Industries (Zimbabwe) Limited

UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2013

1. Financial Performance Net revenue increased by 11% to $16 954 622 on the backdrop of softening demand and tight liquidity conditions. Competitive pressure, particularly at the Merchandising Division, resulted in the overall group gross margin percentage declining from 31% to 27%. Net operating expenses declined by 10%. Loss before interest and tax declined to $842 245 (2012: $2 025 502). A high level of borrowings resulted in the group incurring nance charges of $1 389 486 (2012: $1 130 004). Loss before tax declined by 29% to $2 231 729. 2. Operations Review Merchandising Division sales grew by a modest 4% to $10 966 177. The tight liquidity conditions and competitive pressures that prevailed in the market negatively impacted on the performance of the division. Zimtile sales grew by 29% to $4 576 875, driven by strong demand for concrete roong tiles, bricks and pavers. Following the successful commissioning of a new tile making plant at Zimtile beginning of 2012, production capacity and efciencies have improved. Zimtile is a long standing trusted brand in the concrete tile manufacturing sector. PG Glass achieved a 22% increase in sales to $1 533 727 on the back of an improvement in stocking levels. 3. Outlook and Strategic Actions Subdued business activity is expected to continue for the remainder of the year. However, innovative supply agreements with both local and foreign suppliers have resulted in signicant improvement in accessing key products for the group to distribute through its branch network. The board has approved a number of strategic actions to improve operational performance, reduce the heavy interest burden and strengthen the balance sheet. These include:

Review of group structures which will result in a signicant reduction of overheads going forward; Review of business models, especially those relating to merchandising, which should improve protability; Specic balance sheet restructuring initiatives which will be presented to shareholders and if approved will address the negative equity position; Continuing the plans to dispose of excess to requirements properties which have already been approved by shareholders. Proceeds will be used to reduce bank borrowings. It is noted that current group banking arrangements remain in place.

Shareholders will be advised of the detailed plans and processes in due course. 4. Dividend In light of the company's performance, no dividend can be declared for the period to 30 June 2013. By order of the Board

K. Waniwa (Ms) Company Secretary 23 September 2013

Directors: FM Dzanya (Acting Chairman), *HM Munyati (CEO), SG Chella, R Likukuma, H Matemera, BP Nyajeka, *Executive CB Thorn, *AM Zvandasara (Finance Director)

CONDENSED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 30 JUNE 2013

Unaudited Half Year Ended 30-Jun-13 Continuing Operations Net Revenue Loss before interest and tax Net nance costs Loss before taxation from continuing operations Taxation Loss for the period from continuing operations Discontinued Operations Prot after taxation for the period from discontinued operations Loss for the period Earnings per share Shares in issue (m's) Attributable loss per share (cents) Fully diluted loss per share (cents) 478 (0.49) (0.48) (2,350,270) US$ 16,954,622 (842,245) (1,389,484) (2,231,729) (118,541) (2,350,270)

Unaudited Half Year Ended 30-Jun-12 US$ 15,243,492 (2,025,502) (1,130,004) (3,155,506) 404,667 (2,750,839)

10,429 (2,740,410)

478 (0.57) (0.56)

CONDENSED GROUP STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2013

Unaudited As At 30-Jun-13 US$ ASSETS Non-current assets Current assets Totals assets EQUITY AND LIABILITIES Total equity Non-current liabilities Current liabilities Total equity and liabilities 18,832,723 13,528,339 32,361,062

Audited As At 31-Dec-12 US$ 18,909,560 17,510,036 36,419,596

(782,062) 10,683,713 22,459,411 32,361,062

1,568,208 10,556,852 24,294,536 36,419,596

CONDENSED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 30 JUNE 2013

Share capital US$ 478,330 478,330 478,330

Share premium US$ 4,044,666 4,044,666 4,044,666

Nondistributable reserve US$ 6,629,170 566,895 1,302 7,197,367 7,197,367

Retained earnings US$ (4,771,913) (5,380,242) (10,152,155) (2,350,270) (12,502,425)

Total US$ 6,380,253 (5,380,242) 566,895 1,302 1,568,208 (2,350,270) (782,062)

Balance as at 30 June 2012 Loss for the period Revaluation of land and buildings Exchange difference on translation of foreign subsidiary Balances at 31 December 2012 Loss for the period Balance as at 30 June 2013

CONDENSED GROUP STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 30 JUNE 2013

Unaudited Unaudited Half Year Ended Half Year Ended 30-Jun-13 30-Jun-12 US$ Cash outow from operating activities Proceeds from disposal of property, plant and equipment Acquisition of property, plant and equipment Proceeds from disposal of investments Loss of control due to a rights issue by a subsidiary Net cash generated from investing activities Net proceeds from borrowings Finance costs Net cash utilised from nancing activities Net decrease in cash and cash equivalents At the beginning of the period At the end of the period (1,547,388) 25,000 (384,200) 3,539,569 3,180,369 (329,139) (1,389,484) (1,718,623) (85,643) 386,169 300,526 US$ (1,830,675) 1,599,967 (331,858) (45,205) 1,222,904 1,032,759 (1,130,004) (97,245) (705,016) 1,148,243 443,227

UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2013

SUPPLEMENTARY INFORMATION

Unaudited Unaudited Half Year Ended Half Year Ended 30-Jun-13 30-Jun-12 US$ Capital expenditure Depreciation on Property, plant and equipment Amortisation on intangible assets Interest bearing debt Issued share capital No of shares in issue (m's) Dilution due to share options and convertible debenture (m's) 384,199 414,458 13,443 13,726,518 478,330 478 10 488 US$ 331,858 393,131 11,038,335 478,330 478 10 488

Accounting principles This interim report complies with the requirements of IAS 34. The same accounting policies and methods of measurement and recognition as those applied in the 2012 annual nancial statements have been followed in preparing this interim report. Currency of reporting The nancial statements are presented in the United States Dollar which is the functional currency of the Group. Disposal of part of investment in Manica Boards and Doors (Pvt) Ltd (MBD) PG Industries (Zimbabwe) Limited disposed 18,9% of its 27,9% investment in Manica Boards and Doors (Pvt) Limited. The transaction also involved liquidation of an equivalent portion of the loan investment in MBD. The remaining 9% Shareholding is now treated as an investment. Non-current assets held for sale The assets classied as held for sale in 2012 are still being held for sale. The Group managed to dispose some investments in shares and part of the loan investment with a book value of $2,428,400. However, continued liquidity problems in the market slowed the sale of properties held for sale. Going Concern The Group reported a net loss at 30 June 2013 of $2 350 270 (30 June 2012: loss of $2 740 410) and its current liabilities exceed current assets by $8 931 072 (31 December 2012: $6 784 500). The Group continued to face working capital constraints. These conditions give material uncertainty that may cast signicant doubt about the Group's ability to continue as a going concern and therefore it may not be able to realise its assets and discharge its liabilities in the ordinary course of business. In response to the above, reference is made to the initiatives approved by the Board which are outlined in the section on Outlook and Strategic Actions. The nancial statements have therefore been prepared on the basis that the group will continue to be a going concern. This basis presumes that the group's plans will be effective and the group will realize its assets and discharge its liabilities in the ordinary course of business.

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