DIRECTORS: S S MUTASA (NON-EXECUTIVE CHAIRMAN) - G SAINSBURY* (CE0) - J VEZEY - F DANIELS - R N GORDON - B P NYAJEKA* - Z RANDEREE (*Executive)

UNAUDITED STATEMENT TO SHAREHOLDERS FOR THE HALF YEAR ENDED

30 JUNE 2014

1 HIGHLIGHTS

Financial performance 2014 2013 2012 US$’000 US$’000 US$’000Income 41,908 38,948 34,624

Profit before tax 4,551 3,572 1,435

Cash generated from operations 6,357 6,404 6,442

Basic earnings per share (cents) 1.59 0.78 0.09

2 OVERVIEW

Group basic earnings per share grew by 104% from 0.78 cents per share for the half year ended 30 June 2013 to 1.59 cents per share for the half year ended 30 June 2014. This growth in earnings was on the back of increased earnings by Zimbabwe investments which more than offset the decrease in profits from outside Zimbabwe investments. Zimbabwe investments recorded a profit after tax of $2.6 million versus a loss of $0.8 million for the corresponding period last year whilst outside Zimbabwe profit after tax fell by 77% to $0.8 million from $3.6 million for the half year ended 30 June 2013 mainly due to a decrease in fair value gains. 3 FINANCIAL PERFORMANCE

3.1 Profit before tax analysis

June June 2014 2013Zimbabwe Investments US$’000 US$’000Insurance Zimnat Life (Shareholder funds) 1,380 473Zimnat Lion 1,066 958Grand Reinsurance 146 (6)Minerva Risk Advisors 1,012 1,190 3,604 2,615 Hotels Cresta Zimbabwe (70) (147) Agro Chemicals (share of loss after tax) Sable Chemicals (TA share 51%) - (1,746)ZFC (TA share 22.5%) (198) (495) (198) (2,241) Total - Zimbabwe investments 3,336 227 Outside Zimbabwe InvestmentsInsurance Botswana Insurance Company 792 4,337Lion Assurance Company (Uganda) 479 581 1,271 4,918 Hotels Cresta Marakanelo (35% share of profits after tax) 249 425Cresta Holding 29 135 278 560 Total - foreign investments 1,738 5,478

Zimnat Life (Policyholder funds) Profit before gross change in policy holder liabilities 2,470 1,010Gross change in policyholder liabilities (2,461) (1,007) 9 3 Corporate costs (898) (1,147)Micro-finance, Sovereign Health and other investments 555 (989)

Group profit before tax 4,551 3,572

3.2 Gross written premium June June 2014 2013 US$’000 US$’000 Zimbabwe Investments Zimnat Life (shareholder funds) 4,106 3,710Zimnat Lion 13,542 9,901Grand Reinsurance 3,700 2,649 21,348 16,260 Outside Zimbabwe Investments Botswana Insurance Company 18,810 16,092Lion Assurance Company (Uganda) 5,866 4,282 24,676 20,374 Zimnat Life (policyholder funds) 3,773 3,128Intergroup gross written premium (2,607) (811) Group gross written premium 47,190 38,951

3.3 Hotel revenue

Zimbabwe Investments Cresta Zimbabwe 6,042 6,035 Outside Zimbabwe Investments Cresta Holdings 1,130 1,301

Group hotel revenue 7,172 7,336

3.4 Investment Income

Interest received 1,443 752Dividends received 565 431Realised gain on disposal of investments 212 387Rental Income 228 328Fair value gains/(losses) on: • Investment property - -• Financial assets (31) 2,942 2,417 4,840 Realised investment income 2,448 1,898Unrealised investment income (31) 2,942 2,417 4,840 3.5 Commentary

3.5.1 Zimbabwe investments

(i) InsuranceThis business sector comprises Zimnat Lion Insurance Company, Zimnat Life Assurance Company, Grand Reinsurance and Minerva Risk Advisors. June June 2014 2013 US$’000 US$’000 Underwriting result 2,177 1,020Zimnat Life (Shareholder funds) 913 274Zimnat Lion 1,109 727Grand Reinsurance 155 19 Minerva Risk Advisors Operating profit 962 844 Investment income 488 782Finance costs (23) (31) Profit before tax 3,604 2,615 Cash generated from operations Zimnat Life (Shareholder funds) 819 461Zimnat Lion 865 1,054Grand Reinsurance (128) (67)Minerva Risk Advisors 681 442 2,237 1,890 Combined ratio Zimnat Life (Shareholder funds) 78% 75%Zimnat Lion 77% 81%Grand Reinsurance 92% 99%

a) Underwriting performance• Zimnat Life underwriting profit increased from $0.27 million last year to $0.91 million mainly as a result of a 50% increase in premiums coupled with a decrease in the claims ratio from 43% for the half year ended 30 June 2013 to 29% for the half year under review. The growth in premiums was driven mainly by increase in individual life business.• Zimnat Lion underwriting performance grew by 52% during the period under review largely due to a 37% increase in revenue and good cost control which resulted in a drop its operating expense ratio to 31% from 36% for the corresponding period last year. The increase in revenue was mainly due to growth in market share.• GrandRe recorded an underwriting profit increase on the back of a 40% growth in premiums and a 17% decrease in costs

during the period under review.

b) Operating profitMinerva operating profits increased by 13% during the half year ended 30 June 2014. This was due to an 11% increase in revenues driven largely by increased business by Minerva Reinsurance.

c) Investment incomeInvestment income dropped by 38% when compared to the same period last year largely due to tepid performance on the Zimbabwe investment market during the period under review.

(ii) Hotels

This business sector comprises Cresta Zimbabwe June June 2014 2013 US$’000 US$’000Earnings before interest, tax, depreciation and amortization 589 334Cresta Sprayview pre-opening costs - (124)Depreciation (335) (149)Finance costs (324) (208)De-recognition cost on refurbishment - -Loss before tax (70) (147) Cash generated from operations 704 331

Revenue per available room ($) 41 39Average room rate ($) 73 88

Cresta Zimbabwe incurred a loss before tax of $0.07 million compared to a loss of $0.14 million for the same period last year. The company continued to suffer from an increased “price war” within the hotel industry but, managed to reduce its loss position due to cost reduction initiatives that were implemented during the period. 

(iii) Agrochemicals

This business sector comprises Sable Chemicals, the sole producer of Ammonium Nitrate in Zimbabwe, and Zimbabwe Fertilizer Company (“ZFC”). June June 2014 2013 US$’000 US$’000Loss after tax ZFC (880) (2,250)Sable Chemicals - (3,424) (880) (5,674)TA share of profit of associate ZFC (22% effective interest) (198) (495)Sable Chemicals (51% effective interest) - (1,746) (198) (2,241)

(a) ZFCThe Company’s loss position decreased during the period under review largely due to a reduction in bad debts provisions.

(b) SableAs reported in the Statement to Shareholders for the year ended 31 December 2013 published on 30 April 2014, the Group impaired its investment in Sable due to the uncertainty over future returns from this investment. Whilst significant progress has been made in the negotiations for a viable tariff, the company was not receiving sufficient power supply in order to operate at profitable levels. In light of this, returns to be realised from Sable are still uncertain and the investment in this company remained impaired as at 30 June 2014. 3.5.2 Outside Zimbabwe investments

(i) InsuranceThis business sector comprises Botswana Insurance Company, which is the largest underwriter of short-term insurance in Botswana, and Lion Assurance Company of Uganda.

June June 2014 2013 US$’000 US$’000 Underwriting result 288 1,640Botswana Insurance Company 92 1,289Lion Assurance Company (Uganda) 196 351 Investment income 983 3,278Finance costs - -Profit before tax 1,271 4,918 Cash generated from operations 7,225 3,672Botswana Insurance Company 6,600 2,022Lion Assurance Company (Uganda) 625 1,650

DIRECTORS: S S MUTASA (NON-EXECUTIVE CHAIRMAN) - G SAINSBURY* (CE0) - J VEZEY - F DANIELS - R N GORDON - B P NYAJEKA* - Z RANDEREE (*Executive)

UNAUDITED STATEMENT TO SHAREHOLDERS FOR THE HALF YEAR ENDED

30 JUNE 2014

June June 2014 2013 Combined ratio Botswana Insurance Company 86% 83%Lion Assurance Company (Uganda) 87% 94%

a) Underwriting performance• Botswana Insurance Company’s underwriting profits declined during the period under review mainly due to the continued loss of market share. The company has since been restructured and a slow recovery is anticipated for the remainder of the year. • Lion Assurance Company, Uganda, recorded a drop in underwriting performance during the period under re view largely due to an increase in its claims ratio from 27% for the half year ended 30 June 2013 to 35% for the period under review and write-backs of non-perfoming debtors.

b) Investment incomeThe reduction in investment income was due to unrealised losses on equities arising from the underperformance of stocks on the regional stock exchanges. (ii) Hotels

This business sector comprises Cresta Marakanelo and Cresta Holdings which provide hotel services in Botswana and Zambia. June June 2014 2013 US$’000 US$’000Cresta Marakanelo Earnings before interest, tax, depreciation and amortisation 2,619 2,984Depreciation (236) (326)Finance costs (96) (167)IAS 17 leasing costs (1,284) (1,098)Income tax expense (293) (179)Profit after tax 710 1,214 Cresta Marakanelo – share of profits (35% effective interest) 249 425Cresta Holdings – profit before tax 29 135 278 560 Cash generated from operations Cresta Marakanelo 2,687 1,879Cresta Holdings 76 (409) 2,763 1,470

Revenue per available room ($) 44 49Average room rate ($) 74 89

Cresta Marakanelo’s performance declined during the period under review when compared to the half year ended 30 June 2013. This was mainly due to losses incured by Cresta Golfview (Zambia) which outweighed the 6% growth in operating profits achieved by the Botswana hotels.

4 FINANCIAL POSITION

4.1 Net Asset Value (NAV) Insurance Hotels Total NAV Agro- IFRS Group before chemicals Consolidation NAV Agro- Adjustments chemicals

US$’000 US$’000 US$’000 US$’000 US$’000 US$’000 30 June 2014 Zimbabwe Investments 21,066 9,380 30,446 3,083 (7,116) 26,413Outside Zimbabwe investments 26,421 11,977 38,398 - 960 39,358Group 47,487 21,357 68,844 3,083 (6,156) 65,771

NAV attributable to parent company 32,899 21,357 54,256 3,083 (6,156) 51,183 31 December 2013 Zimbabwe Investments 18,573 9,456 28,029 3,281 (7,324) 23,986Outside Zimbabwe investments 26,618 10,478 37,096 - (180) 36,916Group 45,191 19,934 65,125 3,281 (7,504) 60,902

NAV attributable to parent company 32,057 19,934 51,991 3,281 (7,504) 47,768

The Group’s net asset value position increased by $5 million from $60.9 million at 31 December 2013 to $65,9 million at 30 June 2014 due to profits for the year ($3.4 million) and acquisition of an additional stake in Minerva ($2 million).

4.2 Cash and bank balances 30 June 30 Dec 2014 2013 US$’000 US$’000 Zimbabwe Investments 5,927 4,029Outside Zimbabwe investments 16,727 12,771Group 22,654 16,800

Cash generated from operations by the Group remained static at $6.4 million. After accounting for cash utilized in financing activities, the Group’s cash balances increased from $16.8 million at 31 December 2013 to $22.7 million at 30 June 2014.

4.3 Borrowings

Borrowings decreased from $8 million as at 31 December 2013 to $7, 6 million at 30 June 2014. The decrease was due to loan repayments by Cresta Zimbabwe.

5 OUTLOOK

5.1 Zimbabwe investments

(i) Insurance

• Given the momentum experienced in H1 2014, all Zimbabwe insurance companies are expected to record growth in premiums and underwriting profit in excess of those recorded in FY 2013.

• Investment income growth is expected to be flat given the current conditions prevailing in the Zimbabwean investment market.

• After a difficult 2013, profits at Minerva are expected to continue to grow for the remainder of the financial year.

(ii) Hotels

• The tough trading conditions at the Group’s city hotels are expected to continue into H2 2014. Revpars are forecast to be in line with those achieved in H1 2014 and the group will continue to focus on cost reduction so as to ensure that profits remain above breakeven level.

• Any upturn in economic activity will have a corresponding effect on occupancies and profits at this division.

(iii) Agrochemicals

• The Group is optimistic that a viable electricity tariff for Sable will be finalized during H2 2014. In addition it is anticipated that normal power supplies will be restored in Q3. These will enble the company to complete refurbishment of the plant so as to return the company to its installed capacity.

• As part of its strategy to move away from electricity usage, Sable is currently engaged in investigations to explore the use of Coal Bed Methane as an alternative feedstock in the manufacture of Hydrogen. This study will compliment earlier feasibility studies on coal gasification. It is anticipated that the choice of technology will be finalized after completion of this investigation so that migration to a new technology can be done expeditiously.

5.2 Outside of Zimbabwe investments

(i) Insurance

• Whilst the restructuring changes have already been implemented at BIC, these are only likely to be fully felt during the 2015 financial year. Consequently, underwriting profits for 2014 are anticipated to be below those achieved in 2013.

• During the year, BIC has made an additional investment of US$1,8million in a new associate, Continental Reinsurance Botswana (Pty) Limited, a start-up reinsurance business that is due to commence operations in September 2014. Continental Reinsurance Botswana (Pty) Limited is majority owned by Continental Reinsurance Plc, who will assume management responsibility.

• BIC has concluded an agreement with a fellow short term insurer in Botswana, BHIL Sure, to purchase their short term insurance book for an amount of Pula 8 million. This transaction awaits regulatory approval. This will add an additional annual premium of approximately Pula 25 million.

• At LAC, market share growth is expected to continue and given current claims levels, underwriting profits are forecast to increase over the 2013 financial year.

(ii) Hotels

• Despite a slow start to financial year, occupancies are forecast to improve and budgeted growth levels are likely to be achieved.

• Construction of a new hotel and conference centre in Botswana is awaiting regulatory and municipal approvals. Construction is forecast to commence during the course of Q3 in 2014

UNAUDITED GROUP INCOME STATEMENT FOR THE HALF YEAR ENDED 30 JUNE 2014 30 June 30 June 2014 2013 US$’000 US$’000 Income Net earned premium 22,140 21,852 Gross written premium 47,190 38,951 Change in unearned premium reserve (11,379) (2,787) Insurance premiums ceded to reinsurers (13,671) (14,312) Investment income 2,417 4,840 Realised 2,448 1,898 Unrealised (31) 2,942 Hotel revenues 7,172 7,336 Fees, commission and other income 10,179 4,920 Total Income 41,908 38,948 Expenses Net claims (11,436) (13,060) Hotel cost of sales (2,418) (2,165) Expenses for acquisition of insurance contracts (6,627) (4,740) Operating and administrative expenses (16,672) (14,087) Total expenses (37,153) (34,052) Profit before interest and income tax 4,755 4,896 Finance costs (368) (314) Share of associates profits/(losses) 164 (1,010) Profit before income tax 4,551 3,572 Income tax expense (1,135) (809) Profit for the period 3,416 2,763 Profit attributable to: Owners of the parent 2,626 1,287 Non-controlling interests 790 1,476 3,416 2,763

DIRECTORS: S S MUTASA (NON-EXECUTIVE CHAIRMAN) - G SAINSBURY* (CE0) - J VEZEY - F DANIELS - R N GORDON - B P NYAJEKA* - Z RANDEREE (*Executive)

UNAUDITED STATEMENT TO SHAREHOLDERS FOR THE HALF YEAR ENDED

30 JUNE 2014

Earnings per share for profits attributable to owners of the parent June June 2014 2013Basic (cents) 1.59 0.78 Diluted (cents) 1.36 0.67 Included in the Group’s gross insurance premium revenue for the half year ended 30 June 2014 is gross insurancepremium revenue attributable to policyholders of US$3.772 million (2013: US$2.827 million). UNAUDITED GROUP STATEMENT OF COMPREHENSIVE INCOME FOR THE HALF YEAR ENDED 30 JUNE 2014 June June 2014 2013 US$’000 US$’000Profit for the period 3,416 2,763 Other comprehensive income Exchange gain/(loss) on translating foreign operations 756 (3,083) Net gain/(loss) on available-for-sale assets 35 (1) Revaluation gain on property, plant and equipment 15 - Other comprehensive income/(loss) for the period 806 (3,084) Total comprehensive income/(loss) for the period 4,222 (321) Total comprehensive income/(loss) attributable to:Owners of the parent 3,415 (743) Non-controlling interest 807 422 4,222 (321) UNAUDITED GROUP STATEMENT OF FINANCIAL POSITION AS AT 30 JUNE 2014 30 June 31 Dec 2014 2013 US$’000 US$’000 ASSETS Property, plant and equipment 28,824 28,543 Intangible assets 1,932 1,750 Investment properties 17,081 16,218 Investments in associates 13,567 13,490 Financial instruments 40,592 36,375 Inventories 229 186 Reinsurance receivables 27,696 19,320 Deferred acquisition expenses 3,683 2,376 Insurance receivables 11,367 10,658 Accounts receivable 23,429 10,461 Taxation 246 36 Bank and cash 22,654 16,800 Total assets 191,300 156,213 EQUITY AND LIABILITIES Capital and reserves Issued share capital 1,919 1,919 Non-distributable reserves 50,717 49,728 Accumulated losses (1,453) (3,879) Equity attributable to owners of the parent 51,183 47,768 Non-controlling interests 14,588 13,134 Total equity 65,771 60,902 Liabilities Borrowings 7,579 8,031 Deferred income tax liabilities 4,797 4,282 Deferred revenue 2,634 1,233 Investment contracts with DPF 17,113 16,850 Investment contracts 12,773 10,651 Insurance contract liabilities 53,154 41,832 Insurance payables 7,482 3,959 Accounts payable and provisions 19,997 8,473 Total liabilities 125,529 95,311 Total equity and liabilities 191,300 156,213 Included in the Group’s assets and liabilities at 30 June 2014 are policyholder assets with a carrying amount of US$33.795 million (31 December 2013: US$31.325 million) and policyholder liabilities with a carrying amount of US$33.795 million (31 December 2013: US$31.325 million). UNAUDITED UNAUDITED GROUP STATEMENT OF CASH FLOWS FOR THE HALF YEAR ENDED 30 JUNE 2014 June June 2014 2013 US$’000 US$’000 Cash generated from operations 7,498 7,948 Net finance charge (368) (314) Income tax paid (773) (1,230) Net cash flow from operating activities 6,357 6,404 Net cash generated from/(used in) investing activities 599 (4,001) Net cash (used in)/ generated from financing activities (1,033) 994 Net increase in cash balances 5,923 3,397 Cash and cash equivalents at the beginning of the year 16,800 13,528 Effects of foreign currency translation (69) (990) Cash and cash equivalents at end of the year 22,654 15,935 Included in the Group’s cash and cash equivalents balance at 30 June 2014 is a cash and bank balance attributable to policyholders of US$0.223 million (30 June 2013: US$0.333 million). Cash generated from operations attributable to policy holders during the half year under review amounted to US$1.581 million (30 June 2013: US$1.208 million).

UNAUDITED GROUP STATEMENT OF CHANGES IN EQUITY FOR THE HALF YEAR ENDED 30 JUNE 2014 Attributable to owners of the parent Retained Non- earnings/ Ordunary Non- Issued share distributable (Accumulated shareholders’ controlling Total capital reserves losses) equity interest equity US$’000 US$’000 US$’000 US$’000 US$’000 US$’000Balance at 1 January 2013 1,919 50,129 4,958 57,006 12,298 69,304 Profit for the period - - 1,287 1,287 1,476 2,763 Other comprehensive loss - (2,030) - (2,030) (1,053) (3,083)Total comprehensive (loss)/income - (2,030) 1,287 (743) 423 (320) Transactions with owners: Transfer of reserves - 684 (684) - - - Dividends paid during the year - - - - (181) (181)Balance at 30 June 2013 1,919 48,783 5,561 56,263 12,540 68,803 Balance at 1 January 2014 1,919 49,728 (3,879) 47,768 13,134 60,902 Profit for the period - - 2,626 2,626 790 3,416 Other comprehensive income - 789 - 789 17 806 Total comprehensive income - 789 2,626 3,415 807 4,222 Transactions with owners: - - Buisness cobination - - - - 1,247 1,247 Transfer of reserves - 200 (200) - - - Dividends paid during the year - - - - (600) (600)Balance at 30 June 2014 1,919 50,717 (1,453) 51,183 14,588 65,771

NOTES TO THE UNAUDITED GROUP FINANCIAL STATEMENTS FOR THE HALF YEAR ENDED 30 JUNE 2014 1. Basis of preparation The Group’s Directors are responsible for the preparation and fair presentation of the consolidated financial statements. The principal accounting policies of the Group have been followed in all material respects and conform to International Financial Reporting Standards (“IFRS”) and the Zimbabwe Companies Act (Chapter 24:03). The same accounting policies and methods of computation are followed as compared with those in the prior financial period. The financial statements are presented in United States Dollars which is the functional and presentation currency of the Group. The numbers have been rounded to the nearest US$1,000. June June 2. Related party transactions 2014 2013 US$’000 US$’000 Transactions Insurance contracts to associates 556 594 Insurance contracts through an associate - 2,519

Period-end balances Receivable from asscociates (insurance contracts) 57 255 Payable to associates (insurance contracts) - 71 Key management remuneration Short-term employee benefits 193 188 3. Capital expenditure and commitments Capital expenditure 595 2,759 Depreciation charge 700 467 Capital commitments for purchase of property, plant and equipment 1,400 3,000

4. Segment information Zimbabwe Outside Zimbabwe Investments Investments Group US$’000 US$’000 US$’000 June 2014 Income 27,890 14,018 41,908 Profit before interest and taxation 3,646 1,273 4,919Net interest expense (368) - (368) Income tax expense (686) (449) (1,135) Net profit 2,592 824 3,416 30 June 2014 Total assets 103,274 88,026 191,300 Total liabilities 76,861 48,668 125,529

June 2013 Income 23,813 15,135 38,948 (Loss)/profit before interest and taxation (455) 4,341 3,886 Net interest expense (314) - (314)Income tax expense (42) (767) (809)Net (loss)/profit (811) 3,574 2,763 31 December 2013 Total assets 82,591 73,622 156,213 Total liabilities 59,622 35,689 95,311

5. Dividend No dividends were declared for the half year ended 30 June 2014.