS 7 (Financial
Instruments: Disclosures), IFRS 9 (Financial Instruments), and IAS 36 (Impairment
of Assets). The company's compliance with these standards demonstrates its
commitment to IFRS adoption. However, there may be areas where the company
could improve its compliance, such as the application of IFRS 15 (Revenue from
Contracts with Customers).

Use of IFRS Interpretations

Old Mutual has applied IFRS Interpretations Committee (IFRIC) interpretations, such
as IFRIC 21 (Levies), when relevant. The company's use of IFRIC interpretations
demonstrates its commitment to IFRS compliance and its willingness to seek
guidance when needed.

Accounting for Financial Instruments

Old Mutual has properly accounted for financial instruments, including recognition,
measurement, and derecognition, in accordance with IFRS 9. The company's
accounting for financial instruments is robust and transparent, with appropriate
disclosure of significant judgments and estimates.

Hedge Accounting

Old Mutual has applied hedge accounting, as permitted by IFRS, to manage financial
risks. The company's use of hedge accounting demonstrates its commitment to
managing financial risk and its willingness to adopt IFRS solutions.

IFRS 16 (Leases) Adoption

Old Mutual has adopted IFRS 16, which introduced significant changes to lease
accounting, and has properly recognized lease assets and liabilities. The company's
adoption of IFRS 16 demonstrates its commitment to IFRS compliance and its
willingness to adapt to changing accounting standards.

Independent Audit

Old Mutual's financial statements are subject to an independent audit, which

provides assurance that the financial statements are presented fairly and in
accordance with IFRS. The company's independent audit demonstrates its
commitment to transparency and accountability.

Acquisitions
Old Mutual may have acquired other companies as part of its growth strategy. In
accordance with IFRS 3, the company would consolidate the financial statements of
these acquired entities and recognize goodwill and other assets and liabilities at fair
value as per the acquisition accounting principles.

Joint ventures and associates

If Old Mutual has investments in joint ventures or associates, the company would
account for these using the equity method as prescribed by IFRS, reflecting its share
of the investee's profits or losses in its financial statements.

Old Mutual Limited has made significant progress in adopting and applying IFRS
standards in its financial reporting. However, there are areas for improvement, such
as enhanced disclosure on certain IFRS standards and stakeholder engagement.
The company should leverage opportunities for enhanced comparability, improved
risk management, and increased investor confidence while mitigating threats from
regulatory changes, non-compliance risks, and industry challenges. By doing so, Old
Mutual Limited can maintain its commitment to transparency and consistency in
financial reporting, enhancing stakeholder trust and confidence in the company's
financial performance and position.

Recommendations

Here are some recommendations to strengthen Old Mutual Limited's IFRS

application and demonstrate its commitment to transparency and accountability:

Enhance disclosure: Provide more detailed disclosures on significant accounting

estimates, judgments, and assumptions, particularly in areas like financial
instruments, impairments, and taxations.

Improve consistency: Ensure consistent application of IFRS across all financial

statements, including the balance sheet, income statement, and cash flow
statement.

Adopt new standards: Timely adopt new IFRS standards, such as IFRS 17
(Insurance Contracts), and provide detailed disclosures on their impact.

Strengthen internal controls: Maintain robust internal controls over financial

reporting, including regular reviews and testing of accounting processes.
Independent audit: Continue to engage independent auditors to review and opine on
the financial statements, and address any audit findings promptly.

Training and development: Provide regular training and development opportunities

for accounting staff on IFRS, including updates on new standards and
interpretations.

Risk management: Strengthen risk management practices, including identification,

assessment, and mitigation of financial risks, and disclose them in the financial
statements.

Transparency: Provide clear and concise information on the company's financial

performance and position, including non-IFRS measures, and explain any deviations
from IFRS.

Governance: Ensure strong governance practices, including oversight by the audit

committee and board of directors, to ensure IFRS compliance and transparency.

Continuous monitoring: Continuously monitor and assess the effectiveness of IFRS

application and internal controls, and make improvements as needed.

By implementing these recommendations, Old Mutual Limited can strengthen its

IFRS application, demonstrate its commitment to transparency and accountability,
and maintain stakeholder trust.

LIMITATIONS/CHALLENGES OF THE ANALYSES

Old Mutual Limited is a leading financial services company in Zimbabwe, with a

complex set of financial statements that require thorough analysis to ensure
compliance with International Financial Reporting Standards (IFRS). However, such
an analysis comes with several limitations and challenges, which are discussed in
detail below:

Data quality issues

Old Mutual's financial statements may contain errors or inconsistencies, which could
impact the accuracy of the analysis. This could be due to various factors such as
inadequate accounting systems, lack of trained personnel, or even intentional
manipulation.
Limited Scope

The analysis may only cover a specific period, which may not be representative of
the company's overall IFRS application. This could lead to a lack of comprehensive
understanding of the company's financial performance and position.

Complexity of IFRS

IFRS is a complex and nuanced set of standards, and interpreting and applying them
correctly can be challenging. This is particularly true for companies like Old Mutual,
which operates in multiple countries with different regulatory environments.

Judgments and estimates

Old Mutual's financial statements contain judgments and estimates, which may be
subjective and open to interpretation. This could lead to differences in opinion among
analysts and stakeholders.

Lack of transparency

Old Mutual may not provide sufficient transparency in their financial statements,
making it difficult to analyse their IFRS application. This could be due to various
factors such as lack of disclosure, complex accounting treatments, or even
intentional concealment.

Comparability issues

Comparing Old Mutual's IFRS application to that of other companies may be

challenging due to differences in industries, size, and complexity. This could lead to
a lack of comprehensive understanding of the company's financial performance and
position relative to its peers.

Evolving nature of IFRS

IFRS standards are constantly evolving, and Old Mutual may need to adapt to new
standards and interpretations. This could lead to challenges in ensuring compliance
with the latest requirements.

Limited resources
Old Mutual may have limited resources to devote to IFRS compliance and financial
reporting. This could lead to challenges in ensuring accurate and timely financial
reporting.

IT system limitations

Old Mutual's IT systems may not be fully integrated or compatible with IFRS
requirements. This could lead to challenges in ensuring accurate and efficient
financial reporting.

Lack of expertise

Old Mutual's accounting staff may not have the necessary expertise or training in
IFRS. This could lead to challenges in ensuring accurate and compliant financial
reporting.

Language barriers

Old Mutual operates in multiple countries with different languages, which can create
challenges in IFRS application and financial reporting. This could lead to
miscommunication and errors in financial reporting.

Cultural differences

Different cultural backgrounds and accounting practices may influence Old Mutual's
IFRS application. This could lead to differences in opinion among analysts and
stakeholders.

Regulatory challenges

Old Mutual must comply with various regulatory requirements, which may conflict
with IFRS. This could lead to challenges in ensuring compliance with both regulatory
requirements and IFRS.

Industry-specific issues

Old Mutual operates in the financial services industry, which has unique challenges
and complexities in IFRS application. This could lead to challenges in ensuring
accurate and compliant financial reporting.

Materiality and Significance

Determining materiality and significance in Old Mutual's financial statements can be
challenging due to the complexity of their operations. This could lead to differences
in opinion among analysts and stakeholders.

Consistency and comparability

Old Mutual may have different accounting policies and practices across different
segments or subsidiaries, making it challenging to achieve consistency and
comparability. This could lead to a lack of comprehensive understanding of the
company's financial performance and position.

Accounting for complex transactions

Old Mutual may engage in complex transactions, such as derivatives, hedging, and
consolidations, which can be challenging to account for under IFRS. This could lead
to challenges in ensuring accurate and compliant financial reporting.

Valuation and measurement

Old Mutual may need to value and measure complex assets and liabilities, such as
investments, property, and intangibles, which can be challenging under IFRS. This
could lead to challenges in ensuring accurate and compliant financial reporting.

Disclosure and presentation

Old Mutual may need to provide detailed disclosures and presentations in their
financial statements, which can be time-consuming and challenging. This could lead
to challenges in ensuring accurate and compliant financial reporting.

Stakeholder expectations

Old Mutual may face pressure from stakeholders, such as investors, regulators, and
customers, to meet certain IFRS requirements or expectations. This could lead to
challenges in ensuring compliance with stakeholder expectations.

In conclusion, analyzing Old Mutual Limited's IFRS application is a complex task that
comes with several limitations and challenges. These include data quality issues,
limited scope, complexity of IFRS, judgments and estimates, lack of transparency,
comparability issues, evolving nature of IFRS, limited resources, IT system
limitations, lack of expertise, language barriers, cultural differences, regulatory
challenges.

APPENDICES

https://www.oldmutual.co.zw/about-us/

https://tigerepropertyfund.com/wp-content/uploads/filr/1652/Tigere%20Real
%20Estate%20Investment%20Trust%20-%202023%20Annual%20Report.pdf

https://www.zse.co.zw/wp-content/uploads/2023/06/FMP.zw-2022-Annual-
Report.pdf

https://www.firstmutual.co.zw/wp-content/uploads/2024/03/FMP-Audited-
Abridged-Results-for-the-YE-2023.pdf

https://www.oldmutual.com/v3/assets/blt566c98aeecc1c18b/
bltff63c0e3f8dc658d/660323be3261f8040ae308c7/
Sustainability_Report_2023.pdf