Zimplow : HY22 Results & Audit Review

Reviewed Interim

Condensed Group Results

For the Six Months Ended

30 June 2022

The Directors report the following reviewed interim condensed results in respect of the Group and Company's operations for the six months ended 30 June 2022

Chairman's Statement

Dear Stakeholders

It gives me great pleasure, once again, to present the Zimplow Group's half year inflation adjusted financial statements to our

stakeholders. The Group delivered a resilient performance driven by Powermec, Scanlink, Farmec and CT Bolts, the business units that delivered profitability and volumes growth. The Group once again demonstrated the strength in its diversified structure to achieve both revenue and profitability growth.

Operating Environment

There has been numerous global challenges affecting Zimbabwe in general and the key market segments in which the Group operates in particular, such as erratic rainfall in the 2021/22 season, the geo-political conflict in Eastern Europe as well as the

aftermaths of COVID-19 pandemic amongst the various factors. Such challenges have brought about increases in supply lead times and costs of equipment as well as various inputs required in agriculture, mining, constructions and automotive sectors. On the positive end, the increase in prices for minerals and various commodities has also been an incentive for capacity expansion for various mines and the respective value chains which supply the same raw materials.

Macro-economically, the delay in remittance of foreign currency awarded on the RBZ auction market further increased the lead times and therefore working capital cycles that had been substantially affected by the COVID-19pandemic. The measures

to reduce money supply, such as the suspension of lending in May dampened demand as most agricultural contractors decided to suspend extension of credit to the out-grower schemes in agriculture. In addition, the interest rate spike that followed discouraged bank borrowings which the Group has traditionally leveraged on to address the increased appetite for cash given the long working capital cycles.

The producer prices obtaining at the Grain Marketing Board have so far discouraged deliveries to the primary off-taker

especially on the back of lower than expected 2021/22 yields and increases in inputs costs. On the mining and infrastructure segment, the delay in settling road contractors remain a bottleneck in the spending patterns of contractors both on fleet maintenance and replacement. Despite the various challenges, the Group has remained committed to finding solutions in

order to support its stakeholders in the quest to be the right partner to equipment users in the segments the Group operates.

Operational Performance

The Group continues to leverage on its diversified structure to deliver encouraging and strong performances despite the

challenges prevailing in the operating environment.

Agriculture Equipment

Farmec - Large Scale Farming Equipment

Farmec continue to press ahead with its strategy to deliver high tech equipment to our customers to support their cause

for increased productivity. During the period under review, Farmec had a strong volume performance with tractors at 22% ahead of prior year, and tractor drawn implements 3% up on the prior period. Efforts to improve throughput and capacity in

the workshops through work studies resulted in a 73% growth in hours sold when compared to the same period last year.

Mealie Brand - Small Scale Farming Equipment

The dry spell that persisted in the second half of the 2021/22 season had an impact on the demand for Mealie Brand products due to reduced yields by users of these products who are ordinarily dry land farmers. Animal drawn implements volumes declined by 26% against the comparative period. The spares volumes for the local market were however pleasing with a 35% growth against same period last year as farmers sought to apply the reduced disposal incomes on equipment maintenance rather than replacement. The drive to expand the business unit's capacity and product range remains on course as evidenced by the launch of the 2 Wheel Tractor range of products.

Logistics & Automotive

Scanlink - Trucks & Buses

The improved supply chain dynamics with Scania had a remarkable impact on our business as volumes for trucks and buses grew by 33% and 100% compared to same period last year. In 2021, Scanlink built a strong base in aftersales performance which has been sustained this year as service hours were level against the comparative period. With the supply chain unlocked,

and supported by a strong order book going into the second half of the year, Scanlink is poised for a positive performance this financial year.

Trentyre - Tyres

Trentyre has to a larger extent now weathered disruptions in the supply chain caused by COVID-19 and staff turnover. The

adopted strategies as well as culture alignment is beginning to yield returns. However due to the stock supply gaps in Q1, new tyre sales were 33% down on prior year. On the other hand, retreading volumes grew positively by 61% compared to the previous year driven by new processes, technologies and equipment installed at the factory to enhance capacity. The unit will seek to stabilize the sales of new tyres as we enter the second half of the year.

Mining & Infrastructure Equipment
Powermec - Alternative Power
Powermec recorded an impressive performance buoyed by the continued improvement in reputation in service delivery by
the business unit given the instability on the power grid. The unit recorded a 62% increase in service hours sold compared to
prior year and sold 34% more power in KVA than 2021.
CT Bolts - Fasteners
CT Bolts sold 12% more tonnage compared to 2021 same period under review. The focus remains on establishing relationships
based on quality and strength of our product and services.
Barzem - Earth Moving Equipment
The 6 months period under review has been challenging for Barzem. Firstly, the business unit experienced delays in the
remittance of foreign payments via the auction system causing parts and equipment orders to be delayed or cancelled. The
second quarter then began with a notice of termination of the CAT distributorship which is coming into effect on 1st October
2022. The business unit has therefore been seized with value preservation actions in preparation for Zimplow to transition to
a new supplier of earth moving equipment albeit under a new corporate identity.
Financial Performance	0121
The Group recorded growth in revenue of 24% compared to prior year driven the by positive operational performance and

volumes growth in key segments of the Group. Profitability was 64% ahead of prior year supported by a 12 fold increase in exchange and fair value gains.

The Group remains focused on realigning the working capital position given the need to rely on internal resources arising from increased lead times, delayed remittance of auction funds and reduced demand following the liquidity squeeze driven

by monetary policy measures. The Group is geared on strengthening its balance sheet position by reducing foreign liabilities, and repositioning the Group to deliver earth moving equipment through a new Original Equipment Manufacturer (OEM) or

supplier.

Outlook

The difficult trading environment continues to put pressure on our customers who in turn are focusing on value preservation strategies instead of capacity expansion. The forecast of a La Nina season offers the much needed optimism as we enter the

2022/23 season.

The Group remains positive in its strategy execution to deliver a stronger Zimplow as the year 2022 closes. In addition, the Group is pushing ahead on its commitment to the mining and infrastructure equipment sector and will soon introduce a new corporate brand to service the market's earth moving equipment needs in line with our customer's expectations.

Dividend

Given the Group's focus on realigning the company's structure to a new OEM for earth moving equipment, realignment of working capital cycles as well as the need to reduce exposures to borrowings and foreign liabilities following the monetary policy measures, the board has decided not to declare an interim dividend.

Acknowledgements

I would like to extend my appreciation to Management and all the employees for their continued effort to deliver encouraging and resilient results despite the challenging trading environment. I would also like to thank my fellow Board members as well as our various stakeholders for their continued support to guide Zimplow into the future.

G. T. Manhambara

Chairman

30 September 2022

Auditor's Statement

The Group's inflation adjusted interim financial statements for the period ended 30 June 2022 from which these abridged results have been extracted have been reviewed by the Group's external auditors, Ernst & Young Chartered Accountants

(Zimbabwe).

A qualified review conclusion has been issued in respect of non-compliance with International Accounting Standard 21- The Effects of Changes in Foreign Exchange Rates; International Accounting Standard 8 - Accounting Polices, Changes in Accounting Estimates and Errors; International Financial Reporting Standard 13 - Fair Value Measurement and; International Accounting Standard 29 - Financial Reporting in Hyperinflationary Economies.

The auditor's review conclusion on the Group's inflation adjusted interim financial statements is available for inspection at the Company's registered office. The engagement partner on the audit resulting in this independent auditor's review

conclusion is Walter Mupanguri (PAAB Number 367).

Interim Condensed Consolidated Group and Company Statement of Financial Position as at 30 June 2022

			GROUP							COMPANY
		Reviewed	Unaudited					Reviewed	Unaudited
		Inflation Adjusted	Historical					Inflation Adjusted	Historical
		30-Jun-22	31-Dec-21	30-Jun-22	31-Dec-21					30-Jun-22	31-Dec-21	30-Jun-22	31-Dec-21
	Notes	ZWL$	ZWL$	ZWL$	ZWL$			Notes	ZWL$	ZWL$	ZWL$	ZWL$
ASSETS									ASSETS
Non-current assets									Non-current assets
Property, plant and equipment		9,133,187,247	4,007,222,506			8,045,539,944	1,599,114,730		Property, plant and equipment			2,276,046,260	1,284,842,496			2,084,205,162	536,154,140
Intangible assets		1,905,694	6,599,852			74,585	74,585		Intangible assets			1,905,694	6,599,852			74,583	74,583
Investment property		499,770,000	279,360,526			499,770,000	127,610,000		Investment property			1,102,800,000	356,463,243			1,102,800,000	162,830,000
Deferred tax		-	-			-	5,874,175		Investment in subsidiaries			3,267,237,765	3,267,237,765			784,179,427	784,179,427
Long term receivables		443,785,849	450,358,130			443,785,849	205,720,550		Right of use assets			-	10,636,959			-	989,993
Goodwill		1,552,090,093	1,752,558,394			578,777,779	636,712,769		Long term receivables			352,218,674	390,885,928			352,218,674	178,554,050
Total non-current assets		11,630,738,883	6,496,099,408			9,567,948,157	2,575,106,809		Total non-current assets			7,000,208,393	5,316,666,243			4,323,477,846	1,662,782,193
Current assets									Current assets
Inventories		7,337,205,270	5,275,802,042			2,611,799,740	1,208,237,449		Inventories			4,440,797,335	2,601,504,913			1,723,947,897	757,619,739
Trade and other receivables		1,264,886,150	1,639,626,940			1,264,886,150	748,970,504		Inter company receivables			43,811,908	83,699,321			43,811,908	38,233,284
Prepayments		578,409,573	1,080,409,331			478,097,465	431,321,134		Trade and other receivables			373,258,304	287,630,578			373,258,304	131,387,704
Investment in financial assets		79,913	174,943			79,913	79,913		Prepayments			315,292,688	717,111,464			297,868,530	273,211,449
Cash and bank balances		1,773,824,602	3,109,449,839			1,773,824,602	1,420,375,670		Investment in financial assets			79,913	174,943			79,913	79,913
Total current assets		10,954,405,508	11,105,463,095			6,128,687,870	3,808,984,670		Cash and bank balances			844,223,021	676,738,233			844,223,021	309,129,451
Total assets		22,585,144,391	17,601,562,503			15,696,636,027	6,384,091,479		Total current assets			6,017,463,169	4,366,859,452			3,283,189,573	1,509,661,540
EQUITY AND LIABILITIES									Total assets			13,017,671,562	9,683,525,695			7,606,667,419	3,172,443,733
								EQUITY AND LIABILITIES
Equity
Issued share capital		8,561,843	8,561,843			137,832	137,940		Equity
Share premium		4,809,960,342	4,809,960,342			1,070,311,150	1,070,311,042		Issued share capital			8,561,843	8,561,843			137,832	137,940
Revaluation reserve		4,276,517,621	971,092,475			6,115,234,738	660,254,837		Share premium			4,809,960,342	4,809,960,342			1,070,311,151	1,070,311,043
Capital reserve		(17,206,923)	(17,206,923)			(194,451)	(194,451)		Revaluation reserve			1,305,990,622	517,350,713			1,584,633,641	387,151,381
Change in ownership reserve		(80,013,482)	(80,013,482)			(904,212)	(904,212)		Capital reserve			(17,206,923)	(17,206,923)			(194,451)	(194,451)
Accumulated profit		4,010,794,260	2,992,299,220			2,068,422,305	1,447,144,036		Accumulated profit			3,639,172,624	1,984,172,333			2,570,220,622	802,421,514
Attributable to holders of the parent		13,008,613,661	8,684,693,475			9,253,007,362	3,176,749,192		Attributable to holders of the parent			9,746,478,508	7,302,838,308			5,225,108,795	2,259,827,427
Non-controlling interests		1,571,057,999	1,115,098,259			901,181,192	155,150,629		Total equity			9,746,478,508	7,302,838,308			5,225,108,795	2,259,827,427
Total equity		14,579,671,660	9,799,791,734			10,154,188,554	3,331,899,821
									Non-current liabilities
Non-current liabilities									Deferred tax liabilities			1,480,065,855	640,915,505			722,452,631	149,680,241
Deferred tax liabilities		3,013,074,355	1,479,413,046			710,951,025	203,589,906		Total non-current liabilities			1,480,065,855	640,915,505			722,452,631	149,680,241
Total non-current liabilities		3,013,074,355	1,479,413,046			710,951,025	203,589,906
									Current liabilities
Current liabilities									Trade and other payables			659,663,350	308,237,110			679,931,401	140,800,629
Trade and other payables		3,352,708,789	4,277,319,525			3,352,708,791	1,953,850,650		Provisions			20,268,051	21,087,913			-	9,632,817
Provisions		92,838,425	47,842,888			92,838,425	21,854,309		Short term borrowings	3		160,984,039	188,697,910			160,984,039	86,195,930
Short term borrowings	3	321,365,446	337,457,200			321,365,446	154,148,168		Customer deposits			433,850,591	738,315,338			302,058,084	305,477,485
Customer deposits		916,412,163	1,034,698,904			755,738,932	433,234,941		Lease liabilities			-	3,321,984			-	1,517,460
Current tax liabilities		309,073,553	625,039,206			308,844,854	285,513,684		Current tax liabilities			516,361,168	480,111,627			516,132,469	219,311,744
Total current liabilities		4,992,398,376	6,322,357,723			4,831,496,448	2,848,601,752		Total current liabilities			1,791,127,199	1,739,771,882			1,659,105,993	762,936,065
Total equity and liabilities		22,585,144,391	17,601,562,503			15,696,636,027	6,384,091,479		Total equity and liabilities			13,017,671,562	9,683,525,695			7,606,667,419	3,172,443,733

DIRECTORS: G.T. Manhambara (Chairman), T. Johnson, V. Nyakudya*, L. Kennedy, B.N. Kumalo, K. Patel, G. Pio, M. Davis (*Executive)		1

Reviewed Interim

Condensed Group Results

For the Six Months Ended

30 June 2022

The Directors report the following reviewed interim condensed results in respect of the Group and Company's operations for the six months ended 30 June 2022

Interim Condensed Consolidated Group and Company Statement of Profit or Loss and Other Comprehensive Income - For the Half Year ended 30 June 2022

					GROUP							COMPANY
				Reviewed	Unaudited					Reviewed	Unaudited
				Inflation Adjusted	Historical					Inflation Adjusted	Historical
	Notes	30-Jun-22	30-Jun-21	30-Jun-22	30-Jun-21			Notes	30-Jun-22	30-Jun-21		30-Jun-22	30-Jun-21
				ZWL$	ZWL$	ZWL$	ZWL$					ZWL$	ZWL$		ZWL$	ZWL$
Sales of goods				5,479,149,413	4,771,713,360			3,611,739,325	1,472,126,637		Sales of goods			3,308,045,216	2,677,165,170				2,229,306,110	822,108,793
Rendering of services				513,376,672	56,046,680			345,920,809	78,810,891		Rendering of services			280,273,529	32,940,149				192,406,776	48,696,487
Investment property rental income				13,781,813	11,709,970			9,281,265	1,732,283		Investment property rental income			23,671,875	-				-	-
Revenue	4			6,006,307,898	4,839,470,010			3,966,941,399	1,552,669,811		Revenue	4		3,611,990,620	2,710,105,319				2,421,712,886	870,805,280
Cost of sales				(3,023,238,476)	(2,979,649,949)			(1,713,922,465)	(927,559,825)		Cost of sales			(1,809,166,565)	(1,709,056,336)				(970,660,450)	(465,891,778)
Gross profit				2,983,069,422	1,859,820,061			2,253,018,934	625,109,986		Gross profit			1,802,824,055	1,001,048,983				1,451,052,436	404,913,502
Other operating income				1,505,061,696	122,633,297			1,347,588,593	39,233,825		Other operating income			1,460,769,068	82,813,621				1,477,309,650	26,796,711
Selling and distribution expenses				(95,246,762)	(66,808,517)			(36,162,643)	(17,393,383)		Selling and distribution expenses			(74,012,268)	(53,529,480)				(37,526,304)	(12,838,945)
Administrative expenses				(2,589,168,949)	(1,071,366,430)			(2,416,314,791)	(331,858,881)		Administrative expenses			(685,648,986)	(687,206,271)				(565,987,457)	(206,672,399)
Other operating expenses				(848,430,298)	(180,131,410)			(26,292,387)	(42,591,749)		Other operating expenses			(160,092,070)	(148,694,042)				(17,341,461)	(32,395,720)
Allowance for expected credit losses				(91,367,699)	27,970			(91,367,699)	9,593		Allowance for expected credit losses			(12,931,704)	-				(3,787,103)	-
Monetary gain				918,474,907	127,684,613			-	-		Monetary gain			258,752,868	53,104,971				-	-
Operating profit				1,782,392,317	791,859,584			1,030,470,007	272,509,391		Operating profit			2,589,660,963	247,537,782				2,303,719,761	179,803,149
Finance costs				(23,547,972)	(533,233)			(14,826,023)	(161,704)		Finance costs			(17,757,724)	(3,732,348)				(9,060,381)	(690,082)
Finance income				958,827	485,038			902,093	154,818		Finance income			82,006	318,019				52,939	101,962
Profit before tax				1,759,803,172	791,811,389			1,016,546,077	272,502,505		Profit before tax			2,571,985,245	244,123,453				2,294,712,319	179,215,029
Income tax expense				(916,705,398)	(125,882,756)			(246,177,802)	(45,143,428)		Income tax expense			(916,984,955)	(113,713,736)				(528,608,197)	(41,883,689)
Profit for the year				843,097,774	665,928,633			770,368,275	227,359,077		Profit for the year			1,655,000,290	130,409,717				1,766,104,122	137,331,340
Other comprehensive income											Other comprehensive income
Other comprehensive income that will											Other comprehensive income that will
not be reclassified to profit or loss											not be reclassified to profit or loss
Revaluation of plant, land and buildings net of tax				3,793,127,890	-			5,991,592,093	151,487,560		Revaluation of plant, land and buildings net of tax			788,639,909	-				1,197,397,043	-
Total other comprehensive income											Total other comprehensive income
for the year, net of tax				3,793,127,890	-			5,991,592,093	151,487,560		for the year, net of tax			788,639,909	-				1,197,397,043	-
Total comprehensive income for the year				4,636,225,664	665,928,633			6,761,960,368	378,846,637		Total comprehensive income for the year			2,443,640,199	130,409,717				2,963,501,165	137,331,340
Profit for the year attributed to:											Profit for the year attributed to:
Owners of the parent				1,018,495,039	578,677,290			874,737,037	192,543,001		Owners of the parent			1,655,000,290	130,409,717				1,766,104,122	137,331,340
Non controlling interests				(175,397,265)	87,251,343			(104,368,762)	34,816,076		Total comprehensive profit			1,655,000,290	130,409,717				1,766,104,122	137,331,340
				843,097,774	665,928,633			770,368,275	227,359,077
Total comprehensive profit											for the year attributable to:
for the year attributable to:											Owners of the parent			2,443,640,199	130,409,717				2,963,501,165	137,331,340
Owners of the parent				4,323,920,185	578,677,290			6,236,231,297	269,801,175		Earnings per share			2,443,640,199	130,409,717				2,963,501,165	137,331,340
Non controlling interests				312,305,479	87,251,343			525,729,071	109,045,462
				4,636,225,664	665,928,633			6,761,960,368	378,846,637		Basic earnings per share			4.80	0.55				5.13	0.58
Earnings per share											Diluted earnings per share			4.80	0.55				5.13	0.58
Basic earnings per share				2.96	2.43			2.54	0.81		Headline earnings per share			4.80	0.57				5.12	0.59
Diluted earnings per share				2.96	2.43			2.54	0.81		Diluted Headline earnings per share			4.80	0.57				-	-
Headline earnings per share				2.96	2.45			2.53	0.82
Diluted Headline earnings per share				2.96	2.45			2.53	0.82

Interim Condensed Consolidated Group and Company Statement of Cash Flows - For the Half Year ended 30 June 2022

		GROUP						COMPANY
	Reviewed	Unaudited			Reviewed	Unaudited
	Inflation Adjusted	Historical				Inflation Adjusted	Historical
	30-Jun-22	30-Jun-21	30-Jun-22	30-Jun-21			30-Jun-22	30-Jun-21	30-Jun-22	30-Jun-21
	ZWL$	ZWL$	ZWL$	ZWL$			ZWL$	ZWL$	ZWL$	ZWL$
Cash flows from operating activities								Cash flows from operating activities
Operating profit before tax	1,759,803,172	791,811,389			1,016,546,077	272,502,505		Operating profit before tax	2,571,985,245	244,123,453			2,294,712,319	179,215,029
Adjusted to reconcile profit before tax to net cash flows:								Adjusted to reconcile profit before tax to net cash flows:
Depreciation of property plant and equipment								Depreciation of property plant and equipment
and amortisation of intangible assets	124,532,307	262,967,233			64,412,414	39,249,694		and amortisation of intangible assets	112,276,319	86,031,090			51,824,519	31,433,645
Net fair value adjustments	(220,409,474)	-			(48,962,688)	-		Net fair value adjustments	(746,336,757)	-			(939,970,000)	-
Net unrealised foreign exchange differences	(887,352,473)	(28,902,330)			(4,088,634)	(15,417,222)		Net unrealised foreign exchange differences	(618,660,507)	(28,888,492)			(4,088,634)	18,697,761
Interest received	(958,827)	(364,187)			(902,093)	(154,818)		Interest received	(82,006)	(318,019)			(52,939)	(101,962)
Interest paid	23,547,972	400,374			9,060,381	690,082		Interest paid	17,757,724	3,732,348			9,060,381	690,082
Movement in provisions	44,995,537	133,338,109			(19,358,506)	64,189,285		Movement in provisions	(819,862)	2,194,400			10,635,233	2,158,436
(Profit)/loss on disposal of property, plant and equipment	8,511,006	7,892,199			(2,778,071)	3,383,725		(Profit)/loss on disposal of property, plant and equipment	(344,954)	7,892,199			(860,619)	3,383,725
Working capital changes	852,669,220	1,167,142,787			1,013,928,880	364,443,251		Working capital changes	1,335,775,202	314,766,979			1,421,260,260	235,476,716
(Increase) in Inventories	(2,061,403,228)	(522,836,212)			(1,403,562,291)	(336,144,851)		(Increase) in Inventories	(1,839,292,422)	(441,578,327)			(916,328,158)	(260,392,382)
Decrease/(Increase) in trade and other receivables	374,740,790	(35,513,695)			(753,980,945)	(49,159,504)		(Increase) in trade and other receivables	(85,627,726)	(34,408,064)			(415,535,224)	(20,606,488)
Decrease/(Increase) in prepayments	501,999,758	183,526,840			(46,776,330)	26,287,954		Decrease/(Increase) in prepayments	401,818,776	176,379,385			(74,657,080)	23,413,625
(Decrease)/Increase in customer deposits	(118,286,741)	161,362,987			322,503,992	258,486,626		(Decrease)/Increase in customer deposits	(304,464,747)	187,469,046			(3,419,401)	109,477,067
(Decrease)/Increase in trade and other payables	(924,610,736)	(180,037,624)			1,488,189,359	(67,543,404)		Increase/(Decrease) in intergroup balances	39,887,413	95,503			(5,578,623)	1,272,749
	(1,374,890,937)	773,645,083			620,302,665	196,370,072		(Decrease)/Increase in trade and other payables	351,426,240	104,392,186			518,862,722	30,428,793
Interest received	958,827	364,187			902,093	154,818				(100,477,264)	307,116,708			524,604,496	119,070,080
Interest paid	(23,547,972)	(400,374)			(9,060,381)	(690,082)		Interest received	82,006	238,782			52,939	101,962
Income tax paid	(18,560,421)	(42,800,390)			(15,052,932)	17,214,813		Interest paid	(17,757,724)	(2,802,404)			(9,060,381)	(690,082)
Dividend paid	-	(54,690,621)			-	(24,982,306)		Income tax paid	(10,575,731)	(13,927,978)			(10,575,731)	(1,030,000)
Net cash flow from/(used) in operating activities	(1,416,040,503)	676,117,885			597,091,445	188,067,315		Dividend paid	-	(54,690,621)			-	(24,982,306)
Investing activities								Net cash flow from/(used) in operating activities	(128,728,713)	235,934,487			505,021,323	92,469,654
							Investing activities
Proceeds from sale of property, plant and equipment	34,877,396	825,373			22,402,452	360,403
Purchase of property, plant and equipment	(497,630,670)	(95,307,468)			(456,399,490)	(47,578,358)		Proceeds from sale of property, plant and equipment	935,000	825,373			935,000	360,403
Purchase of financial assets	-	(109,417)			-	(49,981)		Purchase of property, plant and equipment	(72,342,861)	(41,945,277)			(46,933,058)	(27,011,314)
Net cash flows from investing activities	(462,753,274)	(94,591,512)			(433,997,038)	(47,267,936)		Purchase of financial assets	-	(109,417)			-	(49,981)
Financing activities								Net cash flows from investing activities	(71,407,861)	(41,229,321)			(45,998,058)	(26,700,892)
							Financing activities
Repayments of borrowings	(19,167,893)	(14,088,674)			(19,167,893)	(5,726,114)
Proceeds from borrowings	209,522,418	-			209,522,418	-		Lease liability principal repaid	(2,053,688)	(2,067,399)			1,279,680	882,016
Net cash flows from/(used) in financing activities	190,354,525	(14,088,674)			190,354,525	(5,726,114)		Repayments of borrowings	(27,279,512)	(14,088,674)			(19,167,893)	(5,726,114)
Net decrease/(increase) in cash and cash equivalents	(1,688,439,252)	567,437,699			353,448,932	135,073,265		Proceeds from borrowings	95,475,978	-			95,475,978	-
Effects of exchange rate changes on cash								Net cash flows from/(used) in financing activities	66,142,778	(16,156,073)			77,587,765	(4,844,098)
and cash equivalents	187,596,119	3,579,670			-	-		Net increase/(decrease) in cash and cash equivalents	(133,993,796)	178,549,093			536,611,030	60,924,664
Effects of IAS29	179,068,816	17,380,071			-	-		Effects of exchange rate changes on cash
Cash and cash equivalents at 1 January	3,095,598,919	409,381,013			1,420,375,670	154,946,753		and cash equivalents	183,691,372	3,579,670			-	-
Cash and cash equivalents at 30 June	1,773,824,602	997,778,453			1,773,824,602	290,020,018		Effects of IAS29	427,448,901	(30,282,288)			-	-
Comprising of:								Cash and cash equivalents at 1 January	367,076,544	208,061,616			307,611,991	75,305,728
Cash and cash balances	1,773,824,602	3,109,449,839			1,773,824,602	290,020,018		Cash and cash equivalents at 30 June	844,223,021	359,908,091			844,223,021	136,230,392
								Comprising of:
								Cash and cash balances	844,223,021	676,738,233			844,223,021	136,230,392

0121

Interim Condensed Group Consolidated Statement of Changes in Equity - For the Half Year ended 30 June 2022

					Change in		Attributable	Non-
	Share	Capital	Share	Revaluation	Ownership	Retained	to Owners	Controlling
	Capital	Reserve	Premium	Reserve	reserve	earnings	of the parent	Interest	Total
Inflation Adjusted
Balance on 1 January 2021	8,437,673	(17,206,923)	1,746,891,668	1,800,351,063	(80,013,482)	2,380,921,543	5,839,381,541	1,041,767,976	6,881,149,519
Dividend paid	-	-	-	-	-	(72,839,058)	(72,839,058)	-	(72,839,058)
Profit for the year	-	-	-	-	-	578,677,290	578,677,290	87,251,343	665,928,631
Balance at 30 June 2021	8,437,673	(17,206,923)	1,746,891,668	1,800,351,063	(80,013,482)	2,886,759,775	6,345,219,773	1,129,019,319	7,474,239,092
Balance on 1 January 2022	8,561,843	(17,206,923)	4,809,960,342	971,092,475	(80,013,482)	2,992,299,221	8,684,693,475	1,258,752,519	9,943,445,994
Profit for the year	-	-	-	-	-	1,018,495,039	1,018,495,039	(175,397,265)	843,097,774
Other comprehensive income net of tax	-	-	-	3,305,425,146	-		3,305,425,146	487,702,744	3,793,127,890
Balance at 30 June 2022	8,561,843	(17,206,923)	4,809,960,342	4,276,517,621	(80,013,482)	4,010,794,260	13,008,613,660	1,571,057,998	14,579,671,658

Interim Condensed Company Statement of Changes in Equity - For the Half Year ended 30 June 2022

Inflation Adjusted

Balance on 1 January 2021

Dividend paid

Profit for the year

Balance at 30 June 2021

Balance on 1 January 2022

Profit for the year

Other comprehensive income net of tax

Balance at 30 June 2021

					Attributable
Share	Capital	Share	Revaluation	Retained	to Owners
Capital	Reserve	Premium	Reserve	Earnings	of the parent
8,437,673	(17,206,923)	1,746,891,668	480,899,178	2,073,066,506	4,292,088,102
-	-	-	-	(72,839,058)	(72,839,058)
-	-	-	-	130,409,717	130,409,717
8,437,673	(17,206,923)	1,746,891,668	480,899,178	2,130,637,165	4,349,658,761
8,561,843	(17,206,923)	4,809,960,342	517,350,713	1,984,172,333	7,302,838,309
-	-	-	-	1,655,000,290	1,655,000,290
-	-	-	788,639,909	-	788,639,909
8,561,843	(17,206,923)	4,809,960,342	1,305,990,622	3,639,172,623	9,746,478,508

DIRECTORS: G.T. Manhambara (Chairman), T. Johnson, V. Nyakudya*, L. Kennedy, B.N. Kumalo, K. Patel, G. Pio, M. Davis (*Executive)		2

Reviewed Interim

Condensed Group Results

For the Six Months Ended

30 June 2022

The Directors report the following reviewed interim condensed results in respect of the Group and Company's operations for the six months ended 30 June 2022

Supplementary Information

				GROUP
		Reviewed		Unaudited
		Inflation Adjusted		Historical
		30-Jun-22		30-Jun-21	30-Jun-22	30-Jun-21
		No. of shares		No. of shares	No. of shares	No. of shares
Shares in issue	344,580,486		238,380,780	344,580,486	238,380,780
For the purpose of basic EPS	344,580,486		238,380,780	344,580,486	238,380,780
For the purpose of diluted EPS	344,580,486		238,380,780	344,580,486	238,380,780
		ZWL$		ZWL$	ZWL$	ZWL$
Headline earnings	923,436,816		584,618,535	706,567,387	192,372,139
Profit for the year	923,696,497		578,677,288	709,345,458	192,543,001
Headline earnings per share	2.68		2.45	2.05	0.81
Basic profit per share	2.68		2.43	2.06	0.81
Diluted profit per share	2.68		2.43	2.06	0.81
Depreciation	120,195,189		262,967,233	64,412,414	39,249,694
Taxation:
Current tax expense	(447,390,483)		211,489,868	(447,390,483)	290,439,797
Deferred tax movement	536,940,298		(85,607,111)	(15,256,996)	(12,041,981)
				COMPANY
		Reviewed		Unaudited
		Inflation Adjusted		Historical
		30-Jun-22		30-Jun-21	30-Jun-22	30-Jun-21
		No. of shares		No. of shares	No. of shares	No. of shares
Shares in issue	344,580,486		238,380,780	344,580,486	238,380,780
For the purpose of Basic EPS	344,580,486		238,380,780	344,580,486	238,380,780
For the purpose of Diluted EPS	344,580,486		238,380,780	344,580,486	238,380,780
		ZWL$		ZWL$	ZWL$	ZWL$
Headline earnings	1,654,740,609		136,350,964	1,765,243,503	137,160,478
Profit for the year	1,655,000,290		130,409,717	1,766,104,122	137,331,340
Headline earnings per share	4.80		0.57	5.12	0.58
Basic profit per share	4.80		0.55	5.13	0.58
Diluted profit per share	4.80		0.55	5.13	0.58
Depreciation	107,939,201		86,031,090	51,824,519	31,433,645
Taxation:
Current tax expense	305,075,178		147,681,570	305,075,178	190,249,152
Deferred tax movement	611,909,776		(33,967,834)	223,533,019	22,183,248

Notes to the financial statements

1. Presentation and statement of compliance

Basis of preparation

The Group's interim condensed consolidated financial statements for the six months ended 30 June 2022 have not been prepared

under policies consistent with the requirements of International Financial Reporting Standards (IFRS). This is due to non-compliancewith International Financial Reporting Standards (IAS 21) - The Effects of Changes in Foreign Exchange Rates and IAS 8-AccountingPolicies, Changes in Accounting Estimates and Errors in Prior Year. The Interim condensed financial statements have been prepared under the current cost convention in accordance with IAS 29, Financial Reporting in Hyperinflationary Economies and IAS 34 Interim

Financial Reporting.

The interim condensed consolidated financial statements do not include all the information and disclosures required in the annual financial statements, and should be read in conjunction with the Group's annual consolidated financial statements as at 31 December

2021.

Application of IAS 29 (Financial Reporting in Hyperinflationary Economies)

During the reporting period, the economy continued to face significant inflationary pressures as evidenced by a rising Consumer Price Index (CPI). These results have been prepared in accordance with IAS 29 which requires that the interim condensed financial statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the reporting date and that corresponding figures for the previous period also be restated in terms of the same measuring unit.

The Group adopted the Zimbabwe consumer price index (CPI) compiled by Zimbabwe National Statistics Agency (ZIMSTAT) as the

general price index to restate transactions and balances as appropriate. The indices and conversion factors used to restate these financials are given below.

Dates	Indices	Conversion Factors
30	June 2022	8,707.4	1.00
31 December 2021	3,977.5	2.19
30 June 2021	2986.44	2.92
01	January 2021	2,608.80	3.34

The procedures applied in the above restatement of transactions and balances are as follows:

• Comparative information
• All comparative figures as of and of the half-year ended 30 June 2021 were restated by applying the change in the index to 30 June 2022 using the relevant factor of 2.92, for the statement of Profit or Loss and Other Comprehensive Income, statement of
  Cash Flows and statement of Changes in Equity. The statement of Financial position, comparatives were restated by applying a factor of 2.19.
• Current period information
• Monetary assets and liabilities were not restated because they are already stated in terms of the measuring unit current at balance sheet date.
• Non-monetaryassets and liabilities that are not carried at amounts current at balance sheet and components of shareholders' equity were restated by applying the change in the index from the more recent of the date of the transaction and the date of their most recent revaluation to 30 June 2022.
• Items recognised in the income statement have been restated by applying the change in the general price index from the dates when the transactions were initially earned or incurred by applying the monthly index for the half year ended 30 June 2022. Depreciation and amortisation amounts are based on the restated amounts.
• Gains and losses arising from the net monetary position are included in the income statement.
• All items in the statement of cash flows are expressed in terms of the general price index at the end of the reporting period.

Hyper Inflation

The historical amounts were restated at the end of the reporting period to reflect the general change in purchasing power of the reporting currency (ZWL$). Professional judgement was used and appropriate adjustments in preparing financial statements

according to IAS 29. The indices used were obtained from the Zimbabwe National Statistics Agency for the period.

Statement of compliance

These consolidated financial statements have been prepared with the aim of complying with International Financial Reporting

Standards and presented in ZWL$ (Zimbabwe Dollars, rounded to the dollar), which is the Group's functional and presentation currency. While full compliance with IFRS has been possible in the previous periods, compliance has not been achieved from 2019.

1. Leases
   The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
2. Borrowings
   The Group and Company acquired a term loan facility of ZWL95,910,335 and ZWL113,612,083 respectively. The average cost of borrowing was 60% per year for the period, however the interest rates will be raised to a minimum of 200% per year as from July
   2022.
3. Revenue
   An analysis of Group revenue and results for the year:

			Reviewed				Unaudited
			Inflation Adjusted	Historical
			30-Jun-22	30-Jun-21	30-Jun-22	30-Jun-21
Group		ZWL$	ZWL$	ZWL$	ZWL$
Sale of goods: Domestic	5,854,506,278	4,605,637,443			3,450,298,938	2,487,982,722
Sale of goods: Export	138,019,807	222,122,597			138,019,807	222,122,597
Total revenue from contracts with customers	5,992,526,085	4,827,760,040			3,588,318,745	2,710,105,319
Investment property rental income	13,781,813	11,709,970			23,671,875	-
Total revenue	6,006,307,898	4,839,470,010			3,611,990,620	2,710,105,319
Company
Sale of goods: Domestic	3,170,025,409	2,455,042,573			2,115,429,004	773,412,306
Sale of goods: Export	138,019,807	222,122,597			113,877,106	48,696,487
Sale of services: Domestic	280,273,529	32,940,149			192,406,776	48,696,487
Investment property rental income	23,671,875	-			-	-
Total revenue from contracts with customers		3,611,990,620	2,710,105,319			2,421,712,886	870,805,280

5	Segment information
					Mining and	Logistics and		Other	Total
Inflation Adjusted		Agriculture	Infrastructure	Automative	Property	Segments	Segments	Adjustments	Consolidated
			ZWL$	ZWL$	ZWL$	ZWL$	ZWL$	ZWL$	ZWL$	ZWL$
30 June 2022
Revenue	2,749,952,386		1,619,821,712	1,652,951,845	13,781,813	23,563,291	6,060,071,047	(53,763,149)	6,006,307,898
Segment
operating profit	1,302,649,032		(85,969,647)	312,288,327	1,277,270,973	193,330,089	2,999,568,774	(1,217,176,457)	1,782,392,317
Other items
Finance income	816,472		142,355	-	-	-	958,827	-	958,827
Finance costs	(15,224,470)		-	(7,659,686)	(191,659)	-	(23,075,815)	(472,157)	(23,547,972)
Income taxes	(560,616,874)		(125,675,733)	(111,238,419)	203,086,842	(182,374,078)	(776,818,262)	(139,887,136)	(916,705,398)
Group profit after tax		727,624,160		(211,503,025)	193,390,222	1,480,166,156	10,956,011	2,200,633,524	(1,357,535,750)	843,097,774
Segment assets	7,841,662,704		6,860,944,372	3,438,192,896	2,847,130,000	5,022,704,829	26,010,634,801	(3,425,490,410)	22,585,144,391
Segment liabilities	(2,084,846,600)		(2,881,010,290)	(1,594,686,883)	4,434,737	(153,162,786)	(6,709,271,822)	(1,296,200,909)	(8,005,472,731)
Other segment
information
Depreciation
and amortisation	84,499,009		16,384,144	1,966,185	8,556,174	13,126,795	124,532,307	-	124,532,307		0121
Additions to
non-current assets	66,040,848		76,655,852	1,391,967	-	(2,921,240)	141,167,427	-	141,167,427
Inventory provision	88,996,865		271,000,173	11,942,406	-	-	371,939,444	-	371,939,444
Impairment loss
recognized on receivables	12,931,704		78,435,995	-	-	-	91,367,699	-	91,367,699
						Mining and		Other	Total
Inflation Adjusted				Agriculture Infrastructure	Property	Segments	Segments	Adjustments	Consolidated
					ZWL$	ZWL$	ZWL$	ZWL$	ZWL$	ZWL$	ZWL$
30 June 2021
Revenue				2,253,830,852	2,573,929,188	11,709,970	-	4,839,470,009	(1)	4,839,470,008
Segment
operating profit				334,305,820	262,171,833	5,399,576	(60,987,972)	540,889,258	250,970,324	791,859,582
Other items
Finance income				64,281	-	-	8,750	73,031	412,007	485,038
Finance costs				8,252	(38,096)	-	-	(29,844)	(503,389)	(533,232)
Income taxes				(88,985,313)	(63,258,043)	36,711	(18,571,811)	(170,778,456)	44,895,699	(125,882,756)
Group profit after tax				245,393,040	198,875,695	5,436,286	(79,551,033)	370,153,989	295,774,642	665,928,631
Segment assets				5,033,535,027	4,020,310,445	1,440,597,168	1,649,245,528	12,143,688,167	5,457,874,336	17,601,562,503
Segment liabilities				(1,554,173,108)	(1,565,896,318)	5,951,585	(338,594,499)	(3,452,712,340)	(4,349,058,429)	(7,801,770,769)
Other segment
information
Depreciation				97,644,797	15,550,365	12,167,548	4,330,772	129,693,482	(32,314,173)	97,379,309
Additions to non-current assets	89,506,597	21,567,086	-	15,860,442	126,934,125	(31,626,657)	95,307,468
Impairment loss recognized on receivables	81,373,366	131,294,263	-	-	212,667,629	-	212,667,629

6. Barzem Enterprises: Going Concern

As of 30 June 2022, Barzem Enterprises (hereinafter referred to as Barzem) had total assets value of ZWL$5,967,591,435

(ZWL$4,992,847,095 - unaudited historical) and Net Asset value of ZWL$3,038,387,597 (ZWL$1,654,052,627 - unaudited historical).

During the six months to 30 June 2022, Barzem which operates in the Mining Cluster of the Group incurred an inflation adjusted loss

of ZWL357,953,602 (ZWL190,323,348 - unaudited historical). Included in the incurred loss is an inventory obsolescence provision of

ZWL$270,111,205 (ZWL$142,161,686 - unaudited historical). Therefore, the Group has prepared the Barzem financial statements for

the six months ending 30 June 2022 on the basis that it will continue to operate as a going concern. This is notwithstanding the fact that Barzem will cease to be the official distributor of the Caterpillar (CAT) franchise with effect from 30 September 2022, following the issuance of a notice of termination of the Distributorship Agreement by Barloworld Equipment UK. The Group through the Barzem Board of Directors embarked on a deliberate balance sheet preservation initiative in a bid to preserve shareholder value.

The Directors consider that there is no material uncertainties that may cast significant doubt over the above stated assumption as the judgment is premised on the fact that Zimplow being a 51% shareholder in Barzem is in an arbitration process with Barloworld Equipment UK, a 49% shareholder in Barzem. Furthermore, Zimplow is at an advanced stage in concluding discussions with a view to acquiring a new supplier of earthmoving equipment where business operations will be operated under Barzem assets. However, the potential total retrenchment costs associated with this transition is an estimated ZWL$417,285,140.53.

Barzem Enterprises (Private) Limited

		Reviewed		Unaudited
		Inflation Adjusted		Historical
		30-Jun-22	30-Dec-21		30-Jun-22	30-Dec-21
		ZWL$	ZWL$		ZWL$	ZWL$
Summarized statement of financial position
Current assets	3,669,139,642	4,066,021,305			1,614,117,021	320,945,543
Non-current assets	2,298,451,793	926,825,790			2,201,753,968	290,222,233
Current liabilities	(2,000,341,288)	(2,127,944,473)			(1,831,712,973)	(274,593,123)
Non-current liabilities	(784,685,221)	(519,721,805)			(330,105,393)	(37,769,641)
Tota equity	3,182,564,926	2,345,180,817			1,654,052,623	298,805,012
Non-controlling interests	1,571,057,998	1,129,019,319			901,181,192	155,150,629
Summarized statement of profit or loss
Revenue	753,456,020	2,117,654,720			429,212,415	687,106,086
Expenses and taxation	763,732,218	497,870,571			418,418,845	183,232,764
Profit for the year	(357,953,602)	178,063,963			(190,323,348)	73,462,431
Other comprehensive	995,311,722	-			1,285,913,944	224,950,973
Summarized statement of cash flows
Net cash inflow from operating activities	(823,822,585)	212,180,935			-	76,025,051
Net cash outflow from investing activities	(11,805,194)	(71,069,802)			76,868,521	(2,316,610)
Net cash inflow/(outflow)	(835,627,779)	141,111,133			76,868,521	73,708,441

DIRECTORS: G.T. Manhambara (Chairman), T. Johnson, V. Nyakudya*, L. Kennedy, B.N. Kumalo, K. Patel, G. Pio, M. Davis (*Executive)		3

Ernst & Young	Tel: [phone] or 2750979-83
Chartered Accountants (Zimbabwe)	Fax: [phone] or 2773842
Registered Public Auditors	Email: [e-mail]
Angwa City	www.ey.com
Cnr Julius Nyerere Way /
Kwame Nkrumah Avenue
P O Box 62 or 702
Harare
Zimbabwe

To the Shareholders of Zimplow Holdings Limited

Report on the Review of the Interim condensed Inflation adjusted Consolidated and Separate Financial Statements

INTRODUCTIONS

We have reviewed the accompanying interim condensed inflation adjusted consolidated and separate

financial statements of Zimplow Holdings Limited and its subsidiaries ("the Group"), as set out on

pages 12 to 32, which comprise the interim condensed inflation adjusted consolidated and separate statements of financial position as at 30 June 2022 and the related interim condensed inflation adjusted consolidated and separate statements of profit or loss and other comprehensive income, the interim condensed inflation adjusted statements of changes in equity and the interim condensed inflation adjusted consolidated and separate statements of cash flows for the six-month period then ended and explanatory notes.

Management is responsible for the preparation and presentation of this interim condensed inflation adjusted consolidated and separate financial information in accordance with the Internal Financial Reporting Standards. Our responsibility is to express a review conclusion on this interim condensed inflation adjusted consolidated and separate financial information based on our review.

Scope of Review

We conducted our review in accordance with International Standard on Review Engagements 2410,

"Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A

review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Basis for Qualified Review Conclusion

Matter 1: Non-compliance with International Financial Reporting Standards (IAS) 21 - The Effects of Changes in Foreign Exchange Rates and IAS 8 - Accounting Polices, Changes in Accounting Estimates and Errors in prior year

Impact of prior year modification on current period

As explained in note 2.1 to the Interim condensed Inflation adjusted Consolidated and Separate financial statements, the Group and Company changed their functional and reporting currency from United States Dollar (US$) to Zimbabwe Dollars (ZWL) on 22 February 2019 in compliance with Statutory Instrument 33 of 2019.

A member firm of Ernst & Young Global Limited

Independent Auditor's Review Conclusion - Continued

Zimplow Holdings Limited

Our most recent audit opinion and review conclusion were modified due to non-Compliance with IAS 21 due to use of inappropriate exchange rates which did not meet IAS 21 requirements for a spot rate for the period 22 February 2019 to 22 June 2020. Further, the matter emanating from 2019 wherein the Group and Company changed the functional currency from USD to ZWL on an incorrect date had a continuing impact in 2021 due to misstated opening balances. Our prior year audit report was modified due to impact of these matters on Cost of Sales and Income Tax in the Interim condensed Inflation adjusted Consolidated and Separate Statements of Profit or Loss in prior year, as well as Retained Earnings and Non-Controlling Interests (Group only) in the Interim condensed Inflation adjusted Consolidated and Separate Statements of Financial Position in prior year.

Management has not made retrospective adjustments in terms of IAS 8 to correct these matters.

Our review conclusion on the current period's Interim condensed Inflation adjusted Consolidated and

Separate financial statements adjusted financial statements is therefore modified because of the

possible effect of this matter on the comparability of the current period's figures and the

corresponding figures.

Matter 2: Valuation of Investment Property, Freehold Land and Buildings and Manufacturing Plant and Equipment (Group and Company) (Non-compliance with IFRS 13 - Fair Value Measurement and IAS 8 - Accounting Policies, Changes in Accounting Estimates and Errors)

The Group's Investment Property, Freehold Land and Buildings and Manufacturing Plant and Equipment are carried at Group ZWL499,770,000 (2021: ZWL279,360,526) Company ZWL1,102,800,000(2021: 356,463,243), Group ZWL7,414,738,884 (2021: ZWL2,687,154,668) Company ZWL950,451,911 (2021: ZWL311,460,880 ) and Group ZWL1,175,871,614, (2021: ZWL791,653,147) Company ZWL1,076,080,760 (2021: ZWL724,875,421) respectively as at 30 June 2022 as described in Note 9 and 11. The implicit investment method was applied for Industrial and commercial properties and key inputs into the calculations include rentals per square metre and capitalisation rates. Residential properties and vacant stands were valued in terms of the market comparable approach. In both cases, the valuation was performed based on USD denominated inputs and converted to ZWL as the presentation currency using a rental yield as determined by management as described on Note 11.

We have concerns over the appropriateness of using a foreign currency for the valuation inputs and then applying a conversion rate to a US$ valuation to calculate ZWL Investment Property, Freehold Land and Buildings and Manufacturing Plant and Equipment values as in our opinion this may not be an accurate reflection of the current dynamics. We believe that applying a conversion rate to a USD valuation to calculate ZWL property values may not be an accurate reflection of market dynamics, as risks associated with currency trading do not always reflect the risks associated with property trading. We however cannot quantify the misstatements as we are unable to determine the appropriate inputs. With respect to the implicit investment approach, the US$ estimated rentals may not be an appropriate proxy for the ZWL amounts in which rentals are settled. While historical US$ amounts based on similar transactions have been used as a starting point in determining comparable values on the market comparable approach, it is noted that market participants take into account different risk factors in determining an appropriate value in ZWL terms which are not necessarily limited to the exchange rate.

Consequently, Investment Property, Freehold Land and Buildings and Manufacturing Plant and Equipment may be materially misstated, and we are unable to determine what adjustments may be necessary to correctly account for these amounts. Our prior year audit report was also modified due to this matter, no restatements have been made in terms of IAS 8.