Directors: R. Likukuma (Chairperson), P. F. Chingoka, C. E. Dhlembeu, C. M. Gadzikwa, K. Horonga*, P. Marufu, P. C. C. Moyo, J. Mushayavanhu, C. Musodza*, J. P. Mutizwa, K. Naik, L. Sasikwa (*Executive Director)

www.turnall.co.zw

UNAUDITED ABRIDGED RESULTS FOR THE HALF YEAR ENDED 30 JUNE 2015 Financial Highlights US$’000 Increase in revenue 9% to 14 015 Increase in profit from operations 145% to 1 176 Increase in profit before taxation 114% to 490 increase in profit for the period 115% to 400

Consolidated Statement of Changes in Equity Foreign (Accumulated Non- currency losses)/ Share Share distributable Revaluation translation retained capital premium reserves reserves reserve earnings Total US$ US$ US$ US$ US$ US$ US$

Balance at 31 December 2013 4 930 403 181 908 7 655 239 7 639 504 455 130 577 20 538 086

Loss for the year - - - - - (11 924 525) (11 924 525)

Other comprehensive income - Revaluation of property, plant and equipment - - - (3 496 112) - - (3 496 112)Currency translation differences - - - - 1 667 - 1 667 Balance at 31 December 2014 4 930 403 181 908 7 655 239 4 143 392 2 122 (11 793 948) 5 119 116

Profit for the period - - - - - 399 754 399 754 Other comprehensive income Currency translation differences - - - - 1 009 - 1 009 Balance at 30 June 2015 4 930 403 181 908 7 655 239 4 143 392 3 131 (11 394 194) 5 519 879

Notes to the Financial Statements

1 Basis of preparation

The principal accounting policies of the Group have been consistently followed in all material respects. These financial statements were approved for issue by the Board of Directors on 20 August 2015.

2 Statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with accounting policies consistent with International Financial Reporting Standards (IFRS) and in the manner required by the Zimbabwe Companies Act (Chapter 24:03). The consolidated financial statements are based on statutory records and have been prepared on the historical cost basis except for property, plant and equipment that is carried at revalued amounts. These consolidated financial statements are presented in United States dollars, which is the Group’s functional and presentation currency.

Unaudited Unaudited Six months Six months Audited year ended ended ended 30.06.2015 30.06.2014 31.12.2014 US$ US$ US$ 3 Capital expenditure Acquisition of property, plant and equipment to increase plant capacity - - - to maintain current capacity 192 625 334 865 504 412 Commitments for capital expenditure Authorised by directors and contracted for - - - Authorised by directors and not contracted for 648 700 386 048 1 503 778 648 700 386 048 1 503 778 4 Loans and borrowings Short term FBC Bank Limited 1 234 286 3 563 516 1 234 286 African Banking Corporation Zimbabwe Limited 2 763 622 3 770 861 3 061 927 AfrAsia Bank Limited 18 747 276 321 18 545 4 016 655 7 610 698 4 314 758 Long term FBC Bank Limited 1 645 714 - 2 262 857 Total loans and borrowings 5 662 369 7 610 698 6 577 615

Interest was payable on an average rate of 18.5% during the period under review. The loans from FBC Bank Limited and African Banking Corporation Zimbabwe Limited are secured on the Harare and Bulawayo properties on a pari-pasu basis.

Consolidated Statement of Profit or Loss and Other Comprehensive Income Unaudited Unaudited Six months Six months Audited year ended ended ended 30.06.2015 30.06.2014 31.12.2014 US$ US$ US$ Revenue 14 014 935 12 878 086 33 834 344 Cost of sales (10 928 832) (12 005 661) (32 367 915)Gross profit 3 086 103 872 425 1 466 429 Other income 79 526 18 195 65 223 Selling and distribution expenses (699 638) (775 999) (1 839 248)Administration expenses (1 289 729) (2 738 383) (13 046 329) Profit/(loss) from operating activities 1 176 262 (2 623 762) (13 353 925) Finance costs (686 524) (892 261) (1 542 206) Profit/(loss) before tax 489 738 (3 516 023) (14 896 131)

Tax (charge)/credit (89 984) 874 834 2 971 606 Profit/(loss) for the period 399 754 (2 641 189) (11 924 525) Other comprehensive income/(loss) net of income tax: Impairment of property, plant and equipment - - (3 496 112)Foreign currency translation differences 1 009 - 1 667 Total comprehensive income/(loss) for the period 400 763 (2 641 189) (15 418 970) Number of shares in issue 493 040 308 493 040 308 493 040 308 Basic earnings/(loss) per share (cents) 0.08 (0.54) (2.42)

Consolidated Statement of Financial Position Unaudited Unaudited Audited as at as at as at 30.06.2015 30.06.2014 31.12.2014 US$ US$ US$ ASSETS Non-current assets Property, plant and equipment 25 102 908 31 771 100 25 709 234 Investment property 292 216 298 299 294 978 Trade and other receivables 305 465 1 582 221 305 465 Deferred tax 7 942 617 2 524 591 7 781 855 Total non-current assets 33 643 206 36 176 211 34 091 532 Current assets Inventories 7 194 568 17 778 180 7 247 416 Trade and other receivables 5 086 606 11 000 523 5 073 541 Cash and cash equivalents 53 450 181 448 24 903 Total current assets 12 334 624 28 960 151 12 345 860 Total assets 45 977 830 65 136 362 46 437 392 EQUITY Capital and reserves Share capital 4 930 403 4 930 403 4 930 403 Share premium 181 908 181 908 181 908 Non-distributable reserve 7 655 239 7 655 239 7 655 239 Revaluation reserve 4 143 392 7 639 504 4 143 392 Foreign currency translation reserve 3 131 - 2 122 (Accumulated losses)/retained earnings (11 394 194) 3 924 577 (11 793 948)Total capital and reserves 5 519 879 24 331 631 5 119 116 LIABILITIES Non-current liabilities Deferred tax 7 695 250 7 735,791 7,453,697 Loans and borrowings 1 645 714 - 2,262,857 Total non-current liabilities 9 340 964 7 735 791 9,716,554

Current liabilities Loans and borrowings 4 016 655 7 610 698 4 314 758 Trade and other payables 26 540 076 24 745 254 26 779 016 Bank overdraft 560 256 712 988 507 948Total current liabilities 31 116 987 33 068 940 31 601 722 Total equity and liabilities 45 977 830 65 136 362 46 437 392

Consolidated Statement of Cash Flows Unaudited Unaudited Six months Six months Audited year ended ended ended 30.06.2015 30.06.2014 31.12.2014 US$ US$ US$

CASH FLOW FROM OPERATING ACTIVITIES

Operating cash flow Profit/(loss) before taxation 489 738 (3 516 023) (14 896 131)Adjustment for: Depreciation of property, plant and equipment 798 899 1 443 831 2 879 903 Depreciation of investment property 2 762 3 321 6 643 Finance costs 686 524 892 261 1 542 206 Exchange differences - (9 004) - Foreign currency translation differences 1 009 - 1 667 Loss on disposal of property, plant and equipment - 4 400 224 Net change in investments - 2 040 2 040 Operating cash flow before working capital changes 1 978 932 (1 179 174) (10,463,448) Decrease in inventories 52 848 227 720 3 592 831(Incease)/decrease in trade and other receivables (13 065) 4 941 485 10 876 292 (Decrease)/incease in trade and other payables (238 940) (1 176 720) 615 854 Cash generated from operating activities 1 779 775 2 813 311 4 621 529 Withholding tax paid (9 193) (803) (1 263)Realised exchange losses - (7 148) -Interest paid (689 191) (879 701) (1 542 206) Net cash generated from operating activities 1 081 391 1 925 659 3 078 060 CASH FLOWS FROM INVESTING ACTIVITIES Interest received 2 668 3 592 - Proceeds from disposal of property, plant and equipment 51 21 984 92 156 Proceeds from disposal of financial assets - - 21 987 Acquisition of property, plant and equipment (192 625) (334 865) (504 412)Net cash flows used in investing activities (189 906) (309 289) (390 269) NET CASH FLOWS FROM FINANCING ACTIVITIES Decrease in loans and borrowings (915 246) (1 931 654) (2 964 737) DECREASE IN CASH AND CASH EQUIVALENTS (23 761) (315 284) (276 946)

Chairman’s StatementOn behalf of the Board of Directors, I am pleased to present the Turnall Holdings Limited results for the half year ended 30 June 2015.

Changes to the BoardDuring the period, our fellow Board Member Mr. Rodgers Dhliwayo passed away having served for four years. His valuable contribution will be sorely missed. Mr. Herbert Nkala resigned from the Board having served for ten years as Chairman of the Group. We thank Mr. Nkala for his sterling service. The Board has elected me to take over as Chairperson of the Group and also elected Mrs. Portia Marufu and Mr. Peter Farai Chingoka on to the Board. The operating environmentThe operating environment was characterised by weak aggregate demand, liquidity challenges and funding constraints. Focus was on managing costs to over-compensate for any revenue risk, whilst at the same time capturing all potential domestic and exports sales in line with the Group’s 3 Year Strategic Plan. This focus has worked well and the Group is firmly on the profitability recovery path.

The Group has diversified its suppliers, resulting in savings on key raw materials. In particular, the Group changed the supplier of asbestos fibre which resulted in a reduction in cost and improved quality of finished product. Working capital funding remained a key challenge leading to production interruptions due to raw material outages. Sales volumes grew by 8% from 27 151 tonnes in 2014 to 29 435 tonnes for 2015. Market development work being done on the exports front should greatly improve the exports contribution in the second half of the year.

Financial performance The Group’s financial performance for the half year ended 30 June 2015 matched expectation. Revenue at US$14.01 million was 9% above prior year, in line with volume growth. Revenues were predominantly cash which greatly assisted in funding operations. Gross profit at US$3.09 million was 253% above prior year. Improvement in gross profit came from better overhead recovery and procurement savings initiatives. Selling and distribution expenses at $0.7 million were 10% below prior year, whilst administration expenses at $1.29 million were 53% below prior year due to strict cost control measures put in place and inclusion of non-recurring expense line items in prior year.

Total assets have reduced slightly from beginning of the year as the Group continues to work on releasing capital tied in inventories and accounts receivable. Management will continue to seek long term solutions to address the Group’s liabilities position.

OutlookThe 3 Year Strategic Turnaround Plan put in place by Management is on course to achieve the intended objectives. The effects of the reduction in the cost of the main raw material mentioned above will only be felt in the second half of the year due to logistical considerations. The Group has managed to build a firm exports order book which should be realised in the second half. The Group also has pipes orders from private sector companies, which once funding is availed, will boost the pipe plant capacity utilisation. Management will continue with the focus on working capital management and cost control. The Board remains confident that these plans will deliver profitability for 2015 and beyond.

AppreciationI would like to thank our customers, suppliers and other stakeholders, my fellow directors, management and staff at Turnall Holdings Limited for the support and commitment during this challenging period we have gone through.

By Order of the Board

R LikukumaChairperson20 August 2015

DividendAt a meeting of Directors held on 20 August 2015, in order to conserve working capital in the business, the Board resolved not to declare a dividend for the half year ended 30 June 2015.

By Order of the Board

K HorongaCompany Secretary20 August 2015

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