H O L D I N G S

LIMITED

UNAUDITED RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2013

Revenue - local - export Cost of sales Gross profit Other income Selling and distribution expenses Adminstrative expenses Profit from continuing operations Net finance costs Finance income Finance costs Profit before taxation Taxation Current tax Deffered tax Profit for the year from attributable to equity holders Other comprehensive income for the period, net of tax Total comprehensive (loss)/ income for the year Number of shares in issue (000s) Basic earnings per share (cents) 18 121 857 846 334 18 968 191 (14 795 919 ) 4 172 272 514 794 (822 749 ) (2 486 922 ) 1 377 395 (1 348 075 ) 3 610 (1 351 685 ) 29 320 (141 195 ) - (141 195 ) (111 875 ) - (111 875 ) 493 040 (0.02 ) 17 239 381 1 285 234 18 524 615 (12 576 931 ) 5 947 684 45 821 (673 338 ) (2 842 669 ) 2 477 498 (1 201 498 ) 1 329 (1 202 827 ) 1 276 000 (401 882 ) (46 168 ) (355 714 ) 874 118 - 874 118 493 040 0.18

Consolidated Statement of Comprehensive Income Notes on The Financial Statements Six months Six months ended ended ended 1 Accounting policies 30.06.2013 30.06.2012 The principal accounting policies of the company have been consistently followed in all material respects. US$ US$

2 Basis of preparation  The financial statements have been prepared in conformity with International Financial Reporting Standards (IFRSs), promulgated by the International Accounting Standards Board (IASB), which includes standards and interpretations approved by the IASB as well as International Accounting Standards (IASs) and Standing Interpretations Committee (SIC) interpretations issued under previous constitutions.  The financial statements are based on statutory records that are maintained under the historical cost convention and expressed in United States dollars (US$). 3

Capital expenditure 30.06.2013

Six months ended 30.06.2012 US$

2 690 516

Six months ended 31.12.2012 US$

877 755

Chairmans Statement
On behalf of the Board of Directors, I present the Turnall Holdings Limited results for the half year ended 30 June 2013. Operating Environment The operating and economic environment obtaining in the country in the first half of 2013 was largely characterised by liquidity constraints. Demand in the low cost housing segment, was, as a result, subdued especially in the first three months of the year. The countrys liquidity position was further worsened by a generally high interest rate regime and capacity limitations of financial institutions to extend capital loans to individuals for home construction. In addition, the statistics continued to show an over-reliance on imported goods as evidenced by the trade deficit figures, which for the first six months had grown to $2.37 billion on imports of $3.92 billion. The economy also saw its original growth forecast of 5% being revised downwards as signs of a generally weak economy. Agriculture, originally forecast to grow by 6.4 % was revised downwards to 5.4% while mining saw its growth being revised from a high of 17.1% to 5.3%. These statistics further dampened the overall economic outlook and negatively impacted demand. Capacity utilisation was in turn affected and fell to 35% during first quarter 2013. Faced with a declining demand pattern and import pressure due to a weakening rand, the company came under intense pricing competitive pressure and in an effort to retain market share, margins were lowered to reflect the new reality. Margins during first quarter 2013 were, as a result, lower than plan. In addition, our business plan for 2013 took a view that a number of pipe projects that were lined up by the Government for both sewer and water reticulation would come through during first half 2013. Due to funding, these had to be temporarily suspended. Financial performance The financial results for the period under review reflect two business approaches to dealing with an economic environment that to a large extent remained fluid. Pricing and margins during first quarter 2013 were aligned to market in an effort to retain market share. With a high fixed cost structure and lower than normal capacity utilisation, profit margins reduced significantly against a generally high cost of production. A rebound in demand and an improvement in capacity utilisation in second quarter 2013 saw the business quickly re-align prices and margins in an effort to reverse the poor first quarter 2013 performance. The companys revenues of $18.9 million were 2% above last years $18.5 million for the same period. Operating profit was $1.38 million compared to $2.48 million for the same period last year. Gross profit margin at 23% was lower than the 30% achieved in 2012 mainly because of lower than plan pricing during first quarter 2013. The Operating profit margin was, as a result, affected and at 7% against 16% for the same period last year, also reflected generally poor factory capacity utilization levels especially during first quarter 2013. Turnall generated an operaing profit of $0.03 million on revenue of $18.9 million representing a margin of 0.15%, compared with net income of $1.28 million against revenue of $18.5 million. Net finance charges were $1.34 million compared to $1.20 in the previous year. Roofing Tile Project I am delighted to announce that the purchase and installation of the state of the art concrete roofing tile machine has been completed and successfully commissioned. We expect the Standards Association of Zimbabwe (SAZ) and South African Bureau of Standards (SABS) accreditation of the product to be completed by end of third quarter 2013. Commercial production of the tiles has commenced and demand during the first few weeks after commencement has been firm. Your Board has always been of the view that the future of the organisation largely revolved around the business capacity to innovate, expand its product offering and enter into new markets. The commissioning of the Roofing Tile plant and the Non Asbestos plant in Bulawayo in 2012 is testimony of the companys desire to maintain a medium to long term market and business focus. The new investment in roofing tiles, is already delivering a price competitive and a far more environmentally friendly roofing tile. I am also pleased to announce that the commissioning of the paver plant is on track and the new pavers will be introduced to the market by the end of third quarter 2013. These additions represent new revenue streams for the business and we believe that their contribution to business performance will be strongly felt during fourth quarter 2013. Sustainability Performance We have moved towards an integrated approach in managing our sustainability impacts and opportunities. The company adopted the Global Reporting Initiatives (GRI)s Sustainability Reporting Framework as a business model in addressing and managing our economic, environmental, and social and governance aspects of our operations. To this effect, a core sustainability team established in 2011 continued to actively play a critical role in the year under review in identifying and advising management of our economic, environmental, and social impacts and opportunities, and their disclosure for accountability to public and our stakeholders. As a follow up to our first sustainability report prepared using and meeting requirements of the Global Reporting Initiative (GRI) Sustainability Reporting Framework (G3.1: Level C), management has continued, through the sustainability team, to seek ways to improve their sustainability reporting and also working actively to move to level 2 of reporting. We have continued to document and communicate our sustainability performance in material issues relating to our stakeholder engagement; economic, environmental and social performance as well as our governance and ethic approach during the year under review. Your company is committed to upholding the best corporate governance practices, creating wealth for its stakeholders and enriching shareholder value. This is being achieved through a highly responsive strategy underpinned by maintaining healthy relations with business and trade partners, whilst fostering positive industrial relation within the company. Outlook The post-election era should usher in positive economic growth and that in turn should see a growth in investment in infrastructure and housing. As a business, we believe that a growth trajectory for the economy will see us benefit in the areas of housing construction, water and sewer reticulation and an introduction of export incentives. With an expanded product offering that enables the company to compete in all roofing market segments, a future growth in housing will see the company benefit from increased revenue streams unlike in the past. Pipes remain a key growth area for the business and any investment in water and sewer reticulation will see the company benefit from the implementation of a number of projects which have been on the cards. Exports, despite a slow start, represent another key growth area. The company has started supplying into Zambia and has a robust plan to enter into neighbouring markets in the coming months and supply a full range of products including the new roofing tiles. Appreciation On behalf of your Board of Directors, I would like to extend our sincere gratitude to all our stakeholders, employees and fellow Board members.

Consolidated Statement of Financial Position

US$ Six months ended 30.06.2013 US$
33 109 121 288 627 33 397 748 17 560 016 25 195 17 954 982 1 181 736 36 721 929 70 119 677

Six months ended 30.06.2012 US$

31 189 563 294 852 31 484 415 18 530 058 17 929 15 773 485 557 496 34 878 968 66 363 383

ASSETS Non-current assets Property, plant and equipment Investment property Total non-current assets Current assets Inventories Short term investments Trade and other receivables Cash and cash equivalents Total current assets Total assets EQUITY Capital and reserves Share capital Share premium Non- distributable reserve Revaluation reserve Retained earnings Total capital and reserves LIABILITIES Non-current liabilities Loans and borrowings Deffered tax liability Total non-current liabilities Current liabilities Loans and borrowings Trade and other payables Provisions Taxation Bank overdraft Total current liabilities Total liabilities Total equity and liabilities

4 930 403 181 908 7 655 240 7 639 504 9 016 470 29 423 525

4 930 403 181 908 7 655 240 7 639 504 8 942 548 29 349 603

- 6 745 701 6 745 701 10 857 730 20 532 517 659 215 1 488 267 412 722 33 950 451 40 696 152 70 119 677

908 820 6 810 391 7 719 211 10 641 080 13 710 741 580 238 1 674 365 2 688 145 29 294 569 37 013 780 66 363 383

CASH FLOWS FROM OPERATING ACTIVITIES Profit for the year Adjustment for: Depreciation of property, plant and equipmement Depreciation of investment property Net interest costs Unrealised exchange losses Gain on disposal of property,plant and equipment Net change in other investments Income tax expenses Operating cash flows before reinvestment in working capital Change in inventories Change in trade and other receivables Change in prepayments Change in provisions, trade and other payables Cash generated from operating activities Withholding tax paid Income tax paid Realised exchange losses Net cash flows from operating activities CASH FLOWS FROM INVESTING ACTIVITIES Interest received Proceeds from sale of property, plant and equipment Acquisition of property, plant and equipment Net cash flows from investing activities NET CASH FLOWS FROM FINANCING ACTIVITIES Loans raised Interest paid Net cash flows from financing activities INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS

Consolidated Statement of Cashflows

Six months ended 30.06.2013 US$

(111 875 )

Six months ended 30.06.2012 US$

874 118

1 240 098 1 197 818 2 698 2 698 1 348 075 1 201 498 (17 504 ) 1 656 (3 283 ) - (5 235 ) - 141 195 401 881 2 594 169 3 679 669 1 197 095 (1 803 841 ) 82 814 2 113 295 4 183 532 (7 ) - (44 255 ) (44 262 ) 4 139 270 (3 717 697 ) 592 776 (148 837 ) 1 556 861 1 962 772 (72 ) (498 550 ) - (498 622 ) 1 464 150

3 609 29 685 (2 690 516 ) (2 657 222 )

1 329 - (877 755 ) (876 426 )

78 409 (1 289 925 ) (1 211 516 ) 270 532

(2 043 942 ) (1 202 827 ) (3 246 769 ) (2 659 045 )

Herbert Nkala Chairman 21 August 2013 Dividend At a meeting held on 15 August 2013 the Board of Directors resolved not to declare an interim dividend for the half year to 30 June 2013 in view of the need to retain resources for working capital purpose.

Consolidated Statement of Changes in Equity

By Order of the Board Six months ended 30.06.2013 US Per R S Dube Balances as at 01 January 2013 29 535 400 Company secretary Loss for the period (111 875 ) 21 August 2013
Balances at 30 June 2013 29 423 525

Directors : H. Nkala (Chairman), J. A. Jere*, R. S. Dube*, J. P. Mutizwa, P. C. C. Moyo, L. Manyenga, J. Mushayavanhu, C. E. Dhlembeu, R. Likukuma, C. M. Gadzikwa, K. Naik, R. Dhliwayo (* Executive Director)

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