Access Bank Botswana : INDEPENDENT AUDITOR’S REPORT TO THE SHAREHOLDERS OF ACCESS BANK BOTSWANA LIMITED

To the Shareholders of Access Bank Botswana Limited

Our opinion

In our opinion, the consolidated and separate financial statements give a true and fair view of the consolidated and separatefinancial performance and its consolidated and separate cash flows for the year then ended in

What we have audited

12 to 91 comprise: the consolidated and separate statements of financial position as at 31 December 2022; the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended; the consolidated and separate statements of changes in equity for the year then ended; the consolidated and separate statements of cash flows for the year then ended; and the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

We conducted our audit in accordance withresponsibilities under those standards are further described in theaudit of the consolidated and separate financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) issued by the International Ethics Standards Board for Accountants and other independence requirements applicable to performing audits of financial statements in Botswana. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and other ethical requirements applicable to performing audits of financial statements in Botswana.

PricewaterhouseCoopers, Plot 64289, Tlokweng Road, Gaborone, Botswana, P O Box 294, Gaborone, Botswana

T: [phone],www.pwc.com/bw

Country Senior Partner: R Binedell

Partners: A S Edirisinghe, I D Molebatsi, S K Wijesena

Our audit approach

Overview

	Overall group materiality Overall materiality: BWP 3 510 000, which represents 5% of consolidated profit before tax.
Group audit scope The Company and its fully owned subsidiary are financially significant components of the Group based on the consolidated profit before taxes of the Group. We performed a full scope audit of the Company and its subsidiary.
Key Audit Matters

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.

Overall group	BWP 3 510 000.
materiality
How we determined it	5% of consolidated profit before tax.
Rationale for the	We chose profit before tax as the benchmark because, in our view, it is
materiality benchmark	the benchmark against which the performance of the Group is most
commonly measured by users, and is a generally accepted benchmark.
applied
We chose 5% rule of thumb, which is consistent with quantitative
materiality thresholds used for profit-oriented companies in this
industry.

How we tailored our group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

The Group consists of the Company and one wholly owned subsidiary. Our scoping assessment took into consideration the financial significance of each component to the Group. We concluded that the Company and its subsidiary to be financially significant components in the Group based on its contribution to the consolidated profit before tax of the Group.

We performed a full scope audit for the Company and its subsidiary. All testing was performed centrally by the group audit team. By performing the procedures outlined above, we obtained sufficient and appropriate audit evidence regarding the financial information of the Group to provide a basis for our opinion on the consolidated financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current year. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter	How our audit addressed the key audit matter
nd advances (this key audit matter refers both to the Consolidated and separate financial statements) Refer to the following notes to the consolidated and separate financial statements for disclosure relating to this key audit matter:	Our audit addressed the key audit matter as follows: For a sample of loans and advances, we agreed the loans and advances information included in the models to underlying data, accounting records and other information
note 1.3 (Significant judgments and sources of estimation uncertainty - Measurement of expected credit loss); note 1.17 (Financial instruments - Expected credit losses); note 3.1.6 to 3.1.8 (Financial risk management - Credit risk); note 7 (Loans and advances to customers); and note 21 (Impairment credit on financial assets). As at 31 December 2022, gross loans and advances to customers amounted to BWP 6 820 608 000, against which a provision for ECL of BWP 202 413 000 was recognised. The measurement of the ECL for financial assets measured at amortised cost requires the use of complex models and significant assumptions about future economic conditions and credit behaviour. Statistical models have been developed to support the quantification of credit risk. Key areas of significant management judgement and estimation applied in the measurement of ECL on loans and advances include: Assessing criteria for significant increase in credit risk; Determining appropriate Probabilities of applicable to loans and advances; Choosing appropriate models and assumptions for the measurement of ECL; and Establishing the number and relative weightings of forward-looking scenarios for the associated ECL. Establishing groups of similar financial assets for the purposes of measuring ECL.	such as loan agreements and noted no exceptions. Utilising our actuarial expertise, we reperformed and assessed the reasonableness of the ECL calculation by performing the following procedures: We obtained a detailed breakdown of loans and advances by product type and independently calculated the risk stage for each loan. No material differences were noted when classification of loans and advances into various risk stages; Assessed the appropriateness of the model used by the Group and Company with reference to the requirements of IFRS 9 - Financial Instruments, and ensured that the model was consistently applied to all loans and advances portfolios. We noted no matters requiring further consideration and there were no inconsistencies in the manner that it was applied across the loans and advances portfolios; We evaluated the reasonableness of key judgemental inputs used in the model, including: the PDs applied; the LGDs applied; the EADs applied; and the definition and application of SICR by recalculating these assumptions assumptions applied in the ECL. Based on our procedures performed, we noted no matters requiring further consideration in regard to these assumptions; We developed an independent estimation of the ECL on loans and advances by calculating a base case
In addition to the above, judgement is also applied to determine whether any management overlays are required for credit risk elements which are not captured by the models. We considered the ECL on loans and advances to be a matter of most significance to our current year audit due to the degree of judgement and estimation applied by management in determining the ECL, and the magnitude of the ECL recognised as at 31 December 2022.	ECL, which incorporated our independently determined SICR adjustments, after considering forward-looking indicators. We compared our results against the in order to identify possible gaps within the modelling components. We Company's ECL estimates were not materially different from our independently determined range of estimated outcomes. We evaluated the reasonableness of the management overlays by performing the following procedures and noted no material exceptions based on our procedures performed: in support of the overlays and assessed the reasonability of management assumptions by agreeing the overlays to the underlying information supporting the calculations; and Tested the mathematical accuracy of the calculations.

Other information

The directors are responsible for the other information. The other information comprises the

Company Annual Financialwhich we obtained prior

date. The other information does not include the consolidated or the separate financial statements and

Our opinion on the consolidated and separate financial statements does not cover the other information and we do not express an audit opinion or any form of assurance conclusion thereon.

In connection with our audit of the consolidated and separate financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the consolidated and separate financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.