CFI : FY22 Results & Audit Opinion

Audited Abridged Report To Shareholders For The Year Ended 30 September 2022

RETAIL

FARMING

MILLING

PROPERTIES

DIVISION

DIVISION

DIVISION

DIVISION

Directors' Responsibility

The Company's Directors are responsible for the preparation and fair presentation of the Group's financial statements, of which this press release represents an extract. The principal accounting policies applied in the preparation of these financial statements are consistent with those applied in the previous annual financial statements. No significant changes arise from new and revised IFRS which became effective for reporting periods commencing on or after 1 January 2022.

Cautionary Statement- Reliance on all Financial Statements prepared in Zimbabwe for 2019-2022

The Directors would like to advise users to exercise caution in their use of these financial statements due to the impact of the technicalities arising from functional currency changes in February 2019, and its consequent impact on the usefulness of the financial statements for 2019 - 2022 financial periods.

Whilst Directors have exercised due care and applied reasonable judgements they deem appropriate in the preparation and presentation of these financial statements, the Directors advise the need for interpretation caution and remind users that there are significant challenges in ascertaining the underlying business performance in an environment of hyperinflation, multiple exchange rates and rapid changes in economic policies.

Adoption of IAS 29 (Financial Reporting in Hyper-inflationary Economies) Effective July 2019, the Public Accountants and Auditors Board (PAAB) advised that conditions for adopting IAS 29 were satisfied. IAS 29 requires that inflation-adjusted financial statements become the entity's primary financial statements. Historical cost financial statements have been presented only as complementary financial information.

External Auditor's Audit Opinion

These abridged Group financial statements have been audited by the Group's external auditors, Baker Tilly Chartered Accountants (Zimbabwe), who have issued a qualified audit opinion. The auditor's report on the Group's financial statements, is available for inspection at the Company's registered office. The engagement partner on the audit is Mr. Courage Matsa (PAAB Number 607).

Economic Environment

The economy witnessed the resurgence of hyper-inflationary pressures on the back of sharp currency depreciation and the widening gap of up to 90% between the official and alternative markets exchange rates of the Zimbabwe dollar (ZWL) against major foreign currencies. Inflationary pressures were further exacerbated by the war in Ukraine interrupting global supply chains with an adverse effect on commodities markets. During the period, the local currency on the official market depreciated by 617.5% against the USD. The rate moved from ZWL86.67:USD1 on 1 October 2021 to ZWL621.89:USD1 as at 30 September 2022. The exchange rates disparities imposed significant performance translation challenges on both historical and inflation adjusted accounts, given the conflict between IFRS and statutes. The distortions largely affect recorded revenues and profit for the period.

Factors stemming from the global impact of the Ukraine crisis and local growing economic uncertainties in the second half of the year saw average month-on-month inflation increase to 18.1% against 3.3% for the comparable period and 6.1% in the first half of the year. Average annual year-on-year inflation in the second half doubled to 207% against last year's second half inflation of 103.5%. Inflationary pressures in the second half (H2) were spurred by rapid money supply growth on the back of aggressive forward pricing of products and services. In Q4, the Government implemented some decisive policy interventions, mainly anchored by an increase in the minimum lending rate from 80% to 200%. The Government also introduced gold coins which, together with other measures, resulted in some decline in inflation in the post year-end period.

The erratic rains received during the 2021/2022 agricultural season suppressed aggregate demand for agro-inputs. Over and above the erratic rains, the country experienced a mid- season drought resulting in a significant decline in local agricultural output. The Group is therefore expected to continue relying on imports of maize and soya for the next half-year of FY2023.

Financial Performance

Group inflation-adjusted revenues for the year increased by 39.4%, from ZWL 35.39 billion in the previous year, to ZWL 49.37 billion. The increase is mainly attributable to improved sales volumes from Victoria Foods underpinned by continued recapitalization. However, aggregate demand for Retail products decreased in comparison to FY2021 following a below normal 2021/22 agriculture season. Overall, Retail Operations contributed 80.0% (2021- 91.9%), milling operations (Victoria Foods) contributed 17.4% (2021 - 4.3%) and farming operations accounted for 2.6% (2021 - 3.6%) of the Group turnover.

The Group incurred unrealized exchange losses of ZWL 6.1 billion on its foreign currency denominated loans. As a result, the Group posted a loss before tax of ZWL2.59 billion against a loss of ZWL0.75 billion for prior year. The Group incurred a ZWL 0.77 billion inflation-adjusted operational loss (inclusive of monetary gains) before depreciation, impairment and financing costs compared to an operational profit of ZWL0.4 billion in prior year.

The Group invested ZWL548.19 million (2021 - ZWL540.6 million) in capital expenditure for the different Strategic Business Units (SBUs) mainly covering IT infrastructure for various Farm & City Centre and Agrifoods, poultry and irrigation infrastructure at Glenara Estates.

Operations Review

FARM & CITY ('FCC')

The year ended 30 September 2022 was challenging due to both high domestic and imported inflation, multiple exchanges rates and reduced agricultural output, which decreased key revenue driver volumes by 21% compared to prior year. Notwithstanding, FCC opened Builders City branch and refurbished the Sanyati and Chitungwiza branches to increase the trading space and bring convenience to customers.

GLENARA ESTATES

Maize and soya beans output was 13% down from the previous season as a result of reduced planting following late onset of rains. The potato harvest increased by 10%, whilst yields improved by 7% compared to prior year. The Estate invested in additional irrigation infrastructure in order to underpin horticultural production going into the future. In addition, cattle pen fattening and breeding operations were maintained with reasonable success.

PROPERTY DEVELOPMENT

SATURDAY RETREAT

Town planning permits secured in prior year and other development preliminaries pursued during the year will assist the Group in giving impetus to the development stage of the project.

SUNCREST PARK (FORMERLY MAITLANDS ZIMBABWE)

During the period, the Group progressed preparations of title surveys and completion of engineering drawings.

LANGFORD ESTATES

The legal proceedings remain pending before the relevant tribunals. The market will be updated with further progress in due course.

MILLING OPERATIONS

AGRIFOODS

Stockfeed sales registered a flat performance against prior year. Inconsistent raw material supplies limited the potential growth over prior year despite an otherwise vibrant market demand throughout the period. In addition, distortions on USD prices in part, contributed to constrained sales volume growth especially in H2. Notwithstanding the above challenges, Agrifoods continues to put efforts to reassert its presence in the market and demand for its products continues to firm. The focus going into the next year will be to secure adequate raw material supply lines as the entity claws back its market share.

VICTORIA FOODS

The entity's main business thrust in its first year after its exit from judicial management was ensuring the market is supplied with quality consumer household goods thereby enhancing VF's brand presence across various product categories the company is traditionally known for. Your Board is happy to report that VF's products have been warmly received in the market.

The flour mill operated at satisfactory capacity utilization levels for the year on the back of reasonable wheat availability from the 2021 winter season. Maize utilization however operated below expected capacity utilization levels given the poor cereal's output in the 2021/2022 agricultural season.

POULTRY DIVISION

Crest Poultry Group's other units, being Crest Breeders, Hubbard Zimbabwe and Suncrest Chickens, remained under care and maintenance during the period. Joint ventures leveraging the Group's poultry infrastructure and brands are still being pursued.

Sustainable Business Practices

Your Board continues to strive to ensure that its business strategies and its values are constantly aligned with sustainable business practices guided by the Global Reporting Initiatives (GRI's) Sustainability Reporting Guidelines.

Future Prospects

Notwithstanding the challenging economic conditions which prevailed during the period, the Group remains optimistic on the overall medium-term trajectory of the economy, as we anticipate continued growth driven largely by the mining, construction, agricultural sectors and increasing diaspora remittances. The Group will continue to invest in its milling operations in order to underpin its long-term competitiveness.

Priority will also be given to the development of low-cost housing delivery in Harare South in support of Government's Vision 2030 on housing. The scourge of land barons will need resolution to make way for progressive, orderly infrastructure deployment and service delivery to the various settlements.

Your Board will be focused on strengthening its human capital base, improving business models to be adaptive to the changing environment and strengthening its operational systems for the benefit of all stakeholders.

Acknowledgement and Appreciation

I wish to record my sincere appreciation to Management and Staff for their fortitude and resilience in serving our customers' various needs notwithstanding the challenges imposed by the COVID-19 pandemic. I also wish to thank our customers, suppliers and financiers for their enduring support to the Group which has made this turnaround and consolidation to date possible. Lastly, I would also like to record my gratitude and appreciation to my fellow Board members for their valuable contributions, guidance and stewardship.

Ms. I .V. Pasi

Chairperson

DIVIDEND DECLARATION

In view of the significant resources needed to further capitalize Agrifoods and Victoria Foods milling operations, your Board will not declare a dividend for the year ended 30 September 2022.

P. Hare

COMPANY SECRETARY

BY ORDER OF THE BOARD

31 January 2023

ABRIDGED GROUP CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

			INFLATION	ADJUSTED		HISTORICAL
			Year to		Year to
	Notes		30 Sept. 2022	30 Sept. 2021		30 Sept. 2022	30 Sept. 2021
			ZWL		ZWL		ZWL		ZWL
Turnover			49,263,290,566		35,278,030,332		25,057,878,841		7,797,485,774
Change in fair value of biological assets			106,229,376		108,984,678		234,494,249		36,528,365
Revenue			49,369,519,942		35,387,015,010		25,292,373,090		7,834,014,139
Operating (loss) income before depreciation,
impairment and financing costs			(5,783,851,530)		409,838,586		(4,805,805,737)		542,767,406
Depreciation expense			(544,440,648)		(442,895,391)		(144,680,431)		(77,737,754)
Share of (losses) profits from joint ventures			(17,734,117)		8,270,792		(5,027,215)		129,035
Net finance costs			(1,257,872,468)		(757,864,790)		(863,655,727)		(158,217,308)
Monetary gain			5,016,012,566		33,771,215		-		-
(Loss) profit before tax	4.1	(2,587,886,197)		(748,879,588)		(5,819,169,110)		306,941,379
Income tax (expense) credit	4.2		(1,537,265,549)		(724,756,332)		928,775,053		(110,529,667)
(Loss) profit for the year			(4,125,151,746)		(1,473,635,920)		(4,890,394,057)		196,411,712
Other comprehensive income
Gain on property revaluation net of taxes			-		-		6,331,395,622		732,402,503
Gain on equity investment designated as at FVTOCI			-		-		564,304,891		68,422,364
Total other comprehensive income			-		-		6,895,700,513		800,824,867
Total comprehensive (loss) income			(4,125,151,746)		(1,473,635,920)		2,005,306,456		997,236,579
(Loss) profit attributable to:
Equity holders of the parent			(4,125,151,746)		(1,473,635,920)		(4,890,394,057)		196,411,712
Total comprehensive (loss) income attributable to:
Equity holders of the parent			(4,125,151,746)		(1,473,635,920)		2,005,306,456		997,236,579
Basic (losses) earnings per share (cents)			(3,861.75)		(1,379.54)		(4,578.13)		183.87
Diluted (losses) earnings per share (cents)			(3,861.75)		(1,379.54)		(4,578.13)		183.87
Headline (losses) earnings per share (cents)			(3,861.75)		(1,379.54)		(4,578.13)		183.87
Net asset value per share (cents)			6,251.69		10,113.43		4,303.08		1,678.54
Shares in issue			106,820,875		106,820,875		106,820,875		106,820,875

ABRIDGED GROUP CONSOLIDATED STATEMENT OF FINANCIAL POSITION
			INFLATION ADJUSTED	HISTORICAL
ASSETS	Notes	30 Sept. 2022		30 Sept. 2021	30 Sept. 2022		30 Sept. 2021
			ZWL		ZWL		ZWL		ZWL
Non-current assets
Property, plant and equipment			10,131,682,914		10,141,680,238		10,131,682,914		2,665,356,173
Investments (unlisted)			805,771,692		805,771,692		805,771,692		211,766,542
Investments in joint ventures			(11,085,694)		6,648,423		(5,623,922)		(596,707)
Deferred tax assets			-		-		551,499,444		-
Total non-current assets			10,926,368,912		10,954,100,353		11,483,330,128		2,876,526,008
Current assets
Inventories and biological assets	4.3		17,277,193,625		8,165,529,151		12,591,749,149		1,737,647,077
Trade and other receivables			2,347,772,501		1,211,108,350		2,347,772,501		318,293,916
Investments - listed shares			31,317,099		87,485,732		31,317,099		22,992,308
Cash and bank balances			561,246,599		888,461,344		561,246,599		233,498,382
Total current assets			20,217,529,824		10,352,584,577		15,532,085,348		2,312,431,683
TOTAL ASSETS
		31,143,898,736		21,306,684,930		27,015,415,476		5,188,957,691
EQUITY AND LIABILITIES
Equity attributable to owners of the parent			6,678,107,328		10,803,259,075		4,596,593,035		2,591,286,578
Total equity			6,678,107,328		10,803,259,075		4,596,593,035		2,591,286,578
Non-current liabilities
Deferred tax liabilities			2,046,968,967		2,062,105,637		-		379,190,109
Accruals and other payables			5,501,854		14,696,219		5,501,854		3,862,344
Long term borrowings	4.4		9,739,395,382		2,478,770,553		9,739,395,382		651,450,868
Total non-current liabilities			11,791,866,203		4,555,572,409		9,744,897,236		1,034,503,321
Current liabilities
Trade payables			8,409,684,616		4,264,134,858		8,409,684,616		1,120,666,192
Accruals and other payables			1,371,903,836		707,633,829		1,371,903,836		185,974,725
Short term borrowings	4.4		1,377,627,554		351,241,513		1,377,627,554		92,310,516
Bank overdraft			870,831,943		67,783,149		870,831,943		17,814,231
Current tax liabilities			643,877,256		557,060,097		643,877,256		146,402,128
Total current liabilities			12,673,925,205		5,947,853,446		12,673,925,205		1,563,167,792
TOTAL EQUITY AND LIABILITIES
		31,143,898,736		21,306,684,930		27,015,415,476		5,188,957,691

Directors: I. V. Pasi (Group Chairman), S.D. Zinyemba (Deputy Group Chairman), S. N. Chibanguza (Acting Group Chief Executive Officer)*, C. Mutevhe (Acting Financial Director)*, A. Denenga, A. S. Hamilton (Alternate: R. L. Hamilton), Ms. P. Muzani * - Executive Director

1 Wynne Street, Harare. Tel: [phone]/703160

Audited Abridged Report To Shareholders For The Year Ended 30 September 2022

ABRIDGED GROUP CONSOLIDATED STATEMENT OF CASH FLOWS

CASH FLOWS FROM OPERATING ACTIVITIES

CASH (OUT)INFLOWS BEFORE WORKING CAPITAL CHANGES Cash (utilised through) generated from working capital changes

CASH UTILISED IN OPERATIONS

Net interest paid

Income taxes paid

NET (CASH UTILISED) GENERATED FROM OPERATING ACTIVITIE

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment

NET CASH OUTFLOWS TO INVESTING ACTIVITIES

CASH FLOWS FROM FINANCING ACTIVITIES

Acquisition of control of subsidiaries previously under judicial management Long term loans raised

Proceeds from disposal of listed investments Decrease/(increase) in listed investments Net short term loans raised (repaid)

NET CASH INFLOWS FROM FINANCING ACTIVITIES

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR CASH AND CASH EQUIVALENTS AT END OF YEAR

Cash and bank balances

Bank overdraft

INFLATION ADJUSTED

Year to

30 Sept. 2022		30 Sept. 2021
ZWL		ZWL
(874,068,340)	334,625,122
(5,349,590,058)	1,687,081,467
(6,223,658,398)		2,021,706,589
(1,257,872,468)	(757,864,790)
(1,443,724,578)	(947,764,677)
(8,925,255,444)		316,077,122
(548,187,598)	(540,599,009)
(548,187,598)		(540,599,009)

• 3,090,858

7,260,624,829 2,478,770,556

• 18,188,010
  56,168,633 (53,967,194)

1,026,386,041 (1,341,482,471)

8,343,179,503 1,104,599,759

(1,130,263,539) 880,077,872

820,678,195 (59,399,676)

(309,585,344) 820,678,196

561,246,599 888,461,345

(870,831,943) (67,783,149)

HISTORICAL

Year to

30 Sept. 2022	30 Sept. 2021
ZWL	ZWL
(5,046,374,145)	506,239,041
(4,172,500,442)	(280,562,177)
(9,218,874,587)	225,676,864
(409,940,727)	(171,161,496)
(863,655,727)	(158,217,308)
(10,492,471,041)	(103,701,940)
(406,262,601)	(107,019,874)
(397,735,215)	(107,019,874)

• 536,040

9,087,944,514 651,450,868

• 3,947,501
  (8,324,791) (17,972,470)

1,285,317,038 (201,254,435)

10,364,936,761 436,707,504

(525,269,495) 225,985,690

215,684,151 (10,301,539)

(309,585,344) 215,684,151

561,246,599 233,498,382

(870,831,943) (17,814,231)

4.0	Supplementary information	INFLATION	ADJUSTED	HISTORICAL
		Year	to		Year to
		30 Sept. 2022		30 Sept. 2021	30 Sept. 2022	30 Sept. 2021
		ZWL		ZWL	ZWL	ZWL

4.1 (Loss) profit before tax

(Loss) profit before tax is shown after charging the following items:

	Exchange losses	7,442,920,422	91,913,203		10,276,028,223			23,122,768
	Net leasing expenses	295,328,549	199,708,625		174,895,297			45,524,030
	Depreciation expense	544,440,648	442,895,391		144,680,431			77,737,754
	Compensation of directors and key management
	- for services as directors	7,457,497	4,453,973		4,095,589			984,235
	- for management services	237,024,292	190,558,867		129,377,658			40,747,216
4.2	Income tax expense (credit)
	Current tax	558,885,184	536,047,418		560,702,577			140,855,826
	Withholding tax	(14,583)	219,815		54,495			49,488
	Intermediate transactions tax	834,541,130	480,194,063		346,658,784			91,962,629
	Deferred tax charge (credit) relating to current temporary differences	143,853,818	(291,704,964)		(1,836,190,909)			(122,338,276)
		1,537,265,549		724,756,332		(928,775,053)			110,529,667
		INFLATION	ADJUSTED		HISTORICAL
		30 Sept. 2022		30 Sept. 2021		30 Sept. 2022	30 Sept. 2021
4.3	Inventories	ZWL		ZWL		ZWL			ZWL
	Finished goods	11,041,669,664	6,399,338,673		7,659,753,881			1,436,491,547
	Raw materials and consumables	4,928,053,921	761,436,742		4,443,468,914			199,811,536
	Biological assets and agricultural produce on hand	583,443,580	280,727,276		471,991,945			84,809,585
	Land in development	724,026,460	724,026,460		16,534,409			16,534,409

ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITY HOLDERS OF THE PARENT - INFLATION ADJUSTED

	CAPITAL
	RESERVES
	ZWL$
Balance at 30 September 2020	18,610,756,587
Acquisition of control in subsidiaries previously under judicial management	1,001,171,312
Elimination of revaluation reserves - IAS29	(7,185,298,953)
Loss for the year	-
Balance at 30 September 2021	12,426,628,946
Loss for the year	-
Balance at 30 September 2022	12,426,628,946
ABRIDGED GROUP STATEMENT OF CHANGES IN EQUITY ATTRIBUTABLE TO EQUITYHOLDERS OF THE PARENT - HISTORICAL
	CAPITAL
	RESERVES
	ZWL$
Balance at 30 September 2020	1,332,864,914
Acquisition of control in subsidiaries previously under judicial management	238,005,184
Other comprehensive income for the year	800,824,868
Profit for the year	-
Balance at 30 September 2021	2,371,694,966
Profit for the year	-
Other comprehensive income for the year	6,895,700,514
Balance at 30 September 2022	9,267,395,480

NOTES TO THE ABRIDGED GROUP FINANCIAL STATEMENTS

RETAINED

EARNINGS (LOSSES)		TOTAL
ZWL$		ZWL$
(6,675,444,409)		11,935,312,178
(659,588,494)		341,582,818
7,185,298,953		-
(1,473,635,921)		(1,473,635,921)
(1,623,369,871)		10,803,259,075
(4,125,151,747)		(4,125,151,747)
(5,748,521,618)		6,678,107,328
RETAINED
EARNINGS (LOSSES)		TOTAL
ZWL$		ZWL$
204,777,075	1,537,641,989
(181,597,174)	56,408,010

• 800,824,868
  196,411,712 196,411,712
  219,591,613 2,591,286,579

(4,890,394,058) (4,890,394,058)

• 6,895,700,514
  (4,670,802,445) 4,596,593,035

17,277,193,625

8,165,529,151

12,591,749,149

1,737,647,077

4.4 Borrowings

The table below summarizes the movements in the Group's third party borrowings during the period:

Balance at the beginning of the year	2,829,861,336		1,692,723,981		743,761,384		293,604,564
Loans raised during the year	12,752,412,592		4,303,638,958		11,478,063,745		890,163,549
Loans repaid during the year	(4,465,250,992)		(3,166,501,603)		(1,104,802,193)		(440,006,729)
Balance at the end of the year	11,117,022,936		2,829,861,336		11,117,022,936		743,761,384
Short-term borrowings	1,377,627,554		351,241,513		1,377,627,554		92,310,516
Long-term borrowings	9,739,395,382		2,478,770,553		9,739,395,382		651,450,868
Total borrowings
11,117,022,936		2,830,012,066		11,117,022,936		743,761,384

All the loans were raised to fund the Group's working capital requirements. Except for the long-term borrowings, which are unsecured, all short-term loans are secured against Group properties.

4.5 Contingent liabilities at reporting date in respect of;

	Guarantees given to trade creditors	100,000,000	380,500,000		100,000,000			100,000,000
	Langford Estates (envisaged reversal of land for debt swap)	32,000,000	121,760,000		32,000,000			32,000,000
	City of Harare rates	51,564,545	124,188,663		51,564,545			32,638,282
	Staff related provisions	1,271,276	4,837,204		1,271,276			1,271,276
		184,835,821	631,285,867		184,835,821			165,909,558
4.6	Capital commitments
	Authorised but not yet contracted	2,301,340,100	1,841,072,080		2,301,340,100			483,856,000
	The capital expenditure will be financed from the Company's own resources and existing borrowing facilities.
		INFLATION	ADJUSTED		HISTORICAL
		30 Sept. 2022	30 Sept. 2021		30 Sept. 2022	30 Sept. 2021
		ZWL	ZWL		ZWL	ZWL

1.0 General information

The principal activities of the Company, its subsidiaries and joint ventures (the Group) is the holding of investments, the letting of properties, the wholesaling and retailing of agro-inputs and general hardware commodities, the manufacture of stock feeds, the provision of animal health requisites, the operation of maize and wheat mills, crops and livestock farming, the development and management of real estate.

1. Basis of preparation
   The consolidated financial statements for the year ended 30 September 2022 have been prepared in accordance with the requirements of the Zimbabwe Stock Exchange Listing Requirements and in the manner required by the Zimbabwe Companies and Other Business Entities Act (Chapter 24:31) (COBE). The Listing Requirements require financial statements to be prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board ("IASB"). The Group's consolidated inflation adjusted financial statements have been prepared based on the statutory records that are maintained under the historical cost basis and are presented in ZWL.
   The principal accounting policies applied in the preparation of the Group consolidated financial statements are in terms of IFRS except for the non-compliance with IAS 21 (The Effects of Change in Foreign Exchange Rates), and its consequential impact on the inflation adjusted amounts determined in terms of IAS 29 (Financial Reporting in Hyperinflationary Economies) and have been applied consistently in all material respects with those of the previous consolidated annual financial statements.
2. IAS 21 (The Effects of Change in Foreign Exchange Rates)
   As reported in the Group's prior year financial statements, Government promulgated Statutory Instrument ("SI") 33 on 22 February 2019, giving legal effect to the reintroduction of the ZWL as legal tender and prescribed that for accounting and other purposes, certain assets and liabilities on the effective date would be deemed to be ZWL at the rate which was at par with the United States Dollar (USD). CFI Holdings Limited elected to comply with the requirements of Statutory Instrument 33 of 2019 (SI 33/19) which was issued on 20 February 2019. The 1:1 exchange rate between ZWL and USD prescribed by Statutory Instrument 33 of 2019 (SI 33/19) is not in accordance with the requirements of IAS 21. The entity was guided by Statutory Instrument 41 of 2019 (SI 41/19) which stated that in the case of inconsistency between local pronouncement and any international standard, the local pronouncement shall take precedence. Due to the impact of these technicalities, the Directors advise users to exercise caution in their use of these inflation adjusted Group financial statements.
   In light of this failure to fully comply with the requirements of IAS 21, the Group's Independent Auditors, Messrs Baker Tilly Chartered Accountants (Zimbabwe) issued a qualified opinion on the financial statements for the year ended 30 September 2022.
3. Application of IAS 29 (Financial Reporting in Hyperinflationary economies)
   These financial statements have been prepared in accordance with IAS 29 together with International Financial Reporting Interpretations Committee (IFRIC) 7 (Applying the Restatement Approach under IAS 29), as if the economy had been hyperinflationary from 1 October 2018. As noted in the audited financial statements for the years ended 30 September 2019, 2020 and 2021, the Group adopted the Zimbabwe Consumer Price Index ("CPI") as the general price index to restate transactions and balances. Appropriate adjustments and reclassifications, including restatements for changes in the general purchasing power of the Zimbabwe dollar and for the purposes of fair presentation in accordance with IAS 29 have been made in these financial statements to the historical cost financial information. Comparative amounts in the Group financial results have been restated to reflect the change in the general price index from 1 October 2018 to the end of the reporting period.

	Indices	Conversion factor
CPI as at 30 September 2022	12,716.28	1.0000
CPI as at 30 September 2021	3,341.99	3.8050
CPI as at 30 September 2020	2,205.32	5.7662

3.0 External Auditors' Opinion- for the year ended 30 September 2022

These abridged Group financial statements have been audited by the Group's external auditors, Baker Tilly Chartered Accountants (Zimbabwe), who have issued a Qualified Opinion. The qualification was a result of residual effects of non-compliance with IAS 21- The Effects of Changes in Foreign Exchange Rates. The auditor's report on the Group's financial statements, is available for inspection at the Company's registered office.

The engagement partner on the audit is Mr. Courage Matsa (PAAB Number 607).

Revenue
Retail	39,461,934,800		32,548,276,759		19,167,784,752			7,156,801,093
Farming	1,292,842,367		1,288,772,386		993,101,953			286,057,214
Milling	8,560,548,176		1,509,048,305		5,081,855,574			383,611,411
Head Office & Properties	54,194,599		40,917,560		49,630,811			7,544,421
	49,369,519,942		35,387,015,010		25,292,373,090			7,834,014,139
EBITDA
Retail	(2,017,485,596)		(784,325,586)		(5,553,176,233)			462,339,766
Farming	232,763,941		(143,883,244)		134,963,706			(54,706,326)
Milling	1,696,504,368		562,948,777		724,215,285			64,880,580
Head Office & Properties	(697,355,793)		792,489,245		(116,835,710)			70,382,422
	(785,573,081)		427,229,192		(4,810,832,952)			542,896,441
	INFLATION	ADJUSTED		HISTORICAL
	30 Sept. 2022		30 Sept. 2021		30 Sept. 2022	30 Sept. 2021
Segment assets	ZWL		ZWL		ZWL			ZWL
Retail	18,382,882,797		15,503,197,028		17,686,047,530			3,829,089,892
Farming	1,896,916,219		1,074,225,851		1,953,762,347			293,350,602
Milling	4,565,851,168		2,790,230,542		4,081,062,552			731,916,704
Properties & Head Office	6,298,248,552		1,939,031,509		3,294,543,047			334,600,494
	31,143,898,736		21,306,684,930		27,015,415,476			5,188,957,691
Segment liabilities
Retail	18,828,949,190		4,813,881,452		17,500,325,585			1,361,679,668
Farming	1,586,884,727		1,934,452,775		1,525,136,384			415,060,502
Milling	2,570,547,103		1,603,212,687		2,709,662,292			455,179,452
Properties & Head Office	1,479,410,388		2,151,878,942		683,698,179			365,751,492
	24,465,791,408		10,503,425,855		22,418,822,441			2,597,671,113

4.8 Impact of Covid-19 pandemic

In March 2020, the World Health Organisation (WHO) declared COVID-19 a global pandemic. The pandemic has significantly impacted global, domestic, and human economic activity as governments implement measures to mitigate the transmission of the virus. The full impact remains uncertain. The Board and management continue to closely monitor the situation and proffer appropriate measures in response. In particular, the Group keeps prioritizing the safety of its employees, consumers and products in the face of the ongoing pandemic.

4.9 Events after the reporting period

There were no significant adjusting or non-adjusting events after the reporting date at the time of issuing this press release.

Directors: I. V. Pasi (Group Chairman), S.D. Zinyemba (Deputy Group Chairman), S. N. Chibanguza (Acting Group Chief Executive Officer)*, C. Mutevhe (Acting Financial Director)*, A. Denenga, A. S. Hamilton (Alternate: R. L. Hamilton), Ms. P. Muzani * - Executive Director

Chartered Accountants

Celestial Office Park, Unit D

& H Block 1, Borrowdale

Road, Borrowdale, Harare

Zimbabwe

T: [phone], 369 737, 301 598, 301 537

[e-mail]

www.bakertilly.co.zw

Independent Auditor's Report

To the members of CFI Holdings Limited

Report on the Audit of the Inflation Adjusted Consolidated Financial Statements Qualified Opinion

We have audited the inflation adjusted consolidated financial statements of CFI Holdings Limited which comprise the consolidated statement of financial position as at 30 September 2022, and the consolidated statement of profit or loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the Group financial statements, including a summary of significant accounting policies and other explanatory notes.

In our opinion, except for the matters described in the Basis for Qualified Opinion section of our report, the inflation adjusted consolidated financial statements present fairly, the financial position of CFI Holdings Limited as at 30 September 2022, and its financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Companies and Other Business Entities Act (Chapter 24:31).

Basis for Qualified Opinion

Impact of prior year Non-Compliance with International Accounting Standard (IAS) 21- The Effects of Changes in Foreign Exchange Rates and International Accounting Standard (IAS) 8 - Accounting Policies, Changes in Accounting Estimates and Errors

The basis for qualification is due to misstatements contained in the opening balances from prior years. The misstatements were due to non-compliance with IAS 21- The effects of changes in Foreign exchange rates. CFI Holdings Limited elected to comply with the requirements of Statutory Instrument 33 of 2019 (SI 33/19) which was issued on 20 February 2019. The 1:1 exchange rate between ZWL and USD prescribed by Statutory Instrument 33 of 2019 (SI 33/19) is not in accordance with the

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requirements of IAS 21. The entity was guided by Statutory Instrument 41 of 2019 (SI 41/19) which stated that in the case of inconsistency between local pronouncement and any international standard, the local pronouncement shall take precedence.

The effects of misstatements due to non-compliance with IAS 21 on the prior year financial statements and opening balances have not been quantified.

As the prior year financial statements have not been restated in accordance with International accounting standards 8 "Accounting Policies, Changes in Accounting Estimates and Errors" (IAS 8), the misstatements on the prior years' income statement is still carried forward in the current retained

earnings balance.

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's Responsibilities for the Audit

of financial statements section of our report. We are independent of CFI Holdings Limited in accordance with International Ethics Standards Board for Accountants Code of Ethics for Professional Accountants (Parts A and B) (IESBA Code) and other independent requirements applicable to performing audits of financial statements in Zimbabwe. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the inflation adjusted consolidated financial statements of the current year. Key audit matters are selected from the matters communicated with those charged with governance, but are not intended to represent all matters that were discussed with them. In addition to the matters described in the Basis for Qualified Opinion section of our report, we have determined the matters described below to be the key audit matters. These matters were addressed in the context of our audit of the financial statements as a whole. Our opinion on the consolidated inflation adjusted financial statements is not modified with respect to any of the key audit matters described below, and we do not provide a separate opinion on these matters.

	Key Audit Matter	How our audit addressed the key audit
		matter
1.	Hyperinflation Accounting (High risk area
	and significant judgement)
	Following the Public Accountants and Auditors	We obtained an understanding of the CFI
	Board (PAAB) designation of Zimbabwe as	Holdings Limited process for identifying
	hyperinflationary economy, management also	hyperinflationary economies and evaluated
	evaluated and determined the economy of	the policy in relation to hyperinflation
	Zimbabwe to be hyperinflationary. CFI Holdings	accounting. Our audit procedures included,
	Limited applied the requirements of IAS 29 -	among others:
	Financial reporting in Hyperinflationary	● We assessed and tested the indicators
	Economies.
		of hyperinflation	on the	Zimbabwean
	Hyperinflationary accounting was determined to	economy	by corroborating these	with
	be a matter of most significance to the audit due
	industry	report	and	our	own
	to high risk and the significance of the balances
	understanding of the economy;
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and transactions, and the complexity

and

●

We recomputed and tested the

subjectivity relating to the application of the

hyperinflation

workings prepared

by

Standard.

management

by

evaluating

the

IAS 29 requires significant

judgments to

be

rationale

for

the economic

indicators

included

(such

as

the inflation

rate,

made by management

considering

the

cumulative

inflation

rate,

consumer

guidelines provided in IAS 29 are limited.

price indices from various sources).

The adoption of the Standard makes this a high

●

We

tested

the

source data

used

by

agreeing it to supporting schedules.

risk area, the accounting is prone to errors in

● We assessed the reasonability of the

calculations and application of the Standard.

assumptions used by comparing these

to

externally

available

industry,

financial and economic data; and;

●

We tested restatement of statement

financial position and income statement

items for compliance to the

requirements of IAS 29.

●

We assessed whether disclosures in

the

financial

statements appropriately

reflected the effects of the adoption of

IAS 29.

We found that the inflation adjusted

consolidated

financial

statements

have

been properly restated in terms of IAS 29.

Other Information

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

Report. Other information does not include the inflation adjusted financial statements and our auditor's report thereon.

Our opinion on the inflation adjusted consolidated 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 inflation adjusted consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the inflation adjusted financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement on this other information, we are required to report that fact. We have nothing to report in this regard.

Auditor's Responsibilities for the Audit of the Financial Statements

The objectives of our audit are to obtain reasonable assurance about whether the financial statements as a whole, are free from material misstatement, whether due to fraud or error, and to issue an auditor's

report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually

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