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CHAIRMANS STATEMENT ECONOMIC OVERVIEW The economic environment during 2013 was characterised by persistent liquidity challenges, declining inflation and modest economic growth. The countrys Gross Domestic Product is estimated to have grown by 3.4% during 2013 with agriculture estimated to have declined by 1.3%. Industrial capacity utilisation dropped to 39.6% in 2013 compared to 44.2% in 2012. Inflation was 0.33% in December 2013 against 2.91% in 2012 on the back of weakening aggregate demand, stable global oil prices and continued depreciation of the South African Rand. Based on the ZimAsset plan, the government expects Gross Domestic Product growth of 6.1% in 2014 driven by the mining and agriculture sectors. The Botswana economy, where the Group has a reinsurance operation, saw Gross Domestic Product growth rates increase from 4.2% in 2012 to 5.4% in 2013 being led by increased production and higher prices in mining. Interest rates and inflation remained stable while the Botswana Pula depreciated by 14% against the United States Dollar. ZIMBABWE INSURANCE SECTOR In 2013, the Net Premium Written in the life assurance sector grew by 15% to $258 million from $225 million in 2012 with the sector largely adequately capitalised. The short-term insurance sector had an 8% growth from $194 million in 2012 to $210 million in 2013. The major sources of business for the short term insurance sector were motor and fire insurance. ZIMBABWE PROPERTY SECTOR The property sector witnessed reduced activity as there was limited long term funding for property developments and mortgage financing. Commercial rental rates were affected by increased levels of voids and high operating cost components. Declining occupancy ratios led to property owners absorbing a greater proportion of the operating costs. GROUPS PERFORMANCE Financial highlights for the year ended 31 December 2013:
31-Dec-13 US$000 31-Dec-12 US$000 Movement %

Audited Abridged Financial Statements

For the Year Ended 31 December 2013
CONSOLIDATED STATEMENT OF CASH FLOWS FOR THE YEAR ENDED 31 DECEMBER 2013 Prot before taxation Non-cash and separately disclosable items Operating cash ows before working capital changes Working capital changes Cash generated from operations Interest paid Net interest received Taxation paid Net cash ows from operating activities Net cash utilised on investing activities Net cash generated on nancing activities Net (decrease)/increase in cash and cash equivalents
31-Dec-13 US$ 460,733 12,059,640 115,562,001 10,302 25,563,655 3,998,587 7,014,047 1,494,812 786,322 665,718 7,542,502 720,002 10,973,347 18,359,680 205,211,348 31-Dec-12 US$ 653,237 21,468,596 93,315,999 622,760 16,332,557 659,250 6,811,351 323,118 582,773 6,795,081 321,824 4,217,271 24,199,255 176,303,072

First Mutual Park | 100 Borrowdale Road | Borrowdale | Harare | Zimbabwe | P.O. Box BW178 | Borrowdale | Harare | Zimbabwe

OUTLOOK Increased business confidence and an improvement in the liquidity situation in the market are essential to ensure a stable operating environment, which will improve the economic recovery of the country. Going forward the Group will improve risk management through enforcing the actuarial control cycle, active management of trade receivables and continuously reviewing the product portfolio to keep the products relevant and affordable. The Group will continue with its stringent risk assessment approach for money market investments with deposits being placed with stable banking counterparties and equity investments being made into entities that are considered resilient. APPRECIATION On behalf of the Board, I would like to extend my gratitude to fellow Board members, the Regulators (Insurance and Pensions Commission, Securities and Exchange Commission of Zimbabwe, Zimbabwe Stock Exchange and the Reserve Bank of Zimbabwe), Clients, Partners and other Stakeholders for their role whilst interacting with the Group. In addition, my appreciation goes to all Group employees and subsidiary board members for their commitment in steering the Group during the past year. __________________________ Oliver Mtasa Chairman 21 March 2014
CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT 31 DECEMBER 2013 ASSETS Intangible assets Property, vehicles and equipment Investment properties Financial instruments - Available for sale investments - Financial assets at fair value through profit and loss Held to maturity investments Investment in associate Inventory Deferred acquisition costs Tax asset Insurance receivables Rental receivables Other receivables Cash and cash equivalents TOTAL ASSETS EQUITY AND LIABILITIES Equity attributable to equity holders of the parent Share capital Share premium Non-distributable reserves Retained profit Total ordinary shareholders' equity Non-controlling interests Long term liabilities Policyholders' funds Shareholder risk reserves Deferred tax liability Borrowings Current Liabilities Income tax liability Trade and other payables Unearned premium reserve Insurance payables Total Liabilities TOTAL EQUITY & LIABILITIES CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 DECEMBER 2013 Note INCOME Gross premium Retrocessions Net premium income Movement in unearned premium reserve Net premium earned Rental income Fair value gains investment property Investment income Other income Total income EXPENDITURE Claims Commissions Change in policyholder funds Change in shareholder risk reserves Expenses of management Acquisition expenses Property expenses Finance costs Total Expenditure Prot before share of prot/(loss) of associate Share of profit/(loss) of associate Prot before taxation Taxation charge Prot for the year Other comprehensive income/(losses) Available for sale reserve reclassified to profit or loss Exchange differences on translating foreign operations Fair value gain/(loss) available for sale investments Revaluation of land and buildings Deferred tax effect Total comprehensive income for the year, net of tax Prot attributable to: Equity holders of the parent Non-controlling interest Prot for the year Comprehensive income attributable to: Equity holders of the parent Non-controlling interest Total comprehensive income for the year Basic earnings/(loss) per share (US cents) Diluted earnings/(loss) per share (US cents) Weighted average number of shares in issue basic diluted 23 15 16

31-Dec-13 US$ 9,558,961 5,433,208 14,992,169 (11,385,614) 3,606,555 (71,460) 2,358,323 (2,111,867) 3,781,551 (10,159,902) 538,776 (5,839,575) 24,199,255 (5,839,575) 18,359,680 4,567,052 13,792,628 18,359,680

31-Dec-12 US$ 17,966,160 (5,127,513) 12,838,647 (2,891,961) 9,946,686 2,211,873 (1,002,831) 11,155,728 (2,187,103) 6,613,537 15,582,162 8,617,094 15,582,162 24,199,256 8,007,779 16,191,476 24,199,255

Note 5 6 7.1 7.2 8 9 10 11 12 13 14

Movement in cash and cash equivalents At beginning of the year Net (decrease)/increase for the year At end of the year Disclosed as Cash at bank Short-term investments

Gross premium income Total income Profit for the year after tax Profit attributable to shareholders Policyholders funds Total assets

101,101 113,015 5,978 1,627 83,970 205,211

88,599 92,660 13,451 9,795 71,084 176,303

14.1 22.0 (55.6) (83.4) 18.1 16.4

NOTES TO THE FINANCIAL STATEMENTS AS AT 31 DECEMBER 2013 1 Corporate Information First Mutual Holdings Limited (the Group) is a limited liability company incorporated and domiciled in Zimbabwe, whose shares are publicly traded on the Zimbabwe Stock Exchange. The principal activities of the company and its subsidiaries (the Group) are life assurance, general insurance, health insurance, reinsurance, property management and development and actuarial consultancy. The Group has a 19.92% interest in Rainbow Tourism Group Limited, which is involved in the tourism and leisure industry. The consolidated financial statements of the Group for the year ended 31 December 2013 were authorised for issue in accordance with a resolution of the directors at a meeting held on 21March 2014. 2 Statement of Compliance The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS), the Zimbabwe Stock Exchange Act (Chapter 24:18) and the Companies Act (Chapter 24:03).

Gross Premium Written (GPW) at $101.1 million for the year ended 31 December 2013 was 14% above the prior year figure of $88.6 million on the back of improved performance across the Group with health insurance, life assurance and short-term reinsurance businesses being the major contributors in absolute terms. Rental income grew by 6.8% from $7.3 million in 2012 to $7.8 million in 2013 driven by an increase in the contribution of turnover-based rental income. The limited overall economic growth constrained the property market leading to low demand for office and conventional industrial space. The property market continues to face challenges with limited property transactions being recorded especially in residential stands and low value properties. The year-on-year attributable profit declined mainly due to the higher claims ratio for the health insurance business and the adoption of a more prudent approach to technical reserves following the introduction of the actuarial control cycle during the year. As a result, the shareholder risk reserves and incurred but not reported claims provisions increased by $4.4 million (101%) and $1.2million (65%) respectively compared to the prior year. The actuarial control cycle will result in the insurance operations being managed based on actuarially determined parameters in terms of both technical and shareholder risk reserves, which is expected to lead to more efficiency, consistency and financial soundness. OPERATING BUSINESS UNIT ANALYSIS Except where indicated, the commentary below refers to unconsolidated gures. Property Pearl Properties Rental income increased by 2% to $9 million (2012: $8.8 million), due to a marginal increase in rental per square metre and higher turnover based rentals. The average rental per square metre achieved was $8.25 (2012: $8.18) and the annualised rental yield achieved in 2013 was slightly lower at 7.9% (2012: 8.6%) due to slower growth in rentals relative to the appreciation in investment property values. The vacancy rate for the year 2013 was 23.3% (2012: 21.1%), a result of voluntary surrender of space by tenants due to difficult operating conditions in their different industry sectors. Investment properties were revalued by an independent professional valuer and resulted in fair value gains of $8.0 million compared to 2012 fair value gains of $8.9 million. Out of the fair value gains in property recorded in 2013 of $8 million, $6.3 million related to property re-zoning from residential to commercial property. Life Business First Mutual Life Assurance Company Gross Premium Written closed the year at $28.1 million, being 26% higher than the prior year figure of $22.3 million. Employee benefits premium of $15.3 million was 21% higher compared to the previous years premium of $12.6 million due to single premium income and new business written during the year. Individual life premiums increased to $12.8 million (2012: $10.1 million) due to an increase in uptake of products, particularly funeral products. FMRE Life & Health Gross Premium Written grew by 10% to $1.96 million (2012: $1.78 million) with health business contributing 66% of the gross premium written whilst Group life contributed 27% and individual life business contributed 7%. Regional business contributed $940,000 (2012: $186,000) to gross premium, with the business continuously seeking ways to further increase the gross premium written from the region in 2014. Medical Business FML Health Care Company FML Health Care Company premium income grew by 19% to $43.1 million (2012: $36.3 million). The growth is attributable to a 36% increase in membership from 79,242 at the beginning of the year to 107,796 members at year end. The average revenue per member dropped from $40 to $38 as some members downgraded their membership plans due to liquidity challenges. The claims ratio rose from 68% in 2012 to 80% in 2013, contributing to the reduction in operating profit from $6.4 million to $1.9 million in 2013. The Company will continue to seek new business through providing quality service, demonstrated claims paying ability, wellness campaigns, innovative products and affordable pricing to its members. Short-term Insurance Businesses TristarInsurance Company Gross Premium Written decreased by 25% in 2013 to $6.8 million (2012: $9.0 million) as the company adjusted its operations from its legacy issues. The motor class continued to be the most significant contributor in terms of gross premium (62%), followed by fire (16%) and accident (9%). The Company has adopted strategies to grow its business through strengthening broker relations, enhancing service delivery and providing relevant risk management advice. FMRE Property & Casualty (Zimbabwe) The business experienced a 14% growth in gross premium written to $20.1 million (2012: $17.6 million) as major cedants renewed their confidence in the company. The major growth contributors were the increased fire and farming business, with treaty business contributing 42% (2011: 42%). This growth was achieved despite cedants raising their retention limits. FMRE Property & Casualty (Botswana) The business witnessed a 78% jump to $2.7 million in gross premium written (2012: $1.5 million) following the recapitalisation of the business in December 2012. The casualty, engineering, motor and fire classes were the largest contributors to gross premium. Local business accounted for 60% of the total gross premium whilst non Botswana business contributed 40%. The annual growth was a result of growing market confidence and increased marketing efforts, resulting in more acceptance in the local market. LICENCING The Group successfully applied for an investment management license and the new business will start operations in the second quarter of 2014. Regulatory approval was also granted to merge the two reinsurance businesses operating in Zimbabwe, under a composite license. The synergies to be realised from such an arrangement will lead to a stronger reinsurance balance sheet that can attract more business from both local and regional insurance operations. NAME CHANGE At the Annual General Meeting held on 4 June 2013, a resolution was passed to change the name of Africa First Renaissance Corporation Limited to First Mutual Holdings Limited. HUMAN CAPITAL DEVELOPMENT The Group is going through an organisational transformation that is expected to result in optimum operating structures aimed at enhancing operational effectiveness and efficiency. DIRECTORATE Mr Innocent Chagonda resigned from his position as Non-Executive Director and Chairman of the Board with effect from 4 June 2013, the day I was appointed Chairman. On behalf of the Board, I would like to extend my sincere thanks to Mr Chagonda for his invaluable contribution to the Group. DIVIDEND Having taken due regard of the Groups cash flow requirements, the Board of Directors recommends a dividend of 0.1 cents per share to be paid on or about 30 May 2014 to shareholders registered in the books of the Company as at 2 May 2014. The transfer books and register of members will be closed from 3 May to 6 May 2014, inclusive.

380,201 7,957,918 2,323,240 9,247,268 19,908,627 53,377,757 83,969,506 8,806,663 15,012,542 538,776 108,327,487 226,713 13,579,950 4,191,181 5,599,633 23,597,477 131,924,964 205,211,348

380,201 7,957,918 204,171 7,679,435 16,221,725 46,990,055 71,083,634 4,373,604 11,555,600 87,012,838 1,383,709 15,710,936 3,202,918 5,780,891 26,078,454 113,091,292 176,303,072

2.1 New and Amended Standards and Interpretations During the year several standards and amendments to standards became effective, most of them with an effective date of 1 January 2013. Below is a discussion of the nature and impact of those standards or amendments that the Group considers to be relevant. IFRS 10 Consolidated Financial Statements and IAS 27 Separate Financial Statements IFRS 10 establishes a single control model that applies to all entities including special purpose entities. The changes introduced by IFRS 10 require management to exercise significant judgement to determine which entities are controlled and therefore are required to be consolidated by a parent, compared with the requirements that were in IAS 27. Based on the analyses performed, IFRS 10 did not have any impact on the currently held investments of the Group. IFRS 12 Disclosure of Interests in Other Entities IFRS 12 sets out the requirements for disclosures relating to an entitys interests in subsidiaries, joint arrangements, associates and structured entities. The requirements in IFRS 12 are more comprehensive than the previously existing disclosure requirements for subsidiaries. For example, where a subsidiary is controlled with less than a majority of voting rights. The Group has no subsidiaries with material non-controlling interests and does not have unconsolidated structured entities. IFRS 12 disclosures where required have been disclosed in the notes to the financial statements. IFRS 13 Fair Value Measurement IFRS 13 establishes a single source of guidance under IFRS for all fair value measurements. IFRS 13 does not change when an entity is required to use fair value, but rather provides guidance on how to measure fair value under IFRS. IFRS 13 defines fair value as an exit price. As a result of the guidance in IFRS 13, the Group re-assessed its policies for measuring fair values, in particular, its valuation inputs such as non-performance risk for fair value measurement of liabilities. IFRS 13 also requires additional disclosures. Application of IFRS 13 has not materially impacted the fair value measurements of the Group. Additional disclosures where required, are provided in the individual notes relating to the assets and liabilities whose fair values were determined. IAS 1 Presentation of Items of Other Comprehensive Income Amendments to IAS 1 The amendments to IAS 1 introduce a grouping of items presented in other comprehensive income. Items that will be reclassified (recycled) to profit or loss at a future point in time (e.g., net loss or gain on AFS financial assets) have to be presented separately from items that will not be reclassified (e.g., revaluation of land and buildings). The amendments affect presentation only and have no impact on the Groups financial position or performance. IAS 1 Clarication of the Requirement for Comparative Information (Amendment) These amendments clarify the difference between voluntary additional comparative information and the minimum required comparative information. An entity must include comparative information in the related notes to the financial statements when it voluntarily provides comparative information beyond the minimum required comparative period. The amendments clarify that the opening statement of financial position (as at 1 January 2012 in the case of the Group), presented as a result of retrospective restatement or reclassification of items in financial statements does not have to be accompanied by comparative information in the related notes. As a result, the Group has not included comparative information in respect of the opening statement of financial position as at 1 January 2012. The amendment will affect future periods if an opening statement of financial position is provided. IAS 19 (Revised) Employee Benets IAS 19 (Revised 2011) changes, amongst other things, the accounting for defined benefit plans. Some of the key changes that are applicable to the Group include the following: Termination benefits will be recognised at the earlier of when the offer of termination cannot be withdrawn, or when the related restructuring costs are recognised under IAS 37 Provisions, Contingent Liabilities and Contigent Assets. The distinction between short-term and other long-term employee benefits will be based on expected timing of settlement rather than the employees entitlement to the benefits.

17 18

31-Dec-13 US$
101,100,981 (10,610,371) 90,490,610 (1,056,221) 89,434,389 7,778,465 8,096,037 6,389,182 1,316,763 113,014,836 (49,790,515) (6,359,782) (12,885,872) (4,433,059) (26,635,464) (1,797,058) (1,685,361) (71,460) (103,658,571) 9,356,265 202,696 9,558,961 (3,580,512) 5,978,449 (223,742) 3,384 5,813,533 (1,497,019) 4,096,156 10,074,605 1,627,429 4,351,020 5,978,449 3,686,902 6,387,703 10,074,605 0.43 0.43 380,200,758 380,200,758

31-Dec-12 US$
88,598,583 (13,597,621) 75,000,962 (573,543) 74,427,419 7,295,560 7,672,536 2,335,493 929,349 92,660,357 (37,562,936) (4,612,093) (14,068,389) 12,391,063 (25,944,251) (1,558,175) (2,009,890) (73,364,671) 19,295,686 (1,329,526) 17,966,160 (4,515,120) 13,451,040 (205,114) (105,119) (310,607) 5,585 (615,255) 12,835,785 9,795,098 3,655,942 13,451,040 9,399,201 3,436,584 12,835,785 4.43 4.43 221,115,164 221,115,164

19

20 21 22 15 16

None of the above changes affected the measurement of assets or liabilities of the Group. 3 Reporting Period and Currency The reporting period is 1 January 2013 to 31 December 2013. The financial statements are presented in United States dollars being the functional and reporting currency of the primary economic environment in which the Group operates.

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY FOR THE YEAR ENDED 31 DECEMBER 2013 Share capital US$ As at 31 December 2011 Issued share capital Share issue expenses Acquisition of interest in subsidiary Policyholder gain on acquisition of Pearl shares Dividend paid Acquisition of non-controlling interest Other comprehensive loss Profit for the year As at 31 December 2012 Transfer to solvency reserve Other comprehensive income Profit for the year As at 31 December 2013 217,124 163,077 380,201 380,201 Share premium US$ 8,469,330 (511,412) 7,957,918 7,957,918 Non distributable reserves US$ 600,068 (395,897) 204,171 59,596 2,059,473 2,323,240 Retained earnings US$ 1,526,090 563,362 (4,361,333) 156,218 9,795,098 7,679,435 (59,596) 1,627,429 9,247,268 Total equity for parent US$ 2,343,282 8,632,407 (511,412) 563,362 (4,361,333) 156,218 (395,897) 9,795,098 16,221,725 2,059,473 1,627,429 19,908,627 Non controlling interest US$ 48,597,931 (797,373) (2,817,423) (374,813) (1,054,852) (219,358) 3,655,942 46,990,054 2,036,683 4,351,020 53,377,757 Total equity US$ 50,941,213 8,632,407 (511,412) (243,011) (7,178,756) (374,813) (898,634) (615,255) 13,451,040 63,211,779 4,096,156 5,978,449 73,286,384

DIRECTORS: O Mtasa (Chairman), M S Manyumwa (Deputy Chairman), J M Chikura, Dr C U Hokonya, D Hoto*, T Khumalo, W M Marere*, J M Matiza, E K Moyo, I P Z Ndlovu (* Executive Directors)

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NOTES TO THE FINANCIAL STATEMENTS (CONTINUED) AS AT 31 DECEMBER 2013 4 5 Property, vehicles and equipment Ofce Equipment US$ 1,702,969 448,318 (111,423) 2,039,864 166,033 (11,911) 2,193,986 554,734 29,107 (6,260) 877,581 375,293 (6,685) 1,246,189 1,162,283 947,797 Motor Vehicles US$ 3,591,099 1,887,330 (933,634) (2,696) 4,542,099 904,300 (621,092) 4,825,307 1,617,513 774,724 (348,603) 2,043,634 850,715 (508,857) 2,385,492 2,498,465 2,439,815 Ofce Furniture US$ 539,353 16,469 (50,343) 505,479 58,382 (6,139) 557,722 227,277 53,395 (890) 279,782 60,814 (2,495) 338,101 225,697 219,621 Land & Buildings US$ 18,874,896 27,436 18,902,332 64,350 (320,001) 5,126,823 (14,400,000) 9,373,504 1,104,550 215,631 1,320,181 313,227 (25,600) (686,710) 921,098 17,582,151 8,452,406 31-Dec-13 US$ 93,315,999 14,400,000 229,965 (480,000) 8,096,037 115,562,001 622,760 (615,842) 3,384 10,302 Cost At 1 January 2012 Additions Disposals Impairment losses At 31 December 2012 Additions Disposals Revaluation Transfer to property investments At 31 December 2013 Accumulated depreciation At 1 January 2012 Charge for the year Depreciation on disposals At 31 December 2012 Charge for the year Depreciation on disposals At 31 December 2013 Carrying amount At 31 December 2012 At 31 December 2013 6 Investment properties Balance at 1 January Reclassifications from/(to) property, plant and equipment Improvements to existing properties Reclassification to inventory Fair value gains/(losses) Balance at 31 December 7.1 Available-for-sale investments At 1 January Purchases Disposals Fair value gains/(losses) Total available-for-sale investments at fair value 7.2 Financial assets at fair value through prot and loss Fair value At 1 January Purchases Disposals Fair value gains/loss Total nancial assets at fair value through prot or loss 8 Held to maturity investments At 1 January Purchases Redemptions Investment in associate The investments in RTG Limited is as follows: Carrying amount as at 1 January Share of associate profit/(loss) for the year Carrying amount of investment in associate 10 Inventory Property held for trading Work-in-progress Kamfinsa Cluster Houses Capitalised project cost Transfer from investment properties Consumables 11 Insurance receivables Due from policyholders Due from agents, brokers and intermediaries Provision for credit losses 12 Rental receivables Rental receivables Provision for credit losses 13 Other receivables Sundry debtors Staff debtors Trust Bank balance reclassified to other receivables Tenant costs recoveries Provision for credit losses Trust Bank balance Receivables excluding prepayments Prepayments: Prepayments land Prepayments other Total other receivables 14 Cash and cash equivalents Money market investments Cash at bank and on hand 15 Policyholders Funds31- Dec-13 Balance at 1 January Policyholder gain on acquisition of Pearl Transfer from statement of comprehensive income Balance at 31 December 16 Shareholder risk reserve Balance at 1 January Change in shareholder risk reserves Balance at 31 December 17 Trade and other payables Trade payables Payroll and statutory deductions Commissions Medical Saving Fund - savings pot Other 18 Insurance payables Outstanding claims Losses incurred but not reported 19 Premium income Life assurance Medical savings fund Employee benefits Short-term insurance Reinsurance Gross premium Less: Reinsurance ceded Net premiums 6,811,351 202,696 7,014,047 140,150 1,152,034 672,034 480,000 202,628 1,494,812 8,090,337 363,787 8,454,124 (911,622) 7,542,502 1,706,928 (986,926) 720,002 3,724,476 1,400,681 207,399 517,074 5,849,630 (207,399) 5,642,231 4,100,000 1,231,116 10,973,347 13,792,628 4,567,052 18,359,680 71,083,634 12,885,872 83,969,506 4,373,604 4,433,059 8,806,663 7,551,788 914,034 300,007 3,842,994 971,127 13,579,950 2,531,505 3,068,128 5,599,633 12,994,528 43,847,781 15,772,235 6,651,766 21,834,671 101,100,981 (10,610,371) 90,490,610 16,332,557 12,241,941 (6,185,374) 3,174,531 25,563,655 659,250 4,250,000 (910,663) 3,998,587 9

Audited Abridged Financial Statements

For the Year Ended 31 December 2013
31- Dec-13 US$ 20 Investment income Interest income Net gains on disposal of investments Transfer from reserves on disposal of investments Fair value gain/(loss) - equities 21 Other income Tenant interest Dividend received Profit on disposal of fixed assets Actuarial income Fee income 22 Claims Medical business Individual life Employee benefits Surrenders/withdrawals Short-term insurance Reinsurance business Less: Reinsurance recoveries Net claims 23 Prot before tax is shown after charging: Depreciation Audit fees 2,358,323 856,328 3,174,531 6,389,182 199,950 232,510 89,080 140,820 654,403 1,316,763 34,452,944 5,145,957 3,524,583 1,634,712 6,656,150 51,414,346 (1,623,831) 49,790,515 31- Dec- 12 US$ 2,211,873 2,287,956 205,114 (2,369,450) 2,335,493 159,307 230,530 47,021 46,084 446,407 929,349 24,510,237 3,344,555 2,277,085 797,358 4,690,137 3,826,331 39,445,703 (1,882,767) 37,562,936

First Mutual Park | 100 Borrowdale Road | Borrowdale | Harare | Zimbabwe | P.O. Box BW178 | Borrowdale | Harare | Zimbabwe

Audit opinion The Group external auditors, Ernst & Young Chartered Accountants Zimbabwe have expressed an unqualified opinion on the Groups financial statements. The signed Annual Report is available for inspection at the companys registered office.

Total US$ 24,708,317 2,379,553 (1,095,400) (2,696) 25,989,774 1,193,065 (959,143) 5,126,823 (14,400,000) 16,950,519 3,504,074 1,372,857 (355,753) 4,521,178 1,600,049 (543,637) (686,710) 4,890,880 21,468,596 12,059,640 31-Dec-12 US$ 84,137,515 1,505,948 7,672,536 93,315,999 1,181,283 (247,916) (310,607) 622,760

1,600,049 334,115

1,372,857 518,878

24 SEGMENTAL RESULTS AND ANALYSIS Short term US$ Property & Other US$ 9,012,479 6,089,665 10,871,354 25,973,498 (10,296,374) 147,302,111 12,568,198 15,982,901 7,126,967 (589,497) (1,154,396) (417,331) Gross Consolidation Figures Entries US$ US$ Total Consolidated US$

Life US$ As at 31 December 2013 Net premium earned Rental income Investment income Other income Total Income Total expenses Non current assets Current assets Non current liabilities Current liabilities Cashflows from operating activities Cashflows utilised on investing activities Cash utilised in financing activities

Medical US$ 42,877,789 531,016 232,971 43,641,776 (41,753,923) 2,137,324 7,874,881 9,033,597 2,144,264 67,374 -

15,147,043 8,721,027 (5,166,063) (2,369,450) 16,332,557 659,250 659,250

29,769,884 17,060,573 8,740,896 (177,311) 183,565 164,545 38,694,345 17,047,807 (21,988,420) (16,962,507) 95,483,870 4,505,255 12,225,794 15,789,687 93,275,501 208,729 4,166,883 10,979,950 5,519,141 (968,185) (7,727,940) (440,833) -

89,708,246 (273,857) 89,434,389 9,012,479 (1,234,014) 7,778,465 15,184,266 (699,047) 14,485,219 11,452,435 (10,135,672) 1,316,763 125,357,426 (12,342,590) 113,014,836 (91,001,224) (12,657,347) (103,658,571) 249,428,561 (84,088,285) 165,340,276 48,458,560 (8,587,486) 39,871,073 109,467,131 (1,139,644) 108,327,487 31,307,397 (7,709,920) 23,597,477 6,105,723 (2,324,172) 3,781,551 (9,255,795) (904,107) (10,159,902) (417,331) 956,107 538,776

8,140,877 (1,329,526) 6,811,351 140,150 182,968 323,118 6,932,961 115,141 7,048,102 (253,021) 6,795,081 1,087,601 (765,777) 321,824 1,959,330 1,134,003 975,000 4,068,333 4,068,333 148,938 4,217,271 16,191,476 8,007,779 24,199,255 57,015,245 7,178,756 6,889,633 71,083,634 16,764,667 (12,391,063) 4,373,604 7,845,640 1,004,379 227,204 3,613,599 3,020,114 15,710,936 3,918,946 1,861,945 5,780,891 10,182,781 37,690,195 12,602,544 8,986,667 19,136,396 88,598,583 (13,597,621) 75,000,962

As at 31 December 2012 Net premium earned 23,997,039 14,422,150 Rental income Investment income 2,304,484 (384,393) Other income 189,737 331,648 Total Income 26,491,260 14,369,405 Total expenses (16,078,501) (15,348,445) Non current assets 86,306,936 4,781,544 Current assets 15,588,963 15,607,956 Non current liabilities 79,882,488 78,619 Current liabilities 5,473,139 11,242,060 Cash flows from operating activities 3,213,459 (1,614,919) Cash flows utilised on investing activities (3,047,685) 4,207,047 Cash utilised in financing activities 1,486,368 3,330,417

36,256,796 (487,387) 118,998 35,888,407 (33,800,860) 2,051,402 5,820,227 (1,281,777) 8,045,335 2,144,263 (6,145,389) -

8,830,138 35,520,325 6,001,228 50,351,691 (12,598,449) 139,011,583 8,380,730 13,654,864 9,785,411 (10,097,643) (3,576,046) 8,149,131

74,675,985 (248,566) 8,830,138 (1,534,578) 36,953,029 (26,945,000) 6,641,611 (5,712,262) 127,100,763 (34,440,406) (77,826,255) 4,461,584 234,151,465 (91,704,942) 45,397,876 (9,541,327) 92,334,194 (5,321,356) 34,545,945 (8,467,491) (6,354,840) 17,510,569 (8,562,073) 6,374,970 12,965,916 (6,352,379)

74,427,419 7,295,560 10,008,029 929,349 92,660,357 (73,364,671) 142,446,523 35,856,549 87,012,838 26,078,454 11,155,728 (2,187,103) 6,613,537

25 Commitments and contingent liabilities 25.1 Commitments 25.1.1 Authorised but not contracted for: There were no commitments authorised but not contracted for as at year end. 25.1.2 Authorised and contracted for: The Group, through its subsidiary, Pearl Properties (2006) Limited is committed to utilising funds raised at the Initial Public Offer for the construction of the Kamfinsa Cluster Housing Development. The funds that are still to be utilised in respect of this commitment amount to $415,460 (2012: $622,760). 26 Events after the reporting date 26.1 Licences The Group received regulatory approval, subsequent to year end, to merge the two reinsurance businesses operating from Zimbabwe, under a composite licence. The synergies to be realised from such an arrangement will lead to a stronger balance sheet that can attract more business from both local and regional insurance operations. Subsequent to year end, the Group was granted a licence to operate an asset management company. 26.2 Acquisition of land The Group through Pearl Properties (2006) Limited acquired on the 9th of January 2014 land measuring 24.0664 hectares being the remainder of Lot 57 of Mount Pleasant, situated in the District of Salisbury Deed of transfer number 3251/88 at a cost of $9.6 million excluding transfer fees. The acquisition was funded through a combination of internal cash flows and a five (5) year loan secured from a local financial institution. Transfer fees and rate charges of $0.519 million were funded from internal cash flows. The acquisition costs of the land are broken down as follows: Date 30-Dec-13 9-Jan-14 Total Acquisition Price Transfer fees [Including Rates] Total Cost Source of Funds Internal Cash flows External Borrowing Internal Cash flows US$ 4,100,000 5,500,000 9,600,000 519,246 10,119,246

The $4,100,000 from internal cash flows paid on the 30th of December 2013 was accounted for under prepayments [see Note 13] The loan facility sourced from a local financial institution will be administered under the following terms; Facility Amount Tenure Security US$5,500,000.00 5 Years Immovable property, title 0004163/2007, being Stand 18259 Harare Township of Stand 14908 Salisbury Township called First Mutual Park in the name of First Mutual Park (Private) Limited registered and stamped to cover $6,500,000.00 Base Rate minus 3% p.a. [Base Rate at drawdown 13% p.a.] Commitment fee of 1.00% Arrangement fee of 1.00% Management fee 0.5% p.a.

Interest Rate Fees

DIRECTORS: O Mtasa (Chairman), M S Manyumwa (Deputy Chairman), J M Chikura, Dr C U Hokonya, D Hoto*, T Khumalo, W M Marere*, J M Matiza, E K Moyo, I P Z Ndlovu (* Executive Directors)