Innscor Africa : 2022 Annual Report

Annual Report 2022

Our Passion for Value Creation

"Self Funding Our Row crop requirements"

We are Growing our Contract Farming Initiatives towards achieving the minimum 40% of own production threshold set by Government.

VISION

Our vision is to improve the quality of life of the customers in our chosen target markets and thereby create and unlock value for all our stakeholders. We do this by bringing access to best value consumer staple goods at the lowest relative price.

MISSION

Innscor Africa Limited is a focused group of light manufacturing businesses which, together with various strategically integrated agricultural operations, produce a number of Zimbabwe's iconic brands in the consumer staple product space.

We manufacture consumer staple goods for the mass market through a managed, and where strategically appropriate, integrated portfolio of businesses which:

• benefit from being part of our Group
• have the ability of being lowest cost producers
• have the ability or potential to achieve scale
• have the ability to become market leaders

VALUES

• Passion for value creation
• Entrepreneurial spirit
• Leadership
• Quality in all we do
• Integrity
• Accountability
• Trust
• Collaboration

ONLINE

You can find this report and more information about Innscor Africa Limited online at www.innscorafrica.com and can download this report at https://www.innscorafrica.com/investor/financial-reporting/

Innscor Africa Limited Annual Report 2022

About Our Report

Innscor Africa Limited, is a Company listed on the Zimbabwe Stock Exchange

Contents

(ZSE), and presents its 30 June 2022 Annual Report. This 30 June 2022 report integrates both financial and non-financial information necessary to inform our

broad stakeholders on the overview of our economic, environmental and social performance, as well as prospects and strategy of the Group.

01

Overview

IFC Vision, Mission and Values IFC About Our Report

04

Governance

98	Empowerment of the
	Group's Employees

The report reflects our belief in strong corporate sustainable practices underpinning our quest for value creation for the benefit of our stakeholders and shareholders.

All references to a year refer to the Group's financial year which is 30 June, for instance 2022 refers to the financial year, starting 1 July 2021 and ending 30 June 2022.

Reporting Frameworks

The Group's consolidated annual inflation-adjusted financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and the requirements of the Companies and Other Business Entities Act (Chapter 24:31). In reporting non-financial information, the Group is guided by:

Global Reporting Initiatives ("GRI") Protocol

Listing Requirements of the Zimbabwe Stock Exchange ("ZSE") Zimbabwe standard ZWS ISO 26000: 2010 integrating, implementing and promoting socially responsible behaviour throughout the organisation, through its policies and practices and within its sphere of influence; identifying and engaging with stakeholders; and communicating commitments, performance and other information related to social responsibility

The National Code of Corporate Governance in Zimbabwe ("ZIMCODE")

Climate Change Disclosure Framework of the Carbon Disclosure Standards Board ("CDSB") guided by ISO 14064-65-66 Greenhouse gas ("GHG") quantification, reporting, verification, validation Business Reporting on Sustainable Development Goals ("SDGs"): Guide of GRI and United Nations Global Compact ("UNGC"): ISO 26000 and other relevant ISO standards.

Data and Assurance

Our Group's consolidated annual inflation-adjusted financial statements were audited by Messrs Deloitte & Touche Chartered Accountants (Zimbabwe) ("Deloitte") in accordance with International Standards of Auditing ("ISA"). The independent auditor's report on the financial statements is contained on page 180.

Sustainability Report Declaration

The sustainability information in this annual report was prepared using Zimbabwe standard ZWS ISO 26000:2010, the international ISO guidance standard adopted by Zimbabwe, providing the framework to integrate Social Responsibility ("SR") into the values and practices of the Group. It communicates the commitment, performance and relevant information on SR; a key component of sustainability.

The detailed sustainability initiatives conducted by the Group are available on https://www.innscorafrica.com/sustainable- development-goals-sdgs/.

Black Crystal Consulting, an independent sustainability reporting consultant, performed an independent review of this report and the information therein, assessed the actual performance through site visits, and provided third- party assurance that all considerations were taken into account to ensure that the report complies in all material aspects with provisions of the selected standard and linkage requirements.

A summary of the applicable United Nations Sustainable Development Goals ("SDGs") in relation to Innscor Africa Limited is also presented as part of this report.

The report reflects our belief in strong corporate sustainable practices underpinning our value creation ethos.

Forward-looking Statements

This report contains certain forward-looking statements. These statements are based on current estimates and projections by Innscor Africa Limited management using current available information. Future statements are not guarantees of future developments and results outlined therein.

Future Statements are dependent on a number of factors; they involve various risks and uncertainties; and they are based on assumptions that may not prove to be accurate. We do not assume any obligation to update the forward-looking statements contained in this report.

We would welcome your feedback on our reporting and any suggestions you may have in terms of what you would like to see incorporated in our future reports. To do so, please contact Andrew Lorimer or Tracey Stephens on email: [e-mail] or [e-mail] and

phone [phone]/496886.

Addington Chinake	Julian Schonken
Chairman	Group Chief Executive Officer

1. History and Evolution of the Group

1. Group Structure and Profile

1. Our Products and Brands

1. Five Year Performance Highlights

1. Chairman's Statement and Review of Operations

02

Group Contract

Farming

Initiatives

22 PHI Farming

24 Profeeds Broiler and Layer Out-Grower Schemes

03

Significant Business

Units Investments

and Corporate

Social Responsibility

Initiatives

1. Innscor Africa Limited

1. National Foods Limited

1. Profeeds and Aquafeeds

1. Nutrimaster

1. Irvine's

1. Colcom

1. AMP Meats

1. Probottlers

1. Probrands

1. Prodairy

1. Mafuro Farming

1. Natpak and Alpha Packaging

99	Corporate Governance
104	Board of Directors
106	Directorate and Management
110	Risk Management

05

Sustainability

in Our Value

Chain

112 Sustainability Strategy

and Governance

1. Sustainability Achievements

1. Sustainable Development Goals (SDGs)

1. Sustainability in Our Value Chain

06

Sustainability Within

Our Businesses

1. National Foods Limited

1. Baker's Inn

1. Profeeds and Nutrimaster

1. Irvine's

1. Colcom

1. AMP Meats

1. Probottlers

1. Probrands

1. Prodairy

1. Mafuro Farming

1. Natpak

1. Alpha Packaging

1. Providence Human Capital

1. Business Association Memberships
2. Individual Business Awards

Annual Financial

Statements

178 Directors' Responsibility and Approval

of Financial Statements

1. Company Secretary's Certification
2. Report of Directors
3. Independent Auditors' Report

1. Group Statement of Profit or Loss and Other Comprehensive Income
2. Group Statement of Financial Position
3. Group Statement of Changes in Equity

1. Group Statement of Cash Flows
2. Notes to the Financial Statements

1. Company Statement of Financial Position

ANNEXURES

1. Glossary of Terms
2. Shareholders' Analysis
3. Notice to Members

1. Company Calendar and Corporate Information
2. Form of Proxy
   26th Annual General Meeting

1

Innscor Africa Limited Annual Report 2022

Overview

01

Overview

04 History and Evolution of the Group

06 Group Structure and Profile

08 Our Products and Brands

10 Five Year Performance Highlights

12 Chairman's Statement and

Review of Operations

Machine operated by Gift Jena

Innscor Africa Limited Annual Report 2022

History and Evolution of the Group

2016

2017

2022

1987

First Quick Service Restaurant (QSR) branded as Chicken Inn opened on Speke Avenue in Harare.

1993

• Acquired Astra Crocodile Ranching
  & Shearwater Adventures.
• Opened Distribution Group Africa (DGA) and started securing international agencies.

1999

• Acquired Spar Eastern Region and opened SPAR branded Corporate Stores in Harare.

• Secured Steers franchise and opened the first Steers outlet at Speke Avenue, Harare.

2000

• Concluded an Innscor-Exxon Mobil deal to open Innscor branded QSR outlets on Exxon Mobil forecourts across Africa.

2002

• Opened QSR outlets in Nigeria and Senegal on Exxon Mobil forecourts.
• Opened franchised QSR outlets in Malawi and Angola.
• Opened the first SPAR Corporate store in Zambia.

2008

• Invested into a new Timber processing plant for our Bakaya Hardwoods business.
• A new SPAR branded corporate store opened in Chawama, Zambia.

2007

• Acquired a new biscuit line for the Iris Biscuit business.
• New packaging machine purchased for the Snacks business.
• Major refurbishment of the Bakery line at Simon Mazorodze Road Site, Harare.
• Opened 2 additional SPAR stores in Lusaka and Livingstone, with a total of 6 stores now in operation in Zambia.
• Increased the number of franchised QSR outlets in the Nigerian market.

2009

• Acquired shareholding in Irvine's Zimbabwe (Private) Limited, a leading Zimbabwean poultry producer (www.irvineschicken.co.zw).

2010

Unbundled through a dividend in-specie on a one to one basis, the crocodile ranching operation and listed this separately on the ZSE as Padenga Holdings Limited (PHL.zw) (www.padenga.com).

• Acquired automotive retail business Transerv.
• Commenced the reorganisation of the Group into a light manufacturing business.
• Disposed the Group's interest in non-core SPAR Corporate Retail stores, Distribution operations and Tourism operations of Shearwater Adventures.
• Acquired a non-controlling interest in an FMCG manufacturing and downpacking of basic commodities business, Probrands (Private) Limited, (www. probrands.co.zw).
• Unbundled Speciality Retail businesses through a dividend in-specie on a one to one basis and listed it separately on the ZSE as Axia Corporation Limited (AXIA.zw). (www.axiacorpltd.com).
  The following businesses comprised the unbundled Axia: TV Sales & Home, Transerv and Distribution Group Africa (DGA)
• Consolidated the Group's light manufacturing business into key categories.

• Disposed SPAR Zambia Limited and The River Club.

2018

• Acquired remaining non- controlling interest in Colcom Holdings Limited and de-listedthe company. (www.colcom.co.zw).
• Commenced UHT milk production at Prodairy (Private) Limited.
  (www.prodairy.co.zw)

2021

• Invested in Financial Services - MyCash Financial Services.

• Invested in fertiliser blending plant - 'Nutrimaster' through the Profeeds business.

• Invested in a potato grading plant under Sabithorn (Private) Limited.

• Invested in a sorghum beer manufacturing plant under The Buffalo Brewing Company.

• Increased equity in Mafuro Farming.

1995

Acquired and commissioned a mechanised bread plant in Harare.

1998

• Secured Nando's Franchise and opened the first Nando's store in Avondale, Harare.

• Acquired Capri Corporation Limited and reverse-listed Innscor on the ZSE (market cap US$70m).
• Opened QSR outlets namely Chicken Inn, Pizza Inn, Bakers Inn and Creamy Inn in Zambia, Ghana, Kenya, Tanzania, Uganda and Mozambique.

2003

Acquired shareholding in National Foods Holdings Limited (NTFD.zw), a leading supplier of Zimbabwean FMCGs (www.nationalfoods.co.zw).

2004

Acquired shareholding in Colcom Holdings Limited (COLC.zw), a leading manufacturer of pork products in Zimbabwe (www. colcomfoods.com).

2006

• Increased equity in Colcom Holdings Limited (COLC.zw) to 79.64% and started consolidating Colcom into Innscor results.

2005

• Commenced construction of a third crocodile farm in Kariba.
• Expanded QSR footprint into 12 African countries, 7 company operated and 5 franchised.

2011

• Acquired Shepperton Road property in Harare, with space to accommodate 5 breadlines and started consolidation of Bakery operations onto this site.
• Secured Galito's Franchise.

2013

• Franchised Chicken Inn, Pizza
  Inn, Creamy Inn and Galito's branded QSR outlets in Swaziland and Lesotho.
• Grew QSR network in the Zimbabwean, Kenyan & Zambian markets.
• Opened QSR outlets in the Democratic Republic of Congo (DRC).

2015

• Acquired a non-controllinginterest in a leading stockfeeds business, Profeeds (Private) Limited (www.profeeds.co.zw).

• Unbundled QSR operations through a dividend in-specie and listed it separately on the ZSE as Simbisa Brands Limited (SIM.zw),
  (www.simbisabrands.com).
  The following main QSR brands were transferred to Simbisa as part of the unbundling: Chicken Inn, Pizza Inn, Creamy Inn, Nando's, Baker's Inn, Steers, Galito's and other QSR brands.

2019

• Restructure of Probrands (Private) Limited.
• Acquisition of 50.64% interest in Probottlers (Private) Limited.
  (www.probottlers.co.zw).

• Restructured Associated Meat Packers (Private) Limited (AMP) out of Colcom.
• Concluded the dilution of Innscor Appliance Manufacturing (Private) Limited to 25.05%. ("Capri")
• Disposal of interest in Freddy Hirsch (Private) Limited.
• Commenced production of condiments.

2020

• Set target of 100 000 hectares under irrigation, to meet the Country's given requirements.

• Restructure of Baker's Inn Bakeries into Manufacturing, Distribution & Wholesale divisions.
• Disposal of remaining interest in Skitap (Private) Limited T/A Innscor Appliance Manufacturing (Private) Limited "Capri".
• Disposal of our interest in Pure Oils (Private) Limited.

4

5

Innscor Africa Limited Annual Report 2022

Group Structure and Profile

			Mill-Bake								Protein		Head Office Services								Other Light Manufacturing
37.45%	100%	49%	49%	100%	50.1%	50.64%		39.2%	50.1%		58.33%		60%	50.2%

National

Bread

Profeeds

Irvine's

Colcom

Associated

Probottlers

Probrands

Prodairy

Natpak

Zando

The Buffalo Brewing

Company (Private)

Foods Holdings

Division

(Private) Limited

Zimbabwe

Division

Meat Packers

(Private) Limited

(Private) Limited

(Private) Limited

(Private) Limited

(Private) Limited

Limited

Limited

(Associate Company)

(Private) Limited

(Private) Limited

(Associate Company)

National

Shepperton

47 x Retail Stores

Feedmill

Colcom Holdings

Texas Meats

Keshelmar

78.33%

100%

100%

23 x Retail Stores

50% (Private) Limited

Foods Limited

Road Plant Harare

(Division)

(Division)

Limited

(Division)

3x Texas Meat Market

(Associate Company)

Alpha

Saxin

National

1 x Feed

Commercial Hatchery

Triple C Pigs

Silkchin

Mafuro

Packaging

100% Enterprises

100%

Foods Properties

Lennard

Factory (Division)

(Division)

(Division)

(Private) Limited

(Private) Limited

50.01% Trading

80%

Farming

Limited

Bread Bulawayo

(Pvt) Ltd

(Private) Limited

(Division)

(Associate Company)

Sabithorn

Aquafeeds

Breeders

Colcom

54% (Private) Limited

Breathaway

66%

(Private)

(Division)

Foods Limited

Intercane

100%

Food Caterers

Bakers Inn

Limited

(Pvt) Ltd

(Private) Limited

100%

Logistics

50.1%

50%

49.89%

Chicken Stores

(Pvt) Ltd

20 Texas

Nutrimaster

Layers (Division)

Botswana Milling

50%

(Private)

100%

& Produce

Superlinx

Limited

Broilers

Company

(Private)

50%

and Abattoir

(Private) Limited

Limited

(Division)

Red Seal

100%

Manufactures

Innscor Africa Limited is a manufacturer of consumer

(Private) Limited

Treasury Division

IT Services

Payroll & Wellness

Group Properties

Other Head Office

Paperhole Investments

Afrigrain

National

Services

Division

Shared Services

(Private) Limited

Trading Limited

staple and durable goods for the mass market, through

(Associate Company)

(Associate Company)

Foods Logistics

a managed, and where strategically appropriate,

50%

(Pvt) Ltd

(Associate Company)

integrated portfolio of businesses.

50%

60%

The Group commands leading market shares across a range of

Syntegra Solutions

Rafferty Investments

Nutrimaster

its categories and over the years has grown organically, through

50%

(Private)

(Private) Limited

(Private) Limited) t/a

acquisition and by venturing into new categories.

Limited

Providence Human Capital

Tax

IL Integrated

1 x Hospital

Internal

50%

30%

Agric (Private)

The structure of the Group and the effective shareholding

Limited

5 x Industrial

Legal

by Group Companies in the main operating subsidiaries and

Clinics

associates is illustrated herewith.

MyCash

40%

Financial Services

(Private) Limited

6

7