Part 2: Accounting and financial reporting issues and our response
Our review process
We considered the following accounting and financial reporting issues, judgements and estimates in the context of the financial statements and management override of controls and fraud, discussed them with our external auditor, and found the response to each appropriate and acceptable.
Significant issue | Progress and actions taken during the year | Cross-reference |
|---|---|---|
Going concern and long-term viability statement | We advised the Board on the form and basis of conclusion for the long-term viability statement and going concern assessment, reviewing these in depth alongside the Group’s strategy and business model. Our review covered:
Considering potential mitigating actions, we were satisfied with the conclusion and disclosure of the Group’s long-term viability and going concern. | |
The treatment of Nigerian and Tanzanian currency devaluations as exceptional items | During the reporting year, the Nigerian naira devalued against the US dollar by approximately 18% (USD appreciation of 15%). The exchange rate at the close of the year was 1,542 naira per dollar versus 1,303 naira per dollar at the end of March 2024. This has materially affected the Group’s financial results linked to currency exchange and also affected the valuation of derivatives. During the quarter ended December 2024, the Tanzania shilling rose by 10% against the US dollar (USD devalued of 12%), with the exchange rate at 2,445 shilling per dollar on 31 December 2024 versus 2,730 shilling per dollar at the end of September 2024. This has materially affected the Group’s financial results linked to currency exchange and also affected the valuation of derivatives. Our committee was satisfied with the presentation as exceptional items on the Nigerian naira’s impact for the quarters ended June 2024, September 2024 and appreciation in quarter ended December 2024, and the impact of the appreciation related to the quarter ended December 2024 for the Tanzania shilling. See notes 2.22, 3.2, 5b and 5c of the financial statements for details. | |
Review of tax/legal/regulatory matters | We reviewed the key developments in material tax, legal and regulatory cases during the period alongside management’s estimate of key tax, legal and regulatory disputes and how these were rated as probable, possible or remote. We were satisfied with management’s conclusions, the disclosures in the financial statements and the related disclosure as a key source of estimation uncertainty. | |
Goodwill impairment | Our committee received and discussed a management paper on impairment and challenged the appropriateness of the key assumptions and judgements adopted for the annual impairment testing exercise in December 2024. We considered the level of operating cash flow forecasts, resulting headroom and reviewed the sensitivities performed by management on key assumptions such as the discount rate, growth rates and the headroom if a five-year plan were adopted with appropriate long-term growth rates. For more on Airtel Africa’s goodwill impairment assessment, see note 15 of the financial statements. | |
Renewal of tower lease agreements | During the year ended 31 March 2025, the Group renewed the tower lease agreements with American Tower Corporation (ATC) across four of its OpCos. The renewals relate to approximately 7,100 sites across Kenya, Niger, Nigeria and Uganda which were set to expire over the next 12 to 24 months and were renewed for a period of 12 years. This has resulted in an increase in both lease liabilities and ROU assets of $1,225m. Our committee reviewed and was satisfied with the accounting treatment on the renewal. See note 5(e) | |
Hyperinflationary accounting in Malawi | During the year ended 31 March 2025, Malawi met the requirements to be designated as a hyperinflationary economy under IAS 29 ‘Financial Reporting in Hyperinflationary Economies’. The Group has applied hyperinflationary accounting, as specified in IAS 29, at its Malawi operations (functional currency Malawian kwacha) for the reporting period starting 1 April 2024. This resulted in an opening balance adjustment of $308m to consolidated equity. The uplift of the assets on initial adoption resulted in the net asset value of Malawi exceeding its estimated recoverable amount. As a result of this, the initial adjustment was capped at the recoverable amount (primarily goodwill). The Group has chosen the International Monetary Fund’s / National Statistical Office of Malawi’s consumer price index (CPI) as the most appropriate inflation index to reflect the change in purchasing power. Our committee reviewed and was satisfied with the accounting treatment. | |
Share buy-back accounting | On 1 March 2024, Airtel Africa announced its first $100m share buy-back programme in two tranches of maximum $50m each. After the first buy-back programme was complete, on 23 December 2024 the company announced a second buy-back programme of $100m in two tranches of maximum $50m each. Our committee reviewed and was satisfied with the related share buy-back accounting and related disclosures. | Directors’ report, and notes 5d, 26 and 31 |
Alternative performance measures (APMs) | During the reporting period, Airtel Africa has included ‘lease-adjusted leverage’ as an additional APM. This reduces the volatility in the leverage ratio associated with lease accounting under IFRS 16, improves comparability between periods, and reflects the leverage basis of the Group’s financial market debt position. The committee closely reviewed the use of APMs in the Annual Report (including reconciliations disclosed) and concluded that the balance and equal prominence of APMs (in comparison to GAAP measures) was appropriate. For more information on APMs. | See APMs |