Ariston : FY22 Results & Audit Opinion

A U D I T E D

F I N A N C I A L R E S U LT S

FOR THE YEAR ENDED 30 SEPTEMBER 2022

Registered Office: 18 Coghlan Road, Greendale, Harare, P.O. Box 4019, Harare.

Inflation Adjusted Financial Highlights

	INFLATION ADJUSTED	HISTORIC COST
	Audited	Audited
	Year Ended	Year on Year	Year Ended	Year on Year
All figures in ZWL '000	30-Sep-22	Change	30-Sep-22	Change

ARISTON 1908

	REVENUE (ZWL'000)	4,142,399	-12%	2,247,856	118%
	EBITDA (excluding fair value adjustments)	(1,178,599)	-227%	(1,269,672)	-731%
	(LOSS)/ PROFIT AFTER TAXATION (ZWL'000)	(797,001)	961%	7,864,955	-80%
	BASIC EARNINGS PER SHARE (ZWL'000)	3.5352	-7757%	4.8328	2222%
	HEADLINE EARNINGS PER SHARE (ZWL'000)	(0.5120)	1011%	0.0235	-89%
CHAIRMAN'S STATEMENT					Condensed Group Statement of Profit or Loss and Other Comprehensive Income

INTRODUCTION

The financial year ended 30 September 2022 was fraught with a number of major disruptions world wide. The effects of COVID-19 on the world economy continued in the period under review. COVID-19 resulted in a reduction in the macadamia market size. This was particularly the case this year where due to lockdowns in China the macadamia selling season only saw very low volumes finding their way into China. As a result, volumes available for nut cracking were significant resulting in reduction of selling prices. The Ukraine war and effects on the world economy in terms of inflation, and increased costs of agricultural inputs such as fertilisers and chemicals compounded the challenges. Lastly, logistics constraints including container shortages resulted in spiraling costs. The consequences of all the above was a reduction in prices achieved as well as delays in receipts from customers. On the other hand, the tea market held in terms of both demand and prices although the net return would be adversely affected by the same increase in agricultural input costs discussed above.

The agricultural season was characterised by erratic rains and hotter temperatures in the first quarter to the end of December 2021.

FINANCIAL PERFORMANCE (on inflation adjusted terms)

Revenue for the year ended 30 September 2022 reflects a 12% decline to ZWL4.1 billion when compared with the prior comparative period. The Group continued to have significant products sold in United States dollars whose value on the Auction did not reflect inflationary changes. In real terms the revenue line was adversely affected by the reduction in the average selling price of macadamia and lower macadamia nut yield in current year.

A current year loss from operations was posted arising from the impact of the mismatch arising from revenue from exports where Reserve Bank of Zimbabwe (RBZ) retention continued to be paid at a rate significantly lower than the rate being charged by local suppliers resulting in real erosion of value.

After taking into account fair value adjustments, the monetary profit and share of profits from joint ventures, the Group posted a loss before interest and tax of ZWL999 million compared to a loss of ZWL927 million in the prior comparative period.

The Group's finance costs increased by 43% in inflation adjusted terms when compared with the prior comparative period.

The Group performed a revaluation of its buildings, leasehold and improvements, plant and machinery as at 30 September 2022. This was a change in accounting policy as the Group carried these at cost in prior years. The revaluation was performed in a bid to fairly state the value of the assets which had been translated at a rate of 1:1 upon change of functional currency during the financial year ended 30 September 2019. The revaluation resulted in a revaluation surplus net of taxes of ZWL6.5 billion. The Group's total comprehensive income for the year closed at ZWL5.7 billion compared to a loss of ZWL75 million for the prior comparative period.

Overall the Group's balance sheet continued to improve in the period under review as shown by improvements in the Group's financial ratios.

VOLUMES AND OPERATIONS

Tea

Tea production volume in the current year continued on an upward trajectory with a 15% increase to 3,158 tons from 2,748 tons in the prior comparative period. Improvements made through automation of certain production tasks released labour for harvesting resulting in improved production volumes. As previously communicated the labour shortage is expected to persist in the future thereby necessitating continuous improvements and automation of processes.

Export tea sales volumes improved by 10% signaling a slight recovery in the tea market after the declines suffered with the onset of Covid 19 pandemic disruption. The average export tea selling price declined by 1% when compared to the prior comparative period.

Current year average selling prices for local tea sales improved by 12% in USD terms whilst volumes declined by 16% when compared to the prior comparative period.

Macadamia

Macadamia production volumes declined by 14% when compared to the prior comparative period from 1,292 tons to 1,106 tons. Generally the yield achieved this year was lower than that for the prior comparative period although there was an overall improvement on quality. Unfortunately, due to the effects described above on the macadamia market size and demand, the average selling price declined by 21% when compared to the prior comparative average price. As a result of covid 19 lockdowns, the Chinese market remained largely unavailable to the rest of the world resulting in an oversupply for nut cracking market with a decline in average selling prices.

Other products

The diversification of the Group's product offering has never been more important than in the current year. Aggressive growth in the crop offering of basic commodities grown from Kent Estate helped the Group immensely in the current financial year.

The "Other Products" category comprising of potatoes, commercial maize, soya beans, seed maize and bananas contributed 10% to the Group's turnover, down from 11% contribution in the prior comparative period.

Poultry revenue grew by 58% as a result of an increase in the number of placements.

INVESTMENTS

In the period under review, significant investment was made into planting new macadamia orchards, as well as completing the fencing of all macadamia orchards in the Group. Irrigation equipment was rehabilitated where necessary and an additional centre pivot was installed at Kent Estate so as to fully utilise dam water. Further, the tractor fleet was expanded to maintain operations. Lastly, another upgrade of the macadamia drying facility was implemented so as to increase capacity to the match the current macadamia production volumes.

OUTLOOK

The 2022/2023 agricultural season is expected to have normal to above normal rainfall. This will assist in underpinning the Group's production performance. The Group will continue focusing on quality and volume improvements, further automation of activities and improved production efficiencies.

In the short term, production input costs are expected to remain high. At the same time, average selling prices for macadamia will remain depressed whilst tea prices and volume offtake will continue to improve. It is expected that improvements in the macadamia market will only be truly felt in a positive way in the 2024 year.

DIVIDEND

In view of the need to enhance assets and the need to preserve cash resources, the Board has seen it prudent not to declare a dividend.

DIRECTORATE

There have been no changes in the directorate in the period under review.

APPRECIATION

I would like to extend my appreciation to all our customers, suppliers, staff, shareholders, strategic partners and my fellow Board directors for the continued support for their business.

BY ORDER OF THE BOARD

ALEXANDER CRISPEN JONGWE

CHAIRMAN

28 DECEMBER 2022

		Inflation Adjusted	*Historical
		AUDITED	AUDITED
		Year Ended	Year Ended	Year Ended	Year Ended
All figures in ZWL'000	Notes	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
Revenue	9	4,142,399	4,684,437	2,247,856	1,030,220
Cost of production		(2,286,667)	(2,097,640)	(995,264)	(432,374)
Gross profit		1,855,732	2,586,797	1,252,592	597,846
Other operating income		65,049	33,330	47,558	7,322
Operating expenses		(2,312,378)	(2,127,105)	(1,111,581)	(427,137)
(Loss)/ Profit from operations		(391,597)	493,022	188,569	178,031
Fair value adjustments		530,926	(887,516)	1,465,297	(38,380)
Exchange loss		(1,623,530)	2,569	(1,694,311)	5,698
Monetary loss		359,174	(79,968)	-	-
(Loss)/ profit on partial disposal of interest		-	(497,432)	-	267,860
Share of net profit of a joint ventures accounted for using
the equity method	6	125,205	42,462	222,957	10,261
(Loss)/ Profit before interest and taxation		(999,822)	(926,863)	182,512	423,470
Finance costs		(218,719)	(161,125)	(171,017)	(35,887)
(Loss)/ Profit before taxation		(1,218,541)	(1,087,988)	11,494	387,583
Income tax benefit/ (expense)	3	421,539	1,012,849	54,701	(48,834)
(Loss)/ Profit for the year		(797,001)	(75,139)	66,196	338,749
Other comprehensive income:
Items that may be reclassified to profit or loss		-	-	-	-
Items that will not be reclassified to profit or loss:
Gain on revaluation of property, plant and machinery	10	8,701,154	-	10,359,669	-
Tax on other comprehensive income	3	(2,150,925)	-	(2,560,910)	-
Other comprehensive income for the year, net of tax		6,550,229	-	7,798,759	-
Total comprehensive income for the year		5,753,228	(75,139)	7,864,955	338,749
Number of shares in issue ('000)		1,627,396	1,627,396	1,627,396	1,627,396
Weighted average number of shares in issue ('000)		1,627,396	1,627,396	1,627,396	1,627,396
Earnings per share (dollars)
Basic earnings per share		3.5352	(0.0462)	4.8328	0.2082
Diluted earnings per share		3.5352	(0.0462)	4.8328	0.2082

* Historical amounts have been presented as supplementary information and were not subject to an audit or review.

Condensed Group Statement of Financial Position

		Inflation Adjusted	*Historical
		AUDITED	AUDITED
		As at	As at	As at	As at
All figures in ZWL'000	Notes	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
ASSETS
Non - current assets
Property, plant and equipment		13,712,737	5,260,779	10,599,601	129,692
Biological assets		70,670	26,800	70,670	7,045
Right of use assets		75,117	94,176	4,381	710
Investment in joint ventures	6	865,886	773,954	355,641	152,998
		14,724,410	6,155,709	11,030,293	290,445
Current assets
Biological assets		1,727,852	1,240,796	1,727,852	326,180
Inventories		780,257	651,282	690,094	162,284
Trade and other receivables		2,494,725	1,819,843	2,488,568	475,988
Cash and cash equivalents		223,807	29,922	223,807	7,867
		5,226,641	3,741,843	5,130,321	972,319
TOTAL ASSETS		19,951,051	9,897,552	16,160,614	1,262,764
EQUITY
Share capital and reserves
Share capital		322,744	322,744	1,627	1,627
Share premium		2,166,106	2,166,106	10,922	10,922
Revaluation reserve	10	6,550,229	-	7,798,759	-
Distributable reserves		3,067,886	4,045,005	475,398	503,592
		12,106,965	6,533,855	8,286,706	516,141
LIABILITIES
Non-current liabilities
Borrowings	8	3,260,902	942,798	3,260,902	247,843
Deferred tax		2,542,961	813,575	2,588,263	82,053
Lease liabilities		23,128	-	23,128	-
		5,826,991	1,756,373	5,872,292	329,896
Current liabilities
Borrowings	8	712,261	402,074	712,261	105,697
Trade and other payables	7	1,278,722	826,941	1,263,243	211,612
Contract liabilities		19,816	377,558	19,816	99,221
Lease liabilities		6,296	751	6,296	197
		2,017,095	1,607,324	2,001,616	416,727
TOTAL EQUITY AND LIABILITIES		19,951,051	9,897,552	16,160,614	1,262,764

* Historical amounts have been presented as supplementary information and were not subject to an audit or review.

Condensed Group Statement of Cashflows

	Inflation Adjusted	*Historical
	AUDITED	AUDITED
	Year Ended	Year Ended	Year Ended	Year Ended
All figures in ZWL'000	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
Cash flows from operating activities
(Loss)/ profit before interest and taxation	(999,822)	(926,863)	182,512	423,470
Change in working capital	(1,407,710)	(809,586)	(1,811,509)	(99,919)
Non-cash items	(234,526)	2,266,950	(1,668,234)	(340,735)
Cash (utilised in)/ generated from operating activities	(2,642,057)	530,501	(3,297,231)	(17,184)
Cash flows from investing activities
Payments for property, plant and equipment acquired	(307,864)	(479,304)	(129,208)	(83,694)
Proceeds from sale of property, plant and equipment	751	2,291	235	448
Dividends received on investments	33,273	-	20,314	-
Proceeds from sale of investments	741,810	-	176,507	-
Cash generated from/ (utilised in) investing activities	467,970	(477,013)	67,848	(83,246)
Cash flows from financing activities
Cash utilised in financing activities	(52,572)	(562,562)	(27,550)	(13,213)
Cash generated from financing activities	2,420,544	435,733	3,472,873	103,598
Cash generated from financing activities	2,367,972	(126,829)	3,445,323	90,385
Net increase/ (decrease) in cash and cash equivalents	193,885	(73,341)	215,940	(10,045)
Cash and cash equivalents at beginning of the year	29,922	103,263	7,867	17,912
Cash and cash equivalents at the end of the year	223,807	29,922	223,807	7,867

* Historical amounts have been presented as supplementary information and were not subject to an audit or review.

AHL 1969

Directors: Mr. A.C. Jongwe (Chairman), Mr. P.T. Spear* (Chief Executive Officer), Mr. I. Chagonda, Mr. C.P. Conradie, Mrs.T.C. Mazingi, Mr. J.W. Riekert. * Executive

Registered Office: 18 Coghlan Road, Harare, Zimbabwe, P.O. Box 4019,

A U D I T E D F I N A N C I A L R E S U LT S FOR THE YEAR ENDED 30 SEPTEMBER 2022

Condensed Group Statement of Changes in Equity

		Inflation Adjusted
		Share	Revaluation	Distributable
All figures in ZWL'000	Share Capital	Premium	Reserve	Reserves	Total
Balance as at 30 September 2020	322,744	2,166,106	-	4,120,144	6,608,994
Total comprehensive income for the period	-	-	-	(75,139)	(75,139)
Balance as at 30 September 2021	322,744	2,166,106	-	4,045,005	6,533,855
Dividends declared for the 2021 financial year			-	(180,118)	(180,118)
Total comprehensive income for the period	-	-	6,550,229	(797,001)	5,753,228
Balance as at 30 September 2022	322,744	2,166,106	6,550,229	3,067,886	12,106,965
			*Historical
		Share	Revaluation	Distributable
All figures in ZWL'000	Share Capital	Premium	Reserve	Reserves	Total
Balance as at 30 September 2020	1,627	10,922	-	164,843	177,392
Total comprehensive income for the period	-	-	-	338,749	338,749
Balance as at 30 September 2021	1,627	10,922	-	503,592	516,141
Dividends declared for the 2021 financial year	-	-	-	(94,390)	(94,390)
Total comprehensive income for the period	-	-	7,798,759	66,196	7,864,955
Balance as at 30 September 2022	1,627	10,922	7,798,759	475,398	8,286,706

* Historical amounts have been presented as supplementary information and were not subject to an audit or review.

Condensed Notes and Supplementary Information

		Inflation Adjusted	*Historical
		AUDITED	AUDITED
		Year Ended	Year Ended	Year Ended	Year Ended
	All figures in ZWL'000	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
1.	Depreciation and amortisation
	Depreciation of property, plant and equipment excluding
	bearer plants	215,139	267,828	11,320	5,825
	Depreciation of bearer plants	100,249	68,228	505	631
	Depreciation of right of use assets	36,760	33,220	1,289	297
		352,148	369,276	13,114	6,753
2.	Impairment
	Impairment loss recognised	-	62,644	-	316
		-	62,644	-	316
3 Income tax (benefit)/ expense
	Current tax	-	92,776	-	24,389
	Deferred tax movement through profit or loss	(421,539)	(1,105,625)	(54,701)	24,445
	Total income tax through profit or loss	(421,539)	(1,012,849)	(54,701)	48,834
	Deferred tax movement through comprehensive income	2,150,925	-	2,560,910	-
		1,729,386	(1,012,849)	2,506,209	48,834
4. Capital expenditure for the period
	Purchase of property plant and equipment excluding bearer
	plants	274,531	403,445	120,384	67,885
	Capital expenditure incurred on bearer plants	39,588	75,859	12,078	15,809
		314,119	479,304	132,462	83,694
5. Commitments for capital expenditure
	Authorised by directors but not contracted	446,034	66,788	446,034	17,557
		446,034	66,788	446,034	17,557

The capital expenditure will be financed out of the Group's own resources and existing facilities.

		Inflation Adjusted	*Historical
		AUDITED	AUDITED
		Year Ended	Year Ended	Year Ended	Year Ended
	All figures in ZWL'000	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
6. Investment in joint ventures
	Beginning of the period	773,954	147,770	152,998	5,555
	Addition	-	120,558	-	25,593
	Fair value of retained investment	-	463,164	-	111,589
	Share of profit for the period	125,205	42,462	222,957	10,261
	Dividends received	(33,273)	-	(20,314)	-
	End of the period	865,886	773,954	355,641	152,998
7. Trade and other payables
	Trade payables	756,538	595,329	756,538	156,502
	Dividends declared for the 2021 financial year	63,552	-	63,552	-
	Other payables*	458,632	231,612	443,153	55,110
		1,278,722	826,941	1,263,243	211,612
	*Other payables include provisions and statutory liabilities
8. Borrowings
	At amortised cost
	Loans from banks	1,540,862	341,660	1,540,862	89,815
	Bank overdrafts	105,375	71,403	105,375	18,771
	Loans from related parties	2,326,926	931,809	2,326,926	244,954
		3,973,163	1,344,872	3,973,163	353,540
	Long-term	3,260,902	942,798	3,260,902	247,843
	Short-term	712,261	402,074	712,261	105,697
		3,973,163	1,344,872	3,973,163	353,540

1. Bank loans of ZWL 1,540,862,323 (2021: ZWL 341,659,617) (inflation-adjusted) are secured by an assignment of export receivables between Ariston Management Services and 2 customers and an act of surety signed for the full amount of exposure.
   The average effective interest rate on bank loans approximates 10% (2021: 8.5%) per annum.
2. Bank overdrafts are repayable on demand. Overdrafts of ZWL 105,375,301 (2021: ZWL 71,403,412) (inflation-adjusted) have been secured by joint and several guarantees. The average effective interest rate on bank overdrafts approximates 100% (2021: 12% to 40% ) per annum.
3. Loans repayable to related parties of the Group are secured by inventories and a mortgage bond over Kent Estate and carry interest of 6% (2021: 6%) per annum charged on the outstanding loan balances. The loans are not payable on demand, they are due at the end of the loan agreement.
4. Lease liabilities are effectively secured as the rights to the leased assets recognised in the financial statements revert to the lessor in the event of default.
   The Group did not have any debt covenants.

9 . Reportable segments
		Inflation Adjusted	*Historical
		AUDITED	AUDITED
		Year Ended	Year Ended	Year Ended	Year Ended
	Revenue from major products	30-Sep-22	30-Sep-21	30-Sep-22	30-Sep-21
	Tea	1,945,050	1,763,486	1,098,535	381,800
	Macadamia nuts	1,168,082	1,441,643	603,220	323,290
	Vegetables and fruits	146,230	753,058	67,328	160,708
	Poultry	586,481	370,704	287,602	82,513
	Other	296,556	355,546	191,171	81,909
	Total	4,142,399	4,684,437	2,247,856	1,030,220

All revenue is recognised at a point in time.
		Inflation Adjusted
	Southdown	Claremont	Kent	Corporate
All figures in ZWL'000	Estates	Estate	Estate	Office	Total
30-Sep-22
Segment revenue	3,201,958	3,443	936,998	-	4,142,399
Segment EBITDA (excluding fair value adjustments)	38,990,341	(7,745,600)	6,577,651	(39,000,992)	(1,178,599)
Segment depreciation and impairment	268,734	6,506	38,626	38,282	352,148
Segment assets (excluding intersegment assets)	14,391,204	182,774	2,064,826	3,312,247	19,951,051
Segment liabilities (excluding intersegment liabilities)	(3,437,497)	(54,412)	(101,219)	(4,250,958)	(7,844,086)
Net segment assets/ (liabilities)	(600,135)	(55,849)	32,215	623,769	-
30-Sep-21
Segment revenue	3,287,940	547,262	849,235	-	4,684,437
Segment EBITDA (excluding fair value adjustments)	9,708,265	(3,144,996)	(268,925)	(5,365,515)	928,829
Segment depreciation and impairment	204,125	55,417	35,571	136,807	431,920
Segment assets (excluding intersegment assets)	6,412,788	666,486	665,473	2,152,805	9,897,552
Segment liabilities (excluding intersegment liabilities)	(1,578,771)	(106,905)	(28,957)	(1,649,064)	(3,363,697)
Net segment assets/ (liabilities)	295,869	(175,781)	(5,290)	(114,798)	-

Condensed Notes and Supplementary Information (Continued)

9.	Reportable segments (Continued)
				*Historical
		Southdown	Claremont	Kent	Corporate
	All figures in ZWL'000	Estates	Estate	Estate	Office	Total
	30-Sep-22
	Segment revenue	1,748,172	2,234	497,450	-	2,247,856
	Segment EBITDA (excluding fair value adjustments)	(116,331)	111,817	33,601	(1,298,759)	(1,269,672)
	Segment depreciation and impairment	10,379	348	1,827	560	13,114
	Segment assets (excluding intersegment assets)	11,627,205	179,755	1,996,246	2,357,408	16,160,614
	Segment liabilities (excluding intersegment liabilities)	(3,467,319)	(54,412)	(101,219)	(4,250,958)	(7,873,908)
	Net segment assets/ (liabilities)	(600,135)	(55,849)	32,215	623,769	-
	30-Sep-21
	Segment revenue	723,363	118,257	188,600	-	1,030,220
	Segment EBITDA (excluding fair value adjustments)	174,720	6,282	44,996	(24,938)	201,060
	Segment depreciation and impairment	4,163	1,320	674	912	7,069
	Segment assets (excluding intersegment assets)	713,116	110,195	47,912	391,541	1,262,764
	Segment liabilities (excluding intersegment liabilities)	(277,402)	(28,104)	(7,612)	(433,505)	(746,623)
	Net segment assets/ (liabilities)	77,778	(46,209)	(1,391)	(30,178)	-

* Historical amounts have been presented as supplementary information and were not subject to an audit or review.

10. Total comprehensive income

10.1 Change in accounting policy - Revaluation of property, plant and equipment

The Group changed its accounting policy from cost model to revaluation model for two categories within its property, plant and equipment. The two categories are Buildings and leasehold improvements as well as and Plant and machinery. The revaluation was performed in a bid to fairly the state the value of the assets which had been translated at a rate of 1:1 upon change of functional currency during the financial year ended 30 September 2019. This change is effective from 30 September 2022 and has been prospectively applied in terms of IAS 8 paragraph 17.

The revaluation of buildings, leasehold improvements, plant and machinery was carried out as at 30 September 2022 (being the effective date of the revaluation) by EPG Global Real Estate, an independent valuer. The Depreciated Replacement cost has been used as a basis of valuation. This is the cost of erecting and or acquiring, installing and commissioning a new or modern substitute asset with the same or similar productive capacity as the existing one, together with associated charges directly related to the installation of the asset but excluding finance charges. The said cost is then depreciated according to age, obsolescence, use and condition. This method is applied as a last resort where it is difficult to estimate inputs required in computing fair value using the income approach. The Group's property, plant and machinery, is so specialised that there is no active markets for the assets. As such, market inputs which would be applied in the income approach, such as the market capitalisation rate of these assets could not be determined by the valuers. Therefore the Depreciated Replacement Cost has been applied.

A net revaluation surplus after tax of ZWL6,550,228,007 inflation adjusted, has been recognised. The revaluation has contributed both basic and diluted Earnings Per Share of ZWL4.0250. Had no revaluation been performed, buildings and leasehold improvements would have had a carrying amount of ZWL990,099,632 while plant and machinery would have had a carrying amount of ZWL839,027,694. Movement in the Revaluation Reserve is found on the Statement of Changes in Equity. The net replacement method has been used for the purposes of the revaluation.

There are no restrictions on the distribution of the Revaluation balance to shareholders.

Management believes that the change in accounting policy will result in fair presentation of the Group's property, plant and equipment.

1. Currency of reporting
   The Group's consolidated and condensed financial statements are presented in Zimbabwe Dollars (ZWL) which is the functional currency of all its components.
2. Statement of compliance
   The Group's consolidated financial statements which are summarised by these Group financial results have been prepared in compliance with International Financial Reporting Standards (IFRS) promulgated by the International Accounting Standards Board (IASB), which include standards and interpretations approved by the IASB as well as the Standing Interpretations Committee (SIC), the requirements of the Companies and Other Business Entities Act (Chapter 24:31), the Zimbabwe Stock Exchange rules and the relevant Statutory Instruments. The Group financial results do not include all the information and disclosures required to fully comply with IFRS and should be read in conjunction with the Group's consolidated financial statements which are available for inspection at the Company's registered office.
3. Basis of preparation
   The financial results have been prepared based on statutory records which are maintained on a historical cost basis except for certain biological assets and financial instruments that are measured at fair value, and have been adjusted to fully comply with IFRS; these adjustments include restatements of financial information to reflect the effects of the application of International Accounting Standard (IAS) 29 "Financial Reporting in Hyperinflationary Economies" as more fully described on Note 14 below.
   Accordingly the inflation adjusted financial statements represent primary financial statements of the Group. The historical cost information has been provided as supplementary information only.
4. Hyperinflation
   On 11 October 2019, the Public Accountants and Auditors Board (PAAB) announced that the requisite economic factors and characteristics necessary for the application of IAS 29 in Zimbabwe had been met. This pronouncement applies to reporting for financial periods ending on or after 1 July 2019.
   Historical cost basis have been restated to comply with IAS 29 which requires that financial results be prepared and presented in terms of the measuring unit current at the reporting date, with comparative information being restated in the same manner. The restatements to cater for the changes in the General Purchasing Power of the Zimbabwean Dollar (ZWL) are based on indices and conversion factors derived from the Consumer Price Index (CPI) compiled by the Zimbabwe National Statistics Agency.
   Judgement has been used in some of the assumptions including CPIs for some previous years due to limitation of available data.
   Key CPIs and conversion factors used are shown below:

Month	CPI	Conversion Factor
30 September 2022	12,713.12	1.00
Average CPI (October 2021 to September 2022)	6,795.18	2.30
30 September 2021	3,342.02	3.80

1. Accounting policies
   The Group has adopted all the new and revised accounting pronouncements applicable for the period ending 30 September 2022 as issued by the International Accounting Standards Board (IASB). The accounting policies adopted in the preparation of the consolidated financial statements as at 30 September 2021 have been consistently applied in these Group financial results, with the exception of the measurement model used for measuring Property, plant and equipment as described in Note 10 above.
2. Going concern
   The Directors of the Group have continued to review the financial impact of the effects of COVID-19 and the related global lockdown orders on the business. The Directors have also assessed the impact of the war between Russia and Ukraine on the business which has had a negative impact on the Group's cost of production and pricing. They have also performed an overall assessment of the ability of the Group to continue operating as a going concern by reviewing the prospects of the Group. These assessments considered the Group's financial performance for the period ended 30 September 2022, the financial position as at 30 September 2022 and the current and medium term forecasts for the Group taking into account the economic environment in Zimbabwe, climate change, the global supply chain and the expected impact on prices and demand for the Group's products. The directors believe that the Group's plans and activities adequately mitigate the risks. Based on this background, the Directors have every reason to believe that the Group has adequate resources to continue in operation for the foreseeable future. Accordingly, these financial results were prepared on a going concern basis.
3. Audit Opinion
   The inflation adjusted consolidated financial statements from which the condensed version was derived have been audited by PricewaterhouseCoopers Chartered Accountants (Zimbabwe). The engagement partner on the audit is Esther Antonio (PAAB Practicing Number 0661). The auditors have issued an unqualified audit opinion on the Group's inflation adjusted consolidated financial statements. The auditors have also highlighted Key Audit Matters in relation to the Valuation of Biological Assets and the Change in Accounting Policy On Revaluation of Property, Plant and Equipment. There is no separate opinion on these Key Audit Matters.
4. Events after reporting date
   There have been no significant events after the reporting date.

Directors: Mr. A.C. Jongwe (Chairman), Mr. P.T. Spear* (Chief Executive Officer), Mr. I. Chagonda, Mr. C.P. Conradie, Mrs.T.C. Mazingi, Mr. J.W. Riekert. * Executive

Independent auditor's report

To the Shareholders of Ariston Holdings Limited

Our opinion

In our opinion, the consolidated and separate financial statements present fairly, in all material respects, the consolidated and separate financial position of Ariston Holdings Limited (the Company) and its subsidiaries (together the Group) as at 30 September 2022 , and its consolidated and separate financial performance and its consolidated and separate cash flows for the year then ended in accordance with International Financial Reporting Standards (IFRS) and in the manner required by the Zimbabwe Companies and Other Business Entities Act (Chapter 24:31 ).

What we have audited

Ariston Holdings Limited 's consolidated and separate financial statements set out on pages 25 to 78 comprise:

• the consolidated and separate statements of financial position as at 30 September 2022 ;
• the consolidated and separate statements of profit or loss and other comprehensive income for the year then ended;
• the consolidated and separate statements of changes in shareholders' equity for the year then ended;
• the consolidated and separate statements of cash flows for the year then ended; and
• the notes to the financial statements, which include a summary of significant accounting policies.

Basis for opinion

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

audit of the consolidated and separate financial statements section of our report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Independence

We are independent of the Group in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code) issued by the International Ethics Standards Board for Accountants and other independence requirements applicable to performing audits of financial statements in Zimbabwe. We have fulfilled our other ethical responsibilities in accordance with the IESBA Code and other ethical requirements applicable to performing audits of financial statements in Zimbabwe.

PricewaterhouseCoopers, Building No. 4, Arundel Office Park, Norfolk Road, Mount Pleasant P O Box 453, Harare, Zimbabwe

T: [phone], F: [phone], www.pwc.com

Clive K Mukondiwa - Senior Partner

The Partnership's principal place of business is at Arundel Office Park, Norfolk Road, Mount Pleasant, Harare, Zimbabwe where a list of the Partners' names is available for inspection.

Our audit approach

Overview

Materiality

Group

scoping

Key audit

matters

Overall group materiality

• Overall group materiality: ZWL60,927,041 , which represents 5% of inflation adjusted consolidated loss before taxation.

Group audit scope

• We conducted full scope audits on the financial statements of the Company and all of its subsidiaries.This was due to either their financial significance or to meet statutory audit requirements.

Key audit matters

• Valuation of biological assets; and
• Change in Accounting Policy - Revaluation of property, plant

and equipment…

As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated and separate financial statements. In particular, we considered where the directors made subjective judgements, for example in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters, consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.

Materiality

The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.

Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate, on the financial statements as a whole.

Overall group materiality

How we determined it

Rationale for the materiality benchmark applied

ZWL 60,927,041

5% of consolidated inflation adjusted loss before taxation.

We chose consolidated inflation adjusted loss before taxation as the benchmark because, in our view, it is the benchmark against which the performance of the Group is most commonly measured by users and is a generally accepted benchmark.

We chose 5% which is consistent with quantitative materiality thresholds used for listed profit-oriented companies.

How we tailored our group audit scope

We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the consolidated financial statements as a whole, taking into account the structure of the Group, the accounting processes and controls, and the industry in which the Group operates.

We conducted full scope audits on the financial statements of the Company and all its subsidiaries due to either their financial significance, or to meet statutory audit requirements.

The above, together with additional procedures performed at the Group level, including substantive procedures over the consolidation process, provided us with sufficient and appropriate audit evidence regarding the financial information of the Group to form an opinion on the consolidated financial statements as a whole.

Key audit matters

Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the consolidated and separate financial statements of the current period. These matters were addressed in the context of our audit of the consolidated and separate financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

Key audit matter

Valuation of Biological Assets

This key audit matter relates to the consolidated financial statements only.

Livestock, poultry, timber, seasonal crops and produce growing on bearer plants are classified as biological assets and are accounted for in accordance with International Accounting Standard IAS 41, Agriculture.

The fair value gain of the Group's biological assets amounted to ZWL 530,925,561 and the value of the biological assets was ZWL 1,798,521,961 as at 30 September 2022.

The value of biological assets is measured at fair value less costs to sell.

The values of livestock, poultry and timber are determined based on the age, size and relevant market prices less costs to sell

The values of produce growing on bearer plants, which includes macadamia nuts on trees, tea on

bush, fruits on tree and seasonal crops

("produce") are based on the estimated yield (tonnes) from the current crop of unharvested produce, multiplied by the result of the forecast price per crop less estimated costs to sell. This amount is then adjusted by a factor determined by management and the directors to take into

How our audit addressed the key audit matter

We performed the following procedures to assess the appropriateness of the valuation of biological assets:

• Evaluated the methods used by the directors
  in the valuation of biological assets against the requirements of IAS 41, 'Agriculture', as well as against industry practice. No inconsistencies were noted.
• Assessed the consistency of the methods and assumptions used by the directors in the valuation of biological assets by comparing this to those used in the prior year. No changes from previously applied assumptions and methods were noted.
• Assessed the reasonableness of assumptions used in the director's valuation model to determine the value of biological assets by performing the following procedures:
• • For livestock, poultry and timber, the market prices used to determine the fair value were compared to the current market price and the latest invoice price for the sale of a similar age livestock, poultry and timber. No material differences were noted.
  • For produce growing on bearer plants, which includes macadamias on trees, tea on bush, fruits on tree and seasonal