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Contents Page

3

Statement 4

6

8

10

Directors’ Responsibility Statement 11

12

of Financial Position 14

Statement of Profit/loss and Other Comprehensive Income 15

16

of Cash flows 17

to the 18

33

35

Corporate Information 2

Board of Directors

Chairman’s

Managing Director’s Report

Directors’ Report

Statement of Corporate Governance

Report of the Independent Auditors

Statement

Statement of Changes in Equity

Statement

Notes Financial Statements

Analysis of Shareholders

Notice to Members

Table of Contents HOLDINGS

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Nature of business Manufacturing and distribution of rubber and chemical products

Registered office 111 Dagenham Road

Willowvale

HARARE

Registration Number 510/68

Telephone 669879 / 662681-6

Fax 663543-4

Main bankers FBC Bank Limited

Southerton Branch

HARARE

Attorneys Dube, Manikai and Hwacha Legal Practioners

Eastgate Complex

HARARE

Auditors BDO Zimbabwe Chartered Accountants

3 Baines Avenue

P.O Box 334

HARARE

Transfer Secretaries First Transfer Secretaries

1 Armagh Avenue, Eastlea, Harare

P. O. Box 11

HARARE

Corporate information HOLDINGS

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Board of Directors

G.G.NhemachenaChairman

C.E. DhlembeuNon-Executive Director

T. KufazvineiNon-Executive Director

P.C.C. MoyoNon-Executive Director

S.P. BangoDeputy Chairperson

O. M. MoyoNon-Executive Director

Ald A.M. SibandaNon-Executive Director

W. TsurohManaging Director

P. Munyanyi Finance Director

E. MavengereNon-Executive Director

I. Murefu Non-Executive Director

Appointed 8 July 2013

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G.G.NhemachenaChairman

IntroductionThe results for the year ended 31 December 2013 are presented on the back of an increasingly difficult operating environment dominated by severe liquidity shortages which made it difficult to raise additional funding to augment the US$ 1 million raised at the beginning of the year. The reduced aggregate downstream demand resulted in a deflationary trend in the economy despite a GDP growth of 3.4 %.

The economic recovery driven by growth in the agricultural and mining sectors was less than anticipated due to low global commodity prices and foreign direct investment.

Performance The disbursement of the DIMAF funds in the first quarter of the year resulted in significant raw materials cost savings and enhanced the company's market competitiveness. The benefit of this initiative dissipated during the latter course of the year as demand plummeted owing to the liquidity crunch in the economy which resulted in poor debtor performance and longer working capital cycles. As a result the volumes at 990 metric tonnes were 19 % lower than prior year's 1 228 metric tonnes while revenue at US$ 3.8 million was 26% lower than prior year's US$ 5million. Although raw material cost savings of 30 % were realised from the DIMAF funding, the capacity utilisation of around 15 % resulted in gross margins deteriorating from 14% in prior year to 7% in the current year. Administration and operating costs were 12 % higher than prior year due to a debtors impairment charge of US$ 646 774. As a result the operating loss at US$ 3,4 million was 30 % above prior year. Despite the reduced DIMAF interest costs, the overdraft interest charges resulted in finance costs being 26 % above prior year is at US$ 202 399. Net assets declined by 70 % to US$ 1,3million.

Divisional performance

Rubber divisionVolumes at 142 metric tonnes were 20 % lower than prior year's 177 metric tonnes. As a result of the worsening liquidity levels in the economy the revenue at US$ 1.5 million was 34 % lower than prior year's US$ 2.3 million resulting in a negative contribution to gross profit of US$ 773 000. Despite these adversities the division continued to defend its market position while benefiting from national policies that support the manufacturing sector in the face of global competition.

Chemicals division The division was not spared of the economic ills in the country as it recorded volumes of 848 metric tonnes which were 20% lower than prior year's 1051 metric tonnes. Revenue of US$ 2.2million was a 19% decline from the prior year's US$ 2.8 million and contributed US$ 1 million to gross profit. Although there was a decline in performance, the division held its own in the face of fierce competition from imports and reduced downstream local demand. The division is pursuing strategic partnerships to strengthen its market positioning.

OutlookThe positive impact of DIMAF funding demonstrated the company's capability if adequately funded. To this end the fund raising initiatives and restructuring of the current debt is being pursued. The recent policy pronouncements on promoting locally manufactured products together with the promotion of linkages of the manufacturing sector with extractive industries under ZIMASSET are expected to improve product off take.

Chairman’s Statement HOLDINGS

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DividendAt a meeting held on 29 April 2014, the Board considered that in view of the company's performance in the period under review and the need to urgently address the funding challenges, it was not feasible to declare a dividend for the period to 31 December 2013.

Directorate Mr Israel Murefu was appointed to the Board on 28 June 2013. Israel has vast experience acquired over the years in the various sectors of the Zimbabwean economy which the company will benefit from.

AppreciationWe fully appreciate the commitment of our employees, management and all our stakeholders support for the company despite a harsh operating environment. I deeply appreciate the wise counsel from my fellow Directors who continue to steer the company in a difficult environment.

By Order Of The Board

C. NhemachemaChairman

Patrick MunyanyiSecretary

Chairman’s Statement (Cont’d) HOLDINGS

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W. TsurohManaging Director

OverviewThe accessing of Distressed and Marginalised Areas Fund ( DIMAF) by GB Holdings at the end of first quarter of 2013 ushered in new hope for the business as it partially addressed the working capital challenges that had bedevilled the company. Although theUS$ 1million disbursed fell short of the requisite amount of US$ 3 million, significant raw materials cost savings were realised through economic procurement from source. However the benefits of this funding dissipated as the economy slowed down in the second half of the year as was characterised by a worsening liquidity environment which resulted in lower than expected product demand.

PerformanceFollowing the delivery of key raw materials in July 2013, a deliberate strategy of supplying cash to capable customers was followed with significant raw materials channelled towards the diamond mines given their historical performance and potential. In addition, manufacturing entities in the building materials industries together with those in the agricultural sector were supplied with products as these had been identified as growth areas at the end of 2012. The expected additional funding required to augment the initial US$ 1 million DIMAF funding did not materialise owing to the worsening liquidity conditions in the market.

The negative effects of low liquidity levels resulted in a slowdown of economic activity and reduced demand of the company's products. As a result, volumes of 990 metric tonnes recorded were 19 % lower than the prior year's 1228 metric tonnes. The revenue at US$ 3.8 million was 26 % lower than the prior year's US$ 5million. An operating loss of US$ 3.4million was incurred after a cost reduction strategy resulted in administration and operating costs being 12 % higher than prior year despite impairment charges of US$ 646 774. Had these not been effected a 25 % reduction in costs would have been realised. Debtor book performance was affected by the liquidity challenges in the economy resulting in finance costs being 26 % above prior year atUS$ 202 399.

Strategy reviewDespite the multiple challenges in the year, the company has continued to operate by adopting strategies that defended its markets which included product quality, technical support and continued research and development. Continued dialogue with employees and other stakeholders ensured that operations continued even though there were salary arrears and creditors that are past due.

The company remains a key player in the local and regional economies given a level playing field. To this end the ZIMASSET programme has positioned the company in a stronger position as it promotes the link between the country's manufacturing sector and the extractive industries which are expected to drive the economy.

Future prospectsThe 2014 budget as informed by ZIMASSET has supported the local rubber industry by enacting tariff structures that are likely to increase the company's product demand. The company's products are required by sectors that are expected to be the drivers of ZIMASSET and therefore revenue is expected to grow in tandem with the rest of the economy.

Infrastructural development, resuscitation of old mines and improvement of existing mines is expected to drive conveyor belt and rubber related products demand. The chemicals division is expected to ride on the foot prints of the rubber division as it widens its product offering.

It is expected that once local demand surges and economies of scale are derived, exports into the region will once again be a viable option given the company's past history and capability. Additional funding availability remains pivotal in the company's endeavours in 2014 and beyond and hence every effort is being applied in raising economically priced funding.

Managing Director’s Report HOLDINGS

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AppreciationNotwithstanding the challenges that ensued in the second half of the year, the company stood its own in confronting the challenges and has continued to defend its markets albeit at lower than expected levels. My heartfelt thanks to all that made it possible in particular our employees who continue to support the company despite delayed salaries. The support from the Board and other stakeholders have assured us of the future of the company and we trust that the thrust on ZIMASSET will assist the company in achieving a successful turnaround.

W TsurohManaging Director

Managing Director’s Report (Cont’d) HOLDINGS

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The Directors have pleasure in submitting to Shareholders, their report together with the audited financial statements of the company for the year ended 31 December 2013.

ANNUAL RESULTS

INVESTMENT IN PROPERTY, PLANT AND EQUIPMENTCapital expenditure for the year ended 31 December 2013 totalled USD1 464. These funds were spent mainly on the acquisition of computers. The proposed capital expenditure for 2014 is US$50 000 to be spent on vehicles, computerisation and plant refurbishment to attain efficiency.

DIVIDENDThe board, at the meeting held on 29 April 2014, resolved that due to the working capital requirements of the company it was not prudent to declare a dividend for the year ended 31 December 2013.

SHARE CAPITAL As at 31 December 2013, the authorized share capital of the Company was $640 000 comprising 640 000 000 ordinary shares of US$0.001 cents each. Issued share capital is 536 588 624 ordinary shares of US$0.001 cents each with a valueof US$536 588. Details of the authorised and issued share capital, including options available, are set out in note 7 to 8 of the financial statements.

DIRECTORS AND THEIR INTERESTSMessrs, E. Mavengere and P.C.C. Moyo, C. E. Dhlembeu and Alderman Sibanda retire by rotation in terms of Article 95 of the company's Articles of Association and being eligible, offer themselves for re-election.

Mr. I. Murefu was appointed to the Board during the course of the year hence retires and being eligible in terms of Article 101 of the company's Articles of Association offers himself for re-election.

The names of the current Directors of the company are set out on page 3.

No Director had, during or at the end of the year, any material interest in any contract with the company which could be considered to be significant in relation to the company’s business.

SUBSTANTIAL SHAREHOLDERSAccording to information received by the Directors, the following are the only shareholders beneficially holding, directly and indirectly, at 31 December 2013, in excess 5% of the issued share capital of the company:

SMM Holdings (Private) Limited 43%FBC Nominees 19%Workers Trust Management Share Participation 9%

AUDITORS Messrs. BDO Zimbabwe Chartered Accountants offer themselves for re-appointment as Auditors of the company for the year ending 31 December 2013 and shareholders will be asked to re-appoint them and approve their fees for the year ended 31 December 2013.

EMPLOYMENT POLICIESThe continued motivation of employees and management towards overall productivity enhancement is a fundamental feature of the company’s operating philosophy and is key to management of risk. This is achieved through training, development, information sharing and progressive co-operative contributions to operating methods and planning, supported by rewards at competitive levels, including short and long term incentives where appropriate.

The company has employed policies which are appropriate to its business and markets and which attract, retain and motivate the quality of staff necessary to compete. These policies are required to provide equal employment opportunities, without discrimination based on gender, race or physical ability.

Directors’ Report HOLDINGS

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PAYMENTS TO SUPPLIERS

By Order of the Board

The company agrees terms and conditions with suppliers before business takes place and its policy and practice is to pay agreed invoices in accordance with the terms of payment.

Per P Munyanyi (Mr)COMPANY SECRETARY29 April 2014Harare

Directors’ Report (Cont’d) HOLDINGS

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GB Holdings Limited is committed to an open approach to corporate governance. This process enables the company’s shareholders to derive the assurance that, in protecting and adding value to GB Holdings Limited’s financial and human resources investment, the company is being managed ethically, according to prudently determined risk parameters and in compliance with the best international practices.

The Board is chaired by a non-executive director and currently comprises two executive and nine non-executive members. The executive directors generally have the responsibility for making and implementing operational decisions in running the company’s business. Non-executive directors support the skills and experience of the executive, contributing to formulation of policy and decision-making through their knowledge of, and experience in, other businesses and sectors.

The Board, which meets at least quarterly, sets the strategic objectives of the company, determines investment and environmental policies, approves major capital expenditure, acquisitions and investments. The Board also agrees on performance criteria and delegates to management the detailed planning and implementation of the agreed policy, in accordance with appropriate risk parameters. It monitors compliance with policies, and achievement against objectives, by holding management accountable for its activities through the measurement and control of operations by regular reports to the Board including quarterly performance reporting and budget updates. However, to ensure that effective management controls exist on a day to day basis, the Board has delegated certain powers to committees.

These are:

Audit and Risk ManagementFinance and Business Development Human Resources and Remuneration

The operational management of the company is delegated to the Executive Committee, which is chaired by the Managing Director and includes the Finance Director, the divisional General Managers and the Human Resources Executive. The Committee meets not less than twice per quarter and ensures the implementation of strategy and policies.

G. G. NhemachenaChairman29 April 2014

Audit and Risk Management Committee

The members of the Committee as at 31 December, 2013 were as follows:O. M Moyo Chairperson (Non-Executive)C. E Dhlembeu Non-ExecutiveI. Murefu Non-Executive

Finance and Business Development Committee

The members of the Committee as at 31 December, 2013 were as follows:S. P Bango Chairperson (Non-Executive)P. C.C Moyo Non-ExecutiveT. Kufazvinei Non-Executive

Human Resources and Remuneration Committee

The members of the Committee as at 31 December, 2013 were as follows:G.G Nhemachena Chairperson (Non-Executive)E. Mavengere Non-ExecutiveA. Sibanda Non-ExecutiveI.Murefu Non- Executive

Statement of Corporate Governance HOLDINGS

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The directors are required by the Companies Act (Chapter 24:03), to maintain adequate accounting records and are responsible for the content and integrity of the financial statements and related financial information included in this report. It is their responsibility to ensure that the financial statements fairly present the state of affairs of the company as at the end of the financial year and the results of its operations and cash flows for the year then ended, in conformity with International Financial Reporting Standards. The external auditors are engaged to express an independent opinion on the financial statements. The financial statements are prepared in accordance with International Financial Reporting Standards and are based upon appropriate accounting policies consistently applied and supported by reasonable and prudent judgments on the financial statements.

The directors acknowledge that they are ultimately responsible for the system of internal financial control established by the company and place considerable importance on maintaining a strong control environment. To enable the directors to meet these responsibilities, the Board sets standards for internal control aimed at reducing the risk of error or loss in a cost effective manner. The standards include the proper delegation of responsibilities within a clearly defined framework, effective accounting procedures and adequate segregation of duties to ensure an acceptable level of risk. These controls are monitored throughout the company and all employees are required to maintain the highest ethical standards in ensuring the company's business is conducted in a manner that in all reasonable circumstances is above reproach. The focus of risk management in the company is on identifying, assessing, managing and monitoring all known forms of risk across the company. While operating risk cannot be fully eliminated, the company endeavors to minimize it by ensuring that appropriate infrastructure, controls, systems and ethical behavior are applied and managed within predetermined procedures and constraints.

The directors are of the opinion, based on the information and explanations given by management that the system of internal control provides reasonable assurance that the financial records may be relied on for the preparation of the financial statements. However, any system of internal financial control can provide only reasonable and not absolute assurance against material misstatement or loss.

The directors have assessed the ability of the company to continue operating as a going concern and acknowledge that the company has working capital constraints. The directors believe that the preparation of the financial statements on a going concern basis is still appropriate as they have undertaken measures to address the liquidity constraints affecting the company. These measures include the credit facilities with key suppliers and extended payment terms with the tax authority. Refer to Note 24 to the financial statements for more information. The external auditors are responsible for independently auditing and reporting on the company's financial statements. The financial statements and related notes have been audited by the company's external auditors and their report is presented on pages 12 to 13.

The financial statements and the related notes set out on pages 14 to 32, which have been prepared on the going concern basis, were approved by the Board and were signed on its behalf by:

CHAIRMAN MANAGING DIRECTOR29 April 2014

Director’s Responsibility Statement HOLDINGS

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Tel/Fax: +263 4 703876/7/8

Cell: +263 772 573 266/7/8/9

bdo@bdo.co.zw

www.bdo.co.za

Kudenga House

3 Baines Avenue

P. O. Box 334

Harare

Zimbabwe

REPORT OF THE INDEPENDENT AUDITORS

TO THE MEMBERS OF

GB HOLDINGS LIMITED

Report on the financial statementsWe have audited the accompanying financial statements of GB HOLDINGS LIMITED as set out on pages 14 to 32 which comprise the statement of financial position at 31 December 2013, the statement of profit or loss and other comprehensive income, the statement of changes in equity, the statement of cash flows for the year then ended, and the notes to the financial statements, which include a summary of the significant accounting policies and other explanatory notes.

Directors' responsibility for the financial statementsThe company's directors are responsible for the preparation and fair presentation of the financial statements in accordance with International Financial Reporting Standards and in the manner required by the Companies Act (Chapter 24:03). This responsibility includes designing, implementing and maintaining internal controls relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor's responsibilityOur responsibility is to express an opinion on the financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on our judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, we consider internal controls relevant to the company's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company's internal controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Unqualified opinionIn our opinion, the financial statements give a true and fair view, of the financial position of GB HOLDINGS LIMITED as at 31 December 2013 and of its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards.

Emphasis of matterWe draw your attention to Note 24 to the financial statements which indicates that the company incurred a loss before tax of $3,582,027 (2012:$2,762,273) during the year ended 31 December 2013 and as at that date, the company's current liabilities exceeded its current assets by $5,929,067 (2012: $3,274,852). These conditions, along with other matters as set forth in Note 24, indicate the existence of material uncertainty that may cast significant doubt about the company's ability to continue operating as a going concern. Our opinion is not qualified in respect of this matter.

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Report on legal and other regulatory requirementsThe financial statements have been properly prepared in compliance with the requirements of the Companies Act (Chapter 24:03).

BDO Zimbabwe HarareChartered Accountants 29 April 2014

Report of the independent auditors (Cont’d) HOLDINGS

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2013 2012Note US$ US$

ASSETS

Non-current assetsProperty, plant and equipment 4 9,064,980 9,722,792

Current assetsInventories 5 1,320,329 1,316,424 Trade and other receivables 6 479,521 932,903 Bank and cash 34,163 142,240

1,834,013 2,391,567

Total assets 10,898,993 12,114,359

EQUITY AND LIABILITIES

EquityShare capital 7 536,588 536,588 Share options reserve 8 19,200 19,200 Non distributable reserve 9,464,397 9,464,397 Accummulated loss (8,757,243) (5,748,556)

1,262,942 4,271,629Non-current liabilitiesDeferred tax 9 1,272,971 1,846,311 Long term portion of borrowings 10 600,000 330,000

1,872,971 2,176,311

Current liabilitesCurrent portion of borrowings 10 470,952 192,500 Trade and other payables 11 7,074,788 5,381,941 Bank overdraft 12 217,340 91,978

7,763,080 5,666,419

Total liabilities 9,636,051 7,842,729

Total equity and liabilities 10,898,993 12,114,359

Chairman

Managing Diretor29 April 2014

Statement of Financial Positionas at 31 December 2013 HOLDINGS

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2013 2012Note US$ US$

Revenue 13 3,765,503 5,067,696

Cost of sales (3,519,593) (4,383,386)

Gross profit 245,910 684,309

Other income 59,904 17,666

Administrative expenses (3,155,153) (2,684,581)

Other operating expenses (530,289) (619,074)

Loss from operations (3,379,628) (2,601,680)

Finance charges (202,399) (160,593)

Loss before tax 14 (3,582,027) (2,762,273

Income tax credit 15 573,340 655,337

Loss for the year (3,008,687) (2,106,935)

Other comprehensive income - -

Total comprehensive loss for the year (3,008,687) (2,106,935)

Basic loss per share (cents) 16 (0.00561) 0.00393

Diluted loss per share (cents) 16 (0.00554) 0.00388

Statement of profit or loss and other comprehensive incomefor the year ended 31 December 2013

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NonShare distributable Accummulated

Share capital options reserve reserve loss TotalUS$ US$ US$ US$ US$

Balance at 1 January, 2012 536,588 19,200 9,464,397 (3,641,620) 6,378,565

Total comprehensive loss for the year - - - (2,106,936) (2,106,936)

Balance at 31 December, 2012 536,588 19,200 9,464,397 (5,748,556) 4,271,629

Total comprehensive loss for the year - - - (3,008,687) (3,008,687)

Balance at 31 December, 2013 536,588 19,200 9,464,397 (8,757,243) 1,262,942

Statement of Changes in Equityfor the year ended 31 December 2013 HOLDINGS

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2013 2012Note US$ US$

CASH FLOWS FROM OPERATING ACTIVITIESLoss before tax (3,582,027) (2,762,273)

Adjustments for:Depreciation of property, plant and equipment 658,475 656,275 Interest expenses 202,399 160,593 Impairment loss 801 - Profit on disposal of vehicles - (5,185)Operating cash outflow before working capital changes (2,720,352) (1,950,590)

Changes in working capital

(Increase)/decrease in inventories (3,905) 190,613 Decrease in trade and other receivables 453,382 447,941 Increase in trade and other payables 1,692,847 1,606,075 Net cash (outflows to) /inflows from operating activities (578,029) 294,039

CASH FLOWS FROM INVESTING ACTIVITIESProceeds from disposal of vehicles - 14,977 Purchase of equipment (1,464) (16,149)Net cash outflows to investing activities (1,464) (1,172)

CASH FLOWS FROM FINANCING ACTIVITIES

Increase in borrowings 548,452 182,500 Net cash inflows from financing activities 346,053 21,925

(Decrease)/Increase in cash and cash equivalents (233,439) 314,774

Cash and cash equivalents at the beginning of the year 50,262 (264,530)

Cash and cash equivalents at the end of the year 17 (183,177) 50,262

interest paid (202,399) (160,575)

Statement of Cash flowsas at 31 December 2013 HOLDINGS

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1 GENERAL INFORMATION

1.1 Nature of businessThe main business of the company, which is incorporated in Zimbabwe (Registration Number 510/68), is that of producing rubber and chemical products.

1.2 CurrencyThe financial statements are expressed in United States dollars which is both the functional and presentation currency.

2 ACCOUNTING POLICIES

2.1 Basis of preparationThe principal accounting policies adopted in the preparation of financial statements are set out below. The policies have been consistently applied to all the years presented, unless otherwise stated. The financial statements are based on statutory records that are maintained under the historical cost convention.

These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB).

The preparation of financial statements in compliance with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise judgment in applying the accounting policies. The areas where significant judgments and estimates have been made in preparing the financial statements and their effect are disclosed in Note 3.

2.2 Changes in accounting policy and interpretations

a) New standards, interpretations and amendments effective from 1 January 2013

A number of new standards, interpretations and amendments effective for the first time for periods beginning on (or after) 1 January 2013, have been adopted in these financial statements. The nature and effect of each new standard, interpretation and amendment adopted by the company is detailed below. Note: not all new standards and interpretations effective for the first time for periods beginning on (or after) 1 January 2013 affected the company's annual financial statements:-

· Additional disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement). (Amendment to IFRS 7 Financial Instruments: Disclosure – Offsetting financial assets and liabilities).

· Single framework has been established for measuring fair value of financial and non-financial items recognised at fair value (IFRS 13 Fair Value Measurement).

· Amendments to align the presentation of items of other comprehensive income (OCI) with US GAAP. Name changes of statements in IAS 1 have been made (IAS 1 Presentation of Financial Statements).

· Elimination of the 'corridor' approach for deferring gains/losses for defined benefit plans, recognition of actuarial gains/losses on remeasuring the defined benefit plan obligation/asset in other comprehensive income rather than in profit or loss, and not being reclassified in subsequent periods, and amendments to timing for recognition of liabilities for termination benefits (IAS 19 Employee Benefits).

· IAS 32 Amendment to IAS 32 Financial Instruments: Presentation -Offsetting financial assets and financial liabilities.

b) New standards, interpretations and amendments not yet effective and not early adoptedThe following new standards, interpretations and amendments, which have not been applied in these financial statements, will or may have an effect on the company's future financial statements:

IFRS 9 Amendment to IFRS 9 Financial Instruments: Defers the effective date of IFRS 9 to 1 January 2015. Entities are no longer required (but are still permitted) to restate comparatives on first time adoption. Instead, additional disclosures on the effects of transition are required disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement). Applicable for annual reporting periods commencing on or after 1 January 2015.

As comparatives are no longer required to be restated, if an entity takes advantage of the relief there will be no impact on comparative information that is presented in the financial statements. However, additional disclosures will be required on transition, including the quantitative effects of reclassifying financial assets on transition.

Notes to the Financial Statementsfor the year ended 31 December 2013 HOLDINGS

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IFRS 9 Financial Instruments Amends the requirements for classification and measurement of financial assets. The available-for-sale and held-to-maturity categories of financial assets in IAS 39 have been eliminated. Under IFRS 9, there are three categories of financial assets:

· Amortised cost\· Fair value through profit or loss· Fair value through other comprehensive income.

The effective date of IFRS 9 is still to be determined. The company has not yet made an assessment of the impact of these amendments.

IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) Makes three amendments to IFRS 9:

· Adds new hedge accounting requirements into IFRS 9;· Defers the effective date of IFRS 9; and· Makes available for early adoption the presentation of changes in 'own credit' in other comprehensive income (OCI) for

financial liabilities that are accounted for using the fair value option without the need to apply the other requirements of IFRS 9.

Under the new hedge accounting requirements:· The 80-125% highly effective threshold has been removed;· Risk components of non-financial items can qualify for hedge accounting provided; that the risk component is separately

identifiable and reliably measurable;· An aggregated position (i.e. combination of a derivative and a non-derivative) can qualify for hedge accounting provided

that it is managed as one risk exposure;· When entities designate the intrinsic value of options, the initial time value is deferred in OCI and subsequent changes in

time value are recognised in OCI;· When entities designate only the spot element of a forward contract, the forward points can be deferred in OCI and

subsequent changes in forward points are recognised in OCI. Initial foreign currency basis spread can also be deferred in OCI with subsequent changes be recognised in OCI; and

· Net foreign exchange cash flow positions can qualify for hedge accounting.

The effective date of IFRS 9, of periods beginning on or after 1 January 2015, was removed and left open until all other outstanding phases of IFRS 9 have been completed.

The company has not yet made an assessment of the impact of these amendments.

IAS 19 Employee Benefits (Amendment to IAS 19 Employee Benefits: Defined Benefit Plans: Employee Contributions)

The amendment introduces narrow scope amendments that:· Provides a practical expedient to certain contributions from employees or third parties to a defined benefit plan, but only

those contributions that are independent of the number of years of service.· Clarify the treatment of contributions from employees or third parties to a defined benefit plan that are not subject to the

practical expedient. These are accounted for in the same way that the gross benefit is attributed in accordance with IAS 19.70).

Application date is for annual reporting periods commencing on or after 1 January 2014.

When this standard is first adopted for the year ended 31 December 2014, there will be no impact on transactions and balances recognised in the financial statements because the company has no defined benefit plans.

IFRS 7 Financial Instruments: Disclosure – Offsetting financial assets and financial liabilities- Additional disclosures required in relation to information about rights of offset and related arrangements for financial instruments under an enforceable master netting arrangement (or similar arrangement). Minimum disclosure requirements, in a tabular format that splits financial assets and financial liabilities, are:

a) Gross financial assets and liabilities under a master netting (or similar) agreementb) The amounts offset under IAS 32c) The net amount presented in the statement of financial position (i.e. (a) – (b)).d) The amounts subject to an enforceable master netting agreement (or similar) not included in the amount offset under IAS

32 (i.e. (b)), being those that fail to meet the offsetting criteria as well as those related to financial collateral.e) The net of (d) less

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Applicable to periods commencing on or after 1 January 2014.As this is a disclosure standard only, there will be no impact on amounts recognised in the financial statements. Currently, the company does not have (and is unlikely to have) any enforceable master netting (or similar) arrangements in place, and therefore the amendment will not add any additional quantitative and qualitative disclosures.

IAS 36 Impairment of Assets (Amendment to IAS 36 Impairment of Assets- Recoverable amount disclosures for non-financial assets) -

The amendment introduces narrow scope amendments that:· Require the disclosure of the recoverable amount of an asset (or CGU) only in periods in which impairment has been

recorded or reversed in respect of that asset (or CGU).· Expand and clarify the disclosure requirements when an assets (CGUs) recoverable amount has been determined on the

basis of fair value less disposal.· Specifically require the disclosure the discount rate when an asset (or CGU) has been impaired (or impairment reversed)

where the recoverable amount has been determined based on fair value less costs of disposal using a present value technique.

Application date is for annual reporting periods commencing on or after 1 January 2014.As this is a disclosure standard only, there will be no impact on amounts recognised in the primary financial statements.However, the amount of information disclosed regarding impairment may be reduced.

IAS 32- Amendment to IAS 32 Financial Instruments: Presentation (amended December 2011 and effective annual periods commencing on or after 1 January 2014)Offsetting financial assets and financial liabilitiesThe amendment has clarified and expanded the application guidance in relation to the offsetting of financial assets and financial liabilities in respect of:

· The meaning of 'currently has a legally enforceable right of set-off'.· The application of simultaneous realisation and settlement. · The offsetting of collateral amounts. · The unit of account for applying the offsetting requirements.

When this amendment is first adopted for 31 December 2014 year end, there will be no impact in respect of the accounting treatment for offsetting the company's financial assets and financial liabilities.

IFRIC 21 LeviesProvides guidance on when to recognise a liability for a levy imposed by a government, both for levies that are accounted for in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and those where the timing and amount of the levy is certain. The Interpretation identifies the obligating event for the recognition of a liability as the activity that triggers the payment of the levy in accordance with the relevant legislation. It provides the following guidance on recognition of a liability to pay levies:

The liability is recognised progressively if the obligating event occurs over a period of time. If an obligation is triggered on reaching a minimum threshold, the liability is recognised when that minimum threshold is reached.Application date is for annual reporting periods commencing on or after 1 January 2014 .

IFRS 8 Operating Segments Aggregation of operating segments. When operating segments have been aggregated in determining reportable segments, additional disclosures are required regarding judgments made by management in applying the aggregation criteria used to assess that the aggregated segments have similar economic characteristics, including:

· A description of the operating segments that have been aggregated.The economic indicators considered in determining that the aggregated operating segments share similar economic characteristics. Applicable to periods commencing on or after 1 July 2014. \

As this is a disclosure standard only, there will be no impact on amounts recognised in the primary financial statements. As the company does not currently aggregate operating segments in determining reportable segments it is unlikely that any additional disclosures will be required when this amendment is adopted for the first time for the year ended 31 December 2015

2.3 Revenue recognitionRevenue from the sale of rubber and chemical products is measured at the fair value of the consideration received or receivable and represent amounts receivable for goods provided in the normal course of the business net of discount and value added tax. Revenue is recognised when the goods have been delivered to or collected by the customer.

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2.4 Financial instruments

2.4.1 Financial assetsThe company classifies its financial assets in one of the categories discussed below, depending on the purpose for which the asset was acquired. The company has not classified any of its financial assets as held to maturity. The company's accounting policy for each category is as follows:

(i) Loans and receivablesThese assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise principally through the provision of services to customers. They are initially recognized at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.

Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the counterparty or default or significant delay in payment) that the company will be unable to collect all of the amounts due under the terms receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are recorded in a separate allowance account with the loss being recognised within administrative expenses in profit or loss. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written off against the associated provision.

The company's loans and receivables comprise trade and other receivable and cash and cash equivalents in the statement of financial position. Cash and cash equivalents includes cash in hand, deposits held at call with other banks, other short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within current liabilities on the statement of financial position.

2.4.2 Financial liabilitiesThe company classifies its financial liabilities into one of two categories depending on the purpose for which the liability was acquired.

(i) Fair value through profit or lossThey are carried in the statement of financial position at fair value with changes in the fair value recognised in profit or loss.

(ii) Other financial liabilitiesOther financial liabilities include the following items:Borrowings are initially recognized at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the statement of financial position.

Trade payables and other short-term monetary liabilities are initially recognized at fair value and subsequently carried at amortised cost using the effective interest rate method.

2.4.3 Fair value measurement hierarchyIFRS 7 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement. The fair value hierarchy has the following levels:

(a) quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1);(b) inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as

prices) or indirectly (i.e. derived from prices) (Level 2);(c) inputs for the asset or liability that are not based on observable market data (unobservable inputs) (Level 3).

The level in the fair value hierarchy within which the financial asset or financial liability is categorised is determined on the basis of the lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety into only one of the three levels.

2.4.4 De-recognition of financial assetsFinancial assets are derecognized when the rights to receive cash flows have expired or where they have been transferred and the company has also transferred substantially all risks and rewards of ownership. Gains and losses are recognised in profit or loss when the financial assets are derecognized or impaired, as well as through the amortization process.

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2.4.5 Impairment of financial assetsA financial asset is deemed to be impaired when its carrying amount is greater than its estimated receivable amount, and there is evidence to suggest that the impairment occurred subsequent to the initial recognition of the asset in the financial statements. Impairment loss is recognised in profit or loss.

2.5 Post employment benefitsContributions to defined contribution pension schemes are charged to profit or loss in the year to which they relate.

2.6 Property, plant and equipmentProperty, plant and equipment are initially measured at cost. Cost includes expenditure that is directly attributable to the acquisition of the asset. Subsequent costs are included in the asset's carrying amounts or recognised as separate assets, as appropriate, only when it is probable that future economic benefits associated with the items will flow to the entity and the costs can be measured reliably. All other repairs and maintenance costs are charged to profit or loss during the period in which they are incurred. Subsequent to initial measurement, property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Annual depreciation is charged proportionately over the remaining useful life of an asset where its carrying amount is higher than its residual value. If the carrying amount is lower than the residual value, no depreciation is charged.

Subject to the above property, plant and equipment are depreciated on a straight line basis over the remaining useful lives as follows:Industrial buildings 40 years

· Plant and machinery 5 – 13 years· Motor vehicles 4 - 5 years· Office equipment 5 - 10 years· Land and work in progress not depreciated

The assets' residual values and useful lives are reviewed at each reporting date and adjusted if appropriate. The residual value of an asset is the estimated amount that would currently be obtained from disposal of the asset, after deducting the estimated costs of disposal, if the asset was already of the age and in condition expected at the end of its useful life.

Gains and losses on disposals are determined by comparing proceeds with the carrying amounts. These gains and losses are included in profit or loss.

Impairment of property, plant and equipmentThe carrying amount of property, plant and equipment is reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication exists, the asset's recoverable amount is estimated.Impairment loss is recognised directly through profit or loss when the carrying amounts of the assets exceed the fair values of the respective assets.

De-recognition of property, plant and equipmentAn item of property, plant and equipment is derecognized upon disposal or when no future economic benefits are expected from use or disposal.

2.8 InventoriesInventories are initially recognised at cost and subsequently at standard cost. Inventories are stated at the lower of cost and net realisable value, after making allowance for obsolete inventories. Cost is determined on a standard basis for finished goods and work in progress. Where standard cost differs significantly from actual cost, then actual cost is used. Raw materials are stated at actual cost. The cost of finished goods and work in progress comprises raw materials, other direct costs and related production overheads. Net realisable value is the estimated selling price in the ordinary course of business, less costs of completion and selling expenses. Write downs to net realisable values and inventory losses are expensed in the period in which the write downs or losses occur.

2.9 Operating segmentsOperating segments are reported in a manner consistent with the internal reporting provided to the Managing Director.

2.10 Share-based paymentsWhere equity settled share options are awarded to employees, the fair value of the options at the date of grant is charged to the statement of comprehensive income over the vesting period. Non-market vesting conditions are taken into account by adjusting the number of equity instruments expected to vest at each reporting date so that, ultimately, the cumulative amount recognised over the vesting period is based on the number of options that eventually vest. Non-vesting conditions and market vesting conditions are factored into the fair value of the options granted. As long as all other vesting conditions are satisfied, a charge is made irrespective of whether the market vesting conditions are satisfied. The cumulative expense is not adjusted for failure to achieve a market vesting condition or where a non vesting condition is not satisfied.

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Where the terms and conditions of options are modified before they vest, the increase in the fair value of the options, measured immediately before and after the modification, is also charged to profit or loss over the remaining vesting period.

2.11 Income tax

(i) Current taxCurrent tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the tax authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the reporting date.

(ii) Deferred taxDeferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognised for all taxable temporary differences except: Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and in respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint ventures where the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future.

Deferred income tax assets are recognised for all deductible temporary differences, carry-forward of unused tax credits and unused tax losses to the extent that it is probable that taxable profit will be available against which the deductible temporary differences and the carry forward of unused tax credits and unused tax losses can be utilized except: where the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and at the time of the transaction affects neither the accounting profit nor taxable profit or loss; and in respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint ventures. Deferred tax assets are recognised only to the extent that it is probable that the temporary difference will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised.

The carrying amount of deferred income tax assets at each reporting date are reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.

Unrecognised deferred income tax assets are reassessed at each reporting date and recognised to the extent that it has become probable that future taxable profit will allow the deferred tax asset to be recovered.

Deferred income tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised or the liability is settled based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Income tax relating to items recognised directly in equity is recognised in equity and not in profit or loss. Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax relate to the same taxable entity and the same taxation authority.

3. CRITICAL JUDGEMENTS IN APPLYING THE COMPANY'S ACCOUNTING POLICIES

In preparing the financial statements, management is required to make estimates and assumptions that affect the amounts presented in the financial statements and related disclosures. Use of available information and the application of judgment is inherent in the formation of estimates. Actual results in the future could differ from these estimates which may be material to the financial statements. Significant judgments include:

(a) Trade receivablesThe company assesses its trade receivables for impairment at each reporting date. In determining whether an impairment loss should be recognised in profit or loss, the company makes judgments as to whether there is observable data indicating a measurable decrease in the estimated future cash flows from the receivables.

(b) Impairment testingThe company is required to test, on an annual basis, whether an asset has suffered any impairment. Impairment loss is the amount by which the carrying amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the higher of its fair value less costs of disposal and its value in use. The determination of value in use requires the estimation of future cash flows and of a discount rate.

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c) Going concernThe operations of the company were significantly affected, and may continue to be affected for the foreseeable future, by the adverse effects of the liquidity challenges in the economy and the need for recapitalisation of the company. The ability of the company to continue operating as a going concern, in such an environment, is subject to continual assessment.

The assessment requires judgmental estimates and assumptions regarding future cash flows and the discount rate used to determine the present value of the cash flows.

4 PROPERTY, PLANT AND EQUIPMENT

Plant and Motor Office Work in TotalLand Buildings machinery vehicles equipment progressUS$ US$ US$ US$ US$ US$ US$

Carrying amount at 01 January,2012 751,000 4,701,067 4,514,378 248,074 157,407 801 10,372,727Gross carryng amount-Cost 751,000 5,058,152 6,173,103 601,040 294,668 801 12,878,764Accumulated depreciation (357,085) (1,658,725) (352,966) (137,261) - (2,506,037)

Additions - - 2,889 9,500 3,760 - 16,149

Disposals (9,809) (9,809)Gross carrying amount-cost - - - (27,198) - (27,198)Accumulated depreciation 17,389 17.389

Depreciation charge (124,233) (401,454) (90,091) (40,497) - (656,275)

Carrying amount at 31 December, 2012 751,000 4,576,834 4,115,813 157,674 120,670 801 9,722,792Gross carrying amount-Cost 751,000 5,058,152 6,175,992 583,342 298,428 801 12,867,715Accumulated depreciation (481,318) (2,060,179) (425,668) (177,758) - (3,144,923)

Additions - - 584 - 879 - 1,464

Impairment losses (801) (801)

Depreciation charge (133,962) (405,522) (83,517) (35,474) - (658,474)

Carrying amount at 31 December, 2013 751,000 4,442,872 3,710,876 74,157 86,076 - 9,064,980Gross carrying amount-Cost 751,000 5,058,152 6,176,576 583,342 299,307 - 12,868,378Accumulated depreciation - (615,280) (2,465,701) (509,185) (213,232) - (3,803,398)

Land and buildings with a carrying amount of $486,673 were pledged as security for the FBC Bank Limited loan and overdraft facility. Land and buildings with a carrying amount of $695,143 were pledged as security for the Capital Bank Corporation Limited overdraft facility. Land and buildings with a carrying amount of $2,681,261 were pleadged as security for the CABS Loan.

Notes to the Financial Statements (Cont’d)for the year ended 31 December 2013 HOLDINGS

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2013 2012 US$ US$

5 INVENTORIESRaw materials 709,777 660,744 Finished goods 324,511 555,795 Consumables 138,029 54,104 Work in progress 148,012 45,781

1,320,329 1,316,4246 TRADE AND OTHER RECEIVABLES

Trade receivables 1,280,309 1,090,040 Less: impairment allowance (884,945) (238,171)Trade receivables-net 395,364 851,869

Other receivables 84,157 81,034 Financial Assets other than cash and cash equivalents 479,521 932,903classified as loans and receivables

The fair values of trade and other receivables classified as loans and receivables are approximate fair values.

As at 31 December 2013, trade receivables of US$187 247 (2012; US$588 198) were past due but not impaired. They relate to customers with a good payment history. The aging of these receivables is as follows:

Past due but not impairedTotal Up to 3 months 6-12 monthsUS$ US$ US$

2013 187,247 165,432 21,815 2012 588,198 172,753 415,445

As at 31 December 2013, trade receivables of $884,945 (2012:US$238,171) were past due and impaired. The main factors considered in determining that the amounts due are impaired are that the debtors have a default history and the balances have not ben settled within the stipulated credit period. The aging of these receivables is as follows:

2013 2012US$ US$

3 to 6 months 257,192 2,095 6 to 12 months 627,753 236,706

884,945 238,171

Movements in the impairment allowance for trade receivables are as follows:

At 1 January 2012 238,171 46,142Provided during the year 646,774 192,029At 31 December 2013 884,945 238,171

The movement in the impairment allowance has been included in the administrative expenses line in the statement of profit or loss and other comprehensive income.

Other classes of financial assets included within trade and other receivables do not contain impaired assets.

7 SHARE CAPITAL

7.1 Authorised640 000 000 ordinary shares of USD 0.001 each 640,000 640,000

7.2 Issued and fully paid536 588 624 ordinary shares of USD0.001 each 536,588 536,588

Unissued shares are under the control of the directors subject to the limitations imposed by the Companies Act (Chapter 24:03) and the requirements of the Zimbabwe Stock Exchange.

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8 SHARE OPTION RESERVE

The company operates an equity-settled remuneration scheme for the executive directors and certain senior employees. The only vesting condition being that the individual remains an employee of the company over the same period.

8.1 Details of the share option plan are as follows:2013 2012 2013 2012

Number of Exercise Number of Exerciseoptions price options price

US$ US$

Outstanding at the beginning of the year 6,400,000 0.003 6,400,000 0.003 Exercised during the year - - - -Granted during the year - - - -Outstanding at the end of the year 6,400,000 0.003 6,400,000 0.003

The exercise price of the options outstanding at 31 December 2013 was US$0.003. Of the total number of options outstanding at 31 December 2013, 6,400,000 (2012: 6,400,000) had vested and were exercisable.

The estimated fair value of the share options granted in the Employee Share Ownership scheme is US$0.003, which is equal to the share price at the date of grant. This was measured at the fair value of the equity instrument at the grant date.

2013 2012US$ US$

9 DEFERRED TAX

9.1 Analysis of deferred taxAssessed losses (1,064,661) (644,531)Accelerated wear and tear of property, plant and equipment 2,337,632 2,490,842

1,272,971 1,846,311

9.2 Reconciliation

Opening balance 1,846,311 2,501,648Recognised in profit or loss (573,340) (655,337)Closing balance 1,272,971 1,846,311

10 BORROWINGS

FBC Bank 177,083 522,500 CABS 893,870 -

1,070,952 522,500Less short term portion of borrowings (470,952) 192,500

600,000 330,000

The FBC facility accrues interest at 20% (2012:20%) per annum and is repayable in equal monthly instalments until June 2014. The loan and overdraft facility in note 12 are secured by land and buildings with a carrying amount of $486 673. The CABS facility accrues interest at 10% per annum and is repayable in equal monthly instalments until 28 February 2015. The loan is secured by land and buildings with a carrying amount of $2 681 261. See note 4 to the financial statements.

11 TRADE AND OTHER PAYABLES

Trade 1,044,793 765,628Other payables 6,029,995 4,616,313

7,074,788 5,381,941

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2013 2012US$ US$

12 BANK OVERDRAFT FBC Bank Limited 206,190 28,881 Capital Bank Corporation Limited 11,150 63,097

217,340 91,978

The overdraft facilities accrue interest at 20% (2012: 35%) per annum. For the security of the FBC facility see note 10. Land and buildings with a carrying amount of US$695,143 were pledged as security for the capital bank corporation limited overdraft facility.

13 REVENUE

Sale of chemicals 2,244,616 2,759,762 Sale of rubber 1,520,887 2,307,934

3,765,503 5,067,696

14 LOSS BEFORE TAX

Loss before tax is shown after taking into account the following:

ExpensesDepreciation of property, plant & equipment 658,474 656,275 Staff costs 1,915,293 2,376,299 Profit on disposal of vehicle - (5,167)Directors emoluments:- for services as directors 70,633 72,222- for other services 437,636 702,260 Audit fees 46,000 33,593Pension Contributions 40,224 229,804

15 INCOME TAX CREDIT

Current tax - -Deferred tax (573,340) (655,337)

(573,340) (655,337)Tax rate reconciliationLoss before tax (3,582,027) (2,762,273)

Tax at statutory rate of 25.75% (922,372) (711,285)

Tax effect of:Exempt income/disallowable expenses 349,032 332,864Assessed tax losses not previously recognised - (276,916)

(573,340) (655,337)16 LOSS PER SHARE (LPS)

Earnings per share have been determined using the following as numerators and denominators respectively:-

16.1 Loss attributable to equity holders of the company (3,008,687) (2,106,936)

16.2 Number of shares used in diluted LPSWeighted average number of shares used in basic LPS 536,588,624 536,588,624Effect of employee share options 6,400,000 6,400,000Number of shares used in diluted LPS 542,988,624 542,988,624

Basic loss per shareBasic loss per share is calculated by dividing the loss attributable to ordinary equity holders of the parent company by the average number of ordinary shares in issue during the year.

Basic loss per share (cents) (0.00561) (0.00393)Diluted loss per share (cents) (0.00554) (0.00388)

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2013 2012US$ US$

17 CASH AND CASH EQUIVALENTS

Bank and cash 34,163 142,240Bank overdraft (217,340) (91,978)

(183,177) 50,262

18 POST EMPLOYMENT BENEFITS

18.1 Externally administered fundsPensions are provided for employees by a separate fund to which the company and employees contribute. The pension fund is a defined contribution plan under which retirement benefits are determined by reference to the pensionable remuneration and years of service.

18.2 National Social Security Authority SchemeThis scheme was promulgated under the National Social Security Authority Act 1989. The company's obligations under the scheme are limited to specific contributions as legislated from time to time.

Contributions recognised as an expense for the period:Externally administered fund - 190,412National Social Security Authority Scheme 40,224 39,392

40,224 229,80419 RELATED PARTY INFORMATION

19.1 Related party Nature of relationshipReliable Cleaners (Private) Limited Controlled by Managing DirectorSteelnet Holdings Limited Common ShareholderRegatta Financial Advisory Services Common ShareholderSMM Holdings Limited Holding companyFSI (Private) Limited Controlled by a director

19.2 Related party transactionsThe following represent transactions with related parties during year:-Related party Nature of transaction Volume of transaction

2013 2012US$ US$

Reliable Cleaners (Private) Limited Sale of goods 10,529 9,283

19.3 Compensation to key managementKey management are employees who have authority, are responsible for planning, directing and controlling the activities of the company on a day to day basis.

Short term employee benefits 436,976 643,809 Long term benefits 660 58,451

437,636 702,260

20 FINANCIAL INSTRUMENTS - RISK MANAGEMENT

The company is exposed through its operations to the following financial risks:1. Credit risk2 Cash flow interest rate risk3. Liquidity risk

In common with all other businesses, the company is exposed to risks that arise from use of its financial instruments.

Principal financial instrumentsThe principal financial instruments used by the company, from which financial instrument risk arises, are as follows:a) Trade and other receivablesb) Bank and cash balancesc) Trade and other payablesd) Borrowingse) Bank overdraft

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A summary of the financial instruments held by category is provided below:

Loans and receivables Loans and receivables2013 2012US$ US$

Financial assetsBank and cash 34,163 142,240Trade and other receivables 479,521 932,903

513,684 1,075,143

Financial Liabilities At armotised At armotisedcost cost

2013 2012US$ US$

Borrowings 1,070,952 522,500Bank overdraft 217,340 91,978Trade and other payables 7,074,788 5,381,941

8,363,080 5,996,419

The Board has overall responsibility for the determination of the company's risk management objectives and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for desigming and operating processes that ensure effective implementation of the objectives and policies to the company's executive management. The company's internal auditors also review the risk management policies and processes and report their findings to the board of directors.

The main risks facing the company are interest rate risk, credit risk, liquidity and cash flow risk.

20.1 Credit riskFinancial assets which potentially subject the company to concentrations of credit risk consists primarily of bank balances and trade and other receivables. The company's bank balances are placed with high quality financial institutions. The credit risk with respect to trade receivables is managed by individually assessing the credit worthness of each customer before the company's standard credit terms are offered. Further disclosures regarding the trade and other receivables which are neither past due nor impaired are provided in Note 6.

20.2 Cash flow interest rate riskThe company is exposed to cash flow interest rate risk from borrowings and the bank overdrafts. Interest rates on existing facilities are fixed.

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20.3 Liquidity riskLiquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities. The company manages its liquidity risk through regular review of daily, weekly, monthly cash flows. In events of critical gaps, the company uses its borrowing facilities which are limited to levels set by the board. The facilities are loans and overdraft as disclosed in note 10 and 12.

The table summarizes the maturity profile of the entity’s financial liabilities at 31 December 2013 based on contractual undiscounted payments:

As at December2013 Upto 3 to 12 1 to 5 Over 5 Total3 months months years years

US$ US$ US$ US$ US$

Borrowings 245,967 224,985 600,00 - 1,070,952Trade and other payables 1,414,958 2,122,436 3,537,394 - 7,074,788Bank Overdraft 217,340 - - - 217,340

As at December2012 Upto 3 to 12 1 to 5 Over 5 Total3 months months years years

US$ US$ US$ US$ US$

Borrowings 82,500 109,999 330,000 - 522,499Trade and other payables 1,075,780 1,614,430 2,691,731 - 5,381,941Bank overdraft 91,978 - - - 91,978

21 SEGMENT INFORMATION

Description of products from which each reportable segment derives its revenueThe Rubber segment is involved in the production and marketing of rubber products and conveyor belting products, generating 40% (2012: 46%) of the company's external revenue.

The Chemical segment is involved in the manufacturing, importation and distribution of chemical products and contributed 60% (2012: 54%) of the company's external revenue.

Factors that management use to identify the company's reportable segmentsThe company's reportable segments are strategic business units that offer different productsand services. They are managed seperately because each business requires different technology and marketing strategies

Measurement of operating segment profit or loss, assets and liabilitiesThe accounting policies of the operating segments are the same as those described in the summary of significant accounting policies.The company evaluates performance on the basis of profit or loss from operations but excluding non-recurring losses, such as goodwill impairment, and the effects of share based payments.

Segment assets exclude tax assets and assets used primarily for corporate purposes. Segment liabilities exclude tax liabilities and defined benefit liabilities. Loans and borrowings are allocated to the segments based on relevant factors (eg funding requirements). Details are provided in the reconcilliation from segment assets and liabilities to the company position.

Notes to the Financial Statements (Cont’d)for the year ended 31 December 2013 HOLDINGS

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2013 CHEMICALS RUBBER COMPANYUS$ US$ US$

Revenue 2,244,616 1,520,887 3,765,503Inter-segmental revenue - - -Revenue from external customers 2,244,616 1,520,887 3,765,503

Depreciation 196,111 462,364 658,475

Segment loss (718,366) (2,661,262) (3,379,628)

Finance expense - - (202,399)

Company loss before tax (3,582,027)

2012

Revenue 2,759,762 2,307,934 5,067,696Inter-segmental revenue - - -Revenue from external customers 2,759,762 2,307,934 5,067,696

Depreciation 198,700 457,575 656,275

Segment loss (724,061) (1,877,619) (2,601,680)

Finance expense (160,593)

Company loss before tax (2,762,273)

2013

Additions to non-current assets 1,464 - 1,464

Reportable segment assets 4,717,914 6,171,532 10,889,446Corporate head office assets 9,547Total company assets 10,898,993

Reportable segment liabilities 1,993,715 5,298,413 7,292,128Borrowings 1,070,952Deferred tax liabilities 1,272,971Total company liabilities 9,636,051

2012

Additions to non-current assets 16,149 - 16,149

Reportable segment assets 5,696,695 6,028,084 11,724,779Corporate head office assets 389,580Total company assets 12,114,359

Reportable segment liabilities 1,794,864 3,679,055 5,473,919Borrowings 522,500Deferred tax liabilities 1,846,311Total company liabilities 7,842,730

Notes to the Financial Statements (Cont’d)for the year ended 31 December 2013 HOLDINGS

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22 MANAGEMENT OF CAPITAL

The company's objective when managing capital are;To safeguard the company's ability to continue as a going concern so that it can continue to provide returns to shareholders and benefits to other stakeholders, and to provide adequate returns to shareholders by pricing products and services commensurately with the level of risk. The company manages the capital structure and makes adjustments to it in light of the changes in economic conditions and the characteristics of the underlying assets. The capital of the company comprise issued share capital, reserves and retained earnings.

23 CAPITAL COMMITMENTS

2013 2012US$ US$

Authorised but not contracted for 50,000 -

The capital expenditure will be funded from the company's own resources and borrowings.

24 GOING CONCERN CONSIDERATIONS

The company incurred a loss before tax of US$3,582,027 (2012: US$ 2,762,273) for the year ended 31 December 2013. As of that date, the company had a negative working capital position of US$ 5,929,067 (2012: US$ 3,274,852). The ability of the company to operate as a going concern is therefore dependent on return to profitable operations.

T he directors are pursuing the following interventions:

(i) Cost cutting measures to align costs with the level of business being generated. (ii) The government has adopted the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) which

among other things supports the resuscitation of local manufacturing companies through encouraging resource extractive industries to buy from Zimbabwean companies. To this end, the national budget for 2014 discourages importation of conveyor belts which are produced by the company.

(iii) Negotiations are underway at national level to reschedule the Distressed Industries and Marginalised Areas Fund (DIMAF) from a two year tenure to a three year tenure and the company is expected to benefit from this initiative.

(iv) The arrangement with tax authorities to repay the accrued arrears spread over 5 years is still in force.

(v) One of the key suppliers, VIZARA, has agreed to offer credit terms for 2014 on raw materials.

The above interventions are likely to improve demand of the company's products and operating levels. Based on the above, the directors believe that the preparation of the financial statements on a going concern basis is still appropriate.

25 EVENTS AFTER THE REPORTING DATE

25.1 Approval of financial statementsThe financial statements were approved by the Board of Directors for issue on 29 April 2014.

Notes to the Financial Statements (Cont’d)for the year ended 31 December 2013 HOLDINGS

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Top Ten Shareholders

Total holding % of total holding

SMM HOLDINGS (PRIVATE) LIMITED 231,893,327 0.43

FBC PENSION FUND 100,455,283 0.19

GENERAL BELTINGS EMPLOYEE SHARE PARTICIPATION TRUST 47,909,266 0.09

PRAKASH, RADIA 18,128,897 0.03

EQUIVEST NOMINEES (PVT) LTD 15,513,225 0.03

GENERAL BELTINGS MANAGEMENT SHARE PARTICIPATION TRUST 12,365,408 0.02

CHITEPO, BERNARD NORMAN 11,149,839 0.02

TSUROH, WILBROAD 10,514,091 0.02

FBC NOMINEES (PRIVATE) LIMITED 5,866,452 0.01

AKSIA TRUST 5,844,793 0.01

Top Ten Shareholding 459,640,581 0.86

Remaining holding 76,948,042 0.14

Total issued shares 536,588,623 1.00

Analysis by category of Shareholders

No. of shareholders % of total shares Total shares % of total s.holders

COMPANY LOCAL 123 0.11 250,535,114 0.47

PENSION FUND 8 0.01 107,439,377 0.20

EMPLOYEE 13 0.01 67,323,133 0.13

LOCAL RESIDENT 951 0.82 57,054,770 0.11

NON RESIDENTS-INDIVIDUAL 11 0.01 22,167,447 0.4

NOMINEES-LOCAL 33 0.03 21,250,332 0.4

INVESTMENT TRUST AND PROPERTY 13 0.01 9,961,536 0.2

INSURANCE COMPANIES 1 0.00 482,530 0.0

NON RESIDENTS 2 0.00 371,270 0.0

FUND MANAGERS 2 0.00 3,005 0.0

EST 1 0.00 109 0.0

TOTALS 1,158 1.00 536,588,623 1.00

Analysis of Shareholdersas at 31 December 2013

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COUNTRIES

No. of Shareholders % of total s.holders Total shares % of total shares

ZIMBABWE 1143 0.99 513,606,498 0.96

KENYA 1 0.00 18,128,897 0.03

MAURITIUS 1 0.00 3,216,664 0.01

SWEDEN 2 0.00 709,346 0.00

AUSTRALIA 1 0.00 668,731 0.00

SOUTH AFRICA 3 0.00 196,109 0.00

UNITED KINGDOM 5 0.01 43,153 0.00

NAMIBIA 1 0.00 19,175 0.00

BOTSWANA 1 0.00 50 0.00

TOTALS 1,158 1.00 536,588,623 1.00

SHAREHOLDING DISTRIBUTION

No. of shareholders % of total s.holders Total Shares % of total shares

0 - 100 196 0.17 6,704 0.00

101 - 200 53 0.05 7,614 0.00

201 - 500 107 0.09 34,654 0.00

501 - 1,000 113 0.10 87,879 0.00

1,001 - 5,000 290 0.25 801,549 0.00

5,001 - 10,000 98 0.08 734,367 0.00

10,001 - 50,000 162 0.14 3,821,782 0.01

50,001 - 100,000 41 0.04 2,929,104 0.01

100,001 - 500,000 53 0.05 12,049,378 0.02

500,001 - 1,000,000 16 0.01 11,328,135 0.02

1,000,001 - 10,000,000 22 0.02 69,232,954 0.13

10,000,001 - 7 0.01 435,554,503 0.81

TOTALS 1,158 1.00 536,588,623 1.00

Analysis of Shareholders (Cont’d)as at 31 December 2013

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Notice is hereby given that the Eleventh Annual General Meeting of members of the GB Holdings Limited will be held in the Cernol Chemicals Boardroom, 111 Dagenham Road, Willowvale, Harare on Friday 27 June 2014 at 11.30 hours for the following purposes:

ORDINARY BUSINESS1. To receive, consider and adopt the financial statements for the year ended 31 December 2013, together with the reports of

Directors and Auditors thereon.

2. To elect directors of the Company.2.1 Messrs, E. Mavengere and P.C.C. Moyo, C. E. Dhlembeu and Alderman Sibanda retire by rotation in terms of Article 95 of the

Company's Articles of Association and being eligible, offer themselves for re-election.2.2 Mr. I. Murefu was appointed to the Board during the course of the year hence retire and being eligible for re-election in

terms of Article 101 of the Company's Articles of Association offers himself for re-election.

3. To approve the remuneration of the Directors for the year ended 31 December 2013.4. To approve the remuneration of the Auditors for the year ended 31 December 2013.5. To appoint Auditors for the current year. The Auditors BDO Zimbabwe Chartered Accountants, being eligible, offer

themselves for reappointment.

A member entitled to attend and vote at the meeting may appoint any person or persons to attend, speak and vote in his stead. A proxy need not be a member of the Company.

Proxy forms must be received at the registered office of the Company or be lodged with the Transfer Secretaries, First Transfer Secretaries (Private) Limited, 1 Armagh Avenue, Eastlea, P.O Box 11, Harare, not less than 48 hours before the meeting.

By Order of the Board

P. MunyanyiCompany Secretary

111 Dagenham RoadWillovaleHarare4 May 2014

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