African Distillers : 2023 FY Results & Audit Report

(Incorporated in Zimbabwe)

AUDITED FINANCIAL INFORMATION FOR THE YEAR ENDED 31 MARCH 2023

FINANCIAL HIGHLIGHTS

INFLATION ADJUSTED

HISTORIC COST

CHAIRMAN'S STATEMENT

Overview

The operating environment was complex and uncertain, characterised by high inflation, high interest rates, and increased power supply outages. Measures introduced by the government to reduce ZW$ liquidity resulted in relatively stable foreign exchange rates except at the tail end of the year where accelerated depreciation was witnessed resulting in increased value chain costs. The market witnessed an increased US$ transaction flow which helped in sustaining the Company's working capital requirements.

Acquisition of Distell Ltd by Heinken BV

The acquisition of a major shareholder and partner, Distell Ltd by Heineken BV has been approved and implemented with effect from 26 April 2023. The Company continues to receive support from Distell in line with the existing franchise and technical arrangements. It is anticipated that no adverse changes will arise from the acquisition.

Estimated Consumer Price Indices (CPIs)

Due to the absence of official general price indices in February and March 2023 following the promulgation of Statutory Instrument 27 of 2023 on 3 March 2023, the Directors have estimated CPIs for these two months. The estimated CPI is based on the exchange rate movement. This is an area of significant estimation uncertainty and relevant disclosures have been made in Note 4.7 to the complete set of the financial statements.

Trading Summary

Volume growth was strong at 18% above prior year mainly driven by Ready to drink ("RTD") segment which grew by 23%. Wines and Spirits volumes grew by 16% and 14% respectively. The increase in volume was due to improved product availability, increased market penetration and promotional activity.

Financial Perfomance

In inflation adjusted terms, revenue increased by 56% to ZW$41 billion whilst operating income increased by 15% to ZW$5.4 billion. In historical cost terms, revenue increased by 418% to ZW$34.2 billion whilst operating income increased by 316% to ZW$7.5 billion. Revenue growth was driven by increased volume. Cost containment measures were in place over the period, however, cost pressures were experienced in distribution, fuel and power, payroll and maintenance.

		INFLATION ADJUSTED	HISTORIC COST
		March 2023	March 2022	March 2023	March 2022
		Audited	Audited	Supplementary	Supplementary
	Notes	ZW$ 000	ZW$ 000	ZW$ 000	ZW$ 000
CONDENSED STATEMENT OF FINANCIAL POSITION As at 31 March 2023
ASSETS
Non-current assets
Property, plant and equipment	8	3 351 931			2 445 219	1 161 223		248 642
Long term loans receivable		61 367			69 579	61 367		22 869
Deferred taxation		-			-		256 597		1 596
		3 413 298			2 514 798	1 479 187		273 107
Current assets
Inventories	9	11 162 674			4 999 989	9 748 671		1 288 765
Trade and other receivables	10	5 912 444			3 979 781	5 617 869		1 166 020
Cash and cash equivalents		1 866 658			706 950	1 866 658		232 358
		18 941 776			9 686 720	17 233 198		2 687 143
Total assets
	22 355 074			12 201 518	18 712 385		2 960 250
EQUITY AND LIABILITIES
Capital and reserves
Share capital		222 865			222 854	1 187		1 176
Share premium		973 879			969 292	14 998		10 522
Share option reserve		312 488			290 684	52 942		17 094
Non-distributable reserve		-			-	5 361		5 361
Accumulated profit		7 703 820			6 604 335	6 160 137		1 806 921
Total capital and reserves
	9 213 052			8 087 165	6 234 625		1 841 074
Non-current liabilities
Deferred taxation		664 262			709 259	-		-
Current liabilities
Trade and other payables	11	7 521 719			2 780 019	7 521 719		913 728
Current tax liability		1 211 059			247 221	1 211 059		81 256
Short-term borrowings	12	3 744 982			377 854	3 744 982		124 192
		12 477 760			3 405 094	12 477 760		1 119 176
Total liabilities
	13 142 022			4 114 353	12 477 760		1 119 176
Total equity and liabilities
	22 355 074			12 201 518	18 712 385		2 960 250
Ordinary shares in issue (Actual) (millions)		122			121	122		121
Ordinary shares in issue (Weighted average) (millions)	118			116	118		116
Current ratio ( : 1)		2			3	1		2
Shareholders' equity per share (Cents)		7 548			6 687	5 108		1 522
Middle market price (Cents)		29 859			23 110	29 859		23 110

CONDENSED STATEMENT OF CASH FLOWS For the year ended 31 March 2023

In order to give context to the financial results, the Board estimates that, in United States dollars terms, revenue increased by 15% to US$49.4 million and operating income was at US$8.5 million.Users need to exercise caution when using these US$ figures given the challenges in determining the US$ numbers in the current environment.

Future Prospects

The trading environment is envisaged to remain challenging and uncertain, however, it is also anticipated that there will be opportunities for business growth. The Company will continue leveraging on ensuring full product availability, market share protection and brand portfolio expansion for business growth. Focus will also be on production efficiencies and cost containment initiatives.

Dividend

The board has recommended a final dividend of US$0.0050 per share, amounting to US$ 593,137. An interim dividend of US$0.0025 per share was paid in December 2022 bringing the total dividend to US$ 0.0075 per share.

M M Valela

Chairman

DIVIDEND DECLARATION

Notice is hereby given that the Board of Directors declared a final dividend, number 95, of US$0.0050 per share payable in respect of all the qualifying ordinary shares of the Company. This dividend is in respect of the year ended 31 March 2023.

	FINAL DIVIDEND
Dividend Number	95
Announcement Date	12 May 2023
Record Date	26 May 2023
Last Date to Trade	22 May 2023
Ex-Dividend Date	23	May 2023
Payment Date	26	June 2023
Dividend Amount	US$593 137
Dividend per Share	US$0.0050

By order of the Board

• Mutamuko
  Company Secretary

CONDENSED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME

For the year ended 31 March 2023

		INFLATION ADJUSTED		HISTORIC COST
				Restated*
		March 2023		March 2022		March 2023		March 2022
		Audited		Audited	Supplementary	Supplementary
	Notes	ZW$ 000		ZW$ 000		ZW$ 000		ZW$ 000
Revenue
3	41 005 939	26 371 578	34 194 079	6 562 432
Cost of sales		(26 051 300)	(16 015 141)	(18 740 385)	(3 387 717)
Gross profit
	14 954 639	10 356 437	15 453 694	3 174 715
Other operating income		166 347	90 168	146 735	23 361
Distribution costs		( 1 304 486)	( 611 461)	( 1 106 145)	( 154 097)
Administrative expenses		( 1 031 658)	( 631 666)	( 866 031)	(161 512)
Other operating expenses		( 7 385 948)	( 4 478 054)	(6 175 723)	( 1 116 142)
Operating income
	5 398 894	4 725 424	7 452 530	1 766 325
Interest income		3 195	6 255	2 382	1 576
Interest expense		( 609 091)	( 20 360)	( 550 730)	( 4 749)
Net exchange loss		( 573 961)	( 868 111)	( 720 779)	( 236 630)
Net monetary loss		( 531 300)	( 550 813)	-	-
Profit before taxation
4	3 687 737	3 292 395	6 183 403	1 526 522
Taxation	6	( 2 136 268)	( 1 094 744)	( 1 433 893)	( 301 756)
Profit for the period
	1 551 469	2 197 651	4 749 510	1 224 766
Other comprehensive income		-		-		-		-
Total comprehensive income		1 551 469	2 197 651	4 749 510	1 224 766
Earnings per share (Cents) :
Basic		1 318.24	1 894.13	4 035.53	1 055.61
Headline		1 305.57	1 894.59	4 024.65	1 055.64
Diluted		1 293.45	1 801.23	3 959.64	1 003.84

*Note 13

Cash flows from operating activities
Cash generated from
trading after non-cash items	7		5 556 699		4 154 760					7 226 104
Changes in working capital			( 2 970 515)			( 923 548)					( 6 972 860)
Cash generated from operations			2 586 184		3 231 212					253 244
Interest received			3 195		6 255					2 832
Interest paid			( 609 091)		( 20 360)					( 550 730)
Income tax paid			( 786 027)		( 1 214 244)					( 559 091)
Net cash flows generated from
operating activities			1 194 261		2 002 863					( 854 195)
Cash flows from investing activities
Purchase of property, plant and equipment			( 1 220 549)		( 743 003)		( 995 100)
Proceeds on disposal of property, plant and equipment			18 425		-					12 839
Increase in long-term loans receivable			( 222 148)		( 96 119)		( 170 126)
Proceeds from repayment of long-term loans receivable			141 702			78 274					131 628
Net cash flows utilised in investing activities			( 1 282 570)		( 760 848)		( 1 020 759)
Cash flows from financing activities
Proceeds from exercise of share options			4 598		17 725					4 487
Dividend paid to owners of the Company			( 483 401)		( 625 480)		( 401 986)
Proceeds from short-term borrowings			7 391 040		121 700					6 489 646
Repayment of short term borrowings			( 4 762 826)			-					( 4 332 930)
Netcashflowsgeneratedfrom/(utilised)infinancingactivities			2 149 411		( 486 055)		1 759 217
Net movement in cash and cash equivalents
		2 061 102		755 960					( 115 737)
Net foreign exchange difference			391 989		133 560					285 963
Inflation effect on cash and cash equivalents			( 2 585 495)		( 832 174)		-
Cash and cash equivalents at beginning of the period			450 796		393 450					148 166
Cash and cash equivalents at end of the period
		318 392		450 796					318 392
Comprising:-
Bank balances and cash			1 866 658		706 950					1 866 658
Bank overdraft			( 1 548 266)			( 256 154)		( 1 548 266)
			318 392			450 796					318 392
CONDENSED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY For the year ended 31 March 2023
Shareholders' equity at beginning of the year
		8 087 165		6 133 348				1 841 074
Changes in issued share capital
Share options exercised			11		94				11
Changes in share premium
Share options exercised			4 587		17 631				4 476
Changes in share option reserve
Share based payment			53 221		52 897				41 540
Transfer from share option reserve due to
exercise of share options			( 31 417)		( 11 336)		( 5 692)
Changes in distributable reserves
Transfer from share option reserve due to
exercise of share options			31 417		11 366				5 692
Total comprehensive income for the period			1 551 469		2 197 650				4 749 510
Dividend paid			( 483 401)		( 314 455)		( 401 986)
Shareholders' equity at end of the year
		9 213 052		8 087 165				6 234 625

1 565 558 ( 914 617)

650 941

1 576 ( 4 749)

• 295 709)
  352 059

( 201 885)

-

( 31 592)

18 569 ( 214 908)

• 833 ( 140 750)
  40 000
  -
  ( 95 917)

1. 234

1. 050
   -

1. 882

148 166

1. 358 ( 84 192)

1. 166

679 136

26

4 807

13 894 ( 2 872)

• 872

1 224 766 ( 81 555)

1 841 074

DIRECTORATE: M M Valela (Chairman), *S Muchenje (Managing Director), S W Klopper, A. Makamure, R H M Maunsell, *M L Ndachena, N Samuriwo, R Pieters - *Executive Directors

In determining the closing rate applied at year end, the Company considered the following inputs;

• The rate at which supplies were being charged;
• The rate at which foreign currency was obtained from sales.

1.5Historical information

The historical financial disclosure is shown as supplementary information. The information does not comply with the International Financial Reporting Standards in that it has not taken into account the requirements of International Accounting Standard 29 (Financial Reporting in Hyper inflationary Economies). As a result, the auditors have not issued an audit opinion on the historic financial information.

• Share buy back
  The Company is holding 3 434 842 (2022: 3 434 842) of its own shares as treasury stock and no additional shares were acquired during

	the year.	INFLATION ADJUSTED		HISTORIC COST
		March 2023	March 2022		March 2023		March 2022
		Audited		Audited	Supplementary		Supplementary
	Notes	ZW$ 000		ZW$ 000		ZW$ 000		ZW$ 000
3	Revenue
	Gross sales	42 370 093	26 903 897		35 375 265	6 695 676
	Discounts	( 1 364 154)		( 532 319)		( 1 181 186)		( 133 244)
		41 005 939	26 371 578		34 194 079	6 562 432
4	Profit before tax
	This is stated after charging/(crediting) the following
	items of significance:
	Depreciation	310 325	222 538		82 488	14 875
	Impairment recognised on trade and other receivables	30 825	8 802		30 825	2 893
	Royalties	935 045	563 934		783 683	139 772
	Staff costs	5 335 054	2 233 640		4 431 071	568 363
	Retirement benefit costs	253 745	150 774		214 717	37 717
	Compensation of directors and key management:
	for services as directors	63 601	57 582		51 359	14 324
	for management services	824 963	463 050		689 711	119 914
		888 564	520 633		741 070	134 238
	Other operating income:
	Sale of pallets and layer boards	151 433	90 168		133 928	23 361
	(Profit)/Loss on disposal of property,plant and equipment	( 14 914)	535		( 12 807)	35

• Related party transactions
  Delta Corporation Limited ("Delta") and Distell Limited (South Africa) ("Distell") each have an effective shareholding of 51.14% (2022: 50.98%) and 29.45% (2022:28.89%) respectively in the Company. The following transactions of significance were carried out with related parties at arm's length and in accordance with normal business operations of the Company:

	Distell Limited (South Africa)
	Purchase of raw materials	1 563 528	3 000 994		1 329 770	745 465
	Purchase of finished products for sale	1 895 867	980 117		1 728 003	262 450
	Purchase of property, plant and equipment and spares	29 561	102 663		21 791	21 860
	Royalties on finished goods produced and sold under license	831 107		546 229		695 320			139 772
		4 320 063	4 630 004		3 774 884	1 169 547
	Delta Corporation Limited
	Purchase of raw materials	60 281	36 422		54 420	8 931
	Forklift hire	-	17 957		-	4 375
	IT Costs	49 649		9 657		44 476			2 444
		109 930	64 036		98 896	15 750
6	Taxation
	Current income tax expense	2 181 265	1 201 575		1 688 894	303 460
	Deferred tax	( 44 997)		( 106 831)		( 255 001)			( 1 704)
		2 136 268	1 094 744		1 433 893	301 756
7	Cash generated from trading
	Profit before taxation	3 687 737	3 292 395		6 183 403	1 526 522
	Depreciation	310 326	222 538		82 488	14 875
	(Profit)/Loss on disposal of property, plant and equipment	( 14 914)	535		( 12 807)	35
	Share option expense	53 221	52 897		41 539	13 894
	Interest income	( 3 195)	( 6 255)		( 2 382)	( 1 576)
	Interest expense	609 091	20 360		550 730	4 749
	Unrealised exchange losses	383 133	21 477		383 133	7 059
	Net monetory loss	531 300		550 813
		5 556 699	4 154 760		7 226 104	1 565 558
8	Property, plant and equipment
	Movement in the property,
	plant and equipment balance for the year:
	Balance at the beginning of the period	2 445 219	1 925 289		248 642	61 667
	Capital expenditure	1 220 549	743 003		995 100	201 885
	Depreciation	( 310 326)	( 222 538)		( 82 488)	( 14 875)
	Disposals	( 3 511)		( 535)		( 31)			( 35)
	Balance at the end of the period	3 351 931	2 445 219		1 161 223	248 642
9	Inventories
	Finished products	3 609 265	1 788 702		2 992 203	460 455
	Maturing spirits and wines	273 141	177 737		195 906	47 204
	Raw materials	7 284 254	3 037 536		6 561 251	781 795
	Allowance for obsolete Inventory	( 3 986)		( 3 986)		( 689)			( 689)
	Inventories at end of the period	11 162 674	4 999 989		9 748 671	1 288 765
10	Trade and other receivables
	Trade receivables	2 242 578	916 577		2 242 578	301 258
	Prepayments - relating to inventory purchases#	3 701 125	3 039 442		3 406 550	856 952
	Other receivables*	6 640	45 285		6 640	14 884
	Allowance for credit losses	( 37 899)	( 21 523)		(37 899)	( 7 074)
		5 912 444		3 979 781		5 617 869			1 166 020
	* Other receivables includes sundry debtors, staff welfare loans.
	# Included in prepayments are balances with related parties as follows:
	Distell Limited (South Africa)	155 990	504 581		876	105 871
11	Trade and other payables
	Trade payables - local	489 736	136 760		489 736	44 950
	Trade payables - foreign	4 309 865	1 436 636		4 309 865	472 189
	Accruals and other payables^	2 722 118	1 206 623		2 722 118	396 589
		7 521 719		2 780 019		7 521 719			913 728

• Accruals and other payables includes leave pay provision, long service awards, accruals for statutory payments and other sundry creditors. Included in trade payables are balances with related parties as follows;

Distell Limited (South Africa)	3 098 850	1 025 533	3 098 850	337 069

The average credit period on local purchases is 7 days while the average credit period for foreign purchases is more than 90 days.

12 Short-term borrowings

Short-term borrowings compromise of;

Short-term loans	2 196 716	121 700	2 196 716	40 000
Bank Overdraft	1 548 266	256 154	1 548 266	84 192
	3 744 982		377 854		3 744 982		124 192

Short term loans include US$600 thousand unsecured loan at 8.5% interest from Delta with a six-month tenure and bank loans at 12 month tenure.

The company also has the following facilities with the banks: US$1 million overdraft at 10% interest and ZW$1.4 billion overdraft at 100% interest.

13 Restatement of prior year financial statements: Inflation adjusted cost of sales

(IAS29) Financial Reporting in Hyperinflationary Economies (IAS29) requires all items in the statement of comprehensive income to be presented in terms of the measuring unit current at the end of the reporting period, by applying the change in the general price index from the dates when the items of income and expenses were initially recorded in the financial statements.

In the prior year, the Company used the direct method instead of the indirect method to adjust 'cost of sales' for hyperinflation. In terms of the direct method, monthly inflation indices are used to adjust the historical monthly 'cost of sales' expense. In the current year, management has reviewed the use of the direct method in respect of cost of sales.

After due consideration, the Company has revised its approach and retrospectively applied the indirect method to hyperinflate 'cost of sales'. In terms of the indirect method, each component used to determine the 'cost of sales' expense (opening stock, production costs and closing stock) is adjusted for hyperinflation separately rather than adjusting 'cost of sales' as a whole. The use of the indirect method aligns the method used to adjust 'cost of sales' with that used for 'depreciation' and improves the relationship between the inflation adjustments applied to the statement of financial position and those applied to the statement of profit and loss and other comprehensive income. This revision has resulted in a restatement of amounts in the statement of comprehensive income between 'Cost of sales' and 'Net monetary loss' with effect from 1 April 2021. While Operating income has decreased, there has been no impact on profit before tax, taxation, total earnings per share (basic and diluted), the statement of financial position or the statement of cash flows

Impact of change in determination of inflation adjusted cost of sales on the Company's statement of financial position

The change in the determination of inflation adjusted cost of sales had no impact on the Company's statement of financial position.

Impact of change in determination of inflation adjusted cost of sales on the Company's statement of profit or loss and other comprehensive income

	Year ended 31 March 2022
		ZW$'000
Increase in cost of sale		2 068 750
Decrease in net monetary loss		(2 068 750)
Effect on profit before tax		-
Effect on tax expsense		-
Change in profit for the year		-
Effect on basic, headline and diluted earnings per share (ZW$ cents)		-

14 Capital commitments

The Company has no firm capital commitments.

15 Going concern

The Directors have assessed the ability of the Company to continue as a going concern and believe that the preparation of these financial statements on a going concern basis is appropriate.

It is anticipated that the economy will grow positively in the ensuing year and with the promised stable and consistent economic policies, this will also trigger Company growth. Accessibility of foreign currency is key to smooth running of the business, and the Company has been able to access its foreign currency requirements needs from both trading and financial sector and this is also anticipated to continue in the ensuing year.

16 Events after the reporting period

The acquisition of a major shareholder and partner, Distell Ltd by Heineken BV has been approved and implemented with effect from 26 April 2023. The Company continues to receive support from Distell in line with the existing franchise and technical arrangements. It is anticipated that no adverse changes will arise from the acquisition.

17 Auditor's Statement

The condensed financial results should be read in conjunction with the complete set of financial statements for the year ended 31 March 2023 which have been audited by the Company's external auditors, Ernst & Young Chartered Accountants (Zimbabwe). The auditors have issued an adverse audit opinion with respect to non-compliance with International Accounting Standard 21 "The Effects of Changes in Foreign Exchange Rates and International Accounting Standard 8 "Accounting Policies, Changes in Accounting Estimates and Errors" and the consequential impact on International Accounting Standard 29; "Financial Reporting in Hyper inflationary Economies".

The auditor's report is available for inspection at the registered office of the Company. The engagement partner responsible for this audit is Mr Fungai Kuipa (PAAB Practising Certificate Number 335).

ADC 199

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

Independent Audit or's Report

To t he Shareholders of African Dist illers Limit ed

Report on t he Audit of t he Inflat ion Adjust ed Financial St at ement s

Adverse Opinion

We have audited the Inflation Adjusted Financial Statements of African Distillers Limited (the Company) set out on pages 16 to 56, which comprise t he Inflation Adjusted Stat ement of Financial Posit ion as at 31 March 2023, and t he Inflat ion Adjusted St atement of Profit or Loss and Ot her Comprehensive Income, t he Inflation Adjusted Statement of Changes in Equity and the Inflat ion Adjusted Statement of Cash flows for the year t hen ended, and not es to t he Inflat ion Adjusted Financial Stat ement s, including a summary of significant account ing policies.

In our opinion, because of t he significance of t he matters discussed in t he Basis for Adverse Opinion sect ion of our repor t, t he accompanying Inflat ion Adjusted Financial Stat ements do not present fairly t he financial position of the Company as at 31 March 2023, and it s financial performance and its cash flows for t he year then ended in accordance wit h Internat ional Financial Reporting Standards and t he requirements of t he Companies and Ot her Business Ent it ies Act (Chapter 24:31).

Basis for Adverse Opinion

Non-compliance wit h Internat ional Financial Report ing Standards IAS 2 1 - The Effects of Changes in Foreign Exchange Rates and IAS 8 - Accounting Polices, Changes in Accounting Estimates and Errors:

Exchange rat e used in t he prior year and current year

Effective 1 August 2020 t o 31 March 2023, management applied an int ernally generat ed exchange rat e (t ransact ion rat e) t o t ranslat e foreign denominated t ransactions and balances t o the funct ional and report ing currency, the Zimbabwe Dollar (ZW$ ). We believe t hat t he use of a t ransaction rat e is inappropriat e for financial report ing as it does not meet the definit ion of a spot rat e as t he rat e is not accessible t hrough a legal exchange mechanism. We believe that management should have applied t he auct ion exchange rat e and/ or t he Willing-Buyer-Willing-Seller (WBWS) exchange rat e as det ermined by t he int erbank market , as eit her one of these t wo rat es met t he Internat ional Financial Reporting St andards definit ion of a spot rat e.

The errors result ant from t he use of incorrect exchange rat es impact both current year and prior year numbers. The prior year errors should have been correct ed ret rospect ively in accordance wit h IAS 8 - Account ing Policies, Changes in Accounting Est imat es and Errors.

As no ret rospect ive adjustment s in terms of IAS 8 have been made, t he corresponding amount for Trade and ot her receivables on t he Inflat ion Adjusted St atement of Financial Posit ion is mat erially misst at ed. Our audit report is t herefore modified due t o possible impact of this mat t er on comparabilit y of t he prior period and current period amount s. Our prior year audit report was also modified due t o t his matt er .

A member firm of Ernst & Young Global Limited

1 2

Independent Audit or's Report (Cont inued)

Af rican Dist illers Limit ed

Additionally, t he following current year and prior year element s are impact ed due to the cont inuing mat t er:

1. Virt ually all Inflation Adjust ed St at ement of Profit or Loss and Ot her Comprehensive Income it ems are mat erially misst ated except for ot her income, Int erest income and Int erest expense.
2. The Inflat ion Adjust ed Stat ement of Financial Posit ion it ems t hat are affected are as follows:
3. 1. Element s for which misst at ement s could be quant ified

Element		3 1 March 2023		3 1 March 2022
	Amount	Misstat ement	Amount	Misstat ement
Tr ade and	ZW$7 ,52 1 ,7 1 9 ,00 0	ZW$4 ,50 3 ,5 6 4 ,11 1	Not applicable	Not applicable
ot her
Payables
Cash and cash	ZW$1,866,658,000	ZW$64,551,859	ZW$706,950,000	ZW$50,394,290
equivalents

1. Element s for which misst atement s could not be quant ified in t he current year due t o t he volume of t ransact ions:
2. • Invent ories st at ed at ZW$ 11,162,674,000 (2022:ZW$ 4,999,989,000)
   • Accumulat ed profit st at ed at ZW$ 7,703,820,000 (2022:ZW$ 6,604,335,000)
   • Deferred t axat ion st at ed at ZW$ 664,262,000 (2022:ZW$ 709,259,000)

-	Current income t ax liabilit y st at ed at ZW$ 1,211,059,000 (2022:
	ZW$ 247,221,000)

Consequent ly, the Inflation Adjust ed St atement s of Changes in Equit y and Cashflows are impact ed.

Consequential impact on IAS 2 9 - 'Financial Reporting in Hyperinflationary Economies'

Furt hermore, notwit hstanding that IAS 29 has been applied correct ly, it is noted t hat it s application was based on prior and current periods' financial informat ion which was not in compliance wit h IAS

21 / IAS 8 as described above. Had the correct base numbers been used, t he above stat ed accounts would have been materially different . Consequent ly, t he Net monetary loss of ZW$ 531,300,000 (31 March 2022: ZW$ 550,813,000) on t he Inflat ion Adjust ed Statement of Profit or Loss and Ot her Comprehensive Income are impacted.

The effect s of the above depar tures from IFRS are mat erial and pervasive to t he Inflat ion Adjusted Financial Stat ement s.

We conducted our audit in accordance wit h Int ernat ional St andards on Auditing (ISAs). Our responsibilit ies under t hose st andards are fur ther described in t he Auditor 's Responsibilit ies for t he Audit of t he Inflation Adjusted Financial Statements sect ion of our repor t . We are independent of t he Company in accordance wit h t he Int ernat ional Code of Et hics for Professional Accountants (including Internat ional Independence Standards) (IESBA Code) and ot her independence requirements applicable to performing audit s of Financial Stat ements in Zimbabwe. We have fulfilled our ot her et hical responsibilit ies in accordance wit h t hese requirements and the IESBA Code. We believe t hat t he audit evidence we have obtained is sufficient and appropriate t o provide a basis for our adverse opinion.

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Independent Audit or's Report (Cont inued)

Af rican Dist illers Limit ed

Key Audit Matter

Except for the mat t ers describe in t he Basis for Adverse Opinion Sect ion, we have det ermined t hat t here are no other key audit mat t ers t o communicat e in our report .

Ot her informat ion

Ot her information consists of the information included in the Company's 2023 Annual Report ot her t han t he Inflation Adjusted Financial Stat ements and our audit or 's report thereon. Management is responsible for t he ot her informat ion.

Our opinion on the Inflat ion Adjusted Financial Statement s does not cover t he ot her informat ion and we do not express any form of assurance conclusion t hereon.

In connection with our audit of t he Inflation Adjusted Financial Statements, our responsibility is to read t he ot her information and, in doing so, consider whether t he ot her informat ion is materially inconsistent wit h t he Inflat ion Adjusted Financial Statements, or our knowledge obtained in t he audit or ot herwise appears to be materially misstat ed. If, based on the work we have performed, we conclude that there is a material misstatement of t his ot her informat ion, we are required to repor t t hat fact . As described in t he Basis for Adverse Opinion section above, t he Company did not comply wit h t he requirements of IAS 21, IAS 8 and t he consequent ial impact on IAS 29. We have concluded t hat t he ot her informat ion is mat erially misst at ed for the same reasons.

Responsibilit ies of t he Directors for the Inflat ion Adjusted Financial Statement s

The directors are responsible for the preparat ion and fair present at ion of the Inflat ion Adjusted Financial Statements in accordance wit h Internat ional Financial Report ing Standards and t he requirements of t he Companies and Ot her Business Entit ies Act (Chapter 24:31), and for such internal cont rol as t he direct ors determine is necessary t o enable t he preparat ion of Inflat ion Adjusted Financial Stat ement s t hat are free from material misstat ement , whet her due to fraud or error.

In preparing t he Inflat ion Adjusted Financial Statements, t he directors are responsible for assessing t he Company's abilit y to cont inue as a going concern, disclosing, as applicable, mat ters related t o going concern and using the going concern basis of accounting unless t he directors eit her intend t o liquidate t he Group or to cease operat ions, or have no realist ic alternat ive but to do so.

Auditor's Responsibilit ies for t he Audit of t he Inflat ion Adjusted Financial Statement s

Our object ives are to obtain reasonable assurance about whet her t he Inflat ion Adjusted Financial Stat ement s are free from material misstat ement , whet her due to fraud or error, and to issue an auditor 's report t hat includes our opinion. Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance wit h ISAs will always detect a mat erial misstatement when it exists. Misstat ement s can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence t he economic decisions of users t aken on t he basis of t hese Inflation Adjusted Financial Stat ements.

As par t of an audit in accordance wit h ISAs, we exercise professional judgement and maintain professional skepticism t hroughout t he audit . We also:

• Ident ify and assess t he risks of material misstatement of t he Inflat ion Adjusted Financial Statements, whet her due to fraud or error, design and perform audit procedures responsive to t hose risks, and obtain audit evidence t hat is sufficient and appropriate t o provide a basis for our opinion.

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