Atlas African Industries Limited / Ticker: AAI / Index: AIM and NSE / Sector: Support

Services

31 August 2016

Atlas African Industries Limited

(‘Atlas’ or the ‘Company’)

Interim Results

Atlas Development (AIM, NSE: AAI), the Kenyan headquartered, African focussed support services

and logistics company, provides interim results for the six month period ended 30 June 2016.

CHAIRMAN’S STATEMENT

This has been a frustrating period for the Company and its shareholders.

During the period, we initially made great strides forward to deliver on our strategy to

take advantage of opportunities in the consumer industrial sector: we changed the name

of the Company to Atlas African Industries Limited, shifted our operational focus and

raised US$5 million from new and existing shareholders to strengthen the balance sheet;

through our Ethiopian subsidiary TEAP Glass PLC (‘TEAP’) we secured a 100 year land

lease for our planned new state-of-the-art glass bottle manufacturing facility (the first 45

years of lease payments have been paid in advance) on a 5.5 acre site located in Chancho,

in close proximity to established infrastructure and just 30 kilometres from intended

mine sites for the majority of materials needed to produce high quality bottles; we

appointed MH Engineering Plc, a leading Ethiopian firm, to conduct a full feasibility study,

including architectural, engineering, structural, sanitary, electrical and mechanical

design and quantity surveying services; we commenced ground clearing and

geotechnical drilling on-site ahead of constructing ancillary buildings, and placed

deposits on long lead items. The tangible potential of our Ethiopian project (the ‘Chancho

Project’) was further underpinned by the signing of a memorandum of understanding

with leading Ethiopian brewer Raya Brewery Share Company (‘Raya’), with a view –

subject to confirmation of quality – to entering into an offtake agreement to regularly

supply international standard, high quality glass bottles to Raya in substitution of the

imported bottles it currently uses.

Preliminary economic studies had highlighted the strong potential of the Chancho Project

based on a yearly production capacity of 105 million 330ml bottles, with full production

targeted for early 2019. The Ethiopian Government has designated manufacturing as a

top industrial priority with an emphasis on replacement of imports; the high-quality glass

bottle market is currently dominated by expensive imports, so we identified our project

as having huge benefit to all stakeholders, both the investors and Ethiopia. Success of the

Chancho Project has the potential to generate significant revenue in tax to the Ethiopian

Government as well as generate employment of 195 people in the area. Furthermore, we

perceived significant ancillary benefits would be seen within associated businesses and

supply chains.

Despite these considerable efforts and the factors which suggested that the Chancho

Project would generate positive impacts for the Company, its shareholders, the local

community around Chancho and the Ethiopian Government through tax revenues, our

progress has been undermined and derailed by the actions of the Ethiopian Revenue and

Customs Authority (‘ERCA’). As shareholders will be aware from our announcement of

11 May 2016 we have been subjected to a complete injustice, through the summary

removal of approximately US$2.4 million from TEAP’s bank account with the

Development Bank of Ethiopia by ERCA. ERCA’s actions stem from a tax claim made

against Ardan Risk & Support Services (‘Ardan’) which categorically relate to periods

prior to Atlas’ involvement with Ardan. Atlas has received legal advice that neither it nor

TEAP has any liability for any such taxes under Ethiopian law.

The Board continues in its fight to retrieve the expropriated funds and is pursing all legal,

diplomatic and political channels in order to seek redress, including direct appeals to the

Government of Ethiopia and the Ethiopian Investment Commission and through the UK

Foreign Office and the British Business Secretary; our major shareholders have been

actively lobbying the Canadian and US Governments.

The Company believes that the unilateral removal of these funds was unlawful. I want to

again reiterate and assure shareholders that the Board is examining all available options

as it seeks to have the Company’s funds returned. Concurrently, the Board has been

actively considering alternative options available to maximise shareholder value and on

1 August 2016 announced that the Company has acquired an interest in BonanzaWin, a

Nigerian based gaming company offering a range of online and real-play gaming

experiences including sports betting, casino slot games, and lotto.

This investment is in line with the Company’s active development strategy to identify and

support prospective growth opportunities across Africa. Atlas’ total investment into

Equatorial Partners Limited (‘EPL’, which holds a 60% stake in Saerimner Ltd

(‘Saerimner’) a Nigerian registered company operating under the trading name

“BonanzaWin”) at this stage is US$0.3 million, in consideration for which it has acquired

a 10% equity stake in EPL. BonanzaWin has established a portfolio of gaming businesses

currently focussed on the Nigerian market; the company has a secure online gaming

platform, which powers a wide range of games including sports betting, live casino and

slot games, has three gaming shops where customers can play and place bets, and is a

regulated provider of the Nigerian lottery, for which BonanzaWin sells tickets through a

number of local sales agents. BonanzaWin is licenced and regulated by the Lagos State

Lottery Board and Atlas believes the company represents a compelling investment

opportunity to access Nigeria’s growing gaming and entertainment sectors. For the 12-

month period ended 31 December 2015 EPL and Saerimner reported a loss of US$0.3

million.

Financial Review

For the period under review the Company is reporting turnover of US$63k and

comprehensive losses of US$2.1million. At 30 June 2016 the Company had cash and cash

equivalents of US$1.7 million.

Outlook

While all the building blocks are in place to develop a valuable project for both

shareholders and the people of Ethiopia, the actions taken by ERCA have caused the

Company to suspend activities in connection with the Chancho Project. The Chancho

Project has intrinsic value and we have received approaches from international brewing

companies who see investment into it as a potential entry point into Ethiopia. Despite the

disappointments relating to recent events in Ethiopia, the recent investment in

BonanzaWin provides us with exposure to Nigeria’s large consumer market, specifically

the fast-growing gaming and entertainment market. With rising incomes and increasing

consumer demand, the African continent continues to develop and unlock new market

opportunities and we look forward to keeping shareholders updated with developments

across our portfolio.

Finally, I would like to thank the executive team, who have been upstanding in their

commitment to the Company in the face of severe hardships, and also our shareholders

whose support is invaluable as we focus on remedying the current difficult situation.

Ian H. Mann

Non-Executive Chairman

30 August 2016

For further information please visit www.atlassupport.com or contact:

Carl Esprey Atlas Development Tel: +44 (0) 20 7408 9200

Callum Stewart Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710 7600

Ashton Clanfield Stifel Nicolaus Europe Limited Tel: +44 (0) 20 7710 7600

Edward Burbidge Burbidge Capital Tel: +254 (0) 202 100 102

Susie Geliher St Brides Partners Ltd Tel: +44 (0) 20 7236 1177

FINANCIAL STATEMENTS

CONSOLIDATED INTERIM INCOME STATEMENT

2016 2014 2015

6 months ended 30 June 2016

6 months ended

31 December 2014

18 months ended

31 December

2015 UNAUDITED UNAUDITED AUDITED

Notes $ '000 $ '000 $ '000

CONTINUING OPERATIONS

Revenue 63 3,148 3,147

Cost of sales (34) (2,116) (1,924)

Gross Profit 29 1,032 1,223

Operating expenses (2,036) (4,075) (13,291)

Share option charge (67) (2,376) (2,720)

Share of results of associate - 182 88

Operating loss 15 (2,074) (5,237) (14,700)

Investment revenues - -

Finance cost - (532) -

Loss before taxation (2,074) (5,769) (14,700)

Taxation (1) (69) (85)

Loss for the year from Continuing Operations 4 (2,075) (5,838) (14,785)

DISCONTINUED OPERATIONS

Loss for the year from Discontinued Operations - - (19,400)

Loss for the year (2,075) (5,838) (34,185)

Loss for the year attributable to owners of the company (2,065) (5,838) (34,182) Loss for the year attributable to noncontrolling interests (10) - (3)

Earnings per Share US cents US cents US cents

From continuing operations

Basic 5 (0.17) (1.50) (3.58)

Diluted (0.17) (1.50) (3.58)

From continuing and discontinued operations

Basic 5 (0.17) (1.50) (8.21)

Diluted (0.17) (1.50) (8.21)

CONSOLIDATED INTERIM STATEMENT OF COMPREHENSIVE INCOME

2016 2014 2015

6 months ended

30 June 2016

6 months ended

31 December 2014

18 months ended

31 December 2015

UNAUDITED UNAUDITED AUDITED

$ '000 $ '000 $ '000

Loss for the period (2,065) (5,838) (34,182)

Exchange differences on translation of foreign operations (3)

(34) 27

Total comprehensive loss for the year attributable to owners of the company

(2,068) (5,872) (34,155)

Total comprehensive loss for the year attributable to non-controlling interests

(10) - (3)

CONSOLIDATED INTERIM STATEMENT OF FINANCIAL POSITION

2015 2014 2015

Notes 30 June 2016

31 December 2014

31 December 2015

UNAUDITED UNAUDITED AUDITED

ASSETS $ '000 $ '000 $ '000

Non-current assets

Goodwill 790 - 790

Property, plant & equipment 6 2,007 5,373 2,045

Intangible Assets 297 -

Investments in associate - 5,257 -

Loans and other receivables - 8,063 -

Total non-current assets 3,094 18,693 2,835

Current assets

Inventories - 126 -

Trade and other receivables 8 2,471 3,361 194

Cash and cash equivalents 9 1,709 12,872 1,450

Total current assets 4,180 16,359 1,644

TOTAL ASSETS 7,274 35,052 4,479

LIABILITIES

Non-current liabilities

Borrowings - - -

Total non-current liabilities - - -

Current liabilities

Trade and other payables 10 (714) (3,505) (777)

Current tax liabilities (101) (68) (126)

Borrowings - (60) -

Total current liabilities (815) (3,633) (903)

TOTAL LIABILITIES (815) (3,633) (903)

NET ASSETS 6,459 31,419 3,576

EQUITY

Issued capital 11 41,510 36,502 36,616

Foreign exchange reserve 24 (41) 27

Share Option Reserve 2,787 - 2,720

Retained earnings (37,827) (5,042) (35,762) TOTAL EQUITY ATTRIBUTABLE TO THE EQUITY HOLDERS OF THE PARENT 6,494 31,419 3,600

Non-controlling interests (35) - (25)

TOTAL EQUITY 6,459 31,419 3,576

CONSOLIDATED INTERIM STATEMENT OF CHANGES IN EQUITY

Share

capital Retained earnings

Share Option Reserve

Foreign Exchange

Reserve

Non-controlling

Interests

Total attributable

to equity holders of the parent

$ '000 $ '000 $ '000 $ '000 $ '000

Balance at 30 June 2014 20,508 (1,580) - (7) 18,921

Loss for the period - (5,838) - - (5,838) Other comprehensive income - - (34) - (34) Total comprehensive income for the period - (5,838) - (34) - (5,872)

Transactions with owners Share issues - cash received 16,836 16,836

Share issue costs (842) - - - (842) Charge in relation to share-based payments - 2,376 - - 2,376 Total transactions with owners 15,994 - 2,376 - - 18,370 Balance at 31 December 2014 36,502 (7,418) 2,376 (41) - 31,419

Loss for the period - (28,344) - (28,344)

Other comprehensive income - - 68 (3) 65 Total comprehensive income for the period - (28,344) - 68 (3) (28,279)

Transactions with owners Share issues - cash received 114 - - - - 114 Charge in relation to share-based payments - - 344 - 344 Non-controlling Interests - - - - (22) (22) Total transactions with owners 114 - 344 - (22) 436 Balance at 31 December 2015 36,616 (35,762) 2,720 27 (25) 3,576

Loss for the

period - (2,065) - (2,065) Other

comprehensive income - - (3) (3) Total comprehensive income for the period - (2,065) - (3) - (2,068) Transactions with owners

Share issues - cash received 5,077 5,077

Share issue costs (183) - - (183)

Charge in relation to share-based

payments - 67.00 - 67 Non-

controlling Interests (10) (10)

Total transactions with owners 4,894 - 67 - (10) 4,951

Balance at 30 June 2016 41,510 (37,827) 2,787 24 (35) 6,459

CONSOLIDATED INTERIM CASH FLOW STATEMENT

2016 2014 2015

6 months ended 30 June 2016

6 months ended 31 December

2014

18 months ended

31 December 2015

UNAUDITED UNAUDITED AUDITED

$ '000 $ '000 $ '000

CASH FLOWS FROM OPERATING ACTIVITIES

Loss before tax (2,074) (5,769) (14,700)

Working Capital Adjustments:

- Depreciation of property, plant and equipment 226 152 463

- Share of Associates profit - (182) (88)

- Share option charge 67 2,376 2,720

- Net interest cost / (income) - 532 -

Operating cash flow before movements in working capital

(1,781) (2,891) (11,605)

Working capital adjustments:

- Decrease/(Increase) in inventories - 126 -

- Decrease/(Increase) in receivables (2,277) (992) 2,175

- Increase / (decrease) in payables (88) 2,993 400

- Increase in pre-operational expenses (intangibles)

(297) - -

Cash used in operations (4,443) (765) (9,031)

Net Interest (cost) / received - (9) -

Net cash used in operating activities (4,443) (774) (9,031)

CASH FLOWS FROM INVESTING ACTIVITIES

Purchase of property, plant and equipment (228) (5,351) (2,334)

Purchase of subsidiary, net of cash received - - -

Disposal of Discontinued Operation - - (6,459)

Proceeds from Sale of motor vehicles 39 - -

Decrease /(Increase) in loans to associate - 482 -

Net cash used in investing activities (189) (4,869) (8,793)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from issue of share capital 5,077 16,836 16,950

Share issue costs (183) (842) (842)

Repayment of borrowings - (55) -

Net cash flow from financing activities 4,894 15,939 16,108

Net increase / (decrease) in cash and cash equivalents

262 10,296 (1,716)

Cash and cash equivalents at start of the period 1,450 3,132 3,132

Effect of foreign exchange rate changes (3) (556) 34

Cash and cash equivalents at end of the period 1,709 12,872 1,450

NOTES TO THE INTERIM FINANCIAL STATEMENTS

1. GENERAL INFORMATION

Atlas African Industries Limited, formerly Atlas Development & Support Services Limited

(“Atlas” or the “Company”) is incorporated and domiciled in Guernsey. The nature of the

Group’s operations and its principal activities are set out in the Chairman’s Statement.

The presentational currency of the Group is US Dollars as this reflects the Group’s business

activities in the services sector in sub-Saharan Africa and therefore the Group’s financial

position and financial performance.

The interim financial statements have been prepared in accordance with International

Financial Reporting Standards (“IFRS”) as adopted by the European Union.

BASIS OF PREPARATION

The interim consolidated financial statements of the Group for the 6 months ended 30 June

2016, which are unaudited and have not been reviewed by the Company’s auditor, have been

prepared in accordance with the International Financial Reporting Standards (‘IFRS’), as

adopted by the European Union, accounting policies adopted by the Group and set out in the

annual report for the year ended 31 December 2015. The Group does not anticipate any

significant change in these accounting policies for the year ended 31 December 2016.

References to 'IFRS' hereafter should be construed as references to IFRSs as adopted by the

EU.

This interim report has been prepared to comply with the requirements of the AIM Rules of

the London Stock Exchange (the ‘AIM Rules’). In preparing this report, the Group has adopted

the guidance in the AIM Rules for interim accounts which do not require that the interim

consolidated financial statements are prepared in accordance with IAS 34, ‘Interim financial

reporting’. While the financial figures included in this report have been computed in

accordance with IFRSs applicable to interim periods, this report does not contain sufficient

information to constitute an interim financial report as that term is defined in IFRSs.

The financial information contained in this report also does not constitute statutory accounts

under the Companies (Guernsey) Law 2008, as amended. The financial information for the

year ended 31 December 2015 is based on the statutory accounts for the period then ended.

The auditors reported on those accounts. Their report was unqualified and did not include

any statements of emphasis of matter.

The current period financial statements have been prepared in accordance with the IFRS

principles applicable to a going concern, which contemplate the realisation of assets and

liquidation of liabilities during the normal course of operations. Having carried out a going

concern review in preparing these interim financial statements, the Directors have concluded

that there is a reasonable basis to adopt the going concern principle.

CRITICAL ACCOUNTING ESTIMATES JUDGMENTS

The preparation of the interim consolidated financial statements is in conformity with IFRS as

adopted in the EU requires the use of certain critical accounting estimates. It also requires

management to exercise its judgement in the process of applying the Group’s accounting

policies. The estimates and assumptions that have a significant risk of causing a material

adjustment to the carrying amounts of assets and liabilities within the next financial period

are discussed below.

LOSS FOR THE PERIOD

Operating expenses include:

2016

6 months

ended 30 June

2016

$ '000

2014

6 month period

to 31 December

2014

$ '000

2015

18 months to

31 December

2015

$ ‘000

Foreign exchange losses /(gains) 11 521 1,288

Consultancy fees 229 386 1,230

Senior Staff Costs 376 708 2,130

LOSS PER SHARE

The calculation of the basic and diluted loss per share is based on the following data:

2016

6 months ended

30 June 2016

$ '000

2014

6 month

period to 31

December

2014

$ '000

2015

18 months to

31 December

2015

$ ‘000

Loss for the purposes of basic loss per share from continuing operations

(2,075) (5,838) (14,785)

Loss for the purposes of basic loss per

share from continued and discontinued

operations

(2,075) (5,838) (345,185)

Number of shares

2016

6 months ended

30 June 2016

$ '000

2014

6 month period

to 31

December

2014

$ '000

2015

18 months to

31 December

2015

$ ‘000

Weighted average number of ordinary

shares for

the purposes of basic and diluted loss

per share

1,228,359,974 377,565,443 414,537,392

Loss per Share from continuing

operations

(0.17) cents (1.5) cents (3.58) cents

Loss per Share from continuing and

discontinued operations (0.17) cents (1.5) cents (8.21) cents

PROPERTY, PLANT AND EQUIPMENT

Plant &

Equipment Motor Vehicles Total

COST $ ‘000 $ ‘000 $ ‘000

As at 1 January 2016 2,328 187 2,515

Additions 228 - 228

Disposals - (53) (53)

As at 30 June 2016 2,556 134 2,690

DEPRECIATION

As at 1 January 2016 (445) (25) (470)

Charge for the period (220) (6) (226)

Disposals 13 13

As at 30 June 2016 (665) (18) (683)

NET BOOK VALUE AT 30 June 2016 1,891 116 2,007 NET BOOK VALUE AT 31 December

2015 1,883 162 2,045

INTEREST IN SUBSIDIARIES

Investments include:

Country of

registration / incorporation

Class of Shares held

% ownership

Principal Activity

ADSS Holdings Limited (formerly Ardan Risk Holdings)

Mauritius Ordinary 100 Investment

Holding

ADSS Trading Limited (formerly Ardan Risk Trading)

Mauritius Ordinary 100 Trading Entity

East Africa Packaging Holdings Limited

Mauritius Ordinary 100 Investment

Holding

TEAP Glass plc Ethiopia Ordinary 100 Trading Entity

Atlas Development (Engineering) PLC

Ethiopia Ordinary 100 Trading Entity

ADSS Extractive Mining Oil and Gas Supportive Services

Ethiopia Ordinary 50 JV Trading Entity

Kalamu Development & Support Services

Tanzania Ordinary 100 Trading Entity

Ardan Servicos Medicos Limitada

Mozambique Ordinary 100 Dormant Entity

Ardan Servicos Logisticos Limitada

Mozambique Ordinary 100 Dormant Entity

Kalamu Management Services Limited

Mauritius Ordinary 66 Trading Entity

The Directors consider the carrying amount of investment in subsidiaries has not suffered any impairment loss.

TRADE AND OTHER RECEIVABLES

All non-current receivables are due within five years from the end of the reporting period.

2016

6 months ended

30 June 2016

$ '000

2014

6 month period to

31 December 2014

$ '000

2015

18 months to

31 December

2015

$ ‘000

Trade receivables - 863 -

Other Receivables 2,410 2,393 5

Prepayments 45 105 166

Rental Deposits 16 - 23

Loans to associate - 8,063 -

Less non-current portion: loans to

associate - (8,063) -

TOTAL CURRENT ASSETS 2,471 3,361 194

The effective interest rates on non-current receivables were 2.2%.

The directors consider that the carrying amount of trade and other receivables approximates their

fair value.

There are no significant amounts past due.

CASH AND CASH EQUIVALENTS

2016

6 months ended

30 June

2016

$ '000

2014

6 month period

to 31 December

2014

$ '000

2015

18 months to

31 December

2015

$ ‘000

Cash and cash equivalents 1,709 12,872 1,450

FINANCIAL LIABILITIES

2016

6 months ended

30 June

2016

2014

6 month

period to 31

December

2015

18 months to

31 December 2015

$ ‘000

$ '000 2014

$ '000

Trade Payables 234 2,347 369

Other Payables 480 1,158 408

Current Tax Liabilities 101 68 -

Borrowings - 60 -

TOTAL TRADE AND OTHER

PAYABLES 815 3,633 777

Trade and other payables principally comprise amounts outstanding for trade purchases and

ongoing costs. The increase during the current period in payables relates to ALK which has

now been consolidated.

The directors consider that the carrying amount of financial liabilities approximates their fair

value.

SHARE CAPITAL

Allotted and fully paid

Ordinary shares of no par value Number $’000

At 31 December 2015 433,063,193 36,616

Issue of shares 1,064,307,692 4,894

Total share Capital:

At 30 June 2016 1,497,370,885 41,510

The Company has one class of ordinary share which carries no right to fixed income.

On 15 August 2014, 77.8 million ordinary shares were issued for cash at a price of 9.0 pence

per ordinary share.

On 23 October 2014, the Company issued 350,000 ordinary shares in part payment for

services rendered by an adviser.

On 17 December 2014, the Company issued 39.1 million ordinary shares at a price of 8.13

pence per ordinary share.

During December 2014, 350,000 shares were issued to the Company’s Kenyan nominated

adviser at a price of £0.10/shares in lieu of professional fees of £35,000.

On 16 February 2016, the Company issued 1,064 million ordinary shares at a price of 0.325

pence per ordinary share.

MOVEMENT IN RETAINED EARNINGS

2016 6 months ended

30 June 2016 $ '000

2014 6 month period to

31 December 2014

2015 18 months to 31 December

2015

$ '000 $ ‘000

Prior Period Losses (35,762) (1,580) (1,580)

Loss for the period (2,065) (5,838) (34,182)

Retained Earnings (37,827) (7,418) (35,762)

CONTROLLING PARTY

The Directors believe that there is no ultimate controlling party.

POST BALANCE SHEET EVENTS

On 1 August 2016, the Company announces that it has acquired a 10% interest in BonanzaWin,

a Nigerian based gaming company offering a range of online and real-play gaming experiences

including sports betting, casino slot games, and lotto.

On1 August 2016, Barry Lobel stepped down from his role as Chief Financial Officer and

Executive Director, effective immediately. The Board is assessing options for a replacement

CFO and expect to fill the position with a non-board appointment in due course.

INTERIM SEGMENTAL REPORTING

Segment information about these businesses is presented below:

Ethiopia Mauritius Unallocated Total

$ '000 $'000 $ '000 $ '000

Revenue

External Sales - - 63 63

Inter-segment sales - - - -

Total revenue - - 63 63

Segment results

Operating profit/(loss) by segment

- (33) (1,974) (2,007)

Share option charge - - (67) (67)

Share of results of associates - - - -

Operating profit/(loss) - (33) (2,041) (2,074)

Finance costs - - - -

Loss before taxation - (33) (2,041) (2,074)

Tax - - (1) (1)

Loss for the year from Continuing Operations

- (33) (2,042) (2,075)

Loss for the year from Discontinued Operations -

- - -

Loss for the year - (33) (2,042) (2,075)

Consolidated Total Assets 3,069 1,037 3,168 7,274

Consolidated Total Liabilities (64) (741) (10) (815)

** ENDS **