CFI : Annual Report

FINANCIAL HIGHLIGHTS

For the 5 year period 30 September 2019 - 2023

			INFLATION-ADJUSTED
		2023	2022	2021	2020	2019
		ZWL	ZWL	ZWL	ZWL	ZWL
CONSOLIDATED RESULTS
Revenue	201,990,662,782	58,433,763,803	41,884,070,966	23,444,348,331	18,024,103,910
Group (loss) profit before taxation	(125,229,779,769)	(3,063,022,103)	(886,373,879)	2,676,840,639	2,302,624,256
(Loss) profit attributable to equity holders of the parent	(92,728,437,520)	(4,882,529,607)	(1,744,195,475)	1,488,687,260	1,609,797,356
Total shareholders' equity (Group's net asset value)	(84,910,366,990)	7,904,207,832	12,786,737,440	14,126,637,040	12,734,927,864
Group's total assets	146,530,347,447	36,861,918,544	25,218,592,284	23,145,608,071	21,614,572,808
Cash (utilised through) generated from operating activities	(90,531,759,708)	(10,586,608,687)	374,108,882	(4,805,269,025)	(2,082,430,825)
Capital expenditure	(5,082,488)	(22,676,340)	639,852,987	494,560,979	281,766,897
Cash resources net of borrowing	(106,708,355,231)	(13,524,533,560)	(2,378,247,570)	(2,073,813,560)	(4,143,574,048)
ORDINARY SHARE PERFORMANCE
Shares in issue	106,820,875	106,820,875	106,820,875	106,820,875	106,820,875
(Loss) earnings per share (ZWL cents)	(86,807.41)	(4,570.76)	(1,632.82)	1,396.75	1,508.71
Diluted (loss) earnings per share (ZWL cents)	(86,807.41)	(4,570.76)	(1,632.82)	1,396.75	1,508.71
Net asset value per share (ZWL)	(794.89)	73.99	119.70	132.26	117.09
Market price at year end (ZWL)	2,200.00	357.61	N/A	N/A	N/A
Industrial index	126,642.42	14,771.65	8,580.16	5,213.30	232.78
FINANCIAL STATISTICS
Net interest cover (times)	(12.94)	(5.03)	(0.04)	0.95	1.03
Ordinary shareholders' equity to total assets - %	(57.95)	21.44	50.70	61.03	58.92
Return on total assets - %	(63.28)	(13.25)	(6.92)	6.43	7.45
Return on ordinary shareholders' equity - %	109.21	(61.77)	(13.64)	10.54	12.64
Return on capital employed - %	1,241.08	(41.67)	(13.77)	10.54	12.64
Debt to equity ratio - %	(141.17)	179.51	26.82	15.92	34.49
Current asset ratio -%	70.97	159.52	174.06	185.22	257.95

			HISTORICAL
	2023	2022	2021	2020	2019
	ZWL	ZWL	ZWL	ZWL	ZWL
CONSOLIDATED RESULTS
Revenue	193,640,524,069	25,292,373,090	7,834,014,139	1,920,324,644	177,397,474
Group (loss) profit before taxation	(129,564,857,031)	(5,819,169,110)	306,941,379	401,566,241	(10,673,059)
(Loss) profit attributable to equity holders of the parent	(100,019,788,740)	(4,890,394,057)	196,411,712	275,519,286	(12,170,040)
Total shareholders' equity (Group's net asset value)	(93,399,360,114)	4,596,593,034	2,591,286,578	1,537,641,991	145,699,516
Group's total assets	138,041,354,327	27,015,415,475	5,188,957,691	2,788,789,689	308,394,633
Cash (utilised through) generated from operating activities	(92,735,225,931)	(10,492,471,041)	(103,701,940)	(186,392,693)	(38,264,329)
Capital expenditure	(4,388,016)	(8,527,386)	107,019,874	34,134,256	1,963,403
Cash resources net of borrowing	(106,708,355,232)	(11,426,608,280)	(528,077,233)	(303,866,490)	(79,946,684)
ORDINARY SHARE PERFORMANCE
Shares in issue	106,820,875	106,820,875	106,820,875	106,820,875	106,820,875
(Loss) earnings per share (ZWL cents)	(93,633.19)	(4,578.13)	183.87	257.93	(11.42)
Diluted (loss) earnings per share (ZWL cents)	(93,633.19)	(4,578.13)	183.87	257.93	(11.42)
Net asset value per share (ZWL)	(874.35)	43.03	24.26	14.39	1.36
Market price at year end (ZWL)	2,200.00	357.61	N/A	N/A	N/A
Industrial index	126,642.42	14,771.65	8,580.16	5,213.30	232.78
FINANCIAL STATISTICS
Net interest cover (times)	(13.19)	(5.73)	2.94	3.07	0.74
Ordinary shareholders' equity to total assets - %	(67.66)	17.01	49.94	55.14	47.24
Return on total assets - %	(72.46)	(18.10)	3.79	9.88	(3.95)
Return on ordinary shareholders' equity - %	107.09	(106.39)	7.58	17.92	(8.35)
Return on capital employed - %	107.09	(106.39)	7.58	17.92	(8.35)
Debt to equity ratio - %	(128.34)	260.80	29.39	21.42	58.17
Current asset ratio -%	65.10	122.55	147.93	123.91	140.05

N/A: The company was under Zimbabwe Stock Exchange suspension from 1 January 2018 until 11 October 2021, consequently market prices were unavailable at Statement of Financial Position dates for periods 2019 to 2021.

IFC

CONTENTS

	Page No.
Financial highlights	IFC
Our goal and strategic intent	2
Corporate information	3
Group structure	4
Group management	5
Notice to shareholders	6
Chairperson's report	7 - 8
Group Chief Executive Officer's report	9
Corporate governance	10 - 11
Directors' report	12
Sustainability Report	13 - 22
Report of the independent auditors	23 - 26

Consolidated statements of profit or loss and other comprehensive income 27

Company statements of profit or loss and other comprehensive income	28
Consolidated statements of financial position - inflation adjusted	29
Consolidated statements of financial position - historical	30
Consolidated statements of changes in equity	31
Consolidated statements of cash flows	32
Notes to the consolidated financial statements	33 - 70
Shareholders' analysis	IBC
Note: IFC means Inside Front Cover
IBC means Inside Back Cover

CFI Holdings Limited has its origins in the Farmers' Co-operative Society which commenced business in 1908, principally to market maize. The M.S. Kobenhavn, the largest sailing ship of its kind at the time, was chartered to carry 51 901 bags of maize from Beira to London.

1	ANNUAL REPORT 2023

OUR GOAL AND STRATEGIC INTENT

OUR GOAL

"Our goal is to increase shareholder wealth by nurturing businesses that will continually outperform the market norm". In order to achieve this, CFI Holdings Limited is invested in highly focused, synergistic businesses that seek to maintain a balance of activities that offer substantial growth.

These activities include:-
v Retail	-	Farming inputs
	-	Building supplies and general hardware
	-	Veterinary products and technical services
v Farming	-	Cereal production (mainly maize and soya beans)
	-	Horticultural production
	-	Poultry breeding and rearing
v Milling	-	Stock feeds milling
	-	Maize and flour milling
	-	Vitamin and mineral supplements production
	-	Snack foods production
	-	Downpacking of various FMCG goods (rice,
		salt and other dry goods)
v Properties	-	Property management and development

OUR STRATEGIC INTENT

To offer ever improving quality in our products and services to satisfy the needs of all our stakeholders:

These include our:-

• Customers
• Employees
• Suppliers
• Regulatory authorities
• Shareholders

2

CORPORATE INFORMATION

Directors	I. V. Pasi (Group Chairperson)
	S. Zinyemba (Deputy Group Chairperson)
	S. N. Chibanguza (Acting Group Chief Executive Officer)*
	T. Dumba (Acting Group Finance Director)*
	A. Denenga
	A. S. Hamilton (Alternate: R. L. Hamilton)
	P. Muzani
	W. E. Munakopah
	* - Executive Directors
Group Company Secretary & Legal Counsel	P. Hare
Transfer Secretaries	First Transfer Secretaries (Private) Limited
	1 Armagh Avenue, Eastlea, Harare, Zimbabwe
	Telephone: [phone] / 72
	[e-mail]
Auditors	Baker Tilly Chartered Accountants (Zimbabwe)
Bankers	AFC Bank
	CBZ Bank Limited
	Central African Building Society (CABS)
	FBC Bank Limited
	Nedbank Limited
	NMB Bank Limited
	Ecobank Limited
	Steward Bank Limited
	People's Own Savings Bank (POSB)
Legal Advisors	Nyawo Ruzive Legal Practitioners
	1 Wynne Street
	Harare, Zimbabwe
Registered Office	1 Wynne Street, Harare, Zimbabwe
Postal Address	P.O. Box 510, Harare, Zimbabwe
Telecommunications	Telephone [phone] / 790685
	Telefax [phone]
	Email: [e-mail]
	Website: www.cfigroup.co.zw

3	ANNUAL REPORT 2023

GROUP STRUCTURE

CFI HOLDINGS LIMITED BOARD

CFI OPERATIONAL BOARD

Retail

Division

Farm & City

Vetco

Farming

Division

Glenara Estates

Hubbard Zimbabwe

Crest Breeders

Suncrest

Milling

Division

Agrifoods

Agrimix

Victoria Foods

Properties

Division

Saturday Retreat

Estate

SATURDAY RETREAT

ESTATE

Your Home, Your Palace

4

GROUP MANAGEMENT

GROUP EXECUTIVES		CORPORATE SERVICES
Shingirayi N. Chibanguza	Acting Group Chief Executive	Rutendo Chidemo	Acting Group Human Resources Manager
	Officer
		Muchanaka Zuwirai	Group Finance Manager
Tariro Dumba	Acting Group Finance Director
		Tanaka Hofisi	Group Treasurer
Panganayi Hare	Group Company Secretary & Legal
	Counsel	Eve Muguza	Group ICT Manager
		Edward Mandisodza	Acting Group Internal Audit Manager

DIVISIONAL MANAGEMENT	PROPERTIES DIVISION
RETAIL DIVISION		Vimbai Mudzongo	Acting Properties Manager
CFI Retail & Vetco		Saturday Retreat and Lot A Of The Rest
Tapiwa Nhari	General Manager	George Chambara	Finance Manager
Brian Zimbeva	Finance Manager
FARMING DIVISION
Glenara Estates
Tapuwa Chukucha	Finance Manager
Antoinette Moyo	Administrator
MILLING DIVISION

Agrifoods, Agrimix & Hubbard Zimbabwe

Lewis Chirenje	Operations Manager
Simbarashe Chikava	Finance Manager
Victoria Foods
Cliff Mukumba	Operations Manager
Shadreck Kwendavaviri	Finance Manager
Lenmore Mushambi	Production Manager

5	ANNUAL REPORT 2023

NOTICE TO SHAREHOLDERS

NOTICE IS HEREBY GIVEN that the twenty eighth (28th) Annual General Meeting ("AGM") of CFI Holdings Limited (the Company) will be held in the Farm & City Boardroom, 1 Wynne Street, Harare on Thursday 28 March 2024 at 11:00 am, for the purpose of transacting the following business:

ORDINARY BUSINESS

1. Financial Statements
   To receive and adopt financial statements for the year ended 30 September 2023, together with the reports of the Directors and Auditors thereon.
2. Re-electionof Directors
   To re-elect the following directors by individual resolutions in terms of Section 201 of the Companies and Other
   Business Entities Act [Chapter 24:31]:

1. To re-elect Mr S.D Zinyemba who retires by rotation in terms of the Articles of Association and being eligible, offers himself for re-election.
   Mr Zinyemba serves as the co-founder and current Chief Executive Officer of Bellevue Abattoir & Butcheries Group. Prior to this role, he gained experience as a Bank Examiner in the Bank Licensing Supervision and Surveillance Division at the Reserve Bank of Zimbabwe. With a background in international business, holding a Bachelor's degree from NKU, USA, and a Masters' in Business Intelligence from CUT, ZW, Mr. Zinyemba also brings extensive expertise in the energy, construction, and logistics sectors. Currently, he is actively pursuing a Doctorate in Business Administration.
2. To re-elect Ms P Muzani who retires by rotation in terms of the Articles of Association and being eligible, offers herself for re-election.
   Ms. Muzani has a long association with the Group with extensive experience of 13 years in the retail business. Ms. Muzani is currently studying towards a Masters in Business Administration.
3. Directors Remuneration
   To confirm directors' fees for the year ended 30 September 2023.
4. Auditors Fees and Appointment

1. To approve the remuneration of the auditors for the year ended 30 September 2023.
2. To reappoint Messrs Baker Tilly Chartered Accountants (Zimbabwe), who have been the Company's external auditors for 6 years. Mr Richard Mandeya (PAAB Number 0965) has served as the engagement audit partner to the Company for 1 year.

EXPLANATORY NOTES TO THE PROPOSED RESOLUTIONS

Election of Directors

At each AGM, one third of the directors (other than the Managing Director), or, if their number is not a multiple of three, then the number nearest to but not being less than one third shall retire. The directors retiring from office shall be eligible for re-election (Articles 68 and 69).

No person other than a director retiring at the meeting shall, unless recommended by other directors, be eligible for the office of director unless, not less than seven nor more than twenty-one clear days before the date appointed for the meeting, there shall have been given to the Secretary notice in writing, signed by a member duly qualified to attend and vote at the meeting for which such notice is given, of his intention to propose such person for election and also notice in writing signed by the person to be proposed of his willingness to be elected (Article 70).

Notes

1. In terms of the Companies and Other Business Entities Act (Chapter 24:31) a member entitled to attend and vote at a meeting is entitled to appoint a proxy to attend and vote on a poll and speak in his stead. A proxy need not be a member of the company.
2. In terms of clause 50 of the Company's Articles of Association, instruments of proxy must be lodged at the registered office of the company at least 48 hours before the time appointed for holding of the meeting.
3. Members are requested to advise the Transfer Secretaries in writing of any change in address.

By order of the Board

P. Hare

Group Company Secretary & Legal Counsel

1 March 2024

6

CHAIRPERSON'S REPORT

Directors' Responsibility

The Company's Directors are responsible for the preparation and fair presentation of the Group's financial statements. 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 International Financial Reporting Standards (IFRS) which became effective for reporting periods commencing on or after 1 January 2023.

Cautionary Statement- Reliance on all Financial Statements

prepared in Zimbabwe for 2019-2023

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 - 2023 financial periods.

Whilst Directors have exercised due care and applied reasonable judgments they deemed 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 numerous changes in economic policies.

Adoption of IAS 29 (Financial Reporting in Hyperinflationary

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 Group inflation adjusted 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 audit partner is Mr. Richard Mandeya (PAAB Number 0965).

Economic Environment

Continuing on from prior year, the operating environment remained challenging, characterized by hyperinflation, unstable exchange rates and intermittent power outages. The first half of the year saw stable conditions following tough fiscal and monetary policy interventions instituted in the last quarter of FY2022. However, the second half of the year was met with exchange rate volatility characterized by a rapid widening of the gap between exchange rates quoted on the official banking platform and rates on the alternative market. Policy interventions in June 2023, though stabilizing exchange rate movements, tightened liquidity with the unintended consequence of straining funding for business operations.

Year-on-year(Y-O-Y) inflation declined from 56.1% as at 30 September 2022 closing at 18.4% as at 30 September 2023, whilst average month-on-month inflation for the period was 1.5% (2022:3.8%). The exchange rate disparities and the use of blended inflation figures imposed significant performance translation challenges on both historical and inflation adjusted accounts. The distortions largely affect recorded revenues and profit for the period.

Despite normal rains received during the 2022/23 farming season, consumer spending power declined from prior year following the knock-on effects of the high cost of inputs and depressed producer prices. Notwithstanding, the Group welcomes certain policy measures implemented by the Government of Zimbabwe through the liberalization of grain marketing to the benefit of millers, farmers and consumers.

Financial Performance

Group inflation-adjusted revenues for the year increased by 245.7% from ZWL 58.43 billion in the previous year to ZWL 201.99 billion reflective of the mismatch between rapid inflation of the ZWL during the year period as compared to the subdued official inflation statistics. Overall, retail operations contributed 76.3% (2022- 79.8%), whilst milling operations contributed 20.1% (2022 - 18.0%) and farming operations accounted for 3.4% (2022 - 2.2%) of Group turnover.

7	ANNUAL REPORT 2023

CHAIRPERSON'S REPORT

Expenses increased in real terms, as a consequence of these expenses being pegged by suppliers and service providers in USD, but converted to ZWL at prevailing parallel market exchange rates. On the other hand, selling prices were determined in line with official exchange rates, which consistently lagged behind market rates. The Group incurred unrealized exchange losses of ZWL 139.5 billion (2022 - ZWL 7.2 billion) on its foreign currency denominated loans and creditors. Consequently, the Group posted a loss before tax of ZWL125.23 billion against a loss before tax of ZWL3.06 billion from prior year.

The Group invested ZWL2.29 billion (2022 - ZWL648.8 million) into property, plant and equipment, mostly in company motor vehicles and capitalized Victoria Foods plant spares, as well as center- pivot irrigation equipment at Glenara Estates.

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. As the Group continued to make strides over the year in understanding its role and impact on the environment and community, your Board is tasked with furthering strategies to advance its sustainability priorities.

Future Prospects

The operating environment is forecasted to remain challenging and complex in the medium term aggravated by the now prevailing El Nino induced 2023/24 phenomenon. This is set to reduce agricultural output in the region. Given that the agricultural sector is a mainstay to the Group's operations, proactive management practices will therefore be employed to ensure the Group's survival in these difficult times.

Going forward, in the short to medium term, the Group will prioritise continued investments in its milling operations in order to underpin its long-term competitiveness. Long term focus remains directed towards the development of low-cost housing delivery in Harare South in support of Government's Vision 2030 development goals. The Group will therefore maintain its efforts to resolve all issues affecting its interests in its land banks to make way for progressive, orderly infrastructure deployment and service delivery to the various settlements.

Your Board also aims to continuously strengthen its human capital base, improve business models to be adaptive to the changing environment and to strengthen its operational systems for the benefit of all stakeholders.

Dividend Declaration

In view of the reported losses and current debt position, your Board will not declare a dividend for the year ended 30 September 2023.

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 during these trying times. I also wish to thank our shareholders, customers, suppliers and financiers for their enduring support to the Group, which has made the ongoing business turnaround strategy possible. Lastly, I would also like to record my gratitude and appreciation to my fellow Directors for their valuable contributions, guidance and stewardship.

Ms. I.V. Pasi

Chairperson

19 December 2023

8