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African Sun Limited Annual Report 2013 1

ANNUAL REPORT 2013

STRENGTHENEDFOR GROWTH

African Sun Limited Annual Report 20132

STRENGTHENED FORGROWTH


To exist is to change, to change is to mature, to

mature is to go on creating oneself endlessly

African Proverb

Contents

5 Corporate Profile7 Financial Highlights10 Our Business Overview Statement of Vision Our Core Values and Beliefs The African Sun Way Brands Property Portfolio21 Historical Highlights 24 Message from the Chairman28 Our Strategy 30 Group Chief Executive’s Report35 Accounting Philosophy36 Certificate by the Group Company Secretary37 Directors’ Report38 Corporate Governance41 Directors’ Responsibility for Financial Reporting

42 Independent Auditor’s Report44 Consolidated Statement of Financial Position 45 Company Statement of Financial Position 46 Consolidated Statement of Comprehensive Income47 Consolidated Statement of Changes in Equity48 Consolidated Statement of Cash Flows49 Notes to the Consolidated Financial Statements100 Notes to the Company Statement of Financial Position110 Group Supplementary Information112 Shareholders’ Profile114 Group Structure115 Board of Directors118 Corporate Information119 Management120 Notice to Members122 Shareholders’ Diary123 Corporate and Hotel Directory


Storms make trees grow deeper roots.

A tree is strong because of its roots

STRENGTHENED FOR GROWTH


ProductPeople

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African Sun Limited represents leading hotel properties on the African continent and internationally recognised brands created on pure performance. With a clear vision to become the benchmark hotel operator in the markets we operate in, the Group manages hotels and resorts in Zimbabwe and has a growing portfolio of hotels in Nigeria and Ghana.

Our Business

ZimbabweThe Zimbabwe operations portfolio currently forms the largest business segment under African Sun and comprises seven resorts, five city hotels, timeshare units and five casinos.

ResortsThe Group operates seven resort hotels located in the country’s primary tourist destinations. These include three

resort hotels in the town of Victoria Falls (which successfully hosted the 28th session of the United Nations World Tourism Organisation (UNWTO) General Assembly in 2013), namely Elephant Hills Resort & Conference Centre, The Kingdom at Victoria Falls and The Victoria Falls Hotel; with the latter jointly operated with Meikles Africa (Private) Limited. Close to the resort town of Victoria Falls in Hwange is African Sun’s safari operation, Hwange Safari Lodge. The other resort hotels operated by the Group are; the Great Zimbabwe Hotel in Masvingo, located within walking distance of the Great Zimbabwe National Monument, Troutbeck Resort in Nyanga and Caribbea Bay Resort in Kariba.

City HotelsAfrican Sun also operates five city hotels which include three InterContinental Hotels Group (IHG) affiliated brands, the Crowne Plaza Monomotapa, and the two Holiday Inn branded

Processes Promotion


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hotels in Harare and Bulawayo. African Sun Amber Hotel Mutare and Beitbridge Express Hotel make up the city hotels portfolio and are the Group’s home-grown brands.

TimesharesThe Group also operates the Blue Swallow and the Kingfisher Cabanas timeshare units situated in Nyanga and Kariba, respectively.

Sun CasinosAfrican Sun, through its casinos division, Sun Casinos, is the largest casino operator in Zimbabwe, with five casinos located across the country.

West African Sun

NigeriaThe Group has a presence in Nigeria where the following hotels are operated under management contracts; Nike Lake Resort in Enugu State, Best Western Ikeja in Lagos, Best Western Homeville in Benin City, Edo State and African Sun Amber Residence in GRA, Ikeja, Lagos.

GhanaAfrican Sun has resumed operations in Ghana with the opening of a new leased hotel, African Sun Amber Hotel Accra Airport.

As African Sun adds more rooms to its portfolio, a combined brand strategy involving the use of InterContinental Hotels Group (IHG) brands, namely Holiday Inn and Crowne Plaza as well as the Best Western brands will be implemented. The IHG and Best Western brands are tried and tested with great brand equity and awareness, especially amongst international and business travellers. African Sun will also use its own brands in markets where the Group deems it appropriate; these are made up of:

The Group has strengthened its operations to achieve growth going forward. We continue with our quest to grow shareholder value, anchored by our four pillars:


2013 2012

GROUP SUMMARY (CONTINUING OPERATIONS): (US$)

Revenue 56 275 679 54 426 751

(Loss) / profit before tax (5 928 925) 1 689 546

EBITDA 6 954 274 6 288 728

Attributable (loss) / profit (6 568 454) 1 009 972

Headline earnings 932 303 970 231

Total assets 59 791 179 59 190 763

Market capitalisation 17 302 758 7 415 468

SHARE PERFORMANCE: US cents

Number of shares outstanding 823 940 874 823 940 874

Earnings / (loss) per share

Basic earnings basis / US centsBasic (loss) / earnings per share for the year (0.80) 0.12

Diluted earnings basis / US centsDiluted (loss) / earnings per share for the year (0.77) 0.12

Headline earnings / US cents 0.11 0.12

Net asset value per share / US cents 1.93 2.78

Market price per share / US cents 2.10 0.90

FINANCIAL RATIOS

Pre-tax return on equity: % (37) 7

*Interest cover: times 1.51 1.55

Financial Highlights

*Financial ratio has been calculated excluding material non-recurring costs like impairment of property and equipment, impairment of investment in associate, impairment of availble-for-sale financial assets, fair value adjustment on investment in associate and retrenchment costs.

People

Our people remain an invaluable asset to our business. We rely on the talents, skills and expertise of our team in order to achieve our goals.

All the wonders you seek are within yourself.African Proverb


Produc Promotion People

We create opportunities for personal growth, development and equitable rewards for our employees.


Processt


Statement of Vision

VISIONTo be the benchmark hotel operator wherever we operate leveraging on the full tourism value chain.

MISSIONWe exist to create value for all our stakeholders through the deployment of our intellectual property and service skills in a professional, predictable and consistent manner.

WE DO SO BY:

Our Business Overview

A mind that is stretched by new experiences can never go back to its old dimensions.African Proverb



Our Core Values and Beliefs

INTEGRITY – We do what we say. We are true to self and true to others.

RESPECT – In all our relationships, we seek to build and honour.

CARE – We show concern and seek the well-being of everyone.

FUN - We enjoy everything we do.

PROFESSIONALISM – We exude expert competence in the way we do business.

RESPONSIBLE MANAGEMENT – Conservation of our natural and other resources is integral to all we do.

The African Sun Way

SHARED VISION We will always seek a buy-in whilst providing competent and professional leadership.

SHARED VALUES Our values are the glue that binds us together.

TIMEOUS EXECUTION AND CLOSUREIt is not done until the task is complete.

EFFECTIVENESSWe will deliver beyond expectations.

ADAPTABILITYWe will be flexible without losing our strategic intent.

EFFICIENCYWe will be disciplined in utilising resources in all we do.

CONNECTIVITYIt is our responsibility to get the message across to the other party.



And the day came when

the risk to remain tight

in a bud was more painful

than the risk it took to

blossom.

African Proverb





Product


One of the key factors that distinguishes the Group from other players in the industry is our wide product base located in prime locations. We are dedicated to the continuous improvement of our hotels to ensure a product that is functional, appealing and in line with international benchmarks.

We don’t receive wisdom; we must discover it for ourselves after a journey that no one can take for us or spare us.African Proverb


Product Process Promotion People


The strong brands in our portfolio are a cut above the rest.

Premier Brand

Franchise Brands

Timeshare Brands

Casinos Brand

Stand-alone brands

Home-grown brands

Homeville Benin City



Our premier brand, The Victoria Falls Hotel, offers world-class hospitality with signature touches that define luxury travel. The IHG and Best Western brands, consistent with global benchmarks, cater for the needs of global travellers. Our stand-alone brands equipped with definitive personalities, offer real African hospitality with an international touch for both business and leisure travellers. Our home-grown brand, the African Sun Amber brand, is targeted at middle range business and leisure travellers seeking warm and comfortable hotels. Timeshare owners enjoy access to 3 700 holiday resorts in over 100 countries through the Resort Condominium International (RCI) exchange. Our casinos offer unforgettable experiences to the gaming enthusiasts.

Brands

Number of Units


Property Portfolio

The Victoria Falls Hotel 161 40 3

Elephant Hills Resort & Conference Centre 276 500 4

The Kingdom at Victoria Falls 294 100 4

Hwange Safari Lodge 100 100 2

Caribbea Bay Resort 83 120 1

Troutbeck Resort 70 300 2

Great Zimbabwe Hotel 47 250 1

Crowne Plaza Monomotapa 201 280 2

Holiday Inn Harare 201 180 2

Holiday Inn Bulawayo 157 300 2

African Sun Amber Hotel Mutare 96 200 1

Beitbridge Express Hotel 104 150 1

Zimbabwe total 1 790 - -

Best Western Homeville 80 1 000 2

Best Western Ikeja, GRA 112 100 2

Nike Lake Resort 179 500 2

African Sun Amber Residence 69 100 1

Nigeria total 440 - -

African Sun Amber Hotel Accra Airport 200 12 1

Total African Sun Hotels 2 430 - -

Makasa Sun Casino

Bulawayo Sun Casino

Harare Sun Casino

Manica Sun Casino

Golden Sun Prive Casino

Blue Swallow Lodges 24

Kingfisher Cabanas 11

Sun Casinos

Hotels Rooms RestaurantsConference Capacity

Timeshares

ZIMBABWE

NIGERIA

GHANA

Games Available




ProcesseOur clearly established operating procedures ensure that we are predictable and consistent in our service delivery across all markets. Our real time, online ERRNLQJ�DQG�SD\PHQW�SODWIRUP�KDV�SXW�WKH�*URXS�DW�WKH�PDUNHW·V�ÀQJHUWLSV��7KLV�online option is the quickest, easiest way to book and experience an unforgettable stay at any African Sun hotel or resort.

True strength lies in submission which permits one to dedicate his life, through devotion, to something beyond himself.African Proverb



We rely on formalised and proprietary business management systems aswell as leveraging on technology trends to enhance efficiencies.



Never tell people how to do

things. Tell them what to do

and they will surprise you with

their ingenuity.

African Proverb


Historical Highlights

Our Journey Thus Far

– Rhodesia and Nyasaland Hotels (Private) Limited is formed as a wholly-owned subsidiary of Rhodesian Breweries.

– Sable Hotels (Private) Limited is established.

– Rhodesian Government grants first casino licence for The Victoria Falls Hotel.

– Development of the first four world-class hotels: Monomotapa Hotel in Salisbury, The Wankie Safari Lodge in Wankie, Caribbea Bay in Kariba, and the Elephant Hills Country Club in Victoria Falls.

– Meikles Southern Sun Hotels is established, becoming the largest hotel chain in Southern and Eastern Africa, with control of 13 major properties in the country.

– Meikles Southern Sun Hotels changes its name to Zimbabwe Sun Hotels after Zimbabwe’s independence.

– Zimbabwe Sun Hotels merges with Touch the Wild safari operations, later sold to Rainbow Tourism Group (Private) Limited on 30 April 1998.

– Zimbabwe Sun Limited is floated on the Zimbabwe Stock Exchange (ZSE), at the time being the largest flotation in Zimbabwe, with 70 million shares offered to the public, which was over-subscribed by 28%.

– Opening of the timeshares built in Troutbeck, Nyanga and at Caribbea Bay, which received “Gold Crown Resorts” status from the RCI in 1999.

– First Holiday Inn franchise in Harare.

– The Elephant Hills Resort hosts the Commonwealth Heads of Government meeting; officially opening in 1992.

– First regional office for reservations is established in Johannesburg.

– The construction of Express by Holiday Inn Beitbridge is completed.

– Zimbabwe Sun Limited acquires 40% equity and management of Baio Do Paraiso SARL, Mozambique.

– Makasa Sun is re-developed into The Kingdom at Victoria Falls.

– Zimbabwe Sun Limited is unbundled from Delta Corporation Limited.

– Zimbabwe Sun Limited owns 100% shares in the timeshare operation in Vilanculos, Mozambique.

– Dawn Properties Limited is listed as the first property entity on the Zimbabwe Stock Exchange.

– The Hospitality Training Academy (HTA) is re-launched.

– Zimbabwe Sun Limited acquires The Grace Hotel in Rosebank, South Africa, ranked among the “Top Ten” hotels in Africa and the Middle East by Condé Nast Traveller (USA) in its first year of operation.

– Zimbabwe Sun Limited adds The Lakes Hotel and Conference Centre, in Johannesburg, South Africa to its portfolio.

– Zimbabwe Sun Limited rebrands its name to African Sun Limited.

– African Sun Limited adds Obudu Mountain Resort to its regional portfolio.

– African Sun Limited takes over management of Holiday Inn Accra Airport.

– African Sun Limited acquires Hotelserve Holdings (Private) Limited.

– The Company raises US$10 million through a Rights Offer.

– Best Western Ikeja – Lagos Nigeria opened its doors to the public on 1 October 2010.

– Best Western Homeville, Benin City, Nigeria opened its doors to the public on 1 October 2011.

- African Sun Limited closed The Grace in Rosebank, The Lakes Hotel and Conference Centre in South Africa and

disinvested from Hotelserve Holdings (Private) Limited in Zimbabwe.

- African Sun Limited exits the Holiday Inn Accra Airport Hotel management contract.

- African Sun Amber Residence GRA Ikeja, Lagos Nigeria opened its doors to the public 2 November 2012.

- African Sun realised the first profit before tax since dollarisation.

- African Sun exited Obudu Mountain Resort after expiry of management contract.

- African Sun Amber Hotel Accra Airport, Ghana opened its doors to the public on 10 December 2013.


Promotion


The Group continues to focus on promotions to ensure the availability of packages that are relevant to the market and the visibility of the brand. Growing regional and international business with higher yields remains a top priority.

My best friend is the one that

brings out the best in me.

African Proverb

.


We provide packages that are relevant tothe dynamic needs of our markets.



Message from the Chairman

BEKITHEMBA LLOYD NKOMOChairman

The improvement in performance, coupledwith the significant strides taken to reduce debt,

bodes well for the future of the Group.



DEAR SHAREHOLDERSOver the past three years, the Group has been strengthened through the implementation of the following strategic initiatives:

Building on the results of these successful initiatives, the Group recorded a notable growth in EBITDA (+11%) in the year under review, compared to the previous financial year. The improvement in performance, coupled with the significant strides taken to reduce debt, bodes well for the future of the Group.

BUSINESS OVERVIEWInternational tourism arrivals grew by 5% in 2013 compared to 4% in 2012, with growth being registered in all regions and sub regions. Despite the lingering economic difficulties in the Euro Zone, Europe performed surprisingly stronger than

expected, with a 5% growth in international tourist arrivals. The growth was led by Central and Eastern Europe (+7%) and Southern and Mediterranean Europe (+6%). In the other regions, growth was recorded in Asia and the Pacific (+6%), Africa (+5%) and America (3%).

Emerging economies continue to drive international tourism expenditure, with all BRIC countries except India reporting double-digit growth. China (+31%) and Russia (+28%) led the growth in expenditure on travel abroad among the top ten most important source markets in the world during the first half of 2013.

PERFORMANCE AND SHAREHOLDER RETURNS In the year under review the Group registered an 11% growth in EBITDA to $6.95 million from $6.29 million achieved last year. The growth was underpinned by cost savings at cost of sales level and cost reduction. Resultantly, the Group’s headline earnings were maintained at almost the same level as last year at $924 382.



INVESTMENTSDuring the period under review, $8 million was spent on improving our hotels. Of this, $2.68 million was spent on the refurbishment of our hotels, $2.36 million on new projects and the balance of $3.95 million was spent on normal additions and replacements. The Group will continue to invest in its properties to achieve service excellence and improve our guest satisfaction.

STRENGTHENING OUR FINANCIAL POSITIONThe Group has crafted a solid plan to strengthen its balance sheet position. The plan is aimed at debt reduction and restructuring to achieve our goals of 20% pre-tax return on equity and gearing of 30%. To this end, the Group has already paid off short-term loans amounting to $4.1 million post year end, reducing total borrowings from $22.32 million (as recorded in this report) to $18.22 million.

The next phase of our debt reduction will be financed through two initiatives which are expected to raise at least $12 million. These are:

Dawn Properties Limited, once all approval processes are completed

shareholders.

A strengthened balance sheet will see the Group freeing up working capital and improving our liquidity position and profitability.

CORPORATE SOCIAL INVESTMENTThe Group continued to plough back into communities in which we operate. In the year under review, Holiday Inn Bulawayo refurbished a 40-bedded ward, at the Mpilo Hospital in Bulawayo, which had been closed. Such an approach will be extended to other hospitals and communities we have committed to assist.

OUTLOOKAs we look into 2014, priority will be to drive shareholder value. In this regard, growth in EBITDA and headline earnings will be driven by:

disposal of the remaining 16.54% shareholding in Dawn Properties Limited and a possible capital call on the shareholders to achieve 30% gearing

consequently the yields at the hotels that have been refurbished

with the addition to the portfolio of a leased hotel in Accra and a further two management agreements in Nigeria

foreign arrivals

business and

CHANGES IN SHAREHOLDING: MANDATORY OFFER TO MINORITIESAs was communicated to shareholders in the Circular dated 4 November 2013, there was a material change to the Company’s shareholding structure during the course of the year with Lengrah Investments (Private) Limited trading as BCM Hotels and Real Estate, now holding 45% of the Company’s issued share capital.

A mandatory offer to the minority shareholders is currently going through the approval processes with the regulatory authorities, and shareholders will be advised accordingly. An independent financial advisor will be appointed to issue a fair and reasonableness opinion on the mandatory offer.

The new shareholder has availed funding for debt reduction and will unlock opportunities for further growth. The new shareholder is a mutual shareholder of Dawn Properties and African Sun, giving strategic synergy and coherence between the two entities which will result in further value being created for all stakeholders.

DIRECTORATEThere have been no changes to the Directorate since the last Annual General Meeting of the Company was held. DIVIDEND DECLARATIONIn view of the need to reduce borrowings and to conserve cash, the Board has resolved not to declare a final dividend for the year ended 30 September 2013.

APPRECIATIONI would like to commend management, staff and fellow directors for their continued hard work and commitment throughout the year.

B. L. Nkomo Chairman 12 December 2013



Do not go where the path

may lead, go instead

where there is no path

and leave a trail.

African Proverb

Our Pillars DRIVING PROFITABILITY

People

Product

Process

Promotion

Harnessing the skills and capabilities which lie in our people

Competitive hotel products in terms of appearance, ambience and functionality in line with global trends

Effective and efficient business systems to ensure service excellence

Robust packages and consistent presence in traditional and emerging tourist source markets

ProfitabilityProfitability growth to be sustained from growth in foreign arrivals, interest savings and new hotel projects


Our Strategy

Strategic Intent

1. We aim to consistently achieve a 20% pre-tax return on

equity.

2. We will seek to be in the top 3 measured by Revenue

Generation Index (RGI) in markets where we operate.

3. We aim to ensure that our management contracts and

leases are bankable with sustainable long - term returns.

4. Create a bench in our talent development for

sustainability, succession and growth.

Our Strategic Priorities Outcomes Linked to Strategic Priorities

Create a bench in our talent development for sustainable succession and growthDevelop a service culture as a competency

Always maintain the brands with the best returns

Provide effective and efficient business systems that ensure that we deliver in a consistent, predictable and sustainable manner

Employee engagement Employee training and development Employee wellness

Completion of refurbishmentRooms growthCustomer satisfaction

Stakeholder engagement Service excellenceProprietary business management systemsLeveraging on ICT trends to enhance efficiencies

Maintain top 3 position measured by Revenue Generation Index (RGI)

Brand loyaltyIncreased marginsProfit

Consistently achieve 20% pre-tax return on equity

Strengthen balance sheetDiversification of earningsCost optimisation to improve operating leverage


Our Strategy


Group Chief Executive’s Report

The year 2013 was transformative for the Group as we redefined the strategy that will enable us to attain the objective of becoming

the benchmark hotel operator in markets that we operate in.

SHINGIRAI ALBERT MUNYEZAGroup Chief Executive


Group Chief ExecutiveÕs Report

INTRODUCTIONThe year 2013 was transformative for the Group as we redefined the strategy that will enable us to attain the objective of becoming the benchmark hotel operator in markets that we operate in. The financial year was characterised by progress in the refurbishment of our properties, increased exposure on the global market, growth in foreign business and improvement in the Guest Satisfaction. The strategic thrust adopted will continue to guide the business to achieve growth in a predictable, consistent and sustainable manner.

STRATEGY REVIEWIn 2013, the focus was on being predictable, consistent and sustainable in the way we run our business. Our strategic priorities are therefore focusing on increasing return on equity, competitiveness of our hotels measured by the Revenue Generation Index (RGI), maintaining brands with the best returns, and creating a bench in our talent development.

BEING IN THE TOP 3 MEASURED BY RGIAfrican Sun’s strategic priority is to increase our competitiveness by ensuring that our hotels are in the top 3 measured by Revenue Generation Index (RGI) in markets we operate in. In 2013, the Group achieved this target in all markets save for Elephant Hills Resort and Conference Centre, which was fourth in the Victoria Falls market. As we go into 2014, we envisage an improvement for all our hotels leveraging on our promotions and ICT platforms.

SUSTAINABILITY OF OUR LEASES AND MANAGEMENT CONTRACTSIn pursuit of our growth strategy, African Sun’s focus is on maintaining bankable leases and management contracts with sustainable long-term returns for the shareholders. The Zimbabwe portfolio, starting with the Safari Lodges is being optimised through the introduction of strategic partnerships


to unlock value in our business segments. In terms of rooms growth, we remain focused on investing in growth cities, particularly in West Africa (Nigeria and Ghana), leveraging on our past success. In this regard, the Group has opened its first lease in Accra, Ghana. The 200 roomed hotel will be operated under one of the Group’s home-grown brands; Amber as Amber Hotel Accra Airport Ghana.

EMPLOYEE WELLNESS AND CREATING A BENCH IN OUR TALENT FOR SUSTAINABLE SUCCESSION AND GROWTHIn order to have sustainability, we have reviewed our strategy on our people, focusing on employee wellness and creating a bench in our talent for succession and growth. In response to this, the Group launched an Employee Wellness Policy that is based on four pillars, namely: Food and Nutrition, Fitness and Exercise, Medical Health and Psychosocial Support. The Group continues to strengthen its development programs to ensure that we have the right competencies. Resultantly 70% of our teams at supervisor level and above are internally trained. We will continue with our intensive internal talent development for service excellence.

RETURN ON EQUITY GROWTHThe Group remains committed to unlocking shareholder value. As such, our target is to achieve a pretax return on equity of 20%. The improvement in return on equity is to be supported by our debt reduction strategy, targeting gearing of 30%, cost containment, sweating our ICT investment, completion of our refurbishment, and growth in rooms, particularly in Ghana and Nigeria.

BUSINESS OVERVIEWGlobal tourism continued to grow by 5% in 2013 compared to 4% in 2012. In line with this growth trend, we realised an 8% increase in foreign arrivals into our hotels compared to the prior year. Growth in arrivals was recorded from the traditional source markets of USA, Germany, Japan, UK and other European countries including those from Scandinavia. A decline was recorded in arrivals from China and France.

Domestic room nights suffered a 9% decline compared to the prior year due to cancellations and postponements of bookings during the periods before and after the harmonised elections that were held in July 2013; persistent liquidity constraints facing the economy also contributed to the decline.

The sales mix of the Group shifted in favour of foreign business, which contributed 39% to the room nights sold compared to 35% achieved last year. ADR increased by 7% to $100 from

$93 achieved last year, supported by foreign business which gives a higher yield in terms of ADR. The increase gave rise to a 2% increase in RevPAR to $48, but was weighed down by the decline in occupancies following a 9% drop in domestic business.

FINANCIAL REVIEWRevenue increased marginally by 3.4% to $56.28 million on the back of an 8% increase in foreign room nights, coupled with an improvement in food and beverage revenues.

EBITDA for the year grew by 11% to $6.95 million (12% margin) up from $6.29 million (12% margin) achieved last year following a 3% improvement in cost of sales and the growth in revenue.

Financing costs increased by 3% from last year to close at $3.07 million due to an increase in short-term loans. Finance costs are expected to reduce going forward, following the repayment of borrowings amounting to $4.1 million post year end, with resultant savings of at least $740 000 in interest costs expected in the coming year.

The loss after tax of $6.57 million down from a profit of $1 million last year was as a result of exceptional charges amounting to $7.63 million. These are outlined below:

Dawn Properties Limited held for sale as at the reporting date,

investment in Dawn Properties Limited.

Net debt increased by 17% from last year, closing at $18.09 million, due to additional borrowings obtained for hotel refurbishments and the new hotel project in Ghana.

Gearing increased to 53% from the 40% reported in September 2012. This was primarily attributable to the reduction in equity arising from the impairment, fair value adjustment and the increase in debt mentioned above.

SIGNIFICANT FINANCIAL MATTERSPrior period adjustmentsThe Group adjusted retrospectively for the following items in the results for the year ended 30 September 2013.

The first adjustment pertains to items of Freehold Properties (staff houses) and Leasehold Properties (timeshares cottages), which were omitted from the valuation performed in 2009 upon dollarisation. The restated amount of these assets is




$6.13 million split as $4.53 million for Freehold Properties and $1.6 million for Leasehold properties. A revaluation of the assets was carried out on 28 February and 15 April 2013, and results have been restated back to 2011, as it was impractical to restate them to 2009 (see further discussion in the notes to the consolidated financial statements).

The second adjustment relates to the incorrect accounting of equity accounted earnings from associate (Dawn Properties Limited). The treatment of these earnings up to 30 September 2012 was that the Group would eliminate a portion of rentals paid to Dawn Properties proportional to its shareholding from the associate’s profit after tax. This method was a departure from IAS 28, “Investment in Associates”. This error was corrected retrospectively to 2009 resulting in an aggregate increase in assets (investment in associate) of $1.42 million (see note 6 of the consolidated financial statements).

The third adjustment relates to a change in IAS 12, accounting for deferred tax assets which was adopted by Dawn Properties Limited. The IASB has amended IAS 12, ‘‘Income Taxes’’, to introduce an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. The net increase in the Group’s assets and retained earnings arising from this change was $1.06 million. Further details of the adjustment are explained in note 6 of the consolidated financial statements.

Partial disposal of the investment in Dawn Properties LimitedDuring the year the Directors approved a disposal of 12% in Dawn Properties Limited to reduce borrowings. The disposal of the 12% was effected on the Zimbabwe Stock Exchange on 2 October 2013 and proceeds were received shortly thereafter.

The disposal resulted in a markdown on the carrying amount of the investment in the books of the Group in the form of a fair value adjustment on the disposal portion and impairment on the remaining 16.54%. The fair value adjustment amounted to $3.21 million and the impairment amounted to $4.42 million, giving a total of $7.63 million charged to the Group’s income statement.

OUTLOOKGoing forward we believe that our team and an enabling environment place us in a prime position to take advantage of future growth opportunities. We will remain committed to the objectives that have steered our business over the past year. In addition to our commitment to increase return on equity and achieve strong business performance in all markets,

we remain committed to making a positive and sustainable impact on the communities in which we operate. The year 2014 is looking bright as we expect; 1. An increase in foreign arrivals from new and emerging

markets as well as the traditional tourist source markets.2. Increase in Meetings, Incentives, Conventions and

Exhibitions (MICE) business in the Victoria Falls area, riding on the success of the UNWTO and the 800 seater conference capacity

3. Ease of access to our hotels through the online booking platform

4. Further cost and interest reduction5. New openings, particularly the lease in Ghana, will steer

topline growth

APPRECIATIONAllow me to express appreciation to my executive team, management and staff for their continued hard work and commitment throughout the year. My appreciation also goes to the Board for their leadership and support rendered throughout the year.

Shingirai A. MunyezaGroup Chief Executive

12 December 2013



Everyone wants to live on top of the mountain, but all the happiness and growth occurs while you’re climbing it.African Proverb


Accounting Philosophy

African Sun Limited is dedicated to achieving meaningful and responsible reporting through comprehensive disclosure and explanation of its financial results. This is done to ensure objective corporate performance measurement, to enable returns on investment to be assessed against the risks inherent in their achievement and to facilitate appraisal of the full potential of the Group.

The core determinant of meaningful presentation and disclosure of information is its validity in supporting management’s decision-making process. While the accounting philosophy encourages the pioneering of new techniques, it endorses the fundamental concepts underlying both the financial and management accounting disciplines as enunciated by the Institute of Chartered Accountants of Zimbabwe (ICAZ), the International Accounting Standards

Board (IASB) and the International Federation of Accountants (IFA). The Group is committed to the regular review of financial reporting standards and to the development of new and improved accounting practices. This is practised to ensure that the information reported to management and stakeholders of the Group continues to be internationally comparable, relevant and reliable. This includes, wherever it is considered appropriate, the early adoption of financial reporting standards.

The Group adopts all accounting standards and interpretations applicable that are issued by the IASB and the International Financial Reporting Interpretations Committee (IFRIC). Unless otherwise stated, these standards are applied consistently to enhance comparability of financial information relating to different financial periods.


I the undersigned, in my capacity as the Group Company Secretary, hereby confirm, to the best of my knowledge and belief, that for the financial year ended 30 September 2013, the Company has complied with Zimbabwe Stock Exchange Listing Requirements, lodged with the Registrar of Companies all returns required of a public quoted Company in terms of the Companies Act (Chapter 24:03) and that all such returns are true, correct and up to date.

Edwin T. ShangwaGroup Company Secretary 12 December 2013

EDWIN T. SHANGWAGroup Company Secretary

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DirectorsÕ Report

The directors present their Annual Report and the Audited Financial Statements of the Company and the Group for the year ended 30 September 2013.

YEAR’S RESULT 2012

2013 Restated

EBITDA 6 954 274 6 288 728(Loss)/profit for the year. (6 568 454) 1 009 972Headline earnings 932 303 970 231

DIVIDENDS No dividend was declared for the year ended 30 September 2013. CAPITAL COMMITMENTS 2013 2012

Authorised by directors and contracted for 630 042 1 504 563 Authorised by directors but not contracted for 4 872 268 6 532 363 Total Commitments 5 502 310 8 036 926

INVESTMENTSThe Company holds equity investments in the following entities to the extent indicated below:

African Sun Limited PCC (Mauritius) 100%African Sun Zimbabwe (Private) Limited 100%Dawn Properties Limited 28.54%

SHARE CAPITALThere were no changes to the issued share capital which stands at 823 940 874 ordinary shares. The issued share capital and share premium total US$32 295 830. The number of unexercised ordinary shares currently under the employee share option scheme total 32 926 655. No additional shares were issued as at 30 September 2013.

RESERVESThe movement in the reserves of the Group is shown in the Group statement of changes in shareholders’ equity and in the relevant notes to the financial statements.

DIRECTORSMessrs David W. Birch and Vernon. W. Lapham retire by rotation. Although eligible, both directors have opted not to stand for re-election.

AUDITORSMembers will be asked to re-appoint PricewaterhouseCoopers as Auditors to the Group for the ensuing year.

ANNUAL GENERAL MEETINGThe Forty Second Annual General Meeting of members of the Company will be held on Friday, 21 March 2014 at the Ophir Room, 1st Floor, at Crowne Plaza Monomotapa, 54 Park Lane, Harare at 1100 hours.

By Order of the Board:

Shingirai A. Munyeza Nigel Mangwiro Edwin T. Shangwa Group Chief Executive Group Finance Director Group Company Secretary

12 December 2013

US$ US$

US$ US$


Corporate Governance

THE AFRICAN SUN CHARTERAfrican Sun Limited personnel are committed to a long-published code of ethics which runs through the whole Group in all the jurisdictions in which it operates. This incorporates the Group’s operating, financial and behavioural policies in a set of integrated values, including the ethical standards required of members of the African Sun Limited family in their interface with one another and with all stakeholders.

There are detailed policies and procedures in place across the Group, covering the regulation and reporting of transactions in securities of the Group by the directors and officers. The Group adopted a Corporate Governance Charter and certain recommendations made in the King Report III.

THE NATIONAL CODE ON CORPORATE GOVERNANACE In line with the Company’s continued drive towards better corporate Governance, the Company closely monitors the developments in Zimbabwe on the framing of the National Code on Corporate Governance which has been in the pipeline for the past two years. In this regard there is a commitment to ensure that when it is finally in force, regard will also be given to this code as the Company continues with its drive for best practices in Corporate Governance.

STAKEHOLDERSFor many years, African Sun Limited has had a formalised stakeholder philosophy and structures of corporate governance to manage the interface with the various stakeholder groups. African Sun Limited has in place responsive systems of governance and practice which the Board and management regard as entirely appropriate to ensure that our commitment to good governance remains underpinned by the pillars of responsibility, fairness, transparency and accountability to all stakeholders. These pillars preserve our long-term sustainability, thereby delivering value to all stakeholders.

DIRECTORATEThe Board of directors of African Sun Limited is constituted with a majority of non-executive directors and meets at least quarterly. The African Sun Limited Board is chaired by a non-executive director.

DIRECTORS’ INTERESTSAs provided by the Companies Act (Chapter 24:03) and the Company’s Articles of Association, the directors are bound to declare any time during the year, in writing, whether they have any material interest in any contract of significance with the

Company which could have given rise to a related conflict of interest. No such conflicts were reported this year.

INTERNAL CONTROLThe Board of directors is responsible for the Group’s systems of internal control. These systems are designed to provide reasonable, but not absolute, assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of its assets and to detect and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations.

The controls throughout the Group concentrate on critical risk areas. All controls relating to the critical areas in the casino and hotel operating environments are closely monitored by the directors and subjected to internal audit reviews. Furthermore, assessments of the information technology environment are also performed.

An Audit Services Manager, who reports directly to the chairman of the Risk and Audit Committee, heads the Internal Audit department. The Internal Audit department is designed to serve management and the Board of directors through independent evaluations and examinations of the Group’s activities and resultant business risks.

BOARD MEETINGSThe Board meets at least four times per financial year in order to monitor, consider and review, inter alia, matters of a strategic, financial, non-financial and operational nature. Special Board meetings may be convened on an ad hoc basis, when necessary, to consider issues requiring urgent attention or decision. During the year under review, four Board meetings were held.

The Board works to a formal agenda prepared by the Company Secretary in consultation with the Chairman and the Group Chief Executive, which, inter alia, covers operations, finance, capital expenditure, acquisitions and strategy. Any Board member may request the addition of an item to the agenda and will liaise with the Company Secretary in this regard. Board papers comprising the agenda, minutes of Board and Board committee meetings and the relevant supporting documentation are circulated to all directors in advance of each meeting in order that they can adequately prepare and participate fully, frankly and constructively in Board discussions and bring the benefit of their particular knowledge, skills and abilities to the Board table.


BOARD COMMITTEESThe Board is authorised to form committees to assist in the execution of its duties, powers and authorities. The Board has five standing committees, namely: Risk and Audit, Human Resources and Remuneration, Finance and Investments, Marketing and Nominations. In addition, there is the Corporate Governance Committee, which is an ad hoc committee. The terms of reference and composition of the committees are determined and approved by the Board and have been adopted by the Board on an annual basis.

THE RISK AND AUDIT COMMITTEEThe Risk and Audit Committee deals, inter alia, with compliance, internal control and risk management. It is regulated by specific terms of reference, chaired by a non-executive director, has at least one non-executive director and incorporates the Group Chief Executive and Group Finance Director as members. It meets with the Company’s external auditors to discuss accounting, auditing, internal control and financial reporting matters. The external and internal auditors have unrestricted access to the Risk and Audit Committee.

THE HUMAN RESOURCES AND REMUNERATION COMMITTEEThe Group has a Human Resources and Remuneration Committee which is made up of a non-executive Chairman, the Group Chief Executive and at least one non-executive director. The committee acts in accordance with the Board’s written terms of reference to review remuneration of all African Sun Limited executive directors, senior management and other members of staff.

THE FINANCE AND INVESTMENTS COMMITTEEThe Group has a Finance and Investments Committee which is made up of a non-executive Chairman, the Group Chief Executive, Group Finance Director and at least one non-executive director. It is chaired by a non-executive director. The committee is responsible for the review and preliminary approval of the major investment and financing decisions of the Company.

THE MARKETING COMMITTEEThe Group has a Marketing Committee comprising, a non-executive Chairman, the Group Chief Executive and at least one non-executive director. The committee is responsible for the review of all sales and marketing programmes of the Group.

THE NOMINATIONS COMMITTEEThe Nominations Committee is now a standing, as opposed to an ad hoc, committee, pursuant to the recommendations made in the King III Report. It is made up of a non-executive Chairman, the Group Chief Executive, and at least one non-executive director. It assists with the identification and recommendations of potential directors to the Board.

CORPORATE GOVERNANCE COMMITTEEThe Corporate Governance Committee is an ad hoc committee which sits as and when it is necessary. It is made up of a non-executive Chairman, the Group Chief Executive and two other non-executive directors.

NATIONAL WORKS COUNCIL AND WORKERS’ COMMITTEESThe Group holds National Works Council meetings at least twice a year. Each hotel within the Group has a Works Council representative who attends these meetings, which is a forum where employees participate in the decision-making process and also discuss employees’ concerns, with top management. The Group believes in and practises worker participation throughout the different levels. All hotels have Workers’ Committees, which serve as a communication channel with shop floor employees.

ANALYST BRIEFINGThe Group reports formally to shareholders twice a year when its half and full year results are announced. The Group Chief Executive and the Group Finance Director give presentations on these results to institutional investors, analysts and the media. The data used in these presentations may be found at www.africansuninvestor.com.

ANNUAL GENERAL MEETINGThe Annual General Meeting provides a useful interface with private shareholders, many of whom are also customers.

The Chairman of the Board, the Group Chief Executive and the Group Finance Director are available at the Annual General Meeting to answer questions. Information about the Group is maintained and available to shareholders at www.africansuninvestor.com.



DIRECTORS’ ATTENDANCE OF MEETINGS IN 2013Individual director attendance at Board and Committee meetings appears in the table below. Where a director has not been able to attend a Board meeting, any comments which

he or she had arising out of the papers to be considered at that meeting have been relayed in advance to the Chairman of the Board.


Main Board Finance and Investments Committee

Marketing Committee

Risk and Audit Committee

Human Resources and Remuneration

Committee

Number of meetings 4 4 4 5 4

B. L. Nkomo 4 - - - -

S. A. Munyeza 4 4 4 5 4

D. W. Birch 4 1 - 5 4

E. A. Fundira 3 3 3 - -

V.W. Lapham 4 4 - 5 -

A. Makamure 3 3 - - 3

N. Mangwiro 4 4 4 4 3

N.G. Maphosa 4 - - 4 3

N.R. Ramikosi 4 - 4 - 3

* Messrs E.A. Fundira and A. Makamure as well as Ms N.G. Maphosa were only elected to the Board on 17 October 2012.


African Sun Limited directors are required by the Companies Act (Chapter 24:03) and the Zimbabwe Stock Exchange listings requirements, to maintain adequate accounting records and to prepare financial statements for each financial year which present a true and fair view of the state of affairs of the Group at the end of the financial year, and of the profit or loss and cash flows for the period. In preparing the accompanying financial statements, generally accepted accounting practices have been followed and suitable accounting policies have been used and applied consistently. Reasonable and prudent judgements and estimates have been made. The financial statements incorporate full and responsible disclosure in line with the accounting philosophy of the Group stated on page 35.

The directors have reviewed the Group’s budget and cash flow forecast for the twelve months to 30 September 2014. On the basis of the review of the operating forecasts and in light of the current financial position and existing borrowing facilities, the directors are satisfied that African Sun Limited is a going concern and have continued to adopt the going concern basis in preparing the financial statements. The Group’s external auditors, PricewaterhouseCoopers, have audited the financial statements and their report appears on pages 42.

The Group has an independent internal audit function, which has the objective of assisting executive management and the Risk and Audit Committee in the discharge of their responsibilities, and which monitors the effectiveness of the accounting system and related internal financial controls on a continuing basis. The internal audit function performs a critical examination of the financial and operating information for management, and reports its findings and its recommendations to management and to the Risk and Audit Committee.

Procedures are in place to identify key business risks timeously, to determine the likelihood of the risks crystallising, and to determine the significance of the consequential financial impact on the business.

The Risk and Audit Committee meets quarterly with management, the internal auditors and external auditors, to review specific accounting, reporting and internal control matters, and to satisfy itself that the system of internal control is operating effectively. Both the internal and external auditors have unlimited access to the Risk and Audit Committee. The

Committee also reviews the interim and annual results of the Company prior to their publication.

The Risk and Audit Committee also reviews the IT governance framework and monitor the IT function against the risk and performance imperatives. In exercising their duty of care, the Committee ensures that prudent and reasonable steps have been taken in regard to IT governance.

In addition, the Group’s external auditors review and test appropriate aspects of the internal financial control systems during the course of their statutory examinations of the Group.

The Group’s Risk and Audit Committee has met the internal and the external auditors to discuss their reports on the results of their work, which include assessments of the relative strengths and weaknesses of key control areas.

In a Group of the size, complexity and geographical diversity of African Sun Limited, it may be expected that occasional breakdowns in established control procedures may occur. No breakdowns involving material loss have been reported to the directors in respect of the year under review and it is believed that none of any significance exist.

The financial statements for the year ended 30 September 2013 which appear on pages 44 to 109 have been approved by the Board of Directors and are signed on their behalf by:

Shingirai A. Munyeza Group Chief Executive

Nigel Mangwiro Group Finance Director

12 December 2013

DirectorsÕ Responsibility for Financial Reporting


INDEPENDENT AUDITOR’S REPORTTO THE SHAREHOLDERS OF AFRICAN SUN LIMITED We have audited the consolidated financial statements of African Sun Limited and its subsidiaries (the “Group”), and the accompanying statement of financial position of African Sun Limited (‘the Company’) standing alone, together the “financial statements”, which comprise the consolidated and separate statements of financial position as at 30 September 2013, and the consolidated statements of comprehensive income, changes in equity and of cash flows for the year then ended, and a summary of significant accounting policies and other explanatory information set out on pages 44 to 109. Directors’ responsibility for the financial statements The directors are responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards and in the manner required by the Zimbabwe Companies Act (Chapter 24:03) and the relevant Statutory Instruments (“SI”) SI 33/99 and SI 62/96 and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. Auditor’s responsibilityOur responsibility is to express an opinion on these 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 about 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 the auditor’s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’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 entity’s internal control. 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. OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position of the Group and the Company as at 30 September 2013, and the Group’s consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards and in the manner required by the Zimbabwe Companies Act (Chapter 24:03) and the relevant Statutory Instruments SI 33/99 and SI 62/96.

PricewaterhouseCoopers Chartered Accountants (Zimbabwe)Harare23 January 2014



Experience is not what happens

to you; it’s what you do with

what happens to you.

African Proverb


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Note2013US$

2012 Restated

US$

2011 Restated

US$

ASSETS

Non-current assetsProperty and equipment 9 32 120 488 26 572 739 22 810 447 Biological assets 10 220 651 274 678 234 937 Investment in associate 11 6 067 253 17 588 834 14 103 754 Trade and other receivables 15 2 162 403 238 665 535 512

40 570 795 44 674 916 37 684 650

Current assetsInventories 14 1 643 661 1 472 627 1 324 690 Available-for-sale financial assets - - 10 000 Loans and receivables - - 1 130 504 Trade and other receivables 15 8 990 219 8 436 132 7 342 790 Cash and cash equivalents (excluding bank overdrafts) 16 4 232 123 4 607 088 4 657 480

14 866 003 14 515 847 14 465 464 Non-current assets held for sale 12 4 354 381 - 1 847 871

19 220 384 14 515 847 16 313 335

Total assets 59 791 179 59 190 763 53 997 985

EQUITY AND LIABILITIES

Equity attributable to owners of the parentShare capital 17 8 239 409 8 239 409 8 239 409 Share premium 17 24 056 421 24 056 421 23 701 165 Non-distributable reserve 19 5 888 531 5 888 531 5 888 531 Equity settled share based payments reserve 19 20 171 - - Foreign currency translation reserve 19 (1 187 990) (946 582) (1 616 568)Revaluation reserve 19 249 706 430 871 406 808 Accumulated losses (21 357 162) (14 788 708) (15 078 747)

Total equity 15 909 086 22 879 942 21 540 598

Liabilities

Non-current liabilitiesTrade and other payables 20 1 758 132 - - Borrowings 22 8 093 067 6 443 381 4 914 134 Deferred income tax liabilities 23 4 604 007 4 080 590 3 761 117

14 455 206 10 523 971 8 675 251

Current liabilitiesTrade and other payables 20 14 085 052 10 718 895 10 941 593 Provisions for other liabilities 21 1 113 929 1 418 073 3 676 484 Borrowings 22 14 227 906 13 649 882 8 164 598

29 426 887 25 786 850 22 782 675 Liabilities of a disposal group classified as held for sale - - 999 461

29 426 887 25 786 850 23 782 136

Total liabilities 43 882 093 36 310 821 32 457 387

Total equity and liabilities 59 791 179 59 190 763 53 997 985

These financial statements on pages 44 to 109 were approved by the Board of Directors on 12 December 2013 and signed on its beahlf by:

S.A. Munyeza N. Mangwiro Group Chief Executive Group Finance Director

As at 30 September 2013


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Note2013US$

2012 US$

ASSETS

Non-current assetsProperty and equipment 35 2 058 889 4 761 338 Investments in subsidiaries 36 24 701 731 24 701 731 Investment in associate 37 5 975 065 13 696 029 Deferred income tax asset 44 246 298 29 640 Other receivables 39 526 374 234 610

33 508 357 43 423 348

Current assetsInventories 52 000 44 576 Other receivables 39 1 072 583 5 707 082 Cash and cash equivalents 40 989 319 2 196 375

2 113 902 7 948 033 Non-current assets held for sale 12 4 224 720 -

6 338 622 7 948 033

Total assets 39 846 979 51 371 381

EQUITY AND LIABILITIES

Equity attributable to owners of the companyShare capital 17 8 239 409 8 239 409 Share premium 17 24 056 421 24 056 421 Equity settled share based payments reserve 19 20 171 - Accumulated losses (7 990 247) (2 681 544)

Total equity 24 325 754 29 614 286

Liabilities

Non-current liabilitiesBorrowings 43 - 6 443 381 Other payables 41 1 758 132 -

1 758 132 6 443 381

Current liabilitiesOther payables 41 5 479 361 2 023 141 Provisions for other liabilities 42 215 444 35 780 Borrowings 43 8 068 288 13 254 793

13 763 093 15 313 714

Total liabilities 15 521 225 21 757 095

Total equity and liabilities 39 846 979 51 371 381

These financial statements on pages 44 to 109 were approved by the Board of Directors on 12 December 2013 and signed on its beahlf by:

S.A. Munyeza N. Mangwiro Group Chief Executive Group Finance Director



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Note2013US$

2012 Restated

US$

Revenue 56 275 679 54 426 751 Cost of sales 26 (15 302 031) (15 837 052)

Gross profit 40 973 648 38 589 699 Other income 25 - 1 717 940 Operating expenses 26 (36 234 553) (34 618 008) Other expenses 25 (479 537) (901 665)

Operating profit 4 259 558 4 787 966 Finance costs - net 27 (3 072 787) (2 855 597) Finance income 27 5 723 123 405 Finance costs 27 (3 078 510) (2 979 002) Fair value adjustment and impairment of investment in associate 11 (7 627 895) - Recycled from other comprehensive income 181 165 - Share of profit / (loss) of associate 11 331 034 (242 823)

(Loss) / profit before income tax (5 928 925) 1 689 546 Income tax expense 23 (639 529) (679 574)

(Loss) / profit for the year (6 568 454) 1 009 972

Other comprehensive (loss) / income Items that will not be reclassified to profit or loss Foreign currency translation differences (241 408) 669 986 Items that may be subsequently reclassified to profit or loss Share of other comprehensive income of associate 11 - 24 063 Comprehensive income from associate recycled to income statement (181 165) -

Other comprehensive (loss) / income net of income tax for the year (422 573) 694 049

Total comprehensive (loss) / income for the year (6 991 027) 1 704 021 Attributable to: Owners of the parent (6 991 027) 1 704 021

Earnings / (loss) per share (cents) Basic earnings 28 (0.80) 0.12 Diluted earnings 28 (0.78) 0.12 Headline earnings 28 0.11 0.12 Diluted headline earnings 28 0.11 0.12

For the year ended 30 September 2013


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Share capital

US$

Share premium

US$

Non-distributable

reserve US$

Equity settledshare based

paymentreserve

US$

Foreigncurrency

translationreserve

US$

Revaluationreserve

fromassociate

US$

Accumulated losses

US$

Totalequity

US$

At 30 September 2011 as previously reported 8 239 409 23 701 165 1 327 001 - (1 616 568) 406 808 (16 909 494) 15 148 321

Adjusted for;-prior period error relating to assets (note 6) - - 4 561 530 - - - (89 006) 4 472 524 -prior period error relating to associate (note 6) - - - - - - 876 407 876 407 -change in accounting policy by associate (note 6) - - - - - - 1 043 346 1 043 346

At 30 September 2011 restated 8 239 409 23 701 165 5 888 531 - (1 616 568) 406 808 (15 078 747) 21 540 598

Comprehensive income

Profit for the year restated - - - - - - 1 002 051 1 002 051

Other comprehensive income

Currency translation differences - - - - 669 986 - - 669 986 Share of associate's other comprehensive

income- - - - -

24 063 -

24 063

Transactions with owners

Treasury shares adjustment - 355 256 - - - - (719 933) (364 677)

At 30 September 2012 restated 8 239 409 24 056 421 5 888 531 - (946 582) 430 871 (14 788 708) 22 879 942

Comprehensive loss

Loss for the year - - - - - - (6 568 454) (6 568 454)

Other comprehensive loss

Currency translation differences - - - - (241 408) - - (241 408)Reclassified to income statement - - - - - (181 165) - (181 165)

Equity settled share based payments

Value of employee services - - - 20 171 - - - 20 171

At 30 September 2013 8 239 409 24 056 421 5 888 531 20 171 (1 187 990) 249 706 (21 357 162) 15 909 086

For the year ended 30 September 2013

Attributable to owners of the parent


Note2013US$

2012 Restated

US$

Cash flows from operating activitiesCash generated from operations 29 11 312 440 5 071 659Interest paid 27 (3 748 218) (3 252 900)Income tax paid 23 - (80 369)

Net cash generated from operating activities 7 564 222 1 738 390

Cash flows from investing activitiesPurchase of property and equipment 9 (6 625 393) (7 754 548)Proceeds from sale of property and equipment 29 62 821 2 191 227 Purchase of additional shares in associate 11 - (3 710 442)Deferred expenditure on new projects 15 (2 360 797) - Interest received 27 5 723 123 405 Increase in long-term receivables (486 095) -

Net cash used in investing activities (9 403 741) (9 150 358)

Cash flows from financing activitiesProceeds from short-term borrowings 1 400 820 8 754 125 Proceeds from long-term borrowings 5 519 987 6 500 000 Deposit utilised from / (paid to ) debt service reserve account 195 691 (748 389)Repayment of short-term borrowings (2 581 594) (8 164 598)Repayment of long-term borrowings (2 494 524) (2 108 741)

Net cash generated from financing activities 2 040 380 4 232 397

Net increase / (decrease) in cash and cash equivalents 200 861 (3 179 571)

Cash and cash equivalents at beginning of year 1 462 942 4 657 480

Exchange losses on cash and cash equivalents (52 636) (14 967)

Cash and cash equivalents at end of year 16 1 611 167 1 462 942

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1RWHV�WR�WKH�FRQVROLGDWHG�ÀQDQFLDO�VWDWHPHQWV For the year ended 30 September 2013

1 GENERAL INFORMATION African Sun Limited (‘the Company’) and its

subsidiaries (together ‘the Group’) leases and manages hotel properties. The Group has operations in Zimbabwe, Nigeria and Ghana.

The Company is a public limited company, which

is listed on the Zimbabwe Stock Exchange and incorporated, and domiciled in Zimbabwe. The address of its registered office is African Sun House , Number 6 Seagrave Road, Mount Pleasant, Harare, Zimbabwe.

2 SUMMARY OF SIGNIFICANT ACCOUNTING

POLICIES The principal accounting policies applied in the

preparation of these financial statements are set out below. These policies have been consistently applied to all the years presented, unless otherwise stated.

2.1 Basis of preparation The Group’s financial statements have been prepared

in accordance with International Financial Reporting Standards, (“IFRS”) and the International Financial

Reporting Interpretations Committee, (“IFRIC”) applicable to companies reporting under IFRS. The consolidated financial statements have been prepared under the historical cost convention as modified by the revaluation of property and equipment, financial assets, financial liabilities and biological assets.

The preparation of financial statements in conformity

to IFRS requires the use of certain critical accounting estimates. It also requires management to exercise

its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements are disclosed in note 4.

2.1.2 Going concern The Directors have assessed the ability of the Group

to continue operating as a going concern and believe that the preparation of these financial statements on a going concern basis is appropriate. The appropriateness of the going concern basis is based

on implementation of the following initiatives; Debt reduction - the Group has four main initiatives

for debt reduction:

(i) As at 30 September 2013, the Directors had approved the disposal of 12% shareholding in Dawn Properties Limited to reduce short-term debt. The disposal was completed subsequent to year end and proceeds of US$4.1 million were applied to short-term loans. The repayment is expected to reduce interest expense by at least US$740 000 per annum.

(ii) Shareholders will be requested to approve the

disposal of the remaining 16.54% shareholding in Dawn Properties Limited at a date to be advised once all the necessary approvals have been obtained. The proceeds will be used to reduce short-term loans and improve the net current liabilities position.

(iii) As at 30 September 2013, the Directors had

approved the company to undertake a rights offer for US$6 million. The proceeds will be used to reduce short-term loans and improve the net current liabilities position. The approval of the rights offer by the shareholders will be done at a date to be anounced later.

(iv) The Board had approved the disposal of time share

weeks for a period of 25 years by early maturing most of the existing contracts. The existing contracts range between 3 and 6 years. The proceeds will be used to reduce borrowings. Total proceeds from this disposal are expected to be at least US$10 million.

Investment into new profitable projects - the

Group has signed a lease for a new hotel in Accra, Ghana. The hotel was opened effective 10 December 2013.

The initiatives are complemented by the improving

Zimbabwe operations whose turnover is set to increase by 10.37% in 2014, with ADR growth averaging 6% from the refurbished hotels.

Based on the above the Group continues to adopt

the going concern basis in preparing its consolidated financial statements.



2.1.3 Changes in accounting policy and disclosures (a) New and amended standards, and

interpretations mandatory for the first time for financial years beginning on or after 1 January 2012 adopted by the Group.

IAS 1, ‘Presentation of Financial Statements’, on

presentation of items of other comprehensive income (OCI), amended and effective 1 January 2012. The IASB has issued an amendment to IAS 1. The main change resulting from these amendments is a requirement for entities to group items presented in (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items are presented in OCI.

IAS 12, ‘Income Taxes’ amended and effective 1 January 2012. Currently IAS 12 requires an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. It can be difficult and subjective to assess whether recovery will be through use or through sale when the asset is measured using the fair value model in IAS 40, “Investment Property”. Hence this amendment introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, ‘Income Taxes - recovery of revalued non-depreciable assets’, would no longer apply to investment properties carried at fair value. The amendments also incorporate into IAS 12 the remaining guidance previously contained in SIC 21, which is accordingly withdrawn.

(b) New and amended standards, and interpretations mandatory for the first time for financial years beginning on or after 1 January 2013 early adopted by the Group.

Amendment to IAS 1, ‘Presentation of Financial Statements’ and effective 1 January 2013. The amendment clarifies the disclosure requirements for comparative information when an entity provides a third balance sheet either: as required by IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’; or voluntarily.

Amendment to IAS 16, ‘Property, Plant and Equipment’ and effective 1 January 2013. The amendment clarifies that spare parts and servicing equipment are classified as property, plant and equipment rather than inventory when they meet the definition of property, plant and equipment.

(c) New and amended standards, and

interpretations mandatory for the first time for financial years beginning on or after 1 January 2013 not early adopted by the Group.

IFRS 7, ‘Financial Instruments: Disclosures’, Assets and Liability offsetting, amended and effective 1 January 2013. The IASB has published an amendment to IFRS 7, reflecting the joint requirements with the FASB to enhance current offsetting disclosures. These new disclosures are intended to facilitate comparison between those entities that prepare IFRS financial statements to those that prepare financial statements in accordance with US GAAP. IFRS 9, ‘Financial Instruments’, amended and effective 1 January 2015. This IFRS is part of the IASB’s project to replace IAS 39. IFRS 9 addresses classification and measurement of financial assets and replaces the multiple classification and measurement models in IAS 39 with a single model that has only two classification categories: amortised cost and fair value.

In addition, The IASB has updated IFRS 9 to include guidance on financial liabilities and derecognition of financial instruments. The accounting and presentation for financial liabilities and for derecognising financial instruments has been relocated from IAS 39, ‘Financial Instruments: Recognition and Measurement’, without change, except for financial liabilities that are designated at fair value through profit or loss.

IFRS 10, ‘Consolidated Financial Statements’, effective 1 January 2013. This standard builds on existing principles by identifying the concept of control as the determining factor in whether an entity should be included within the consolidated financial statements. The standard provides additional guidance to assist in determining control where this is difficult to assess. This new standard might impact the entities that a group consolidates as its subsidiaries.



IFRS 11, ‘Joint Arrangements’, effective 1 January 2013. This standard provides for a more realistic reflection of joint arrangements by focusing on the rights and obligations of the arrangement, rather than its legal form. There are two types of joint arrangements: joint operations and joint ventures.

IFRS 12, ‘Disclosure of Interests in Other Entities’, effective 1 January 2013. This standard includes the disclosure requirements for all forms of interests in other entities, including joint arrangements, associates, special purpose vehicles and other off balance sheet vehicles.

IFRS 13, ‘Fair Value Measurement’, effective 1 January 2013. This standard aims to improve consistency and reduce complexity by providing a precise definition of fair value and a single source of fair value measurement and disclosure requirements for use across IFRSs. The requirements, which are largely aligned between IFRSs and US GAAP, do not extend the use of fair value accounting but provide guidance on how it should be applied where its use is already required or permitted by other standards within IFRSs or US GAAP.

IAS 27, ‘Separate Financial Statements’, revised and effective 1 January 2013. This standard includes the provisions on separate financial statements that are left after the control provisions of IAS 27 have been included in the new IFRS 10.

IAS 28, ‘Associates and Joint Ventures’, revised and effective 1 January 2013. This standard includes the requirements for joint ventures, as well as associates, to be equity accounted following the issue of IFRS 11.

Amendment to IAS 32, ‘Financial Instruments: Presentation’ and effective 1 January 2013. The amendment clarifies the treatment of income tax relating to distributions and transaction costs. The amendment clarifies that the treatment is in accordance with IAS 12. So, income tax related to distributions is recognised in the income statement, and income tax related to the costs of equity transactions is recognised in equity.

Amendment to IAS 34, ‘Interim Financial Reporting’ and effective 1 January 2013. The amendment brings IAS 34 into line with the requirements of IFRS 8, ‘Operating Segments’. A measure of total assets and liabilities is required for an operating segment in interim financial statements if such information is regularly provided to the CODM and there has been a material change in those measures since the last annual financial statements.

(d) New and amended standards, and interpretations mandatory for the first time for financial years beginning on or after 1 January 2013 and not relevant to the Group. Amendments to IFRS 1, ‘First Time Adoption of IFRS’ and effective 1 January 2013. The amendment clarifies that an entity may apply IFRS 1 more than once under certain circumstances. The amendment clarifies that an entity can choose to adopt IAS 23, ‘Borrowing Costs’, either from its date of transition or from an earlier date.

The consequential amendment (as a result of the amendment to IAS 1 discussed below) clarifies that a first-time adopter should provide the supporting notes for all statements presented.

IFRS 1, ‘First Time Adoption of International Reporting Standards’ amended and effective 1 January 2013. This amendment addresses how a first-time adopter would account for a government loan with a below-market rate of interest when transitioning to IFRS. It also adds an exception to the retrospective application of IFRS, which provides the same relief to first-time adopters granted to existing preparers of IFRS financial statements when the requirement was incorporated into IAS 20 in 2008. IAS 19, ‘Employee Benefits’, amended and effective 1 January 2013. The IASB has issued an amendment to IAS 19, which makes significant changes to the recognition and measurement of defined benefit pension expense and termination benefits, and to the disclosures for all employee benefits.



2.2 Consolidation

(a) Subsidiaries Subsidiaries are all entities (including special purpose entities) over which the Group has the power to govern the financial and operating policies generally accompanying a shareholding of more than one half of the voting rights.

The existence and effect of potential voting rights that are currently exercisable or convertible are considered when assessing whether the Group controls another entity.

The Group also assesses existence of control where it does not have more than 50% of the voting power but is able to govern the financial and operating policies by virtue of de-facto control.

De-facto control may arise in circumstances where the size of the Group’s voting rights relative to the size and dispersion of holdings of other shareholders give the Group the power to govern the financial and operating policies, etc.

Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are de-consolidated from the date that control ceases.

The Group applies the acquisition method to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair values of the assets transferred, the liabilities incurred to the former owners of the acquiree and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s proportionate share of the recognised amounts of acquiree’s identifiable net assets.

Acquisition-related costs are expensed as incurred. If the business combination is achieved in stages,

the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognised in profit or loss.

Any contingent consideration to be transferred by the group is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IAS 39 either in profit or loss or as a change to other comprehensive income. Contingent consideration that is classified as equity is not re-measured, and its subsequent settlement is accounted for within equity.

Goodwill is initially measured as the excess of the aggregate of the consideration transferred and the fair value of non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower than the fair value of the net assets of the subsidiary acquired, the difference is recognised in profit or loss.

Inter-company transactions, balances, income and expenses on transactions between group companies are eliminated. Profits and losses resulting from inter-company transactions that are recognised in assets are also eliminated. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group.

All subsidiaries in the Group are 100% owned and are consolidated in the presented financial statements.

In the Company, investments in subsidiaries are accounted for at cost.

(b) Changes in ownership interests in subsidiaries without change of control

Transactions with non-controlling interests that do not result in loss of control are accounted for as equity transactions – that is, as transactions with the owners in their capacity as owners. The difference



between fair value of any consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity.

(c) Disposal of subsidiaries When the Group ceases to have control, any retained

interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in profit or loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassified to profit or loss.

(d) Associates Associates are all entities over which the Group

has significant influence but not control, generally accompanying a shareholding of between 20% and 50% of the voting rights. If the holding is less than 20%, the Group will be presumed not to have significant influence unless such influence can be clearly demonstrated. The existence of significant influence by the Group is usually evidenced in one or more of the following ways:

-representation on the board of directors or equivalent governing body of the investee

-participation in the policy-making process -material transactions between the investor and the

investee -interchange of managerial personnel -provision of essential technical information

Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost and the carrying amount is increased or decreased to recognise the investor’s share of profit or loss of the investee after the date of acquisition. The Group’s investment in associates includes goodwill identified on acquisition (refer to note 4.1 (d)).

When the investment, or portion of an investment, meets the criteria to be classified as held for sale, the portion so classified is accounted for in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations”. Any remaining portion is accounted for using the equity method until the time of disposal, at which time the retained investment is accounted under IAS 39 “Financial Instruments”, unless the retained interest continues to be an associate.

If the ownership interest in an associate is reduced but significant influence is retained, only a proportionate share of the amounts previously recognised in other comprehensive income is reclassified to profit or loss where appropriate.

The Group’s share of post-acquisition profit or loss is recognised in the income statement and its share of post-acquisition movements in other comprehensive income is recognised in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured receivables, the Group does not recognise further losses, unless it has incurred legal or constructive obligations or made payments on behalf of the associate.

The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate and its carrying value and recognises the amount adjacent to ‘share of profit / (loss) of an associate’ in the income statement.

Profits and losses resulting from upstream and downstream transactions between the group and its associate are recognised in the group’s financial statements only to the extent of unrelated investor’s interests in the associates.

Unrealised losses are eliminated unless the

transaction provides evidence of an impairment of the asset transferred.



Accounting policies of associates have been changed where necessary to ensure consistency with the policies adopted by the group.

Dilution gains and losses arising in investments in associates are recognised in the statement of comprehensive income.

As at 30 September 2013, the Group had one associate (Dawn Properties Limited). Details of investment in the associate are in note 11.

(e) Joint venture A joint venture is a contractual arrangement whereby

the Group and other parties undertake an economic activity that is subject to joint control (i.e. when the strategic financial and operating policy decisions relating to the activities of the joint venture require the unanimous consent of the parties sharing control). Joint venture arrangements that involve the establishment of a separate entity in which each venture has an interest are referred to as jointly controlled entities.

The Group reports its interests in jointly controlled entities using proportionate consolidation, except when the investment is classified as held for sale, in which case it is accounted for in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations. The Group’s share of the assets, liabilities, income and expenses of jointly controlled entities is combined with the equivalent items in the consolidated financial statements on a line-by-line basis.

Any goodwill arising on the acquisition of the Group’s interest in a jointly controlled entity is accounted for in accordance with the Group’s accounting policy for goodwill arising in a business combination. When a group entity transacts with its jointly controlled entity, profits and losses resulting from the transactions with the jointly controlled entity are recognized in the Group’s consolidated financial statements only to the extent of interests in the jointly controlled entity that are not related to the Group.

2.3 Segment reporting Operating segments are reported in a manner

consistent with the internal reporting provided to the chief operating decision-maker. The chief operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the “executive committee” which is made up of all executive Directors that make strategic decisions.

2.4 Foreign currency translation

(a) Functional and presentation currency Items included in the financial statements of each of

the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The financial statements are presented in United States of America Dollars (US$), which is the Company’s functional and the Group’s presentation currency.

(b) Transactions and balances Foreign currency transactions are translated into

the functional currency using the exchange rates prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the statement of comprehensive income.

Foreign exchange gains and losses that relate to borrowings and cash and cash equivalents are presented in the income statement within ‘finance income or cost’. All other foreign exchange gains and losses are presented in the statement of comprehensive income within ‘administration expenses’. Changes in the fair value of monetary securities denominated in foreign currency classified as available-for-sale are analysed between translation differences resulting from changes in the amortised cost of the security and other changes in the carrying amount of the security. Translation differences related to changes in amortised cost are recognised in profit or loss, and other changes in carrying amount are recognised in other comprehensive income.

Translation differences on non-monetary financial assets and liabilities such as equities held at fair value



through “profit or loss” are recognised in profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as available for sale are included in other comprehensive income.

(c) Group companies The results and financial position of all the Group

entities that have a functional currency different from the presentation currency (none of which has the currency of a hyper-inflationary economy) are translated into the presentation currency as follows:

(i) assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position.

(ii) income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the rate on the dates of the transactions); and

(iii) all resulting exchange differences are recognised in other comprehensive income.

On consolidation, exchange differences arising from the translation of the net investment in foreign operations, and of borrowings and other currency instruments designated as hedges of such investments, are taken to shareholders’ equity. When a foreign operation is partially disposed of or sold, exchange differences that were recorded in equity are recognised in the statement of comprehensive income as part of the gain or loss on sale.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognised inother comprehensive income.

2.5 Property and equipment Property, equipment and motor vehicles are stated at

fair value based on periodic valuations by the Directors or independent external valuers, less subsequent accumulated depreciation and impairment losses. Valuations are performed with sufficient regularity to

ensure that the fair value of a revalued asset does not differ materially from its carrying amount.

Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying amount of the asset, and the net amount is restated to the revalued amount of the asset. Increases in the carrying amount arising on revaluation of property and equipment are credited to a revaluation reserve through the statement of comprehensive income. Decreases that offset previous increases of the same asset are charged against other reserves in equity through other comprehensive income; all other decreases are charged to the statement of comprehensive income. The revaluation surplus included in equity in respect of an item of property, equipment and motor vehicles is transferred directly to retained earnings when the asset is derecognised.

Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognised. All other repairs and maintenance are charged to the statement of comprehensive income during the financial period in which they are incurred.

During the year, the Group revised the useful lives

of its assets as described in note 7. Following the revision, depreciation is calculated on a straight line basis at the following annual rates in order to allocate their cost or revalued amounts to their residual values over their estimated useful lives as follows:

Leasehold properties 8 - 25 years Freehold properties 50 years Equipment 6 - 15 years Motor vehicles 5 years Land is part of leasehold properties and is not

depreciated. Capital work in progress comprise items of equipment

not yet commissioned and is not depreciated. When the equipment is commissioned, it is transferred to the relevant categories and depreciation commences.



Service stocks comprising standard service utensils and linen are not depreciated but the annual charge for usage is recognised in the statement of comprehensive income.

The useful lives and residual values of assets

are reviewed and adjusted if appropriate at each reporting date. Where the residual value of an asset increases to an amount equal to or greater than the asset’s carrying amount, depreciation will cease to be charged on the asset until its residual value subsequently decreases to an amount below its carrying amount.

Assets are assessed for potential impairment at

each reporting date. If circumstances exist which suggest that there may be impairment, a more detailed exercise is carried out which compares the carrying values of the assets to recoverable value based on either realisable value (fair value less costs associated with disposal) or value-in-use. Value-in-use is determined using discounted cash flows budgeted for each cash-generating unit.

Detailed budgets for the ensuing three years are used and, where necessary, these are extrapolated for future years taking into account known structure changes. Service division assets and cash flows are allocated to operating divisions as appropriate. The discount rate used is the internally computed weighted average cost of capital (WACC) which is currently at 13.5%. Impairment losses are recognised as an expense in the statement of comprehensive income and the carrying value of the asset and its annual depreciation are adjusted accordingly (refer note 2.7).

In the event that, in a subsequent period, an asset

that has been subject to an impairment loss is considered no longer to be impaired, the value is restored and the gain is recognised in the statement of comprehensive income.

The restoration is limited to the value which would

have been recorded had the impairment adjustment not taken place.

Profit or losses arising on the disposal of property, equipment and motor vehicles are determined by comparing proceeds with the carrying amount. These are included in the statement of comprehensive income within other income.

The Group capitalises borrowing costs directly

attributable to the construction of new projects or re-development of existing hotels as part of the cost of that asset. Construction of new projects or re-development (refurbishment) of existing hotels takes a substantial period (more than 12 months) to complete. The current refurbishment commenced in May 2011 and will be completed in the first quarter of 2014.

2.6 Biological assets The Group engages in agricultural activity through

management of biological assets for sale as agricultural produce.

Timber plantation Timber plantations are measured at their fair value

less estimated point-of-sale costs. The fair value of timber plantations is determined by a professional valuer based on fair values for the stages of forest development.

2.7 Impairment of non-financial assets Assets that have an indefinite useful life, for example

goodwill, are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows

(cash-generating units). Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.



2.8 Non-current assets (or disposal groups) held for sale

Non-current assets (or disposal groups) are classified as assets held for sale when their carrying amount is to be recovered principally through a sale transaction and a sale is considered highly probable. They are stated at the lower of the carrying amount and fair value less costs to sell.

2.9 Financial assets 2.9.1 Classification The Group classifies its financial assets in the

following categories: at fair value through profit or loss, loans and receivables, and available-for-sale. The classification depends on the purpose for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition.

(a) Loans and receivables Loans and receivables are non-derivative financial

assets with fixed or determinable payment terms that are not quoted in active markets. They are included in current assets, except for maturities greater than twelve months after the end of the reporting period. These are classified as non-current assets. The Group’s loans and receivables comprise “trade and other receivables” and “cash and cash equivalents” in the statement of financial position.

(b) Available-for-sale financial assets Available-for-sale financial assets are non-derivatives

that are either designated in this category or not classified in any other categories. They are included in non-current assets unless management intends to dispose of the investment within twelve months of the end of the reporting period. Gains or losses arising in the fair value of the “available-for-sale financial assets” are recognised through the statement of comprehensive income within the period in which they arise.

(c) Financial assets at fair value through profit or

loss Financial assets at fair value through profit or loss are

financial assets held for trading. A financial asset is classified in this category if acquired principally for

the purpose of selling in the short term. Derivatives

are also categorised as held for trading unless they are designated as hedges. Assets in this category are classified as current assets if expected to be settled within 12 months, otherwise they are classified as non-current.

2.9.2 Recognition and measurement Regular purchases and sales of financial assets are

recognised on the trade-date – the date on which the Group commits to purchase or sell the asset. Investments are initially recognised at fair value plus transaction costs. Financial assets are derecognised when the rights to receive cash flows from the investments have expired or have been transferred and the Group has transferred substantially all risks and rewards of ownership. Available-for-sale financial assets are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method.

The fair values of quoted investments are based

on current bid prices. If the market for a financial asset is not active (and for unlisted securities), the Group establishes fair value by using valuation techniques. These include the use of recent arm’s length transactions, reference to other instruments that are substantially the same, discounted cash flow analysis, and option pricing models, making maximum use of market inputs and relying as little as possible on entity-specific inputs.

2.10 Off-setting financial instruments Financial assets and liabilities are offset and the net

amount reported in the statement of financial position when there is a legally enforceable right to offset the recognised amounts and there is an intention to settle on a net basis, or realise the asset and settle the liability simultaneously.

2.11 Impairment of financial assets (a) Assets carried at amortised cost The Group assesses at the end of each reporting

period whether there is objective evidence that a financial asset or group of financial assets is impaired.

A financial asset or a group of financial assets is



impaired and impairment losses are incurred only if there is objective evidence of impairment as a result of one or more events that occurred after the initial recognition of the asset (a “loss event”) and that loss event (or events) has an impact on the estimated future cash flows of the financial asset or group of financial assets that can be reliably estimated.

Evidence of impairment may include indications that

the debtors or a group of debtors is experiencing significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy or other financial reorganisation, and where observable data indicate that there is a measurable decrease in the estimated future cash flows, such as changes in arrears or economic conditions that correlate with defaults.

For loans and receivables category, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash flows (excluding future credit losses that have not been incurred) discounted at the financial asset’s original effective interest rate. The carrying amount of the asset is reduced and the amount of the loss is recognised in the consolidated statement of comprehensive income.

If a loan or held-to-maturity investment has a variable

interest rate, the discount rate for measuring any impairment loss is the current effective interest rate determined under the contract. As a practical expedient, the group may measure impairment on the basis of an instrument’s fair value using an observable market price.

If, in a subsequent period, the amount of the

impairment loss decreases and the decrease can be related objectively to an event occurring after the impairment was recognised (such as an improvement in the debtor’s credit rating), the reversal of the previously recognised impairment loss is recognised in the consolidated statement of comprehensive income.

(b) Assets classified as available-for-sale The Group assesses at the end of each reporting period

whether there is objective evidence that a financial asset or a group of financial assets is impaired. In the case of equity investments classified as available-for- sale, a significant or prolonged decline in the fair value of the security below its cost is also evidence that the assets are impaired. If any such evidence exists for available-for-sale financial assets, the cumulative loss measured as the difference between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognised in profit and loss is removed from equity and recognised in the statement of comprehensive income. Impairment losses recognised in the statement of comprehensive income on equity instruments are not reversed through the statement of comprehensive income. If in a subsequent period, the fair value of a debt instrument classified as available-for-sale increases and the increase can be objectively related to an event occurring after the impairment loss was recognised in the statement of comprehensive income, the impairment loss is reversed through the consolidated statement of comprehensive income.

2.12 Inventories Inventories, which consist of foodstuffs, beverages,

shop merchandise and consumable stores are stated at the lower of cost and net realisable value. Cost is determined on weighted average cost method. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale.

2.13 Trade receivables Trade receivables are amounts due from customers

for food, beverages, shop merchandise and rooms sold in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classified as current assets, if not they are presented as non-current assets. Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment.



A provision for impairment of trade receivables is established where there is objective evidence that the Group will not be able to collect all amounts due according to the original terms of the receivables. The amount of the provision is the difference between the carrying amount and the present value of future cash flows, discounted at the effective interest rate. The amount of the provision is recognised in the statement of comprehensive income.

2.14 Cash and cash equivalents In the consolidated statement of cash flows, cash

and cash equivalents includes cash in hand, deposits held at call with banks, other short-term highly liquid investments with original maturities of three months or less and bank overdrafts. In the statement of financial position, bank overdrafts are shown within borrowings in current liabilities.

2.15 Share capital Ordinary shares are classified as equity. Incremental

costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of income tax from the proceeds.

Where any Group company purchases the

Company’s equity share capital (treasury shares), the consideration paid, including any directly attributable incremental costs (net of income taxes) is deducted from equity attributable to the company’s equity holders until the shares are cancelled or reissued. Where such shares are subsequently reissued, any consideration received, net of any directly attributable incremental transaction costs and the related income tax effects is included in equity attributable to the company’s equity holders.

2.16 Trade payables Trade payables are obligations to pay for goods or

services that have been acquired in the ordinary course of business from suppliers. Trade payables are classified as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities.

Trade payables are recognised initially at fair value

and subsequently measured at amortised cost using the effective interest method.

2.17 Borrowings Borrowings are recognised initially at fair value,

net of transaction costs incurred. Borrowings are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the statement of comprehensive income over the period of the borrowings using the effective interest method.

Fees paid on establishments of loan facilities are

recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs to the extent that there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a pre-payment for liquidity services and amortised over the period of the facility to which it relates.

Borrowings are classified as current liabilities

unless the Group has an unconditional right to defer settlement of the liability for at least twelve months after the reporting date.

2.18 Borrowing costs General and specific borrowing costs directly

attributable to the acquisition, construction or production of qualifying assets, which are assets that necessarily take a substantial period of time to get ready for their intended use, are added to the cost of those assets, until such time as the assets are substantially ready for their intended use.

Investment income earned on the temporary

investment of specific borrowings pending their expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation.

All other borrowing costs are recognised in profit or

loss in the period in which they are incurred. 2.19 Current and deferred income tax The income tax expense for the period comprises

current and deferred income tax. Tax is recognised in the statement of comprehensive income, except to the extent that it relates to items recognised in other

comprehensive income or directly in equity. In this case the tax is also recognised in other comprehensive income or directly in equity, respectively.



The current income tax charge is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the company’s subsidiaries and associates operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities.

Deferred income tax is recognised using the liability

method on temporary differences arising between the tax bases of assets and liabilities, and their carrying amounts in the financial statements. However, the deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial position date and are expected to apply when the related deferred income tax asset is realised or the deferred income tax liability is settled.

Deferred income tax assets are recognised only

to the extent that it is probable that future taxable profit will be available against which the temporary differences can be utilised.

Deferred income tax is provided on temporary

differences arising on investments in subsidiaries and associates, except for deferred income tax liability

where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are offset

when there is a legally enforceable right to offset current income tax assets against current income tax liabilities and when the deferred income tax assets and liabilities relate to income taxes levied by the same taxation authority on either the taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

2.20 Provisions Provisions are recognised when the Group has a

present legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to settle the obligation; and the amount has been reliably estimated. Restructuring provisions comprise lease termination penalties and employee termination payments. Provisions are not recognised for future operating losses.

Where there is a number of similar obligations,

the likelihood that an outflow will be required in settlement is determined by considering the class of obligations as a whole. A provision is recognised even if the likelihood of an outflow with respect to any one item included in the same class of obligations may be small.

Provisions are measured at the present value of the

expenditures expected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increase in the provision due to passage of time is recognised as interest expense.

2.21 Employee benefits (a) Pension obligations The Group has a defined contribution plan. A defined

contribution plan is a pension plan under which the Group pays fixed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits relating to employee service in the current period and prior periods.

The Group pays contributions to publicly or privately

administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no

further payment obligations once the contributions have been paid. The contributions are recognised as an employee benefit expense when they are due. Pre-paid contributions are recognised as an asset to the extent that a cash refund or reduction in the future payments is available.



(b) Termination benefits Termination benefits are payable when employment

is terminated by the Group before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. The Group recognises termination benefits when it is demonstrably committed to a termination when the entity has a detailed formal plan to terminate the employment of current employees without possibility of withdrawal. In the case of an offer made to encourage voluntary redundancy, the termination benefits are measured based on the number of employees expected to accept the offer. Benefits falling due more than 12 months after the end of the reporting period are discounted to their present value.

(c) Bonus plans The Group recognises a liability and an expense

for bonuses based on a formula that takes into consideration key performance indicators measured on a quarterly basis. The Group recognises a provision where it is contractually obliged or where there is a past practice that has created a constructive obligation.

(d) Share-based payments: share options The group operates an equity-settled, share-based

compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received in exchange for the grant of the options is recognised as an expense. The total amount to be expensed is determined by reference to the fair value of the options granted:

- including any market performance conditions (for

example, an entity’s share price); - excluding the impact of any service and non-

market performance vesting conditions (for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period); and

- including the impact of any non-vesting conditions (for example, the requirement for employees to save).

Non-market performance and service conditions

are included in assumptions about the number of

options that are expected to vest. The total expense is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. In addition, in some circumstances employees may provide services in advance of the grant date and therefore the grant date fair value is estimated for the purposes of recognising the expense during the period between service commencement period and grant date.

At the end of each reporting period, the Group revises

its estimates of the number of options that are expected to vest based on the non-market vesting conditions. It recognises the impact of the revision to original estimates, if any, in the income statement, with a corresponding adjustment to equity.

When the options are exercised, the company issues

new shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium.

2.22 Revenue recognition Revenue is measured at the fair value of the

consideration received or receivable for the sale of goods and services in the ordinary course of the Group’s activities. Revenue is shown net of value-added tax, returns, rebates and discounts.

The Group recognises revenue when the amount of

revenue can be reliably measured, it is probable that future economic benefits will flow to the entity and when specific criteria have been met for each of the Group’s activities as described below.

(i) Revenue from sale of goods Revenue from sale of goods is primarily derived from

the sale of rooms, sale of food and beverages and sale of shop merchandise. Revenue is recognised when rooms, food, beverages and shop merchandise are sold.

(ii) Management fees Management and incentive fees represent fees

earned from hotels managed by the Group usually under long-term contracts with the hotel owner. These are generally a percentage of hotel revenue.



Incentive fees are based on a fixed or variable percent of hotel profits after a stated return threshold to the owner.

Management fees are recognised as revenue when they are earned in terms of the contracts.

In interim periods and at year end incentive fees are

recognised as if they were due had the contract been terminated at the end of the period.

(iii) Timeshare revenue The extended reservations system involves the sale

of lodges owned by the Group. At the end of this period all rights in the apartments revert to the Group. Revenue is accounted for when timeshares are sold.

(iv) Interest income Interest income on loans and receivables is

recognised using the effective interest rate method. When a loan and receivable is impaired, the Group reduces the carrying amount to its recoverable amount, being the estimated future cash flow discounted at the original effective interest rate of the instrument, and continues unwinding the discount as interest income. Interest income on impaired loans and receivables are recognised using the original effective interest rate.

Interest income on bank deposits is recognised when

received. 2.23 Cost of sales Cost of sales includes purchase price of goods and

other costs incurred in bringing the inventories to the location and condition ready for use or sale. The costs include costs of purchasing, storing, transport to the extend it relates to bringing the inventories to the location and condition ready for use or sale.

Salaries and wages of employees directly related

with the sale of rooms, food, beverages and other items of merchandise are included in cost of sales.

2.24 Dividend income Dividend income is recognised when the right to

receive payment is established. 2.25 Leases Leases in which a significant portion of the risks and

rewards of ownership are retained by the lessor are classified as operating leases. Payments made under operating leases (net of any incentives received from the lessor) are charged to the statement of comprehensive income on a straight-line basis over the period of the lease. Leases of property and equipment where the Group has substantially all the risks and rewards of ownership are classified as finance leases. Finance leases are capitalised at the lease’s commencement at the lower of the fair value of the leased property and the present value of the minimum lease payments.

Each lease payment is allocated between the liability

and finance charges so as to achieve a constant rate on the finance balance outstanding. The corresponding rental obligations, net of finance charges, are included in other long-term payables. The interest element of the finance cost is charged to the statement of comprehensive income over the lease period so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The property and equipment acquired under finance leases is depreciated over the shorter of the useful life of the asset and the lease term.

2.26 Dividend distribution Dividend distribution to the company’s shareholders

is recognised as a liability in the Group’s financial statements in the period in which the dividends are approved by the Company’s shareholders.



3 FINANCIAL RISK MANAGEMENT 3.1 Financial risk factors The Group’s activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest rate risk,

cash flow interest rate risk and price risk), credit risk and liquidity risk. The Group’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance.

Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of

Directors. Group treasury identifies, evaluates and hedges financial risks in close co- operation with the Group’s operating units. The Board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(i) Market risk (a) Foreign exchange risk The Group operates regionally and is exposed to foreign exchange risk arising from various currency exposures, primarily

with respect to the South African Rand. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

Management has set up a policy to require Group Treasury to manage the Group’s foreign exchange risk against the

various functional currencies. To manage the Group’s foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, Group Treasury use forward contracts and the asset and liability matching hedge methods, where available. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

The table below summarises the Group’s exposure to foreign exchange risk as at 30 September 2013. Included in the table

are the Group’s assets and liabilities at carrying amounts categorised by currency.

2013US$

2012US$

AssetsSouth African Rand 1 391 453 852 198 Nigerian Naira 608 961 128 172 Australian Dollar 9 317 10 163 Euro 36 667 33 037 Ghanaian Cedi' 239 229 213 739

2 285 627 1 237 309

LiabilitiesSouth African Rand 1 286 593 1 342 179 Nigerian Naira 96 390 97 611 Ghanaian Cedi' 17 035 -

1 400 018 1 439 790

The Group has certain investments in foreign operations, whose net assets are exposed to foreign currency translation risk. Currency exposure arising from the net assets of the Group’s foreign operations is not managed as it is deemed not to impact the Group. However, Central Treasury monitors the movements in the relevant currencies of investment against the reporting currency.



3 FINANCIAL RISK MANAGEMENT (CONTINUED) At 30 September 2013, if the United States of America Dollar had weakened / strengthened by 10% against all the other

currencies with all other variables held constant, loss after tax and equity for the year would have been US$88 561 (2012: US$24 568) higher / lower, mainly as a result of foreign exchange gains / losses on translation of South African Rand, Nigerian Naira and Ghanaian Cedi’ denominated cash and bank balances, trade receivables, trade payables and borrowings.

There were no hedges in place as at 30 September 2013 (2012: nil) (b) Price risk At 30 September 2013, the Group did not hold equity securities and price sensitive commodities (2012: nil).

(c) Cash flow and fair value interest rate risk As the Group has no significant interest bearing assets, the Group’s income and operating cash flows are substantially

independent of changes in the market interest rates. The Group’s interest rate risk arises from long-term and short-term borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the Group to fair value interest rate risk.

The Group analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration

refinancing, renewal of existing positions and alternative financing. Based on these scenarios, the Group calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions.

Based on the simulations performed, the impact on post tax loss and equity of a 1% shift in interest rates, with all other

variables held constant would be a maximum increase /decrease of US$223 210 (2012: US$200 933). The simulations are done monthly given the nature of the current loan facilities to verify that the maximum loss potential is within the limit set by management.

Currently, the Group does not undertake any hedging on its short-term loans due to the nature and terms of the loan

facilities. On long-term loans, the Group assesses risks and hedges as the credit committee deems necessary. At 30 September 2013, there were no hedges in place.

(ii) Credit risk Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, and deposits with banks and

financial institutions, as well as credit exposures to hotel customers including outstanding receivables and committed transactions. For banks and financial institutions, only well established and reliable institutions are used. For hotel customers, management assesses the credit quality of the customers taking into account their financial position, past experience and other factors in the market. Individual limits are set based on internal and external information. The utilisation of credit limits is regularly monitored and there were no credit limits exceeded during the year ended 30 September 2013. Sales to walk in customers are cash settled in advance.

Counterparty risk is further managed by constant engagement with credit customers to determine the current position and

recoverability. All credit granted is subject to terms and conditions, where upon breach by the customers, the company takes legal action where amounts are material and recovery is possible. As at 30 September 2013, customers with receivables amounting to US$130 000 (2012: nil) were handed over to debt collectors. Receivables handed over for legal action are generally written off as uncollectible and are reversed when recovered.

There is no risk associated with receivables from related parties, staff and joint venture partners.



3 FINANCIAL RISK MANAGEMENT (CONTINUED)

In the view of management, the credit quality of unimpaired trade receivables is considered sound. Management does not expect any losses from non-performance by these counter parties.

The Group ‘s maximum exposure to credit risk by class of financial asset is as follows:

2013US$

2012 US$

Trade and other receivables (excluding pre-payments and deferred expenditure) 8 401 849 8 290 159 Cash and cash equivalents (excluding bank overdrafts) 4 232 123 4 607 088

12 633 972 12 897 247

The fair value of cash and cash equivalents at 30 September 2013 approximates the carrying amount. The credit quality of trade receivables can be assessed by reference to historical information about counterparty default

rates. Trade receivables from counterparties without external rating are shown below:

2013US$

2012US$

Group 1 3 292 727 3 157 685 Group 2 1 820 601 1 776 199

5 113 328 4 933 884 Group 1-Existing customers with no defaults in the past Group 2-Existing customers with some defaults in the past. The above receivables are shown after specific provision on certain customers There is no concentration of credit risk with respect to cash and cash equivalents as the Group holds cash accounts with

high quality financial institutions with sound financial and capital cover. The financial institutions holding the cash and cash equivalents of the Group have the following external credit ratings:

2013US$

2012US$

AA- 725 040 1 601 007 A+ 370 018 1 146 821 A- 399 513 591 663 BBB+ 20 516 89 465 BBB 1 662 072 610 848 BB+ 602 307 - BB 449 613 564 005 B+ 3 044 3 279

4 232 123 4 607 088

The ratings have been obtained from the latest available ratings on the financial institutions used by the Group. (iii) Liquidity risk Cash flow forecasting is performed in the operating entities of the Group and aggregated by the Group Treasury. Group

Treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Group does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities. Such forecasting takes into consideration the Group’s debt financing plans, covenant compliance, compliance with internal financial position ratio targets and, if applicable external regulatory or legal requirements, for example, currency restrictions.



3 FINANCIAL RISK MANAGEMENT (CONTINUED) Surplus cash held by the operating entities in excess of the balance required for working capital management are transferred

to the Group Treasury. Group Treasury invests surplus cash in interest bearing current accounts, time deposits and money markets deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

The table below analyses the Group’s liquidity gap in to relevant maturity groupings based on the remaining period at the

reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than 1yearUS$

Between 2 and5 years

US$

At 30 September 2013

LiabilitiesBorrowings 14 227 906 8 093 067 Trade and other payables 14 085 052 1 758 132


Assets held for managing liquidity riskTrade and other receivables (excluding pre-payments and deferred expenditure) 8 401 849 526 374 Cash and cash equivalents (excluding bank overdrafts) 4 232 123 - Non-current assets held for sale 4 354 381 -

Total assets held for managing liquidity risk 16 988 353 526 374

Liquidity gap (11 324 605) (9 324 825)


LiabilitiesBorrowings 13 649 882 6 443 381 Trade and other payables 10 718 894 -


Assets held for managing liquidity riskTrade and other receivables (excluding pre-payments) 8 051 494 238 665 Cash and cash equivalents (excluding bank overdrafts) 4 607 088 -


Liquidity gap (11 710 194) (6 204 716)

Below is an explanation of how the Group’s liquidity gap will be managed; -the Group will be seeking an approval to dispose its 16.54% shareholding in Dawn Properties Limited at a date to be advised

once all the necessary approvals have been obtained. Proceeds will be used to repay short-term borrowings. -the Group will be seeking a US$6 million rights offer approval from the shareholders at a date to be advised, following

approval by the directors. -the Group intends to raise money through the sale of new 25 year contracts for its time shares, by early maturing the existing

contracts which vary between 3 and 6 years. The proceeds from the sale will be further applied to borrowings. Below is how the Group deals with its liquidity risk on day to day basis; -a substantial amount of its business is cash based, making it possible to settle critical obligations when they fall due. -the Group’s Central Treasury maintains undrawn facilities to match key liabilities when they fall due. As at 30 September 2013, undrawn facility amounted to US$1 701 013 (2012: US$2 585 000) -the Group’s Central Treasury operates a cash fund, where all excess cash balances are placed in a pool, to build cash

reserves to settle key obligations, invest in short-term money markets and plan for low seasons of the business.




-the Group has current borrowings amounting to US$1 500 000 (2011: US$1 428 572) that require posting of collateral in the form of trade receivables and cession of inventories.

3.2 Capital management The Group’s objectives when managing capital are to safeguard the Group’s ability to continue as a going concern in order

to provide returns for shareholders and benefits for other stakeholders and to maintain an optimal capital structure to reduce the cost of capital.

The capital structure of the Group consists of debt (borrowings as detailed in note 22) and equity which comprises issued capital, retained earnings and other reserves as detailed in note 19.

Neither the Company nor any of its subsidiaries are subject to externally imposed capital requirements. The increase in debt from last year resulted from drawdown from our facilities. Decrease in equity resulted from current year

loss which was affected by the fair value adjustment and impairment of the investment in associate. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends paid to shareholders,

return capital to shareholders, issue new shares or sell assets to reduce debt. The Group monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by total capital. Net

debt is calculated as total borrowings (including current and non-current borrowings as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the statement of financial position plus net debt.

During the financial year ended 30 September 2013, the Group’s strategy was to maintain gearing ratio within 40% to 45%.

The gearing ratios at 30 September 2013 and 2012 were as follows:

2013US$

2012 US$

Total borrowings (note 22) 22 320 973 20 093 263 Less cash and cash equivalents (note16) (4 232 123) (4 607 088)

Net debt 18 088 850 15 486 175 Total equity 15 909 086 22 879 942

Total capital 33 997 936 38 366 117

Gearing ratio 53% 40%

The increase in the gearing ratio during the 2013 financial year resulted primarily from the increase in borrowings following drawdown on the Group’s loan facility from Ecobank Ghana (note 22) and reduction in equity arising from current year losses. Current year losses arose mainly as a result of fair value adjustment and impairment of investment in associate (see note 11).



4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS

Estimates and judgments are continually evaluated

and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

4.1 Critical accounting estimates and assumptions The Group makes estimates and assumptions of

future accounting outcomes. The resulting accounting estimates will, by definition, seldom equal the related actual results. 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 year are addressed below.

(a) Income taxes The Group is subject to income taxes in numerous

jurisdictions. Significant judgment is required in determining the provision for income taxes. There are many transactions and calculations for which the ultimate tax determination is uncertain. The Group recognises liabilities for anticipated tax audit issues based on estimates of whether additional taxes will be due. Where the final tax outcome of these matters is different from the amounts that were initially recorded, such differences will impact the current and deferred income tax assets and liabilities in the period in which such determination is made.

Were the actual final outcome to differ by 10% from

management’s estimates, the Group would need to: - increase the deferred tax liability by US$63 678, if

unfavourable, or - decrease the deferred tax liability by US$63 678, if

favourable. (b) Valuation of property and equipment Property and equipment is presented at revalued

amounts less accumulated depreciation. A Directors’ or professional valuation is performed periodically to determine the market values, remaining useful lives and residual values of property and equipment. These measurements require the use of critical judgment. Property and equipment was last valued

by a professional valuer on 31 August 2011 and the last used estimates are still considered relevant.

Revaluations are done making reference to recent

market transactions on arms length. (c) Going concern The Directors assess the ability of the Group to

continue operating as a going concern at the end of each financial year. As at 30 September 2013, the Directors have assessed the ability of the Group to continue operating as a going concern and believe that the preparation of these financial statements on a going concern basis is still appropriate. Some of the initiatives implemented to ensure the Group returns to profitability and continues as a going concern are discussed under note 2.1.2.

(d) Valuation of investment in associate (Dawn

Properties Limited) The Group applies the equity accounting method

for the investment in Dawn Properties Limited. Impairment on investment in Dawn Properties Limited is tested by comparing the carrying amount to the recoverable amount. Recoverable amount is the higher of value in use and fair value less cost to sale.

The value-in-use was calculated using Dawn

Properties Limited pre-tax free cash flows for the next 5 years. The key assumptions in the calculation are as detailed below:

Period of planning: 5 years. Discount rate: 13.5%. Growth rate: 10% in the first two years, 7.5% in the

next 2 years, and 3.6% there after. Inflation: 2.8% Effective tax rate: 12.5% Based on the above, the value-in-use is US$6 066 623. If growth rate is limited to 7.5%, in the first 4 years,

holding all the other variables constant, the value-in-use will decline by US$199 261.



4 CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS (CONTINUED)

(e) Estimates on variable lease commitments Management estimates its variable lease

commitments based on current lease agreements, the unexpired lease periods and expected performance of the hotels for the foreseeable future which is generally twelve months.

As at 30 September 2013, the following assumption

was used to determine the minimum variable lease commitments: Growth in Revenue for the year ending

30 September 2014: 10% Revenue for the financial year ending 30 September 2014 is the minimum achievable revenue for the unexpired lease periods.

(f) Valuation of biological assets The Group owns biological assets in the form of a

timber plantation. The fair value of the plantation is determined by an expert through obtaining the stumpage value of the trees, using the Faustmann model. Variables are input into the formula (including international rates) to derive the fair value. The following variables were used for the valuation as at 30 September 2013;

-estimated area of plantation: 567 hectares -age of trees 4-23 years -valuation based on trees only 7 years and older -risk/discount: 15% (g) Valuation of share options The group operates an equity-settled, share-based

compensation plan, under which the entity receives services from employees as consideration for equity instruments (options) of the Group. The fair value of the employee services received is calculated making certain assumptions which require critical judgment. For the year ended 30 September, the amount charged to the income statement as employee cost was based on the valuation performed by an expert using the following agreed assumptions with management;

-volatility of the African Sun Limited shares: 70.23% -risk free rate: 2.13%; based on the Federal Reserve

Bank of United States of America 10 year treasury bills. The basis is supported by the fact that Zimbabwe is a USD economy.

-vesting period: 3 years -all eligible executives will be in service for the 3

years.



5 SEGMENT INFORMATION Management has determined the operating segments based on the reports reviewed by the executive committee (executive

management team), who make strategic decisions for the purposes of allocating resources and assessing performance. The committee considers the business from both a geographic and deal type perspective. Geographically, management

considers the performance of leased hotel properties in Southern Africa and properties under management in West Africa. The Southern Africa and West Africa segments are further segregated into Zimbabwe and South Africa, and Ghana and Nigeria respectively.

The West Africa segment will have an increased asset base and Revenue, with the soon to open first leased hotel in Accra,

Ghana. (This hotel operating under the name Amber Accra Hotel, opened on 10 December 2013). The executive committee assesses the performance of the operating segments based on: - hotel occupancies; - hotel revenue per available room (RevPAR); - hotel average daily rate (ADR); and - profitability Revenue Sales between segments are carried out at arm’s length and eliminated on consolidation. The revenue from external parties

reported to the executive committee is measured in a manner consistent with that in the income statement. The segment information provided to the executive committee for the reportable segments is as follows:

Southern Africa West Africa

ZimbabweUS$

South AfricaUS$

BotswanaUS$

GhanaUS$

NigeriaUS$

ConsolidatedUS$

Discontinuedoperations

US$

Continuingoperations

US$


Revenue: Sale of rooms 28 884 143 - - - - 28 884 143 - 28 884 143 Sale of food and beverages 22 667 732 - - - - 22 667 732 - 22 667 732 Gaming 1 522 041 - - - - 1 522 041 - 1 522 041 Conferencing 1 036 239 - - - - 1 036 239 - 1 036 239 Other 1 857 488 - - - - 1 857 488 - 1 857 488 Management fees - - - - 308 036 308 036 - 308 036

Total revenue 55 967 643 - - - 308 036 56 275 679 - 56 275 679

Other Information

EBITDA 6 540 638 222 677 (236) (24 570) 215 765 6 954 274 - 6 954 274 Depreciation and usage (2 207 565) (5 855) - - (1 759) (2 215 179) - (2 215 179)Impairment (4 417 211) - - - - (4 417 211) - (4 417 211)Finance income 3 246 2 477 - - - 5 723 - 5 723 Finance costs (3 078 510) - - - - (3 078 510) - (3 078 510)Recycled from OCI 181 165 - - - - 181 165 - 181 165 Other expenses (3 690 221) - - - - (3 690 221) - (3 690 221)Share of income of associate 331 034 - - - - 331 034 - 331 034

Profit / (loss) before income tax (6 337 424) 219 299 (236) (24 570) 214 006 (5 928 925) - (5 928 925)

Total assets 52 532 470 2 372 254 119 652 4 249 061 517 742 59 791 179 129 661 59 661 518

Total assets include:Investment in associate 6 067 253 - - - - 6 067 253 - 6 067 253 Additions to non-current assets(other than financial instruments and deferred income tax assets) 6 199 311 - - 1 095 504 - 7 294 815 - 7 294 815

Total liabilities 39 834 188 1 926 323 243 058 1 666 022 212 502 43 882 093 - 43 882 093



5 SEGMENT INFORMATION (CONTINUED)

Southern Africa West Africa

ZimbabweUS$

South AfricaUS$

BotswanaUS$

GhanaUS$

NigeriaUS$

ConsolidatedUS$

Discontinuedoperations

US$

Continuing operations

US$

As at 30 September 2012 (Restated)

Revenue: Sale of rooms 27 927 070 - - - - 27 927 070 - 27 927 070 Sale of food and beverages 21 947 614 - - - - 21 947 614 - 21 947 614 Gaming 1 519 458 - - - - 1 519 458 - 1 519 458 Conferencing 877 567 - - - - 877 567 - 877 567 Other 1 868 160 - - - - 1 868 160 - 1 868 160 Management fees - - - 52 708 234 174 286 882 - 286 882

Total revenue 54 139 869 - - 52 708 234 174 54 426 751 - 54 426 751

Other Information

EBITDA 6 284 109 (101 798) - 65 474 40 943 6 288 728 - 6 288 728 Depreciation and usage (2 289 440) (24 152) - - (3 445) (2 317 037) - (2 317 037)Amortisation - - - - - - - - Impairment - (70 959) - - - (70 959) - ( 70 959)Finance income 116 299 7 106 - - - 123 405 - 123 405 Finance costs (2 954 096) - (24 906) - - (2 979 002) - ( 2 979 002)Other income 39 741 - 56 762 1 636 943 - 1 733 446 - 1 733 446 Other expenses (826 408) (7 038) - (12 766) - (846 212) - (846 212)Share of loss of associate (242 823) - - - - (242 823) - (242 823)

(Loss) / profit before income tax 127 382 ( 196 841) 31 856 1 689 651 37 498 1 689 546 - 1 689 546

Total assets 57 721 178 1 013 159 114 515 213 739 128 172 59 190 763 - 59 190 763

Total assets include:Investment in associate 17 588 834 - - - - 17 588 834 - 17 588 834Additions to non-current assets(other than financial instruments and deferred tax assets) 12 093 771 - - - - 12 093 771 - 12 093 771

Total liabilities 34 222 140 1 748 012 243 058 - 97 611 36 310 821 - 36 310 821

The amounts provided to the executive committee with respect to total assets are measured in a manner consistent with that used for the financial statements. These assets are allocated based on the operations of the segment and the physical location of the asset.

All interest bearing liabilities have been allocated to segments as they relate to specific bank loans obtained by the segments. EBITDA has been calculated excluding exceptional charges retaling to fair value adjustments and impairments for 2013 and

the comparatives.



6 CORRECTION OF PRIOR PERIOD ERRORS AND CHANGE IN ACCOUNTING POLICY IN ASSOCIATE 6.1 Property and equipment The Group erroneously omitted in error staff houses (freehold property) and time shares cottages (leasehold property) upon

the adoption of the multi-currency system in 2009. The valuation of these assets was carried out on 28 February 2013 and 15 April 2013 respectively.

The staff houses which are located away from the hotels, comprise 142 houses in the Victoria Falls area and 9 houses in

Kariba. The time shares cottages include 11 units in Kariba and 24 units in Nyanga. The staff houses are occupied by staff members from 3 hotels in the Victoria Falls area and one in Kariba. There are no rentals associated with the occupation of these houses. Maintenance is generally carried out by the staff occupying each house.

The revenue associated with the timeshares was received prior to dollarisation as most of the timeshare weeks were sold in

1999 for 20 years at inception. The remaining lives of the booked weeks range between 3-5 years. Maintenance of the time share facilities is the responsibility of the timeshare owners association on a day to day basis and not the hotel.

The comparative figures have been restated accordingly from 2011 even though the error occurred in 2009 as there is

inadequate information available to support a valuation in 2009. The effect of the correction of the error on the results for 2012 and 2011 is as follows:

Year ended30 September

2012US$


2011US$

Increase in depreciation (123 573) (123 573)Decrease in deferred tax expense 31 820 31 820

Increase in loss / decrease in profit (91 753) (91 753)

Assets-restatement of the Group's freehold property (staff houses) - 4 526 600 -restatement of the Group's leasehold property (timeshare cottages) - 1 333 333

Increase in property and equipment - 5 859 933

Equity and liabilities(Decrease) / increase in equity - annual depreciation / non-distributablereserve (123 573) 4 437 957 Decrease in liabilities - deferred tax liability (31 820) (34 567)

(91 753) 4 472 524

6.2 Investment in associate The adjustment relates to incorrect computation of profit from associate. Where previously the Group would eliminate a

portion of the rentals paid to Dawn Properties Limited (Dawn), proportionately to its shareholding, from the associate’s profit, it has been corrected and no such deduction will be made going forward.

The method was a departure from what is prescribed in IAS 28,”Investment in Associates” which states that, share of

results of an associate is the proportionate share of the investee’s profit or loss to the investor’s shareholding in the investee. The error has been corrected retrospectively from 2009, as it is practical to do so, and comparative figures have been restated accordingly.



6 CORRECTION OF PRIOR PERIOD ERRORS AND CHANGE IN ACCOUNTING POLICY IN ASSOCIATE (CONTINUED)

The effect of the correction of error on the results from 2010 to 2012 is as follows:Year ended

30 September2012US$

Cumulative to30 September

2011US$

Increase in share of profit from associate 539 754 876 407

AssetsIncrease in investment in associate 539 754 876 407

EquityIncrease in equity 539 754 876 407

6.3 Change in accounting policy in Dawn Properties Limited (Dawn) - Associate Amendment to IAS 12, ‘‘Deferred tax – recovery of underlying assets’.’ The IASB has amended IAS 12, ‘‘Income Taxes’’, to

introduce an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. IAS 12 required an entity to measure the deferred tax relating to an asset depending on whether the entity expects to recover the carrying amount of the asset through use or sale. The IASB believes that entities holding investment properties that are measured at fair value sometimes find it difficult or subjective to estimate how much of the carrying amount will be recovered through rental income and how much will be recovered through sale. This amendment therefore introduces an exception to the existing principle for the measurement of deferred tax assets or liabilities arising on investment property measured at fair value. As a result of the amendments, SIC 21, ‘‘Income Taxes – recovery of revalued non-depreciable assets’’, will no longer apply to investment properties carried at fair value. The IASB has added the rebuttable presumption that the carrying amount of an investment property measured at fair value is entirely recovered through sale. The amendments also incorporated into IAS 12 the remaining guidance previously contained in SIC 21, which is withdrawn.

As a result of this change in accounting policy, the Dawn comparative figures for 2012 and 2011 have been restated as

follows;Year ended

31 March 2012 US$

Year to 31 March 2011

US$

Effect on consolidated statement of financial positionDecrease in deferred tax liability 68 121 6 239 898 Increase in retained earnings 68 121 6 239 898

Effect on consolidated statement of comprehensive incomeIncrease in profit for the year 19 676 68 121

Total effect on African Sun Limited; Year ended30 September

2012 US$


2011 US$

Effect on consolidated statement of financial positionIncrease in assets - investment in associate (at 16.54% shareholding) 14 522 1 043 346 Increase in retained earnings - 1 032 079

Effect on consolidated statement of comprehensive incomeDecrease in loss / increase in profit for the year (at 16.54% shareholding) 14 522 11 267



7 CHANGE IN ACCOUNTING ESTIMATES The Directors reviewed the useful lives of all categories of property and equipment. This review led to a revision of the

useful lives of various assets based on information gathered and historical experience. A major factor surrounding the review was the reality that most of the assets used in the Group’s hotels generally have a longer useful life than was previously assessed. The review has also been motivated by the recent refurbishment work on the Group’s three city hotels, where items of furniture, fittings and equipment were refurbished and upholstered as opposed to replaced. Other items of furniture, fittings and equipment removed from the refurbished hotels were relocated to to other hotels, as asset transfers for continued use.

A close inspection of other assets which were not part of the refurbishment revealed that, the prior used estimates with

regards to useful lives are no longer appropriate given the state of the assets and remaining lives. Example of such assets include kitchen and refrigeration equipment, air conditioners and leasehold improvements whose lives were between 6 and 12 years.

The table below shows the previously used estimates and the revised estimates for various asset categories;

Previous estimates Revised estimates Useful life-

years Depreciation

rate - % Useful life-

years Depreciation

rate - %

Furniture and fittings 6-10 10-16.7 6-15 6.7-16.7 Leasehold improvements 8-12.5 8-12.5 8-25 4-12.5 Plant and machinery 8-13.33 7.5-12.5 8-15 6.7-12.5 Refrigeration 8-13.33 7.5-12.5 8-15 6.7-12.5 Soft furnishings 6.66 15.00 10.00 10.00

The standard useful life of leasehold improvements has been set at 15 years, though for timeshare units is 25 years. For accounting purposes the life will be the shorter of 15 years or the life of the lease, after taking into account any automatic renewals. The remaining lease periods have been taken into account in revising the useful lives of the leasehold improvements for each hotel.

The effects of the change in estimates on the Group’s depreciation expense charged in administration expensesin the year

and future periods is shown below;

2013 US$

Depreciation for the year based on old estimates 2 324 029 Depreciation for the year based on new estimates 2 007 932

Decrease in depreciation 316 097



8 INTEREST IN JOINT VENTURES The Group has a 50% interest in The Victoria Falls Hotel and West African Sun Hotels Limited (WASHL). The Victoria Falls

Hotel is a leased hotel in the Victoria Falls area, and WASHL has hotel management contracts in Nigeria. The following amounts represent the Group’s 50% share of the assets and liabilities, and sales and results of the joint ventures. They are included in the statement of financial position and statement of comprehensive income.

2013US$

2012US$

Assets-Non-current assets 2 712 217 1 363 237 -Current assets 4 590 854 2 626 768

Total assets 7 303 071 3 990 005

Liabilities-Current liabilities 3 357 361 306 806

Net assets 3 945 710 3 683 199

Results-Income 5 813 086 5 448 270 -Expenses (4 519 747) (4 072 617)

Profit before income tax 1 293 339 1 375 653

Proportionate joint ventures commitments 455 962 1 350 000

Joint venture commitments relate to refurbishment and other capital expenditure for The Victoria Falls Hotel.

9 PROPERTY AND EQUIPMENT

Capital workin progress

US$

Freeholdproperties

US$

Leaseholdproperties

US$Equipment

US$

Servicestocks

US$

Motorvehicles

US$TotalUS$

1 October 2011 (Restated) Cost or valuation 1 974 596 4 526 600 6 324 205 18 511 572 1 815 609 1 968 147 35 120 729 Accumulated depreciation and impairment - (70 240) ( 3 402 440) (7 364 305) (437 520) (1 035 777) ( 12 310 282)

Net book amount 1 974 596 4 456 360 2 921 765 11 147 267 1 378 089 932 370 22 810 447

Year ended 30 September 2012 (Restated)Opening net book amount 1 974 596 4 456 360 2 921 765 11 147 267 1 378 089 932 370 22 810 447 Additions 6 317 389 - 14 870 1 213 394 559 413 154 771 8 259 837 Disposals (1 968 718) - - (154 928) (6 587) (131 851) ( 2 262 084)Accumulated depreciation on disposals - - - 68 667 - 68 568 137 235 Transfer (out) / in (1 390 974) - 105 506 1 163 441 122 027 - - Impairment - - - (57 156) (13 803) - ( 70 959)Exchange differences - - - 2 676 12 624 - 15 300 Hotel usage - - - - (229 262) - ( 229 262)Depreciation charge - (70 240) ( 529 699) (1 296 424) - (191 412) ( 2 087 775)

Closing net book amount 4 932 293 4 386 120 2 512 442 12 086 937 1 822 501 832 446 26 572 739

At 30 September 2012 (Restated)Cost or valuation 4 932 293 4 526 600 6 497 914 20 736 155 2 065 566 1 991 067 40 749 595 Accumulated depreciation and impairment - (140 480) ( 3 985 472) ( 8 649 218) (243 065) (1 158 621) ( 14 176 856)

Net book amount 4 932 293 4 386 120 2 512 442 12 086 937 1 822 501 832 446 26 572 739



9 PROPERTY AND EQUIPMENT (CONTINUED)


US$

Freeholdproperties

US$

Leaseholdproperties

US$Equipment

US$

Servicestocks

US$

Motorvehicles

US$TotalUS$

Year ended 30 September 2013 Opening net book amount 4 932 293 4 386 120 2 512 442 12 086 937 1 822 501 832 446 26 572 739 Additions 4 879 610 12 000 203 635 2 154 444 687 576 64 771 8 002 036 Disposals (12 601) - - (125 373) - (103 250) (241 224)Accumulated depreciation on disposals - - - 44 843 - 79 354 124 197 Transfer (out) / in (5 879 806) - 1 214 926 4 756 555 (94 797) 3 121 - Transfer to assets of a disposal group classified asheld for sale - (4 234) (185 726) (2 321) - (192 281)Accumulated depreciation on assets classified to adisposal group - - 2 070 69 876 - - 71 946 Exchange differences - - - - (1 745) - (1 745)Hotel usage - - - - (207 247) - (207 247)Depreciation charge - (70 240) (494 779) (1 277 106) - (165 807) ( 2 007 932)

Closing net book amount 3 919 496 4 327 880 3 434 060 17 524 450 2 203 967 710 635 32 120 488

At 30 September 2013Cost or valuation 3 919 496 4 538 600 7 916 475 27 521 781 2 203 967 1 955 709 48 056 028 Accumulated depreciation and impairment - (210 720) (4 482 415) (9 997 331) - (1 245 074) (15 935 540)

Net book amount 3 919 496 4 327 880 3 434 060 17 524 450 2 203 967 710 635 32 120 488

An independent valuation of the Group’s property and equipment was last performed by valuers to determine the fair values as at 31 August 2011. The valuation which conforms to International Valuation Standards, was determined by reference to recent market transactions on arm’s length terms. Management believes that, the valuation is still a reliable source of reference given that the market values of the assets have not changed significantly as the values of the property and equipment are not volatile.

Capital work in progress relates to refurbishment equipment and hotel furniture, fittings and equipment for the Zimbabwe hotels and the new Ghana hotel that was undertaken during the financial year. This is not depreciated until it is brought to use.

During the year, the Group did not have any impairments (2012: US$70 959). The 2012 impairment was based on non-recoverability of the carrying amounts of items specifically for The Grace Hotel and Holiday Inn Gaborone, and could not be used at any other hotel. Impairment is charged in ‘other expenses’ in the statement of comprehensive income.

Additions to property and equipment of US$8 002 032 (2012: US$8 259 837) includes cash additions of US$6 625 393 (2012: US$7 754 548).

All the depreciation is charged in administrative expenses in the statement of comprehensive income.

Usage relates to depletion of the service stocks through use. All usage is charged in administrative expenses in the statement of comprehensive income.

None of the assets reported above are under a finance lease where the Group is a lessee.

Some of the staff houses under freehold property were pledged as security for a long-term loan of US$1 895 541.



9 PROPERTY AND EQUIPMENT (CONTINUED) During the year, the Group has capitalised borrowing costs amounting to US$1 048 964 (2012: US$464 330) on qualifying

assets. The qualifying assets are refurbishment equipment, furniture and fittings. Hotel refurbishment generally takes a period of 24 months to complete. Borrowing costs were capitalised at the effective interest rate on the Afreximbank loan of 10.15%.

If property and equipment was stated on the cost basis, the carrying amount would be as follows:

Capital work

in progressUS$

Freeholdproperties

US$

Leaseholdproperties

US$Equipment

US$

Servicestocks

US$

Motorvehicles

US$TotalUS$

At 30 September 2013 3 919 496 4 327 880 3 434 060 17 524 450 2 203 967 710 635 32 120 488

At 30 September 2012 4 932 293 4 386 120 2 512 442 12 086 937 1 822 501 832 446 26 572 739

10 BIOLOGICAL ASSETS The Group owns biological assets in the form of a timber plantation. The timber is held mainly for sale as raw timber on

maturity. The total area under the timber plantation as at 30 September 2013 is approximately 567 hectares (2012: 567 hectares).

The fair value of the biological assets less estimated costs to sell was as follows:

2013US$

2012US$

At 1 October 274 678 234 937 (Loss) / gains from changes in fair value less estimated point of sale costs ( 54 027) 39 741

At 30 September 220 651 274 678

Fair value of the timber plantations has been determined by an independent valuer based on the stages of the timber development.

Valuation was based on trees that are 7 years and older, as these have salvage value.

The fair value of the plantation is determined by obtaining the stumpage value of the trees, using the Faustmann model. Variables are input into the formula (including international rates) to derive the fair value.

A 15% risk premium on live plantation is applied on the total value as it is normal practice in forestry valuations. Risks of damage caused by fire outbreaks and pest risk before maturity contribute to the discount factor.

There were no harvests during the financial year (2012: nil) as the entire plantation is still immature.



11 INVESTMENT IN ASSOCIATE

2013US$

2012Restated

US$

At 1 October 17 588 834 14 103 754 Shares acquired during the year - 3 710 442 Share of profit / (loss) for the year 331 034 ( 242 823)Share of other comprehensive income from associate (note 19) - 24 063 Fair value adjustment on reclassification to non-current assets held for sale (3 210 684) - Classified to non-current assets held for sale (note 12) (4 224 720) - Impairment (4 417 211) - Adjustment - ( 6 602)

At 30 September 6 067 253 17 588 834

At 30 September 2013, African Sun Limited owned 28.54% (2012: 28.54%) of the linked units in Dawn Properties Limited. Of the total shareholding, 16.54% was accounted for as investment in associate and 12% was classified as non-current assets held for sale. The sale of the 12% was completed subsequent to year end on 2 October 2013. Dawn Properties Limited is incorporated in Zimbabwe, and is listed on the Zimbabwe Stock Exchange.

The 16.54% shareholding in Dawn Properties Limited is accounted for as investment in associate due to significant influence

arising from; -appointment of two board members on the Dawn Properties Limited board by African Sun. -material transactions between African Sun and Dawn Properties Limited; African Sun leases 8 hotels from Dawn Properties

Limited. -African Sun and Lengrah Investments (Private) Limited have a voting pool agreement, where the combined shareholding of

the two companies amounts to 28.54% of Dawn Properties Limited. Dawn Properties Limited has a 31 March financial year end. The share of results of Dawn Properties Limited is based on

audited financials for the year ended 31 March 2013, and unaudited results for the six months ended 30 September 2013.

The disposal agreement triggered a fair value adjustment on the 294 705 134 linked units amounting to US$3 210 684, as the carrying amount was higher than the amount recoverable through sale. A further impairment test on the remaining 16.54% resulted in an impairment of US$4 417 211 which was charged to the statement of comprehensive income.

In the Company’s statement of financial position, the investment in Dawn Properties Limited is carried at cost less

impairment. At 30 September 2013, the cost was US$5 975 065 (2012: US$13 696 029). See note 37.



11 INVESTMENT IN ASSOCIATE (CONTINUED)

The summarised pro-forma financial statements of Dawn Properties Limited for the 12 months ended 30 September 2013 are as follows:

2013US$

2012Restated

US$

Statement of comprehensive incomeRevenue 5 755 565 5 585 550 Administrative expenses (4 060 865) (4 107 790)

Operating profit 1 694 700 1 477 760 Other income 16 827 -

Profit before taxation 1 711 527 1 477 760 Taxation (126 693) 30 681

Profit after tax 1 584 834 1 508 441 Loss from discontinued operations ( 655 526) (1 431 901)

Profit for the year 929 308 76 540

Statement of financial positionTotal assets 88 012 516 87 359 395

Total liabilities 2 722 014 2 128 431 Equity 85 290 502 85 230 964

Total equity and liabilities 88 012 516 87 359 395

Total assets comprise mainly investment properties, which predominantly constitute hotel properties which are leased and occupied by African Sun Limited.

At 30 September the fair value of the investment in Dawn Properties Limited based on the share price was US$4 064 670

(2012: US$4 627 736)



12 NON-CURRENT ASSETS HELD FOR SALE AND DISCONTINUED OPERATIONS

Group2013US$

2012US$

At 1 October - - Assets classified as held for sale from investment in associate (note 11) 4 224 720 - Total assets of a disposal group classified as held for sale 129 661 -

Total non -current assets held for sale 4 354 381 -

The details of the non-current assets held for sale are given below; (a) Non-current assets held for sale During the year the Group classified as held for sale a 12% shareholding on Dawn Properties Limited following an approval

of disposal by the Directors. The Group entered into a sale agreement with Lengrah Investments (Private) Limited on 1 July 2013. However, at 30 September, all conditions to the sale were not met, hence the re-classification to non-current assets held for sale (see note 11).

Company2013US$

2012US$

At 1 October - - Assets classified as held for sale from investment in associate (note 11) 4 224 720 -

At 30 September 4 224 720 -

(b) Assets and liabilities of a disposal group classified as held for sale During the year the Group re-classified the assets and liabilities of Fothergill Island to assets and liabilities of a disposal

group, following recommendations from the board. The decision to discontinue the operations and sell the hotel was based on the following;

-capital requirements to refurbish the hotel are onerous on the Group, affected viability of recovery of invested capital -the nature of the hotel is not an ideal fit with the Group’s business model. Negotiations between management and an interested party to sell the assets and liabilities are at an advanced stage, and

management believe that this group of assets and liabilities will be disposed during the financial year 2014.

The hotel has been non-operational since 2011, and there are no associated income and losses, cash flows and liabilities.

Below is an analysis of the assets classified as held for sale;

2013US$

2012US$

Assets of a disposal group classified as held for saleProperty and equipment 120 334 - Inventory 9 327 -

Total assets of a disposal group classified as held for sale 129 661 -



13 FINANCIAL INSTRUMENTS

Financial instruments by category:

2013US$

2012US$

Assets as per statement of financial position:Loans and receivables

Trade and other receivables (excluding pre-payments and deferredexpenditure) 8 401 849 7 918 421 Cash and cash equivalents 4 232 123 4 607 088

Total 12 633 972 12 525 509

Liabilities as per statement of financial position:Non-derivative financial

liabilities at amortised cost

Borrowings 22 320 973 20 093 263 Trade and other payables (excluding statutory liabilities) 9 764 933 8 414 486

Total 32 085 906 28 507 749

14 INVENTORIES

2013US$

2012US$

Food and beverage 898 871 798 464 Shop merchandise 72 644 43 810 Consumable stocks 502 773 478 872 Maintenance stocks 169 373 151 481

1 643 661 1 472 627

The cost of inventories recognised as expense and included in “cost of sales” amounted to US$6 253 646 (2012: US$6 356 095). There were no items of inventory that were impaired during the year (2012: nil).



15 TRADE AND OTHER RECEIVABLES

2013US$

2012US$

Trade receivables Less: provision for impairment of trade receivables 5 566 854 5 517 085

(453 526) (583 201)Trade receivables - netPrepayments 5 113 328 4 933 884 Deferred expenditure - rental deposit 299 085 384 638 Deferred expenditure - other preopening expenses 1 726 920 - Amount receivable from joint venture partners 724 768 - PAYE and VAT refundable - South Africa entities 936 108 756 376 Other receivables 121 195 354 551 Receivables from related parties (note 30) 1 480 293 1 782 446 Staff receivables 209 089 140 054

541 836 322 848

Less non-current portion: 11 152 622 8 674 797 Receivables from related parties (note 30)Deferred expenditure - rental deposit 209 089 140 054 Staff receivables 1 636 029 -

317 285 98 611

Total non-current 2 162 403 238 665

Current portion 8 990 219 8 436 132

All non-current receivables are due within ten years from the end of the reporting period.The fair values of trade and other receivables are as follows:Trade receivables 5 113 328 4 933 884 Other receivables (excluding pre-payments and deferred expenditure) 2 537 596 2 508 735 Receivables from related parties 209 089 140 054 Staff receivables 541 836 322 848

8 401 849 7 905 521

The fair value of staff debtors and receivables from related parties is based on cash flows discounted using the Group’s average cost of borrowing of 13.83%. The loans relate to car loans which are payable over 5 years and housing loans which are payable after 5 years. Staff receivables are charged interest at 6%.

The effective interest rates on non-current receivables were as follows:Receivables from related parties 11.54% 12.28%Staff receivables 7.61% 18.50%

As of 30 September 2013, trade receivables of US$3 559 783 (2012: US$2 780 909) were fully performing.

As of 30 September 2013 trade receivables of US$1 553 545 (2012: US$2 152 975) were past due but not impaired. These relate to a number of independent customers from whom there is no recent history of default. The ageing analysis of these trade receivables is as follows:

Up to 30 days 611 395 420 409 30 to 60 days 292 311 278 953 Over 60 days 649 839 1 453 613

1 553 545 2 152 975



As of 30 September 2013, trade receivables of US$453 526 (2012: US$583 201) were impaired and fully provided for. The individually impaired receivables mainly relate to customers in unexpectedly difficult economic situations. The ageing analysis of these trade receivables is as follows:

2013US$

2012US$

Over 60 days 453 526 583 201

The carrying amounts of the Group's trade and other receivables aredenominated in the following currencies:United States of America Dollars 7 703 241 7 965 125 South African Rand 130 885 419 490 Botswana Pula 112 321 - Nigerian Naira 605 917 119 029 Ghanaian Cedi' 2 600 298 171 153

11 152 662 8 674 797

Movements on the group provision for impairment of trade receivables areas follows:At 1 October 583 201 356 791 Provision for receivables impairment 58 404 373 967 Receivables written off during the year as uncollectible (188 079) (147 557)

At 30 September 453 526 583 201

The creation and release of provision for impaired receivables have been included in “other expenses” in the statement of comprehensive income. Amounts charged to the allowance account are generally written off when there is no expectation of recovering additional cash.

The other classes within trade and other receivables contain impaired assets whose impairment has been disclosed

separately in note 25. The maximum exposure to credit risk at the reporting date is the carrying value of each class of receivables stated above.

The Group does not hold any collateral as security. Debtors amounting to US$1 176 117 were pledged as security to a short-term loan of US$1 532 227.

15 TRADE AND OTHER RECEIVABLES (CONTINUED)



16 CASH AND CASH EQUIVALENTS

2013US$

2012US$

Cash at bank and on hand 4 232 123 4 607 088

The net exposure to foreign currency balances was:Bank balancesUnited States Dollars 3 181 714 4 219 246 South African Rand 969 961 298 777 Euro 36 667 33 037 Australian Dollars 9 317 10 163 Nigerian Naira 1 537 3 279 Ghanaian Cedi' 32 927 42 586

4 232 123 4 607 088

The carrying amount of the cash and bank balances approximate its fair value. Cash and cash balances include a restricted balance of US$552 668 (2012: US$748 389) held in an offshore account by Afreximbank as part of the security to the loan. This is 8% of the outstanding loan. The cash is available to the extent that the balance is equal to or more than 8% of the loan outstanding. Cash and cash equivalents comprise the following for the purposes of the statement of cash flows:

Cash and bank balances 4 232 123 4 607 088 Bank overdrafts (note 22) (2 068 288) (2 395 757)Less: restricted cash (552 668) (748 389)

Cash and cash equivalents 1 611 167 1 462 942



17 SHARE CAPITAL AND PREMIUM

17.1 Authorised and issued share capital

Numberof shares

Ordinaryshare capital

US$

Share premium

US$ Total US$

At 1 October 2011 823 940 874 8 239 409 23 701 165 31 940 574 Treasury shares adjustment - - 355 256 355 256

At 30 September 2012 823 940 874 8 239 409 24 056 421 32 295 830

At 30 September 2013 823 940 874 8 239 409 24 056 421 32 295 830

The total authorised number of ordinary shares is 1,5 billion (2012: 1,5 billion) with a par value of US$0.01 per share. All issued shares are fully paid. The unissued shares are under the control of the Directors.

17.2 Treasury shares

Numberof shares

Ordinaryshare capital

US$

Share premium

US$ Total US$

At 1 October 2011 7 532 079 75 321 1 033 139 1 108 460 Treasury shares adjustment - - (355 256) (355 256)

At 30 September 2012 7 532 079 75 321 677 883 753 204

At 30 September 2013 7 532 079 75 321 677 883 753 204

Treasury shares at 30 September 2013 relate to 7 532 078 (2012: 7 532 078) ordinary shares held by African Sun Limited, the parent company.

17.3 Directors’ shareholdings As at 30 September 2013, the directors held directly the following number of shares in the Company:

2013 Number of

shares

2012Number of

shares

D.W. Birch 758 948 758 948

Dr S.A. Munyeza held indirectly shares in the Company through his family trust (Nhaka Trust) which has controlling interests in the following companies:



17 SHARE CAPITAL AND PREMIUM (CONTINUED)

2013 2012

Name Company

Number ofordinary

shares held %

Number ofordinary

shares held %

S A Munyeza Riustrix Investments (Private)Limited - - 146 311 650 17.60Ecobank Asset Management(Private) Limited - - 78 659 897 9.45 Burypast (Private) Limited - - 7 408 648 0.89 Cribbed Investments(Private) Limited - - 12 689 225 1.53Cotition Investments(Private) Limited - - 20 924 172 2.52

Total shareholding - - 265 993 592 31.99

During the year Dr S.A. Munyeza relinquished his 31.99% shareholding in African Sun through Nhaka Trust to Lengrah Investments (Private) Limited trading as BCM Hotel and Real Estate following a cash and share swap transaction in lieu of a 17.02% shareholding in Brainworks Capital Management (Private) Limited (BCM). Lengrah is a subsidiary of BCM, with BCM controlling 68%. Effectively, Dr Munyeza now holds 3.7% of African Sun Limited.

18 SHARE-BASED PAYMENTS Share options are granted to Executive Directors and to selected employees. The exercise price of the granted options is

equal to the market price on approval date which is also the grant date. Options are conditional on the employee completing three years’ service (the vesting period). The options are exercisable starting three years from the grant date, without additional performance and market conditions. The Group has no legal or constructive obligation to repurchase or settle the options in cash.

On 4 July 2013, the Group granted share options to Executive Directors and selected employees. Movements in the number

of share options outstanding and their related weighted average exercise prices are as follows:

2013 2012

Name

Exerciseprice in US centsper share option Share options

Exerciseprice in US centsper share option Share options

At 1 October - - - - Granted 1.55 32 926 655 - -

At 30 September 1.55 32 926 655 - -

None of the outstanding share options were exercisable during the year. The expiry date of all the share options outstanding as at 30 September 2013 is 30 June 2016. The weighted average fair value of options granted during the period determined using the Black-Scholes valuation model

was US$0.0074 per option. The significant inputs into the model are as discussed in note 4 (g).



19 OTHER RESERVES 19.1 Non-distributable reserve The non-distributable reserve arose as the net effect of restatement of assets and liabilities previously denominated in

Zimbabwe dollars on 1 February 2009. 19.2 Equity settled share based payments reserve As reported earlier, the Group has a share options scheme, where employees are given the option to buy the Company

shares at the end of the defined vesting period. The accrued value of employee services is credited to this equity settled share based payments reserve until such time the options are exercised.

19.3 Foreign currency translation reserve On consolidation, exchange differences arising from the translation of transactions and balances of foreign operations which

are different to the Group’s presentation currency are taken to the foreign currency translation reserve. 19.4 Revaluation reserve from associate The revaluation reserve relates to revaluations in Dawn Properties Limited. 19.5 Movements in other reserves

Non-distributable

reserve US$

Equity settledshare based

paymentsreserve

US$

Foreign currencytranslation

reserve US$

Revaluationreserve from

associate US$

Total US$

At 1 October 2011 (Restated) 6 086 531 - (1 616 568) 406 808 4 876 771 Currency translationdifferences from subsidiary - - 669 986 - 669 986 Revaluation of property, plantand equipment of associatenet of tax - - - 24 063 24 063

At 30 September 2012 (restated) 6 086 531 ( 946 582) 430 871 5 570 820 Currency translationdifferences from subsidiary - - ( 241 408) - (241 408)Recycled to income statement - - - (181 165) (181 165)Value of employee services - 20 171 - - 20 171

At 30 September 2013 6 086 531 20 171 (1 187 990) 249 706 5 168 418



20 TRADE AND OTHER PAYABLES

2013 $US

2012$US

Trade payables 2 226 342 1 291 545 Amounts due to related parties (note 30) 397 372 290 743 Statutory liabilities 6 078 251 2 304 408 Accruals 3 007 781 3 039 360 Guests deposits 1 445 190 1 547 619 Rent liability for The Lakes Hotel 706 979 859 240 Other payables 1 981 269 1 385 980

15 843 184 10 718 895 Less non-current:Other payables - statutory liabilities on a payment plan 1 758 132 -

Current 14 085 052 10 718 895

Statutory liabilities relate to pay as you earn (PAYE), pension obligations, value added tax (VAT) and tourism levy.

Statutory liabilities under non-current liabilities are payable in 24-36 months.

21 PROVISIONS

Balance at 30 September

2012 US$

Current provision

US$

Utilised/reversed

provision US$


2013 US$

Leave pay 556 978 192 484 - 749 462 Liquidated damages 450 000 - (450 000) - Legal costs 411 095 - (46 628) 364 467

1 418 073 192 484 ( 496 628) 1 113 929

(a) Leave pay This amount is the Group’s liability to pay employees for their annual leave days. Current provision is included in profit or loss

under ‘administrative expenses’. (b) Liquidated damages The amount related to a liability of the Group which arose from the cancellation of the Holiday Inn and Express by Holiday

Inn franchise for two hotels in Zimbabwe in 2011. The Group has been in constant negotiations with Intercontinental Hotel Group (IHG) to have the liability reversed. Based on the progress of the negotiations, it is the opinion of the Directors that this liability is no longer payable and has been reported as a contingent under note 32 (ii).

(c) Legal costs The amounts represent legal costs for claims brought against the Group. The provisions were recognised in profit or loss

within ‘administrative expenses’. The balance at 30 September 2013 is expected to be utilized in 2014, as the cases are on-going. In the Directors’ opinion, after taking appropriate legal advice, the outcome of the legal claims will not give to any loss beyond the legal costs provided at 30 September 2013.



22 BORROWINGS

2013 $US

2012$US

Non-current Foreign bank loans 4 207 553 6 443 381 Local bank loans 3 885 514 -

Total non-current 8 093 067 6 443 381

CurrentBank overdrafts 2 068 288 2 395 757 Foreign bank loans 4 148 987 2 500 000 Local bank loans 8 010 631 8 754 125

Total current 14 227 906 13 649 882

Total borrowings 22 320 973 20 093 263

Current local bank loans mature in 2014 and bear an average interest cost of 16.89% annually. The US$4 148 987 foreign bank loans classified under current relates to US$2 500 000 current portion of the Afreximbank loan and US$1 648 987 part drawdown from a US$2 350 000 bridging loan from Ecobank Ghana.

Bank overdrafts of US$2 068 288 (2012: US$2 395 757) are part of the Group’s facilities and charged interest on prevaling on

market rates. All bank overdrafts are unsecured. The Ecobank Ghana loan bears interest at 11%, and is payable from proceeds of a replacement long-term facility from

Afreximbank being negotiated between African Sun Limited and the two banks. In the event that the Afreximbank loan is delayed, Ecobank Ghana has guaranteed extension of the loan for an additional 48 months. The loan is secured by a bank guarantee from Ecobank Zimbabwe.

The Afreximbank bank loan has the following terms: US$6 707 553 from Afreximbank bears interest at LIBOR plus 7%. The loan is for 5 years with an option to extend for an

additional 2 years. The loan is secured by bank guarantees amounting to US$7 200 000, a cash deposit of US$552 668 and an African Sun Limited guarantee.

During the year, the Group repaid US$2 494 524 towards its long-term loan from Afreximbank. Local long-term loans have the following terms: US$1 990 000 from FBC Bank bears interest at 15% per annum. The loan is unsecured and is payable on 31 August 2016. US$1 895 541 from ZB Bank bears interest at 6.7% per annum. The loan is secured by fixed property and is payable on 31

December 2015. The exposure of the Group’s borrowings to interest rate changes and the contractual repricing dates at the end of the

reporting period are as follows:

2013 $US

2012$US

6 months or less 11 328 919 12 399 882 6-12 months 2 898 987 1 250 000 1-5 years 8 093 067 6 443 381

22 320 973 20 093 263



22 BORROWINGS (CONTINUED) The fair value of the Afreximbank non-current loan is US$4 207 553 (2012: US$6 443 381), based on cash flows discounted

using a rate based on the borrowing rate of 7.28%. The carrying amount of the Ecobank loan and all other current borrowings approximate their fair value as the impact of discounting is not significant.

The Group’s bank loans are denominated in the following currencies:

2013 US$

2012US$

United States of America Dollars 22 320 973 20 093 263

The Group has the following undrawn borrowing facilities:Floating rate- Expiring within one year 1 000 000 2 585 000 Fixed rate- Expiring after one year 701 013 -

1 701 013 2 585 000

The facilities expiring within one year are provided by Zimbabwean financial institutions and are subject to review at various dates during the next financial year.

Total current bank borrowings include US$7 600 000 secured liabilities (2012: US$7 800 000). The loans are secured by; -cession of debtors amounting to US$1 176 117 -deed of pledge of funds in foreign currency accounts -general covering bond over movable assets financed by specific facilities -unlimited guarantee by African Sun Zimbabwe (Private) Limited -294 705 134 Dawn Properties Limited linked units

23 INCOME TAXES

23.1 Income tax expense

2013 US$

2012Restated

US$

Current income tax:Income tax on current year profits 116 112 - Withholding tax - 360 101

116 112 360 101 Deferred income tax:Originating and reversal of temporary differences 523 417 319 473

Income tax expense 639 529 679 574

The tax on the Group's loss before tax differs from the theoretical amount that would arise using the weighted average tax rate applicable to profits of the consolidated entities as follows:

(Loss) / profit before income tax (5 928 925) 1 689 546

Tax calculated at domestic tax rates applicable to profits in the respective countries (1 631 887) 561 051

Tax effects of:-Associate results reported net of tax (85 241) 62 527 -Income not subject to tax 836 (40 180)-Expenses not deductible for tax purposes 2 355 821 96 176

Income tax expense 639 529 679 574



23 INCOME TAXES (CONTINUED) The weighted average applicable tax rate was 27.88% (2012: 25.75%). The increase has been brought about by increase in

taxable profits in Nigeria.

The applicable tax rates in the different counties for the year were; Zimbabwe 25.75% (2012: 25.75%) South Africa 28% (2012: 28%) Ghana 25% (2012: 25%) Nigeria 30% (2012: 30%)

23.2 Deferred income taxes The analysis of deferred income tax assets and deferred income tax liabilities is as follows:

2013 US$

2012Restated

US$

Deferred income tax assets: -Deferred income tax assets to be recovered after more than 12 months 289 766 167 830 -Deferred income tax assets to be recovered within 12 months 555 450 645 270

845 216 813 100

Deferred income tax liabilities:-Deferred income tax liabilities to be recovered after more than 12 months 4 931 395 3 004 923 -Deferred income tax liabilities to be recovered within 12 months 517 828 1 888 767

5 449 223 4 893 690

Net deferred income tax liabilities 4 604 007 4 080 590

The gross movement on the deferred income tax account is as follows:

At 1 October 4 080 590 3 761 117 Charge to non-distributable reserves - - Income statement charge 523 417 319 473

At 30 September 4 604 007 4 080 590

The movement in deferred income tax assets and liabilities during the year, without taking into consideration the offsetting of balances within the same tax jurisdiction, is as follows:

Deferred income tax liabilities Accelerated

taxdepreciation

US$

Fair valuegainsUS$

OtherUS$

Total US$

At 1 October 2011 (Restated) 5 630 664 162 (528 810) 5 102 016 Credited to the income statement (34 567) - - (34 567)Credited to other comprehensive income (912 832) (162) 739 235 (173 759)

At 30 September 2012 (Restated) 4 683 265 - 210 425 4 893 690 Charged to income statement 618 754 - (63 221) 555 533

At 30 September 2013 5 302 019 - 147 204 5 449 223



23 INCOME TAXES (CONTINUED)

Deferred income tax assets Provisions

US$Tax losses

US$Other

US$ Total US$

At 1 October 2011 (Restated) (1 030 571) (64 194) (243 388) (1 338 153)Charged / (credited) to the income statement 890 493 (608 828) 243 388 525 053

At 30 September 2012 (Restated) (140 078) (673 022) - (813 100)Charged / (credited) to the income statement 84 601 (116 717) - (32 116)

At 30 September 2013 (55 477) (789 739) - (845 216)

Deferred income tax assets are recognised for tax loss carry-forwards to the extent that the realisation of the related tax benefit through future taxable profits is probable. Based on forecasts, Directors are of the opinion that the taxable profits will offset the current deferred tax asset.

The Group recognised deferred income tax assets for all losses incurred in 2013 and 2012. Tax losses amounting to US$1 790 136 and US$1 276 815 expire in 2017 and 2018 respectively.

24 EMPLOYEE PENSION COSTS The Group and all employees contribute to one or more of the following independently administered defined contribution pension funds: (a) African Sun Limited Pension Fund This fund is a fully funded, uninsured, consolidated defined contribution scheme. All employees, except those who are

members of the Catering Industry and Pension Fund are members of this fund. (b) Catering Industry Pension Fund This is a defined contribution scheme which covers employees in specified occupations of the catering industry. The majority

of employees of African Sun Limited are members of this fund. (c) African Sun SA (Proprietary) Limited The subsidiary company has a defined contribution provident fund, of which full time employees of the company are

members. (d) National Social Security Authority Scheme The Group and all its employees based in Zimbabwe contribute to the National Social Security Authority Scheme, promulgated

under the National Social Security Act 1989. The Group’s obligations under this scheme are limited to specific contributions legislated from time to time.

2013 US$

2012US$

Group contributions to the plans during the year charged to the incomestatement amounted to;African Sun Limited Pension Fund 681 097 728 848 African Sun SA (Proprietary) Limited 15 774 49 940 Catering Industry Pension Fund 536 217 578 083 National Social Security Authority Scheme 405 081 338 829

1 638 169 1 695 700



25 OTHER INCOME AND EXPENSES

2013US$

2012US$

Other incomeFair value adjustment on biological assets (note 10) - 39 741 Profit on disposal of property and equipment (note 29) - 41 256 Exit fees on termination of the Holiday Inn Accra Airport Hotel managementcontract - 1 636 943

- 1 717 940

Other expensesImpairment of property and equipment (note 9) - 70 959 Impairment of available-for-sale financial assets - 10 000 Loss on disposal of property and equipment 5 595 - Fair value adjustment on biological assets (note 10) 54 027 - Impairment of other receivables 419 915 820 706

479 537 901 665

Termination of the Holiday Inn Accra Airport management contract The management contract was terminated effective 1 January 2012. Fair value adjustment on assets classified to non-current assets held for sale The adjustment relates to marking down of the 12% shareholding in Dawn Properties Limited that was set aside for disposal

as at 30 September 2013 (see note 11). Impairment of investment in associate This impairment arose from further assessment of the investment in Dawn Properties Limited following classification of the

12% shareholding to non-current assets held for sale (see note 11). Impairment of other receivables Impairment of other receivables relate to discounting of receivables from staff and related parties.



26 EXPENSES BY NATURE

2013US$

2012Restated

US$

Inventory recognised in cost of sales 6 253 646 6 356 095 Employee benefit expenses - payroll cost in cost of sales 6 365 818 6 735 645 - outside laundry in cost of sales 669 958 709 110 - other cost of sales 2 012 609 2 036 202 - pension costs 1 303 038 1 695 700 - payroll cost in administration expenses 9 221 502 9 237 207 - retrenchment costs 162 728 19 804 Directors remuneration - fees 69 502 95 961 - salaries 360 000 360 000 Impairment charges on trade receivables 246 483 363 053 Depreciation, usage and amortisation 2 215 179 2 317 037 Sales and marketing 3 718 578 2 905 597 Operating lease costs 6 529 657 6 969 334 Audit fees -current year 46 111 40 000 -prior year 251 454 264 354 Repairs and maintenance 2 258 522 2 240 224 Electricity and water 2 963 989 3 290 333 Franchise fees 410 340 430 857 Insurance 566 012 429 793 Licenses 407 415 382 605 Vehicle running expenses 580 109 566 579 Security 1 283 700 1 048 712 Other expenses 3 640 234 1 960 858

Total cost of sales and operating expenses 51 536 584 50 455 060

27 FINANCE COSTS AND INCOME

2013US$

2012US$

Interest income on loan to Holiday Inn Accra Airport - 3 812 Interest income on bank deposits 5 723 119 593

5 723 123 405

Interest costs on bank borrowings (3 918 729) (3 443 332)Interest cost on statutory liabilities (208 745) - Borrowing costs capitalised 1 048 964 464 330

(3 078 510) (2 979 002)

Net financing costs for the year (3 072 787) (2 855 597)

For the purposes of statement of cash flows, net interest paid comprise thefollowing;Interest on bank borrowings charged to the statement of comprehensiveincome (3 078 510) (2 979 002)Interest on borrowings paid in prior year - 63 798 Accrued interest on bank loans prior year (167 670) (85 878)Accrued interest on bank loans current year 124 325 167 670 Accrued interest on statutory liabilities 208 745 - Borrowing costs capitalised (1 048 964) (464 330)Accrued borrowing costs capitalised 213 856 44 842

Total interest paid (3 748 218) (3 252 900)Interest income on bank deposits 5 723 123 405

Net Interest paid (3 742 495) (3 129 495)



27 FINANCE COSTS AND INCOME (CONTINUED)

Borrowing costs capitalised during the financial year ended 30 September 2013 were US$1 048 964 (2012: US$464 330). Included in this amount is an accrued portion of US$213 857 (2012: US$44 842).

28 EARNINGS PER SHARE 28.1 Basic Basic earnings per share is calculated by dividing the profit or loss attributable to equity holders of the Company by the

weighted average number of ordinary shares in issue during the year excluding ordinary shares purchased by the Company and held as treasury shares (note 17.2).

20132012

Restated

(Loss) / profit for the year: US$ (6 568 454) 1 009 972

Weighted average number of ordinary shares 823 940 874 823 940 874

Basic (loss) / earnings per share for the year: cents (0.80) 0.12

28.2 Headline Headline earnings is a measure of earnings excluding “separately identifiable re-measurements” net of tax (both current and

deferred) and related non-controlling interest, other than re-measurements specifically included in headline earnings. There were no adjustments in 2013 (2012: nil) and profit /(loss) for the year was used to compute headline earnings.

20132012

Restated

(Loss) / profit for the year: US$ (6 568 454) 1 009 972 Adjusted for;Fair value adjustment on assets classified to non-current assets held for sale(note 11): US$ 3 210 684 - Impairment of investment in associate (note11): US$ 4 417 211 - Fair value adjustment on biological asset: US$ 54 027 (39 741)Recycled from other comprehensive income: US$ (181 165) -

Headline earnings 932 303 970 231

Weighted average number of ordinary shares 823 940 874 823 940 874

Headline earnings per share: cents 0.11 0.12

28.3 Diluted Diluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume

conversion of all dilutive potential ordinary shares. At the end of 30 September 2013, there were 32 926 655 potential dilutive share options (2012: nil) which were granted on the 4th of July 2013. For the share options, a calculation is done to determine the number of shares that could have been acquired at fair value (determined as the average annual market share price of the company’s shares) based on the monetary value of the subscription rights attached to outstanding share options. The number of shares calculated as above is compared with the number of shares that would have been issued assuming the exercise of the share options.



28 EARNINGS PER SHARE (CONTINUED)

20132012

Restated

Weighted average number of ordinary shares in issue 823 940 874 823 940 874 Adjusted for;Share options 24 303 007 -

Weighted average number of ordinary shares for diluted earnings 848 243 881 823 940 874

Diluted (loss) / earnings per share for the year: cents (0.77) 0.12

Diluted headline earnings per share for the year: cents 0.11 0.12

29 CASH GENERATED FROM OPERATIONS

2013US$

2012Restated

US$

(Loss) / profit before income tax (5 928 925) 1 689 546 Adjustments for:-depreciation and hotel equipment usage (note 9) 2 215 179 2 317 037 -(profit) / loss on disposal of property and equipment 5 595 (41 256)-amounts recycled from other comprehensive income (181 165) - -impairment of investment in associate (note 11) 4 417 211 --impairment of property and equipment (note 9) - 70 959-increase in impairment of trade receivables - 201 912 -trade receivables written off - 161 141 -impairment of other receivables - 820 706 -fair value (gains) / loss on biological assets (note 10) 54 027 (39 741)-fair value adjustment on assets classified to non-current assets held for sale(note 11) 3 210 684 -Value of employee service 20 171 - -finance costs-net (note 27) 3 072 787 2 855 597 -share of (income) / loss from associates (note 11) (331 034) 242 823 Changes in working capital-Increase in inventories (including those classified to non-current assets heldfor sale) (180 361) (147 937)-Decrease / (increase) in trade and other receivables 170 673 (238 374)-Increase / (decrease) in trade and other payables (including those classifiedto long-term) 4 767 598 (2 820 754)

Cash generated from operations 11 312 440 5 071 659

In the statement of cash flows, proceeds from sale of property and equipmentcomprise:

Net book amount 117 027 2 149 971 (Loss) / profit on disposal of property and equipment (5 595) 41 256 Proceeds accounted for under receivables (48 611) -

Cash proceeds from disposal of property and equipment 62 821 2 191 227



30 RELATED PARTY TRANSACTIONS (a) Major shareholders The major shareholders of the Group are Lengrah Investments (Private) Limited, Old Mutual Life Assurance Company

Zimbabwe (Private) Limited and Old Mutual Zimbabwe Limited who combined own 54.83% of African Sun Limited shares. The remaining 45.85% of the issued shares are widely held.

The Changes from 2012 arose as a result of Lengrah acquiring the shares from the vehicles previously controlled by the

Group Chief Executive, Dr. Shingi Munyeza. (b) Group entities

Ownership interest Country of incorporation 2013 2012

SubsidiariesAfrican Sun Zimbabwe (Private) Limited Zimbabwe 100% 100%African Sun Limited PCC (Mauritius) Mauritius 100% 100%

AssociateDawn Properties Limited Zimbabwe 28.54% 28.54%

Of the 28.54% held at 30 September 2013, 12% was classified as non-current assets held for sale (note 11).

Joint venturesThe Victoria Falls Hotel Zimbabwe 50% 50%West African Sun Hotels (Private) Limited Nigeria 50% 50%

The following transactions were carried out with related parties:

(a) Lease rentals2013 2012US$ US$

Rent paid 2 123 310 2 197 425

African Sun Limited owns 28.54% (2012:28.54%) of the shares in Dawn Properties Limited. As at 30 September 2013, 12% shareholding in Dawn Properties Limited was classified as held for sale, see note 11 and 12.

Lease rentals relate to the leases of 8 hotels rented from Dawn Properties Limited. All leases with Dawn Properties Limited

are at normal commercial terms and conditions. (b) Key management compensation Key management includes directors (executive and non-executive), members of the Executive Committee, the Company

Secretary and Head of Internal Audit. The compensation paid or payable to key management for employee services is as shown below;

2013US$

2012US$

Salaries and other short term employee benefits 974 302 1 000 761 Post employment benefits 128 355 116 652 Share based payments 12 867 -

1 115 524 1 117 413 On 4 July 2013, the company granted 21 002 877 share options to key management in lieu of services. The options vest in 3

years from date of granting. US$12 867 was charged to the income statement during the year relating to the share options granted (2012: nil).



30 RELATED PARTY TRANSACTIONS (CONTINUED)

(c) Year end balances arising from transactions with related parties2013 2012US$ US$

Payables (rentals) 397 372 290 743 The payables to Dawn Properties Limited arose from lease rentals and are due one month after billing. The payables bear no

interest.

(d) Loans to executives The receivables from executives arose from housing loans advanced. Housing loans have a grace period of 5 years, after

which, capital and interest accrued are paid over 5 years. Housing loans bear no interest. The balance on loans to executives is analysed below:

2013 2012US$ US$

At 1 October 140 054 180 000Housing loans advanced during the year 137 813 89 662 Unwinding of interest (68 778) (129 608)

At 30 September 209 089 140 054

Receivables from related parties are discounted using the Group’s average cost of borrowing of 13.83%.

31 COMMITMENTS 31.1 Operating lease commitments The Group leases all its hotels in Zimbabwe and one in Ghana under non-cancellable operating lease agreements. The lease

terms are between 5 and 15 years, and all the lease agreements are renewable at the end of the lease period at market rates. The undiscounted future minimum lease payments under the operating leases are as follows:

2013US$

2012US$

Not later than 1 year 7 981 357 6 313 213 - Fixed 3 300 000 1 398 000 - Variable based on forecasts 4 681 357 4 915 213

Later than 1 year and not later than 5 years 31 925 428 25 252 852 - Fixed 13 200 000 5 592 000 - Variable based on forecasts 18 725 428 19 660 852

Later than 5 years 51 426 785 17 045 675 - Fixed 28 020 000 3 774 600 - Variable based on forecasts 23 406 785 13 271 075

Total lease commitments 91 333 570 48 611 740

The difference in estimated operating lease commitments between 2013 and 2012 is due to renewal of a number of leases during the 2013 financial year and a new lease signed in Ghana.

Variable lease commitments are based on estimates described in note 4.



32 CONTINGENCIES (i) Legal case against dismissed employees The Victoria Falls Hotel Partnership, in which the Group has 50% joint control, is a defendant in a legal case involving

69 dismissed employees. The employees were dismissed following their involvement in an illegal industrial action. They have since challenged the dismissal through the courts. The Directors believe, based on legal advice, that the action can be successfully defended. The Group’s share of the estimated accrued benefits to the dismissed employees as at 30 September 2013 is US$548 611 (2012: US$245 611).

(ii) InterContinental Hotel Group (IHG) liquidated damages In 2012 the Group discontinued the use of IHG brands on two hotels. However, the discontinuance was done giving short

notice to IHG and this gave rise to liquidated damages amounting to US$598 791 being claimed by IHG. Part of the amount was included in 2012 provisions. However, following discussions with IHG, the Directors are of the opinion that the matter will be resolved without paying the damages. The prior provision of US$450 000 was therefore reversed during the year.

It is not anticipated that any material liabilities will arise from the contingent liabilities, other than those provided for (see note

21).

33 EVENTS AFTER REPORTING DATE (a) Disposal of the 12% shareholding in Dawn Properties Limited The proceeds amounting to US$4 224 720 from the disposal of the 12% shareholding in Dawn Properties Limited were

received on the 11th and 18th of October. The proceeds were used to settle US$4 138 078 worth of borrowings and the difference was used to settle transaction costs.

(b) Final drawdown on the Ecobank Ghana facility The Company through its subsidiary African Sun Ghana (Private) Limited made a final drawdown of US$701 013 on 7 October

2013 from the Ecobank Ghana loan facility. (c) Opening of a new hotel in Accra, Ghana The Group opened its first leased hotel in Accra, Ghana effective 10 December 2013. The Hotel is operated under the Amber

brand, one of the Group’s internally generated brands. The hotel is called African Sun Amber Hotel Accra Airport. (d) Exiting of the Obudu Mountain Resort Management Contract The Group has exited the Obudu Mountain Resort management contract following its expiry on 13 November 2013. (e) Change in shareholding structure As at 3 December 2013, Lengrah Investments (Private) Limited (Lengrah) is now the single largest shareholder of African Sun

Limited owning 45%. A mandatory offer to the minorities as required by the Zimbabwe Stock Exchange will be published once all regulatory approvals are obtained.

31 COMMITMENTS (CONTINUED)

31.2 Capital expenditure2013US$

2012US$

Authorised by Directors and contracted for 630 042 1 504 563 Authorised by Directors but not contracted for 4 872 268 6 532 363

5 502 310 8 036 926

Capital expenditure relates to acquisition of property and equipment. The greater part of capital expenditure will be financed from free cash flows following completion of the greater aspects of our refurbishment.


1RWHV�WR�WKH�FRPSDQ\�VWDWHPHQW�RI�ÀQDQFLDO�SRVLWLRQAs at 30 September 2013

34 FINANCIAL RISK MANAGEMENT

34.1 Financial risk factors The Company’s activities expose it to a variety of financial risks; market risk (including currency risk, fair value interest

rate risk, cash flow interest rate risk and price risk), credit risk and liquidity risk. The Company’s overall risk management programme focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Company’s financial performance.

Risk management is carried out by a central treasury department (Group Treasury) under policies approved by the Board of

Directors. Group treasury identifies, evaluates and hedges financial risks in close co- operation with the Group’s operating units. The Board provides principles for overall risk management, as well as policies covering specific areas, such as foreign exchange risk, interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess liquidity.

(i) Market risk (a) Foreign exchange risk The Company is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the

South African Rand. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations.

Management has set up a policy to require Group Treasury to manage the Group’s foreign exchange risk against the various

functional currencies. To manage the Company’s foreign exchange risk arising from future commercial transactions and recognised assets and liabilities, Group Treasury use forward contracts, and the asset and liability matching hedge methods where available. Foreign exchange risk arises when future commercial transactions or recognised assets or liabilities are denominated in a currency that is not the entity’s functional currency.

As at 30 September 2013, the Company was exposed to exchange risk on South African Rand bank balances of US$20 033

(2012: US$50 857) At 30 September 2013, if the United States of America Dollar had weakened / strengthened by 10% against the South

African Rand, with all other variables held constant, loss after tax for the year would have been US$2 003 (2012: US$5 086) higher / lower, mainly as a result of foreign exchange gains / losses on translation of SouthAfrican Rand denominated bank balances.

There were no hedges in place as at 30 September 2013, (2012: nil). (b) Price risk As at 30 September 2013, the company did not have any marketable securities and price sensitive commodities. At 30 September 2012, equity securities held were transferred to treasury shares. The movement in the balance of equity

securities in 2012 was as follows;

2013 2012US$ US$

At 1 October - 113 188 Transferred to treasury shares - (103 188)Written off during the year - (10 000)

At 30 September - -



34 FINANCIAL RISK MANAGEMENT (CONTINUED) (c) Cash flow and fair value interest rate risk The Company has no interest bearing assets. The Company’s interest rate risk arises from long-term and short-term

borrowings. Borrowings issued at variable rates expose the Company to cash flow interest rate risk which is partially offset by cash held at variable rates. Borrowings issued at fixed rates expose the Company to fair value interest rate risk.

The Company analyses its interest rate exposure on a dynamic basis. Various scenarios are simulated taking into consideration

refinancing, renewal of existing positions and alternative financing. Based on these scenarios, the Company calculates the impact on profit and loss of a defined interest rate shift. For each simulation, the same interest rate shift is used for all currencies. The scenarios are run only for liabilities that represent the major interest-bearing positions.

Based on the simulations performed, the impact on post tax loss of a 1% shift in interest rates, with all other variables held

constant would be a maximum increase / decrease of US$80 683 (2012: US$196 982). The simulations are done monthly given the nature of the current loan facilities to verify that the maximum loss potential is within the limit set by management.

Currently, the Company does not undertake any hedging on its short-term loans due the nature and terms of the loan

facilities. On long-term loans, the Company assesses risks and hedges as the Group Treasury deems necessary. At 30 September 2013, there were no hedges in place.

(ii) Credit risk Credit risk is managed on a Group basis. Credit risk for the Company arises from cash and cash equivalents, and deposits

with banks and financial institutions. For banks and financial institutions, only well established and reliable institutions are used.

At 30 September 2013, the credit risk of the Company is limited to cash and cash equivalents amounting to US$989 319

(2012: US$2 196 375). The fair value of cash and cash equivalents at 30 September 2013 approximates the carrying amount. There is no concentrations of credit risk with respect to cash and cash equivalents as the Company holds cash accounts with

high quality financial institutions with sound financial and capital cover. The financial institutions holding the cash and cash equivalents of the Company have the following external credit ratings:

2013 2012US$ US$

AA- 564 529 841 573 A+ 271 315 485 705 BBB+ 816 - BBB 81 302 23 928 BB+ 51 586 - BB - 845 169 B+ 19 771 -

989 319 2 196 375

The ratings have been obtained from the latest published financial information of the financial institutions. (iii) Liquidity risk The Group Treasury monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet

its cash flow needs, while maintaining sufficient headroom on its current undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants (where applicable) on any of its borrowing facilities.



34 FINANCIAL RISK MANAGEMENT (CONTINUED) Surplus cash held by the Company in excess of the balance required for working capital management is transferred to

the Group Treasury. Group Treasury invests surplus cash in interest bearing current accounts, time deposits and money markets deposits, choosing instruments with appropriate maturities or sufficient liquidity to provide sufficient head-room as determined by the above-mentioned forecasts.

The table below analyses the Company’s liquidity gap into relevant maturity groupings based on the remaining period at the

reporting date to the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted cash flows.

Less than 1yearUS$

Between 2 and

5 yearsUS$


LiabilitiesBorrowings 8 068 288 - Other payables 5 479 361 1 758 132


Assets held to manage liquidity riskOther receivables 1 072 583 526 374 Cash and cash equivalents (excluding bank overdrafts) 989 319 - Non-current assets held for sale 4 224 720 -

- Total assets held for managing liquidity risk 6 286 622 526 374

Liquidity gap (7 261 027) (1 231 758)


LiabilitiesBorrowings 13 254 793 6 443 381 Other payables 2 023 141 -


Assets held to manage liquidity riskOther receivables 5 707 082 234 610 Cash and cash equivalents (excluding bank overdrafts) 2 196 375 -


Liquidity gap (7 374 477) (6 208 771)

The Company’s strategies to manage the liquidity gap are discussed under note 3.1 (iii). The Company’s liquidity risk is also managed through undrawn facilities of US$1 001 013 (2012: US$1 325 000)




34.2 Capital management The Company’s objectives when managing capital are to safeguard the Company’s ability to continue as a going concern

and to maintain an optimal capital structure to reduce the cost of capital. In order to maintain or adjust the capital structure, the Company may adjust the amount of dividends paid to shareholders,

return capital to shareholders, issue new shares or sell assets to reduce debt. Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated

as net debt divided by total capital. Net debt is calculated as total borrowings (including “current and non-current borrowings” as shown in the statement of financial position) less cash and cash equivalents. Total capital is calculated as “equity” as shown in the statement of financial position plus net debt.

During the financial year ended 30 September 2013, the Company’s strategy was to maintain gearing ratio within 30% to

40%. The gearing ratio at 30 September 2013 and 2012 were as follows:

2013 2012US$ US$

Total borrowings (note 43) 8 068 288 19 698 174 Less cash and cash equivalents (note 40) (989 319) (2 196 375)

Net debt 7 078 969 17 501 799 Total equity 24 325 755 29 614 286

Total capital 31 404 724 47 116 085

Gearing ratio 23% 37%

The decrease in gearing ratio during the financial year resulted primarily from reduced third party borrowings which were transferred to a subsidiary.



35 PROPERTY AND EQUIPMENT


US$Equipment

US$

Motorvehicles

US$TotalUS$

Year ended 30 September 2012 Opening net book amount 331 717 17 432 330 265 679 414 Additions 5 517 794 7 669 33 750 5 559 213 Disposals - - (45 000) (45 000)Accumulated depreciation on disposals - - 16 294 16 294 Inter-segment transfers (1 390 974) - - (1 390 974)Depreciation charge - (4 040) (53 569) (57 609)

Closing net book amount 4 458 537 21 061 281 740 4 761 338

At 30 September 2012Cost / valuation 4 458 537 26 275 556 951 5 041 763 Accumulated depreciation - (5 214) (275 211) (280 425)

Net book amount 4 458 537 21 061 281 740 4 761 338

Year ended 30 September 2013Opening net book amount 4 458 537 21 061 281 740 4 761 338 Additions 3 725 926 45 850 8 500 3 780 275 Inter-segment transfers (6 417 852) - - (6 417 852)Depreciation charge - (6 861) (58 011) (64 872)

Closing net book amount 1 766 611 60 050 232 229 2 058 889

At 30 September 2013Cost / valuation 1 766 611 72 125 565 451 2 404 186 Accumulated depreciation - (12 075) (333 222) (345 297)

Net book amount 1 766 611 60 050 232 229 2 058 889

An independent valuation of the Company’s property and equipment was last performed by valuers to determine the fair values as at 31 August 2011. The valuation which conforms to International Valuation Standards, was determined by reference to recent market transactions on arm’s length terms. Management believes that, the valuation is still a reliable source of reference given that the market values of the assets have not changed significantly.

Capital work in progress relates to refurbishment of equipment and hotel furniture, fittings and equipment for the Zimbabwe

hotels that was undertaken during the financial year. This is not depreciated until it is brought to use. None of the assets reported above are under a finance lease where the company is a lessee. During the year, the Company has capitalised borrowing costs amounting to US$464 330 (2012: US$464 330) on qualifying

assets. Borrowing costs were capitalised at the effective interest rate on the Afreximbank loan of 8.83%

If property and equipment were stated on the cost basis, the carrying amount would be as follows:


US$Equipment

US$

Motorvehicles

US$TotalUS$

At 30 September 2013 1 766 611 60 050 232 229 2 058 890

At 30 September 2012 4 458 537 21 061 281 740 4 761 338



36 INVESTMENTS IN SUBSIDIARIES

2013 2012US$ US$

African Sun Limited PCC (Mauritius) 100%At acquisition 682 000 682 000 Shareholders' loan 6 194 857 6 194 857

Total investment in African Sun Limited PCC (Mauritius) 6 876 857 6 876 857

African Sun Zimbabwe (Private) Limited 100%At acquisition 4 630 991 4 630 991 Shareholders' loan 13 193 883 13 193 883

Total investment in African Sun Zimbabwe (Private) Limited 17 824 874 17 824 874

Total investment in subsidiaries 24 701 731 24 701 731

Loans to the subsidiaries bear no interest and do not have fixed repayment dates. The investments in subsidiaries were not impaired during the year (2012: nil).

37 INVESTMENT IN ASSOCIATE

2013 2012US$ US$

At 1 October 13 696 029 9 985 587 Shares acquired during the year - 3 710 442 Fair value adjustment on investment classified to non-current assets held for sale (1 531 769) -Impairment triggered by the disposal (1 964 475) - Classified to non-current assets held for sale (4 224 720) -

At 30 September 5 975 065 13 696 029

At 30 September, African Sun Limited owned 28.54% (2012: 28.54%) of the linked units in Dawn Properties Limited. Of the total shareholding, 16.54% was accounted for as investment in associate and 12% was classified as non-current assets held for sale. The sale of the 12% was completed subsequent to year end on 2 October 2012. Dawn Properties Limited is incorporated in Zimbabwe, and is listed on the Zimbabwe Stock Exchange.

The disposal triggered an impairment assessment on the remaining 16.54% resulting in an impairment of US$1 964 475

charged to the statement of comprehensive income. The amounts of fair value adjustment and impairment in the Group (see note11) differ from that in the Company as the

investment is carried at cost in the Company’s books.



38 FINANCIAL INSTRUMENTS

Financial instruments by category:

2013 2012US$ US$

Assets as per statement of financial position: Loans and receivables

Other receivables 1 598 957 5 941 692 Cash and cash equivalents 989 319 2 196 375

Total 2 588 276 8 138 067

Liabilities as per statement of financial position:Non-derivative financial liabilities at amortised

costs

Bank borrowings 8 068 288 19 698 174 Other payables (excluding statutory liabilities) 2 696 073 1 014 734

Total 10 764 361 20 712 908

39 OTHER RECEIVABLES

2013 2012US$ US$

Non-current -receivables from related parties 209 089 140 054 -staff receivables 317 285 94 556

526 374 234 610

Current -receivables from related companies - 4 950 319 -staff receivables 174 944 176 126 -other 897 639 580 637

1 072 583 5 707 082

Total receivables 1 598 957 5 941 692

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

The fair values of the receivables are as follows:Receivables from related companies - 4 950 319 Receivables from related parties 209 089 140 054 Staff receivables 492 229 270 682 Other 897 639 580 637

1 598 957 5 941 692

The fair value of staff receivables and receivables from related parties is based on cash flows discounted using the company’s average borrowing rate of 13.83%. The loans relate to car loans which are payable over 60 months, and housing loans which are payable after 5 years, over 5 years. Interest on staff receivables is 6%.



40 CASH AND CASH EQUIVALENTS

2013 2012US$ US$

Cash at bank and in hand 989 319 2 196 375

The net exposure to foreign currency balances was:Bank balancesUnited States Dollars 969 286 2 145 894 South African Rand 20 033 50 481

989 319 2 196 375

The carrying amount of the cash and bank balances approximate its fair value. Cash and bank balances include a restricted balance of US$552 668 (2012: US$748 389) held in an offshore account by

Afreximbank as part of the security to the loan. This is 8% of the outstanding loan. The cash is available to the extent that the balance is equal to or more than 8% of the loan outstanding.

41 OTHER PAYABLES

2013 2012US$ US$

Accruals 221 848 211 019 Statutory liabilities 4 541 420 1 008 407 Amounts owed to Group companies 1 113 536 - Other payables 1 360 689 803 715

7 237 493 2 023 141 Less non-currentStatutory liabilities on a payment plan 1 758 132 -

Current 5 479 361 2 023 141

39 OTHER RECEIVABLES (CONTINUED)

The effective interest rates on non-current receivables were as follows:

2013 2012Receivables from related parties 12.28% 12.28%Staff receivables 7.61% 18.50%



43 BORROWINGS

2013 2012US$ US$

Non-currentGroup loans - 6 443 381

CurrentGroup loans - 5 929 125 Local bank loans 6 000 000 5 325 000 Bank overdrafts 2 068 288 2 000 668

Total current 8 068 288 13 254 793

Total borrowings 8 068 288 19 698 174

Current local bank loans mature in 2014 and bear an average interest of 16.89% per annum. Bank overdrafts of US$2 068 288 (2012: US$2 000 668) are part of the Company’s facilities and charged interest on prevailing

market rates. All bank overdrafts are unsecured. In the prior year, Group loans were shown as foreign bank loans, being funds received by the holding Company on behalf of

its subsidiary African Sun Zimbabwe (Private) Limited. The borrowing relationship is between African Sun Zimbabwe (Private) Limited and third parties. The holding company manages the funds on behalf of the subsidiary. There is no effect on the Company statement of financial position.

The exposure of the Company’s borrowings to interest rate changes and the contractual repricing dates at the end of the

reporting period are as follows:

2013 2012US$ US$

6 months or less 8 068 288 12 004 793 6 to 12 months - 1 250 000 More than 12 months - 6 443 381

Total 8 068 288 19 698 174

42 PROVISIONS FOR OTHER LIABILITIES Provisions are recorded when the Company has a present legal or constructive obligation as a result of past events, for which

it is probable that an outflow of economic benefits will occur, and where a reliable estimate can be made of the amounts of the obligations. A reliable estimate is the amount the Company would rationally pay to settle the obligation at the reporting date.

The provisions balance is made up of the following:


2012 US$

Current

provision US$

Utilised

provision US$


2013 US$

Leave pay 35 780 179 664 - 215 444

This amount is the company’s liability to pay employees for their annual leave days.



43 BORROWINGS (CONTINUED)

The carrying amount of current borrowings approximate their fair values as the impact of discounting is not significant. The facilities expiring within one year are with Zimbabwean financial institutions and are subject to review at various dates

during the next financial year. Total current bank borrowings include US$4 000 000 secured liabilities (2012: US$7 800 000). The loans are secured by; -cession of debtors amounting to US$1 176 117 in African Sun Zimbabwe (Private) Limited -deed of pledge of funds in foreign currency accounts -unlimited guarantee by African Sun Zimbabwe (Private) Limited -294 705 134 Dawn Properties Limited linked units

44 DEFERRED INCOME TAXATION

Deferred income tax is calculated in full on temporary differences under the liability method using a principal tax rate of 25.75% (2012: 25.75%)

The analysis of deferred income tax assets and deferred income tax liabilities is as follows:

2013 2012US$ US$

Deferred income tax assets:-Deferred income tax assets to be recovered after more than 12 months 432 151 - -Deferred income tax assets to be recovered within 12 months 55 477 379 884

487 628 379 884

Deferred income tax liabilities:-Deferred income tax liabilities to be recovered after more than 12 months 224 593 52 588 -Deferred income tax liabilities to be recovered within 12 months 16 737 297 656

241 330 350 244

Net deferred income tax assets (246 298) (29 640)

The gross movement on the deferred income tax account is as follows:

At 1 October (29 640) (21 291)Credited to statement of comprehensive income (216 658) ( 8 349)

At 30 September (246 298) (29 640)

45 ACCOUNTING POLICIES

The accounting policies applied in the preparation of the Company Statement of Financial Position are consistent with those applied in the consolidated financial statements as per note 2.


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4 YEAR REVIEW

CAGR(%)

30 September 2013

30 September 2012

30 September 2011

30 September 2010

SHARE PERFORMANCE: CENTSPer shareBasic earningsBasic (loss) / earnings per share from continuing operations (83) (0.80) 0.12 (0.44) (0.13)Basic loss per share from discontinued operations - - - (0.81) (0.27)Basic (loss) / earnings per share for the year (26) (0.80) 0.12 (1.25) (0.40)

Diluted earningsDiluted (loss) / earnings per share from continuing operations (81) (0.77) 0.12 (0.44) (0.13)Diluted loss per share from discontinued operations - - - (0.81) (0.27)Diluted (loss) / earnings per share for the year (26) (0.77) 0.12 (1.25) (0.40)

Headline earningsHeadline earnings / (loss) per share 175 0.11 0.12 0.23 (0.27)Diluted headline earnings / (loss) per share 175 0.11 0.12 0.23 (0.27)

Net asset value (14) 1.93 2.78 2.61 3.01 Closing market price (9) 2.10 0.90 1.20 2.79

Share informationIn issue - 831 472 907 831 472 907 831 472 907 831 472 907 Market capitalisation (9) 17 302 758 7 415 468 9 977 675 23 281 241 ZSE industrial index 13 200 146 156 137

RATIOS AND RETURNSRevenue generationRevenue: US$ 12 56 275 679 54 426 751 48 796 506 39 942 218Room occupancy % - 48 50 51 45 RevPAR: US$ 10 48 45 40 36 ADR: US$ 8 100 91 80 79

Profitability and returnsEBITDA: US$ 75 6 954 274 6 288 728 2 733 646 1 295 272 EBITDA margin (%) - 12 12 6 3Pre-tax return on equity (%) - (37) 7 (22) (16)Income after taxation to total capital employed (%) - (11) 2 (7) (6)Pre-tax return on total assets (%) - (10) 3 (9) (8)

SolvencyGearing (%) - 53 40 36 16 *Interest cover (times) - 1.51 1.55 1.49 (1.50)Shareholders' equity to total assets (%) - 27 39 40 50 Total liabilities to total shareholders' funds (%) - 276 159 151 101

LiquidityCurrent assets to interest free liabilities and short term borrowings 0.65 0.56 0.69 0.90

ProductivityTurnover per employee: US$ 7 32 986 32 669 27 980 26 691

OtherNumber of employees (7) 1650 1666 1744 2 030 Number of shareholders (1) 9041 9013 9107 9 244

* Ratio has been calculated excluding material non-recurring costs like impairment of property and equipment, impairment of investment in associate,

impairment of available-for-sale financial assets, fair value adjustment on investment in associate and retrenchment costs.


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DEFINITIONS Taxed interest payable This is calculated by taxing interest payable at the standard rate of taxation. Interest cover timesThis is the ratio of income before tax and interest to interest expensed. Net assets These are equivalent to shareholders’ equity.

Revenue generation index (RGI)This a measure used to assess the rate at which a hotel generates revenue compared to its market. It is calculated by dividing the hotel’s RevPAR by the total market RevPAR.

Pre-tax return on equityThis is calculated by relating to closing total shareholders’ funds, operating income plus dividend income and equity accounted earnings. Pre-tax return on total assetsThis is calculated by relating to closing total assets, operating income plus dividend income and equity accounted earnings. Taxed operating return This is calculated by relating to closing total capital employed, income after taxation plus taxed interest payable. Basic earnings per shareThe calculations are based on the earnings attributable to ordinary shareholders. Account is taken of the number of shares in issue for the period during which they have participated in the income of the Group. Diluted earnings per shareDiluted earnings per share are calculated by dividing the profit / (loss) by the adjusted weighted average number of ordinary shares, assuming conversion of all dilutive potential ordinary shares. Headline earnings per shareThe calculations are based on the headline earnings attributable to ordinary shareholders. Account is taken of the number of shares in issue for the period during which they have participated in the income of the Group.

Diluted headline earnings per shareDiluted headline earnings per share are calculated by dividing the headline earnings / (loss) by the adjusted weighted average number of ordinary shares, assuming conversion of all dilutive potential ordinary shares.

Financial gearing ratioThis represents the ratio of interest-bearing debt, less cash to total shareholders’ equity.


6KDUHKROGHUV·�3URÀOHAs at 30 September 2013

Shareholders analysis as at 30 September 2013 by size

Range of Holdings Number of

shareholders % Issued shares %

1-5000 7,431 82.19 6,060,791 0.735001-10000 498 5.51 3,458,831 0.4210001-25000 518 5.74 7,980,174 0.9625001-50000 180 1.99 6,365,572 0.7650001-100001 132 1.46 9,105,867 1.10100001-200000 96 1.06 13,103,060 1.58200001-500000 76 0.84 23,987,881 2.88500001-1000000 31 0.34 23,288,438 2.80Above 1 000 000 79 0.87 738,122,293 88.77TOTAL 9,041 100.00 831,472,907 100.00

Shareholder analysis by type



Local Companies 704 7.79 290,503,560 34.93Insurance Companies 17 0.19 133,265,035 16.03Local Individuals 7,526 83.24 120,446,340 14.49Fund Managers 31 0.34 73,233,960 8.81Charitable and Trusts 180 1.99 64,715,740 7.78Pension Funds 75 0.83 43,903,642 5.28Local Nominee 134 1.48 37,918,140 4.56New Non Residents 206 2.28 37,643,508 4.53Investments 72 0.80 14,932,566 1.80Foreign Nominees 28 0.31 10,285,661 1.24Foreign Companies 9 0.10 4,192,396 0.50Deceased Estates 53 0.59 344,294 0.04Banks 4 0.04 85,480 0.01Foreign Individual Resident 1 0.01 2,346 0.00Government/Quasi-Government 1 0.01 239 0.00Total 9,041 100.00 831,472,907 100.00

Top Shareholders

Range of Holdings Shareholding

2013 % Shareholding

2012 %

Lengrah Investments (Private) Limited 287,613,748 35.00 - -Old Mutual Zimbabwe 184,213,472 22.16 189,769,028 22.82 Riustrix Investments (Private) Limited - - 146,311,650 17.60 Ecobank Asset Management (Private) Limited - - 78,659,897 9.46 Zimbabwe Allied Banking Group 41,131,913 4.95 41,131,913 4.95 Turner Roy 14,323,474 1.72 14,323,474 1.72 Coitition Investments (Private) Limited - - 20,924,172 2.52 Equivest Nominees (Private) Limited 14,206,617 1.71 13,322,999 1.60 Altfin Assurance Company Limited 13,663,366 1.64 21,086,671 2.54 Criben Investments - - 12,689,225 1.53 Chikata Trust 11,015,674 1.32 11,015,674 1.32 Workers’ Compensation Insurance Fund (NSSA WCIF) 10,586,064 1.27 - 0.00National Social Security Authority (NSSA NPS) 8,314,665 1.00 - 0.00Other 534,017,662 64.23 282,238,204 33.94 Total 831,472,907 100.00 831,472,907 100.00

Lengrah Investments (Private) Limited purchased the shares held by: Coitition (Private) Limited, Ecobank Asset Management (Private) Limited, Riustrix Investments (Private) Limited and Criben Investments (Private) Limited. Furthermore, Lengrah Investments (Private) Limited purchased shares on the open market.




6KDUHKROGHUV·�3URÀOH

As at 30 September 2013 by Type (Summarised)



Public 9,009 99.65 805,135,736 96.83 Directors 2 0.02 8,167,596 0.98 Non-Public 30 0.33 18,169,575 2.19

Total 9,041 100.00 831,472,907 100.00

Non-Public includes Employee Share Participation Trust and managerial employees who hold shares in the Company in their individual capacities. Public refers to Local Companies, Insurance Companies, Nominees, Banks, Investments, Trusts, Pension Funds and other organisations. Directors means Company directors who hold shares in the Company directly and indirectly.

Shareholder analysis by typeMajor Shareholders 2013 % 2012 %

Lengrah Investments (Pvt) Limited 287,613,748 35.00 - - Old Mutual Zimbabwe 184,213,472 22.16 189,769,028 22.82Zimbabwe Allied Banking Group 41,131,913 4.95 41,131,913 4.95Turner Roy 14,323,474 1.72 14,323,474 1.72

Total 527,282,607 63.83 245,224,415 29.49

Top ShareholdersResident and Non-Resident Shareholders 2013 % 2012 %

Resident 786,449,409 94.59 824,117,312 99.12Non Resident 45,023,498 5.41 7,355,595 0.88

Total 831,472,907 100.00 831,472,907 100.00

The residency of a shareholder is based on place of domicile as recorded in the share register as defined for Exchange Control and does not denote status in terms of indigenisation regulations.

Share price information

Mid-Market price at:

Friday 31 December 2012 0.90 US cents Thursday 31 March 2013 1.60 US cents Thursday 30 June 2013 2.00 US cents Friday 30 September 2013 2.10 US cents

Price range

Highest 01 October 2012 to 30 September 2013 2.30 US cents Lowest 01 October 2012 to 30 September 2013 0.80 US cents Average Price 01 October 2012 to 30 September 2013 1.45 US cents


*URXS�6WUXFWXUHAs at 30 September 2013

DAWN PROPERTIES

LIMITED

28.54%

AFRICAN SUN

LIMITED PCC

(MAURITIUS)

100%

AFRICAN SUN ZIMBABWE

(PRIVATE) LIMITED

100%

AFRICAN SUN LIMITED

SHAREHOLDER STRUCTURE

Old Mutual Zimbabwe

Lengrah Investments (Private) Limited

Zimbabwe Allied Banking Group Limited

Public Investors

African Sun Employee Share Participation Trust 0.98%

0.98%

35%

35%

22.15%

22.15%

4.95%

4.95%

36.92%

36.92%


Mr Bekithemba Nkomo was appointed as Chairman on 15 May 2012, having previously served on the Board as Deputy Chairman. He joined the African Sun Limited Board on 21 November 2004. Mr Nkomo worked for various companies at senior and executive management level before establishing his own business. He has over 20 years’ experience in financial management and general management. He is currently the Managing Director of a manufacturing business he acquired ten years ago.

He sits on various boards, which include financial, manufacturing and marketing companies.

Mr David Birch joined the Board of African Sun Limited on 21 November 2004. He is a seasoned insurance practitioner whose experience spans over 30 years at senior and executive management level. He held operational and executive management positions culminating in his appointment as the General Manager, Managing Director, Regional Director and as a Consultant after retirement, for a leading insurance broker in Zimbabwe. In addition to the African Sun Limited Board, he sits on the boards of a financial institution and three insurance companies. He is the past Chairman of Zimbabwe Insurance Brokers Association and Chairman of the Board of Trustees of Junior Achievement in Zimbabwe.

Dr Munyeza is an accomplished business leader and currently holds the reins at African Sun Limited. He is a visionary with global perspective and entrepreneurial drive. Dr Munyeza holds a balanced portfolio of experience that has been recognised in the business arena. He is the 2010 winner of the Hospitality Investment Conference Africa (HICA) Mover and Shaker Award. He was conferred with an hounorary Doctorate in Business Administration and Development by Solusi University in March 2010, in recognition of his contribution to business development in the tourism sector. He is the Zimbabwe 2008 Institute of Directors Award winner, was twice recipient of the Institute of Directors Runner-up Award, crowned CEO of the Year 2008 by the Institute of People Management Zimbabwe and received the Zimbabwe Tourism Authority Personality of the Year Award for four years running. Dr Munyeza played an instrumental part in bringing about a turnaround of tourism in Zimbabwe through various initiatives and works closely with governments in Africa to improve tourism and hotel development. He serves on a number of boards, which include financial institutions, tourism and hospitality.

BEKITHEMBA LLOYD NKOMOChairman

DAVID WILLIAM BIRCHNon-Executive Director

SHINGI MUNYEZAGroup Chief Executive

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Mr Lapham joined the Board of African Sun Limited on 1 July 2009. He was a winner of the ICAZ Duff Award for being the overall top student in Zimbabwe and ICAZ Award for being the top student in Financial Management, Financial and Management Accounting. A former partner with Ernst and Young, Mr Lapham’s area of expertise is in corporate finance and he was instrumental in setting up a new service offering with Ernst and Young and subsequently recommended the disposal of this entity to a well established Merchant Bank in Zimbabwe. He also sits on the boards of Medtech holdings limited, The Cotton Company of Zimbabwe and several private companies

Mrs Ramikosi, a South African national, was appointed to the African Sun PCC Board on 1 August 2009 and subsequently to the African Sun Limited Board on 17 September 2010. A holder of a Master’s degree in Business Administration, a post-graduate diploma in Advertising and Marketing (majoring in Strategic Planning and Client Service) and a Bachelor of Science degree, Mrs. Ramikosi has extensive experience in Marketing, Advertising and Communications. She has worked for multinationals and South Africa’s leading listed private enterprises and the South African government’s state-owned companies. She has extensive experience working on global brands on the African continent, North and South America, Europe and Asia.

She is the founding member of Phuphani Marketing, a strategic marketing consultancy and co-founder of Masters and Savant Worldwide, a specialist design production agency.

Mr Mangwiro joined the African Sun Limited Board on 24 February 2006. A Chartered Accountant, Mr Mangwiro has served as Finance Director at three companies where he was instrumental in the financial turnaround of two of the institutions, which are listed on the Zimbabwe Stock Exchange. He has over ten years’ experience at senior level in the finance field and his areas of expertise are structured finance with focus on modeling and investments, mergers and acquisitions as well as turnaround of companies to profit-making position. As Group Finance Director at African Sun, Mr Mangwiro plays a pivotal role in capital raising and expansion initiatives for the entire Group covering Zimbabwe, South Africa, Nigeria and Ghana.

In addition to the African Sun Limited Board, Mr Mangwiro sits on various boards, including that of a pharmaceuticals company, which he chairs.

VERNON WRIGHT LAPHAMNon-Executive Director

NONHLANHLA RENE RAMIKOSINon-Executive Director

NIGEL MANGWIROGroup Finance Director


Mr Fundira was appointed to the Board of African Sun Limited on the 17th of October 2012. He is a holder of a BSc (Hons) Economics and Finance, MBA in Finance and Strategic Management and a Diploma in Marketing as well as other pertinent qualifications attained from various Universities. He is the Founder of a diversified tourism based leisure group with interest in photographic and non-photographic safaris operating on the shores of Lake Kariba and in Victoria Falls. Mr Fundira is a past recipient of the Private Sector Tourism Personality of the Year Award (2009), the ZTA Tourism Image Builder of the Year Award (2010) and the ZTA Tourism Personality of the Year Award (2010).

He sits on the Safari Club International (SCI) Board and the African Wildlife Consultative Board (AWCF) as well as serves as a Trustee of several charitable organisations.

Ms Maphosa was appointed to the African Sun Limited Board on the 17th of October 2012. A registered Legal Practitioner, Conveyancer, Notary Public and a Partner with Sawyer and Mkushi Legal Practitioners, Ms Maphosa has been in practice for the past 12 years where she is attorney of record for several reputable financial institutions in Zimbabwe. She is also affiliated to the Institute of Bankers Zimbabwe and specialises in International Corporate Law and Finance.

Ms Maphosa sits on several Boards and Trusts including Hillbrass (Private) Limited (Kintyre Estates), Tumaini and S.A.I.D Trust (International).

Mr Makamure was appointed to the African Sun Limited Board on the 17th of October 2012. A Chartered Accountant by training, Mr. Makamure is the Company Secretary and Group Treasurer for Delta Corporation Limited and has experience in Accounting, Treasury Management, Taxation, Procurement and Logistics Management, Finance and Company law among other professional spheres. Mr Makamure sits on several Boards which include Schweppes Zimbabwe Limited and Mandel Training Centre.

EMMANUEL ANESU FUNDIRA Non-Executive Director

ALEX MAKAMURENon-Executive Director

NYARADZO G MAPHOSA Non-Executive Director



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DIRECTORATE

ChairmanB.L. Nkomo

Executive DirectorsS.A. Munyeza – Group Chief ExecutiveN. Mangwiro – Group Finance Director

Non-Executive DirectorsD.W. BirchV. W. LaphamN.R. RamikosiE.A. FundiraA. MakamureN.G. Maphosa

Group Company SecretaryE. T. Shangwa

BOARD COMMITTEES

Risk and Audit CommitteeV.W. Lapham (Chairman)N.G. MaphosaD.W. Birch S.A. MunyezaN. Mangwiro

Nominations CommitteeB.L. Nkomo (Chairman)D.W. BirchS.A. Munyeza

Human Resources and Remuneration CommitteeD.W. Birch (Chairman)A. MakamureN.G. MaphosaN.R. RamikosiS. A. Munyeza

Marketing CommitteeN.R. Ramikosi (Chairman)E.A. FundiraS.A. Munyeza

Finance and Investments Committee

E.A.Fundira (Chairman)A. MakamureV.W. Lapham S.A. MunyezaN. Mangwiro

AuditorsPricewaterhouseCoopers Chartered Accountants (Zimbabwe)Building Number 4, Arundel Office ParkNorfolk RoadMount PleasantP O Box 453HarareZimbabwe

BankersMBCA Bank Limited16th Floor, Old Mutual CentreThird StreetHarareZimbabwe

Legal AdvisorsDube, Manikai & Hwacha Legal Practitioners6th Floor, Gold BridgeEastgate ComplexRobert Mugabe RoadHarareZimbabwe

REGISTERED OFFICEAfrican Sun HouseNo. 6 Seagrave Road Mount PleasantHarareZimbabwe


EXECUTIVE COMMITTEES.A. Munyeza - Group Chief ExecutiveN. Mangwiro - Group Finance DirectorJ. Mwanza - Group Operations Director E. Nyakurerwa - Group Human Resources DirectorE.T. Shangwa - Group Company Secretary

SENIOR EXECUTIVESA. Chinhara - Group Sales & Marketing ManagerL.A. Mahomed - Internal Audit Services ManagerT. Hwingwiri - Group Operations Manager F.F. Muswere - Group Technical ManagerS. Samoto - Group Business Information Systems

ManagerB. Dirorimwe - Corporate Finance ManagerL. Moyo - Group Executive Chef

HOTEL AND RESORT GENERAL MANAGEMENT

Property General Managers

GhanaA. Matema - African Sun Amber Hotel Accra Airport

NigeriaD. Kanyandu - Nike Lake Resort, EnuguB. Chimanga - Best Western Ikeja, LagosK. Mupfigo - Best Western Homeville, Benin CityW. Kazhilla - African Sun Amber Residence GRA

Ikeja, Lagos

ZimbabweG. Togni - The Victoria Falls Hotel PartnershipT. Mutyandasvika - Elephant Hills Resort and Conference

CentreD. Kung - The Kingdom at Victoria FallsV. Halimana - Troutbeck ResortA. Chikwanda - Caribbea Bay ResortM. Zulu - Great Zimbabwe HotelT. Makiwa - Hwange Safari LodgeC. Chinwada - Holiday Inn HarareI. Katsidzira - Crowne Plaza MonomotapaC. Mulinde - Holiday Inn BulawayoS. Dube - African Sun Amber Hotel MutareC. Chimbira - Beitbridge Express Hotel.

Sun CasinosR. Choto - General ManagerJ. Kaseke - Bulawayo Sun CasinoJ. Wenyimo - Makasa Sun CasinoB. Chiutare - Harare Sun CasinoP. Nyathi - Golden Prive Sun Casino M. Parichi - Manica Sun Casino

Sun VacationsC. Svova - Blue Swallow Units and Kingfisher

Cabanas

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NOTICE IS HEREBY GIVEN THAT, the Forty Second Annual General Meeting of Shareholders of African Sun Limited will be held in the Ophir

Room,1st Floor at Crowne Plaza Monomotapa 54 Parklane, Harare, on 21 March 2014 at 1100 hours for the following purposes:

ORDINARY RESOLUTIONS

1. Statutory Financial Statements

To receive and adopt the financial statements for the year ended 30 September 2013, together with the report of the Directors and Auditors therein.

2. To Appoint Directors

Messrs David W. Birch and Vernon. W. Lapham retire by rotation. Although eligible, both directors have opted not to stand for re-election.

Messrs Stewart P. Cranswick, Timothy Nuy and Walter T. Kambwanji were appointed to the Board on 24 January 2014. They retire at the end of their

interim appointments. All being eligible, they will offer themselves for re-election at the Annual General Meeting.

3. Auditor’s Remuneration

To determine the Auditor’s remuneration for the past audit. PricewaterhouseCoopers have indicated their willingness to continue in office.

4. Director’s Fees

To approve the payment of Directors’ fees for the chairman and non-executive directors for the year ended 30 September 2013.

1RWLFH�WR�0HPEHUV


Note:

(a) In terms of section 129 of the Companies Act (Chapter 24:03), members are entitled to appoint one or more proxies to act in the alternative, to

attend, vote and speak in their place at the meeting. A proxy need to be a member of the Company.

(b) In terms of Article 80 of the Company’s Articles of Association, instruments of the proxy must be lodged at the registered office of the Company at

least forty-eight hours before the time appointed for holding the meeting.

By Order of the Board

E.T. Shangwa

Company Secretary

African Sun Limited

African Sun House

6 Seagrave Road

Mount Pleasant

Harare

Zimbabwe

20 February 2014

1RWLFH�WR�0HPEHUV


SHAREHOLDERS’ DIARY

Full Year Results 2013 December 2013Annual Report 2013 Published February 2014Forty-second Annual General Meeting 21 March 2014

INTERIM REPORTS ANTICIPATED DATEHalf Year Results 2014 June 2014Full year Results 2014 November/December 2014Forty-third Annual General Meeting March 2015

6KDUHKROGHUV·�'LDU\


African Sun Limited Incorporated in the Republic of Zimbabwe Registration number: 643/1971

Registered office Transfer Secretaries African Sun House Corpserve (Private) LimitedNo. 6 Seagrave Road 2nd FloorMount Pleasant ZB Bank CentreHarare cnr Kwame Nkrumah Avenue/First StreetP O Box CY 1211 P O Box 2208Causeway HarareHarare ZimbabweZimbabwe Tel: +263 4 751559/61Tel: +263 4 302892, 302894, 302906, 304114, 304050, 304416, 304256, 403073, 304006, 304038 Email: [email protected]: [email protected]: www.africansunhotels.com

Investor RelationsWeb: www.africansuninvestor.com

Telephone Directory

For reservations:Pan African Central Reservations Office, Johannesburg (PACRO) +27 100030079,100030081-5Email: [email protected]

Harare Central Reservations Office Harare (HACRO) +263 4 700521-4 or 250501-7 or 705110Email: [email protected]

West Africa Central Reservations Office (WACRO) +234 8058205186Email: [email protected]

Resorts, city hotels and lodges

ZimbabweThe Victoria Falls Hotel Partnership +263 13 44751-60 or 44203-5Elephant Hills Resort and Conference Center +263 13 44793-9The Kingdom at Victoria Falls +263 13 44275 or 13 42358Troutbeck Resort +263 298 881 or 298 883-6Caribbea Bay Resort +263 61 2452-4Hwange Safari Lodge +263 18 331-6Great Zimbabwe Hotel +263 39 262274, 265427 or 264187Crowne Plaza Monomotapa +263 4 704501-30Holiday Inn Harare +263 4 251200-14 or 795610-38Holiday Inn Bulawayo +263 9 252464, 257211 or 252460-9African Sun Amber Hotel Mutare +263 20 64431Beitbridge Express Hotel +263 86 23001-4 or 23371-2

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NigeriaNike Lake Resort +234 805 055 7000 or 803 762 2200 or 802 536 6655Best Western Ikeja, Lagos +234 1 448 2200-1 or 1 448 3340-67Best Western Homeville, Benin City +234 52 290 830 or +234 52 885 687African Sun Amber Residence GRA Ikeja +234 18 447 832 or 831

GhanaAfrican Sun Amber Hotel Accra Airport +233 545 987 438 or 574 286 422 or 302 742 730-59

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THE COMPANY SECRETARYAfrican Sun House

No. 6 Seagrave Road Mount Pleasant

HararePO Box CY 1211, Causeway,

Harare, ZimbabweTel: +263 4 250501-7 or +263 4 700521-4

Email: [email protected]

CORPORATE HEAD OFFICEAfrican Sun House

No. 6 Seagrave Road Mount Pleasant

HararePO Box CY 1211, Causeway,

Harare, ZimbabweTel: +263 4 250501-7 or +263 4 700521-4

Email: [email protected]: www.africansunhotels.com

www.africansuninvestor.com

strengthened for growth - african sun · african sun limited annual report 2013 7 2013 2012 group...

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