Unifreight Africa : 2023 FY Financials & Audit Report

Total Transport & Logistics Solutions

Abridged Audited Financial Results

for the year ended 31 December 2022

Corner OrmeWillow Roads, New Adbernnie Harare P.O. Box 772 Harare, Zimbabwe, Tel: [phone], Website:www.unifreight.co.zw

Chairman's Statement

Overview 2022 was both a challenging year as well as year of change for Unifreight. While a number of macro-economic changes to the operating environment weighed down performance, there were also a number of positive developments that will see Unfreight grow from strength to strength.

The Zimbabwe Dollar depreciated substantially during the first half of 2022 which was addressed by raising the bank policy lending rate from 80% to 200% p.a. This immediately halted the currency depreciation but created a loan : deposit ratio retraction effectively lowering the liquidity in the market as industry moved to re-pay loans as quickly as possible. The resultant low loan: deposit ratio affected many businesses cash flow including Unifreight's.

Amongst the challenging macro-economic conditions Unifreight managed to secure a very attractive instalment sale agreement from a foreign creditor resulting in the re-capitalisation of 50 brand new FAW 380hp prime movers with 50 AFRIT taut-liner trailers. This substantial re-capitalisation will go a long way towards diluting the fixed cost overhead of the business.

FINANCIAL PERFORMANCE SUMMARY

The Group's financial results and the commentary have been prepared on an inflation-adjusted basis as required by IAS 29 "Financial Reporting in Hyperinflationary Economies". Financial statements prepared under the historical cost convention have only been presented as supplementary information. The Directors would like to advise users to exercise caution on their use of these audited abridged consolidated financial statements, due to the material and pervasive impact of the technical difficulties of reporting under International Accounting Standard (IAS) 29.

The group made a loss of (ZWL1.50b) at FY2022 which was largely driven by the Group's shareholding in

Zimplow which declined by (ZWL 2.16b) during 2022 driven by the inflation adjusted re-valuation of historical value. Revenue from continuing operations grew by 31% to ZWL 14.4b. However EBIT reduced by (58%) on the back of a 306% increase in financial costs for 2022. Our balance sheet grew from ZWL13.1b to ZWL18.6b due to the re-capitalisation of the fleet.

DIVIDEND DECLARATION

The Directors have decided not to declare a dividend for the period under review as they continue to assess the economic environment.

OUTLOOK

The Group is optimistic about the future and will drive growth through increased capacity availability as well as improved efficiencies. The additional 50 trucks were long overdue with the market readily availing additional volume to Unfreight.

APPRECIATION

On behalf of the Board, I wish to express my sincere gratitude and appreciation to our customers, business partners, and our valued shareholders for their confidence in us, which will be deservedly rewarded over time. I would also like to extend my gratitude to the Unifreight Board of Directors, employees, management, and executive team for their passion, commitment, and dedication to achieving a high-performance culture and ensuring Unifreight continues to grow.

ON BEHALF OF THE BOARD

Peter Annesley Chairman

Auditor's Statement

These abridged financial results derived from the audited consolidated inflation adjusted financial statements of Unifreight Africa Limited and its subsidiaries "the Group" for the financial year ended 31 December 2022, should be read together with the complete set of audited consolidated inflation adjusted financial statements of the Group, for the year ended 31 December 2022, which have been audited by Grant Thornton Chartered Accountants (Zimbabwe) and the auditor's report signed by Farai Chibisa, Registered Public Auditor 0547. A qualified opinion has been issued on the audited consolidated inflation adjusted financial statements of the Group, for the year then ended. A qualified opinion was issued regarding non-compliance with the requirements of the following:

• • International Accounting Standard (IAS) 21 - The Effects of Changes in Foreign Exchange Rates;

• • International Accounting Standard (IAS) 29 - Financial Reporting in Hyperinflationary Economies;

• • International Accounting Standard (IAS) 2 - Inventories;

• • International Financial Reporting Standard (IFRS 11) - Joint Arrangements,

  International Accounting Standard (IAS 28) - Investments in Associates and Joint Ventures; and

• • International Financial Reporting Standard (IFRS) 13 - Fair Value Measurement with respect to fair valuation disclosures for Investment Property for the prior year.

The auditor's report includes a section on key audit matters outlining matters that, in the auditor's professional judgement, were of most significance in the audit of the consolidated inflation adjusted financial statements. The key audit matter was with respect to revenue recognition. The auditor's opinion is not modified in respect of this matter.

24 March 2023

The auditor's report on the consolidated inflation adjusted financial statements and the full set of the audited consolidated inflation adjusted financial statements, is available for inspection at the company's registered office and the auditor's report has been lodged with the Zimbabwe Stock Exchange.

ABRIDGED AUDITED CONSOLIDATED STATEMENT OF FINANCIAL POSITION as at 31 Dececember 2022

ASSETS

Non current assets Vehicles and equipment Investment properties Investment in equity instruments

Right of use of asset Intangible assets

Current assets Inventories Income tax asset

Trade and other receivables Cash and cash equivalents

TOTAL ASSETS

EQUITY AND LIABILITIES

Equity

Share capital Share premium Non-distributable reserve Fair value reserve for financial assets at FVOCI Equity component of shareholders loans Retained earnings

Non current liabilities Loans and borrowings Lease liability Deferred tax liabilities

Current liabilities

Trade and other payables Income tax payable Lease liability

Loans and borrowings

TOTAL EQUITY AND LIABILITIES

ABRIDGED AUDITED CONSOLIDATED STATEMENT

2022 ZWL 000 Historical

2021 ZWL 000 Historical

OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 31 December 2022

Revenue Operating costs Movement in expected credit losses

Dividend received Other operating income Earnings before interest, tax, depreciation and amortisation (EBITDA)

Finance costs Depreciation Monetary gain/ (loss)

Profit before taxation Income tax expense/(credit)

Net profit for the yearOther comprehensive income to be reclassified to profit or loss in subsequent periods:

Net (loss)/gain on equity instruments designated at fair value through other comprehensive income Other comprehensive (loss)/income for the year, net of tax

Total comprehensive (loss)/ income for the year, net of tax

Earnings per share

- Basic (loss)/earnings for the year attributable to ordinary equity holders of the parent (cents)

- Diluted (loss)/earnings for the year attributable to ordinary equityholders of the parent (cents)

- Headline (loss)/earnings for the year attributable to ordinary equity holders of the parent (cents)

ABRIDGED AUDITED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2022

Balance as at 1 January 2021

1,148,848

168,349 18,193 810,258 50,548 1,500

528,836

183,669

300

320,128

24,739

1,677,684

1,206,415

1,065 2,060 46,356 476,994

8,931 671,009

179,941 - 154,020 25,921

291,328

240,459 -

7,013

43,856

1,677,684

Profit for the year

Net gain on equity instruments designated at fair value through other comprehensive income Dividend

Balance as at 31 December 2021

Balance as at 1 January 2022

Profit for the year

Net loss on equity instruments designated at fair value through other comprehensive income Balance as at 31 December 2022

Attributable to equity shareholders of the parentShare capital Inflation AdjShare premium Inflation AdjNon-distributable reserves Inflation Adj Fairvalue reserve Equity portion of of financial Shareholders loans assets at FVOCI Inflation AdjRetained Earnings Inflation Adj ZWL 000 ZWL 000 ZWL 000 ZWL 000 ZWL 000 ZWL 000
163,968 - - -	317,178 - - -	5,577,707 - - -	- - 1,251,234 -	1,375,070 - - -	144,105 1,995,936 - (28,931)
163,968	317,178	5,577,707	1,251,234	1,375,070	2,111,110
163,968 - -	317,178 - -	5,577,707 - -	1,251,234 - (2,160,296)	1,375,070 - -	2,111,1120 652,556 -
163,968	317,178	5,577,707	(909,062)	1,375,070	2,763,666

Fairvalue reserve of financial assets at FVOCI

Share capital Inflation AdjShare premium Inflation AdjNon-distributable reserves Inflation Adj

Equity portion of Shareholders loansRetained

Inflation Adj

Earnings Inflation Adj

ZWL 000 163,968 -

ZWL 000 317,178 -

ZWL 000 5,577,707 -

ZWL 000

ZWL 000 1,375,070 -

ZWL 000

- -

144,105 1,995,936

- - 163,968

- - 317,178

- - 5,577,707

1,251,234 - 1,251,234

- - 1,375,070

-

(28,931) 2,111,110

163,968 -317,178 -

5,577,707 -1,251,234 -1,375,070 -2,111,1120 652,556

-

-

-

(2,160,296)

-

-

163,968

317,178

5,577,707

(909,062)

1,375,070

2,763,666

Total

Equity Inflation Adj

ZWL 000 7,578,028 1,995,936

1,251,234

(28,931) 10,796,267 10,796,267 652,556

(2,160,296)

9,288,527

ABRIDGED AUDITED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2022

Net cash (utilised)/ generated from operating activities

Cash (utilised)/ generated from operations

Dividend paid

Interest paid Taxation paid

Net cash utilised in investing activities

Purchase of vehicles and equipment to increase operations

Proceeds from sale of property, vehicles and equipment Dividend received

Net cash generated from financing activities

Proceeds from borrowings

Payment of deferred consideration Principal payment of lease liabilities Repayments of borrowings

(Decrease)/increase in cash and cash equivalents

Cash and cash equivalents at beginning of year

Effect of currency translation on cash and cash equivalents Effects of inflation

Cash and cash equivalents at end of year

2022 Inflation Adj ZWL 000

2021 Inflation Adj

ZWL 000

637,573

883,320 (28,931)

(152,849) (63,967)

(279,350)

(321,203)

27,752 14,101

21,609

260,958

(773) (113,205)

(125,369)

379,833

279,763 23,800 (598,354)

85,042

NOTES TO THE ABRIDGED AUDITED CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2022

General Information

Unifreight Africa Limited (formerly Pioneer Corporation Africa Limited) was incorporated in Zimbabwe in 1970. It is the holding company of a Group of companies primarily involved in the road transport industry whose main activities include inter-city freight consolidations, the distribution of general goods, and a courier service.

The Company is incorporated in Zimbabwe. Other entities in the Group are incorporated in Botswana. The company is listed on the Zimbabwe Stock Exchange.

These Group consolidated financial statements are presented in Zimbabwean Dollars and were authorised for issue by the Board of Directors on 24 March 2023.

Basis of preparation

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the international Accounting Standards Board (IASB). The accounting policies are applied consistently throughout the Group. The consolidated financial statements are presented in Zimbabwean dollars (ZW$) and all values are rounded to the nearest 1 000 dollars except where otherwise stated.

The consolidated financial statements are initially prepared under the historical cost convention as restated for the changes in the general purchasing power of the functional currency for the purposes of fair presentation in accordance with IAS 29 (Financial Reporting in Hyperinflationary Economies). This historical cost information has been restated for changes in the general purchasing power of the Zimbabwe dollar and as a result are stated in terms of the measuring unit current at the end of the reporting period. Accordingly, the inflation adjusted consolidated financial statements represent the primary financial statements of the Group, the Historical Consolidated Statement of profit or Loss and other comprehensive income and Consolidated Statement of financial position has been included only as supplementary information.

Inflation adjustment

The Public Accountants and Auditors Board (PAAB) in their circular 01/19 communicated that the factors and characteristics to apply IAS 29, Financial Reporting in Hyper-Inflationary Economies had been met in Zimbabwe. The pronouncement require that entities reporting in Zimbabwe apply the requirements of IAS 29 with effect from 1 July 2019.

IAS 29 requires that the financial statements prepared in the currency of a hyperinflationary economy be stated in terms of the measuring unit current at the balance sheet date and the corresponding figures for the previous period be stated in the same terms. The restatement has been calculated by means of conversion factors derived from the consumer price index. The Group used the inflation adjustment factors derived from the monthly Consumer Price Indices as published by the Reserve Bank of Zimbabwe. The following factors were applied:

Period / Month

Prior year

Jan-22

Feb-22

Mar-22

Apr-22

May-22

Jun-22

Accounting policies

Factor	Period / Month	Factor
3.4376	Jul-22	1.2506
3.2632	Aug-22	1.1129
3.0499	Sep-22	1.0755
2.8688	Oct-22	1.0426
2.4828	Nov-22	1.0242
2.0523	Dec-22	1.0000
1.5703

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board.

The policies applied are consistent with those applied in previous years.

Trade and other receivablesCurrent

Trade receivables Receivables due from related parties

Less: provision for impairment

• Prepayments 6,095,060 71,578

• Trade receivables - net 1,935,839 669,726

  Trade and other payables

  Staff debtors VAT receivable Other debtors

  Current

  Trade payables Trade payables due

  • Accrued expenses 254,531 114,170

  • to related parties 189,659 126,340

  • Social security and other

  • statutory liabilities 186,620 108,403 1,777,495 826,602

  Borrowings

  Borrowings represent facilities for capital expenditure and working capital. The interest rates are between 10% and 205%.

  Shareholder loans

  Equity component of shareholders loansLoans and Borrowings

  Finance cost

  Finance cost comprises the following:

  • - Bank borrowings

  • - Consideration liability

  • - Leases liabilities

  Capital expenditure

  Acquisition of vehicles and equipment

  Contingent liabilities

  2022	2021
  ZWL '000	ZWL '000
  Inflation Adj	Inflation Adj

  1,375,070 1,375,070 (1,375,070) (1,375,070)

  -

  • 6,051,446 150,759

  • 6,051,446 150,759

  60,712 13

  • 70,033 92,124

  • 621,131 152,849

  1,335,314

  321,203

  The group is a defendant in various labour disputes with former employees. The cases are at various stages. The total being claimed in all these cases is ZW$ 895,800.

  Subsequent events

  There are no adjusting or non-adjusting events after the reporting date which have an effect on the financial position of the group as at the reporting date nor require disclosure in the financial statements.

  Directors: P.J. Annesley (Chairman); R.E. Kuipers * (Chief Executive Officer); B.N. Ndebele; H. Crabbe; M. Kalweit

  *Executive