For the year ended 30 September 2013

Loss Before Tax -$5.94m

7
Total Accumulated shareholders' losses equity

Revenue $56.27m

Occupancy

REVPAR

ADR

EBITDA $6.97m
Equity settled Non- share based distributable payment reserve reserve 1,327,001 4,759,530 6,086,531 6,086,531 6,086,531 Foreign currency translation Revaluation reserve reserve

Headline Earnings $0.92m

Gearing 53% from 40%

2013 52,767,134 2,372,254 119,652 4,249,061 517,742 60,025,843 39,897,360 1,926,323 243,058 1,666,022 212,502 43,945,265 2012 57,966,511 1,013,159 114,515 213,739 128,172 59,436,096 34,288,061 1,748,012 243,058 97,611 36,376,742

+3.4%

-2%

48%

+2%

$48

+7%

$100

+11%

-454%

-4%

Message to Shareholders
INTRODUCTION
The year under review saw the Group recording notable growth in both EBIDTA (+11%) over the same period last year. This improvement in performance, coupled with significant strides taken to reduce debt, bodes well for the future of the Group. after tax. This method was a departure from IAS 28, Investment in Associates, and would have resulted in a perpetual loss to the Group, as Dawns Revenue is predominantly rentals from African Sun. This error was corrected retrospectively to 2009 resulting in an aggregate increase in assets (investment in associate) of $1.42 million (see note 3 of the condensed financial report). 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 Groups assets and retained earnings arising from this change was $1.06 million. Further details of the adjustment are explained in note 3 of the condensed financial report.

Group Statement of Changes in Shareholders Equity

All figures in US$ At 30 September 2011 as previously reported Adjusted for; -prior period error relating to assets (note 3) -prior period error relating to associate (note 3) -change in accounting policy by associate (note 3) At 30 September 2011 restated Comprehensive income Profit for the year (restated) Other comprehensive income Currency translation differences Share of associate's other comprehensive income Transactions with owners Treasury shares adjustment At 30 September 2012 restated Comprehensive income Loss for the year Other comprehensive loss Currency translation differences Reclassified to income statement Equity settled share based payments Value of employee services Balance at 30 September 2013 Share capital 8,239,409 8,239,409 8,239,409 8,239,409 Share premium 23,701,165 23,701,165 355,256 24,056,421 24,056,421 - (1,616,568) 406,808 (16,909,494) 15,148,321 (99,673) 876,407 1,043,346 4,659,857 876,407 1,043,346

SEGMENT ANALYSIS (continued)

All figures in US$ Total Assets Zimbabwe South Africa Botswana Ghana Nigeria Total liabilities Zimbabwe South Africa Botswana Ghana Nigeria

BUSINESS OVERVIEW

The period under review witnessed a notable growth in tourist arrivals into our hotels. The markets recorded the following growth: USA (11%), Germany (18%), Japan (31%), and the UK (26%). A decline was recorded in arrivals from China and France by 26% and 9% respectively. In line with this growth trend in foreign business, the Group realised an 8% increase in foreign room nights sold compared to the prior year. Domestic room nights suffered a 9% decline compared to the prior year due to cancellations and postponements of bookings during the period before and after the harmonised elections that were held in July 2013, as well as the persistent liquidity constraints facing the economy. 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, largely weighed down by the decline in occupancies following the contraction in domestic business. The 9% drop in the domestic market was a result of the persistent liquidity constrains facing the economy. The Group managed to mitigate the impact of the difficult trading environment through the following initiatives; An increase in room capacity arising from partial completion of the refurbishment of Crowne Plaza Monomotapa, Holiday Inn Harare and The Victoria Falls Hotel Procurement efficiency, reducing cost of sales Continued staff training and development, which resulted in improved customer satisfaction index from 84% last year to 88%.

- (1,616,568) 20,171 669,986 (946,582) (241,408) -

406,808 (15,089,414) 21,727,931 24,063 1,002,051 (719,933) 1,002,051 669,986 24,063 (364,677)

Partial disposal of the investment in Dawn Properties Limited.

During 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 Groups income statement.

430,871 (14,807,296) 23,059,354 (181,165) (6,576,375) (6,576,375) (241,408) (181,165) 20,171

The profit before tax from Ghana in 2012 includes a once off payment received of US$1,636,943 million following termination of the Holiday Inn Accra Ghana management contract. The loss before tax in Zimbabwe amounting to US$6 347 091 includes fair value loss and impairment of investment in associate of US$7 681 923. Included in the Zimbabwe segment assets is an investment in associate (Dawn Properties Limited) of US$6 067 253 (2012: US$17 588 834). There are no differences from the last annual financial statements in the basis of segmentation or in the basis of measurement of segment profit or loss.

OUTLOOK

The growth in foreign arrivals witnessed in 2013 is expected to continue into 2014. Recovery of the domestic patronage will be curtailed in 2014 if the current difficult trading conditions facing the economy continue. As we look to 2014, growth in profitability will be driven by: The anticipated improvement in Guest Satisfaction and consequently the yields at the hotels that have been refurbished Growth in rooms under management expected in 2014, with the addition to the portfolio of a leased hotel in Accra and a further two management agreements in Nigeria Recovery in the resort hotels backed by an increase in foreign arrivals Working with a strategic partner to revive the lodges and safari business Further debt reduction, which will be achieved through a disposal of the remaining shareholding (16.54%) in Dawn Properties Limited and a possible capital call on the shareholders to achieve 30% gearing, and Further cost containment initiatives to be implemented.

20,171 (1,187,990)

249,706 (21,383,671) 16,080,577

8.

TAXATION EXPENSE
Current Withholding tax Deferred income tax Charge for the year (116,112) (520,670) (636,782) (360,101) (316,727) (676,828)

Notes to the Financial Report

1. BASIS OF PREPARATION
The principal accounting policies of the Group have been followed in all material respects and conform to International Financial Reporting Standards (IFRS) and the Zimbabwe Companies Act (Chapter 24:03). The same accounting policies and methods of computation are followed as compared with those in the prior financial year. This publication should be read in conjunction with the annual financial statements for the year ended 30 September 2013, which have been prepared in accordance with IFRSs and Zimbabwe Companies Act (Chapter 24:03).

FINANCIAL REVIEW

Revenue 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 $6.97 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 8% 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 $6.58 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: $3.21 million fair value loss on the 12% investment in Dawn Properties Limited held for sale as at the reporting date, $4.42 million impairment on the remaining 16.54% 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.

9.

EARNINGS PER SHARE

Profit attributable to owners of the company Adjusted for; Fair value adjustment on assets classified to non-current assets held for sale Impairment of investment in associate Fair value adjustment on biological assets Recycled from other comprehensive income Headline earnings Number of shares in issue Weighted average number of shares in issue Basic earnings per share: cents Headline earnings per share: cents (6,576,374) 3,210,684 4,417,211 54,027 (181,165) 924,382 823,940,874 823,940,874 (0.80) 0.11 1,002,051 (39,741) 962,310 823,940,874 823,940,874 0.12 0.12

2.

AUDIT OPINION
The auditors have expressed an unqualified opinion on these financial statements, and it is available for inspection at the Company Secretar ys office.

3. PRIOR PERIOD ERROR 3.1 Property, equipment and motor vehicles

The Group 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 done on 28 February 2013 and 15 April 2013 respectively. The staff houses which are located away from the hotels, include 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 currently available to support a valuation in 2009. The effect of the correction of the error on the results for the financial year ended 2012 and 2011 is as follows: All figures in US$ Increase in depreciation Decrease in deferred tax expense Increase in loaa / decrease in profit Assets Restatement of the Group's freehold property (staff houses) Restatement of the Group's leasehold property (timeshare cottages) Equity and liabilities (Decrease) / increase in equity - annual depreciation / non-distributable reserves (Decrease) / increase in liabilities - deferred tax liability Total equity and liabilities Year Ended 30 Sept 2012 (134,240) 34,567 (99,673) Year Ended 30 Sept 2011 (134,240) 34,567 (99,673) 4,526,600 1,600,000 6,126,600 4,625,290 (34,567) 4,659,857

CHANGES IN SHAREHOLDING: MANDATORY OFFER TO MINORITIES

As was communicated to shareholders in the Circular dated 4 November 2013, there was a material change to the Companys shareholding structure during the course of the year with Lengrah Investments (Private) Limited trading as BMC Hotels and Real Estate, now holding 45% of the Companys 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 coherence between the two entities which will result in further value being created for all stakeholders.

Diluted earnings per share

During the year the company granted 32 926 655 share options to Executive Directors and key management. 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 companys 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. Weighted average number of ordinary shares in issue Adjusted for; Share options Weighted average number of ordinary shares for diluted earnings Diluted (loss) / earnigs per share for the year: cents Diluted headline earnings per share for the year: cents 823,940,874 23,519,039 847,459,913 (0.78) 0.11 823,940,874 823,940,874 0.12 0.12

SIGNIFICANT FINANCIAL MATTERS Prior period Adjustments

The 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 (time shares 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 condensed financial report). 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 associates profit

DIRECTORATE

There have been no changes to the Directorate since the last Annual General Meeting of the Company was held.

DIVIDEND DECLARATION

In 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.

10. FINANCE COSTS PAID

For the purposes of the statement of cashflows, finance costs paid were computed as follows; Finance costs per income statement Interest on borrowings paid in prior year Accrued interest costs from prior year paid Accrued interest on statutory liabilities Accrued interest on bank loans current year Accrued interest costs current year Borrowing costs capitalised Accrued borrowing costs capitalised Interest income Finance costs paid as per statement of cashflows 3,072,787 167,670 (208,745) (124,325) 1,048,964 (213,857) 5,723 3,748,217 2,855,597 (63,798) 85,878 (167,670) 464,330 (44,842) 123,405 3,252,900

APPRECIATION

We would like to commend management, staff and fellow directors for their continued hard work and commitment throughout the year. B L Nkomo S A Munyeza Chairman Group Chief Executive 12 December 2013

(134,240) (34,567) (99,673)

3.2 Investment in Associate

Group Statement of Financial Position

All figures in US$ Assets Non-current assets Property, equipment and motor vehicles Biological assets Investment in associate Trade and other receivables Current assets Inventories Trade and other receivables Loans Available-for-sale financial assets Cash and bank balances Non-current assets held for sale Total assets Equity and liabilities Equity attributable to owners of the company Share capital Share premium Non-distributable reserve Equity settled share based payments reserve Foreign currency translation reserve Revaluation reserve Accumulated losses Total equity Liabilities Non-current liabilities Trade and other payables Borrowings Deferred income tax liability Current liabilities Trade and other payables Provisions for other liabilities Borrowings Liabilities of a disposal group classified as held for sale Total liabilities Total equity and liabilities Note As at 30 Sept 2013 As at 30 Sept 2012 Restated 26,818,072 274,678 17,588,834 238,665 44,920,249 1,472,627 8,436,132 4,607,088 14,515,847 14,515,847 59,436,096 8,239,409 24,056,421 6,086,531 (946,582) 430,871 (14,807,296) 23,059,354 6,443,381 4,146,511 10,589,892 10,718,895 1,418,073 13,649,882 25,786,850 25,786,850 36,376,742 59,436,096 As at 30 Sept 2011 Restated 23,066,447 234,937 14,103,754 535,512 37,940,650 1,324,690 7,342,790 1,130,504 10,000 4,657,480 14,465,464 1,847,871 16,313,335 54,253,985 8,239,409 23,701,165 6,086,531 (1,616,568) 406,808 (15,089,414) 21,727,931 4,914,134 3,829,784 8,743,918 10,941,593 3,676,484 8,164,598 22,782,675 999,461 23,782,136 32,526,054 54,253,985

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 associates profit, it has been corrected and no such deduction will be done 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 investees profit or loss to the investors 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. The effect of the correction of error on the results from 2010 to 2012 is as follows: All figures in US$ Increase in profit from associate Increase in profit Assets Increase in investment in associate Equity and liabilities Increase in equity Year Ended Cummulative to 30 Sept 2012 30 Sept 2011 539,754 539,754 539,754 539,754 876,417 876,417 876,417 876,417

11. INVESTING ACTIVITIES Assets addition and disposal

Additions Normal replacements Expansion Refurbishment Disposals Cost, reconciled as; -accumulated depreciation -cash received -proceeds accounted for under receivables -loss on disposal charged to the income statement 2,852,928 1,095,504 2,676,961 6,625,393 241,225 124,197 62,821 48,612 5,595 1,437,159 6,317,389 7,754,548 2,369,718 137,235 2,191,227 41,256

32,355,155 220,651 6,067,253 2,162,403 40,805,462 1,643,661 8,990,216 4,232,123 14,866,000 4,354,381 19,220,381 60,025,843 8,239,409 24,056,421 6,086,531 20,171 (1,187,990) 249,706 (21,383,671) 16,080,577 1,758,132 8,093,067 4,667,179 14,518,378 14,085,052 1,113,929 14,227,906 29,426,887 29,426,887 43,945,266 60,025,843

Asset additions under normal replacements relate to standard hotel asset replacements/additions and are financed from free cash flows. Asset additions under refurbishment relate mainly to the refurbishment of Crowne Plaza Monomotapa, Holiday Inn Harare, Holiday Inn Bulawayo, Elephant Hills Hotel and The Victoria Falls Hotel. Financing of the refurbishment program was through a long-term loan payable over 5 years. Disposal of assets relates to sale of old items of furniture, fittings and equipment withdrawn from the hotels under the on-going refurbishment. Increase in non-current receivables 486,095 -

3.3 Change in accounting policy in Dawn Properties Limited (Dawn)

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 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. 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; All figures in US$ Effect on consolidated statement of financial position Decrease in deferred tax liability Increase in retained earnings Effect on consolidated statement of comprehensive income Increase in profit for the year Total effect on African Sun Limited Effect on consolidated statement of financial position Increase in assets - investment in associate (at 16.54% shareholding) Increase in retained earnings Effect on consolidated statement of comprehensive income Increase in profit for the year (at 16.54% shareholding) Year Ended 31 Mar 2012 68,121 68,121 19,676 Year Ended 30 Sept 2012 14,522 14,522 Year Ended 31 Mar 2011 6,239,898 6,239,898 68,121 Year Ended 30 Sept 2011 1,043,346 1,032,079 11,267

The increase in non-current receivables of US$486 095 (2012: nil) in the statement of cashflows relates to vehicle and housing loans which were advanced to staff during the year. The loans are payable over 5 years. The fair value of the loans was determined using the discounted cash flows method based on the Groups average cost of borrowing of 13.83%.

12. CASH AND CASH EQUIVALENTS

For the purposes of the statement of cashflows, cash and cash equivalents comprise the following; Cash and bank balances Bank overdraft Restricted cash Cash and cash equivalents at the end of the year 4,232,123 (2,068,288) (552,668) 1,611,167 4,607,088 (2,395,757) (748,389) 1,462,942

15 5

The restricted cash amount of US$552,668 has been deducted from cash and bank balances to determine cash and cash equivalents as the use of the cash is restrictive in nature and is not available within a 90 day period. The cash is held in an offshore account by Afreximbank as part of the security to the US$10 million refurbishment loan. The amount is 8% of the outstanding loan. Cash from this restricted account is available only to the extent that the balance is more than 8% of the loan outstanding.

13. RELATED PARTY TRANSACTIONS

(i) Lease rentals paid to Dawn Properties Limited (Dawn) 2,123,310 2,197,425 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 as 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. Lease rentals relate to the 8 hotels leased from Dawn. All leases with Dawn are at normal commercial terms and conditions. (ii) Balances arising from transactions with Dawn Payables - rentals 397,372 290,743

Group Statement of Comprehensive Income

All figures in US$ Revenue Cost of sales Gross profit Other income Operating expenses Other expenses Operating (loss) / profit Financing costs - net Fair value adjustment on assets classified to non-current assets held for sale Impairment of investment in associate Recycled from other comprehensive income Share of profit / (loss) from associate (Loss) / profit before taxation Income tax charge (Loss) / profit for the year Other comprehensive (loss) / income net of tax: Foreign currency translation differences Share of other comprehensive income of associate Comprehensive income from associate recycled to income statement Total other comprehensive (loss) / profit TOTAL COMPREHENSIVE (LOSS) / INCOME FOR THE YEAR Profit attributable to: Owners of company Total comprehensive (loss) / income attributable to: Owners of the Company Earnings / (loss) per share: cents Basic earnings Headline earnings Diluted earnings Diluted headline earnings EBITDA RECONCILIATION (Loss) / profit before taxation Adjusted for; Other income Depreciation and usage Net financing costs Other expenses Fair value adjustment on assets classified to non-current assets held for sale Impairment of investment in associate Recycled from other comprehensive income Share of (profit) / loss from associate Earnings before interest, depreciation and amortisation (5,939,593) 2,225,845 3,072,787 499,709 3,210,684 4,417,211 (181,165) (331,034) 6,974,444 1,678,879 (1,717,940) 2,327,706 2,855,597 901,665 242,823 6,288,730 9 9 9 9 Note 7 14 10 Year ended 30 Sept 2013 56,275,679 (15,302,031) 40,973,648 (36,225,049) (499,709) 4,248,890 (3,072,787) (3,210,684) (4,417,211) 181,165 331,034 (5,939,593) (636,782) (6,576,375) (241,408) (181,165) (422,573) (6,998,948) (6,576,375) (6,998,948) (0.80) 0.11 (0.78) 0.11 Year ended 30 Sept 2012 Restated 54,426,751 (15,837,052) 38,589,699 1,717,940 (34,628,675) (901,665) 4,777,299 (2,855,597) (242,823) 1,678,879 (676,828) 1,002,051 669,986 24,063 694,049 1,696,100 1,002,051 1,696,100 0.12 0.12 0.12 0.12

4. 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 experience. The major fact(s) surrounding the reviews was that, most of the assets used in the Groups hotels generally have a longer useful life than prescribed in the accounting policy. The facts have been motivated by the recent refurbishment work on the the Groups three city hotels, where some 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 taken 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 based on prior estimates. Example of such assets was kitchen equipment, refrigeration equipment, air conditioners and leasehold improvements whose lives were between 6 and 12 years. The table below shows a schedule of the previous used estimates and the revised estimates for various asset categories; Previous estimates Useful life Depreciation years rate - % Furniture and fittings Leasehold improvements Plant and machinery Refrigeration Soft furnishings 6-10 8-12.5 8-13.33 8-13.33 6.66 10-16.7 8-12.5 7.5-12.5 7.5-12.5 15.00 Revised estimates Useful life Depreciation years rate - % 6-15 8-15 8-15 8-15 10.00 6.7-16.7 6.7-12.5 6.7-12.5 6.7-12.5 10.00

The payables to Dawn arose in the normal course of business. The rentals are due one month after billing and bear no interest.

14 EXPENSES BY NATURE
Cost of sales -inventory in cost of sales -payroll in cost of slaes -outside laundry in cost of sales -other cost of sales Depreciation, usage and amortisation Operating lease costs Payroll cost in administration expenses Sales and marketing Security Repairs and maintenance Other expenses Total cost of sales, administrative expenses and other expenses There was no write down or write back of inventory. 6,253,646 6,365,818 669,958 1,903,660 2,225,845 6,529,657 9,221,502 3,718,578 1,283,700 2,258,522 11,595,902 52,026,788 6,356,095 6,735,645 709,110 2,036,202 2,327,706 6,969,334 9,237,207 2,905,597 1,048,712 2,240,224 10,801,560 51,367,392

7 8

15. PROVISIONS

Though the standard useful life of leasehold improvements has been set at 15 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 Groups depreciation expense charged in administration expenses in the year and future periods is shown below; All figures in US$ Depreciation for the year based on old estimates Depreciation for the year based on new estimates Decrease in depreciation 2013 2 324 029 2 018 598 305 431

The provision balance is made up of the following: Balance at 30 Sept 2012 Leave pay Liquidated damages Legal costs 556,978 450,000 411,095 1,418,073 Current provision 192,484 192,484 Utilised / reversed provision (450,000) (46,628) (496,628) Balance at 30 Sept 2013 749,462 364,467 1,113,929

(a) Leave pay

5. BORROWINGS
All figures in US$ Non-current: Foreign Local loans Current: Foreign loans Bank Overdrafts Local loans Total current Total borrowings 2013 4,207,553 3,885,514 8,093,067 4,148,987 2,068,288 8,010,631 14,227,906 22,320,973 2012 6,443,381 6,443,381 2,500,000 2,395,757 8,754,125 13,649,882 20,093,263

This amount is the Groups liability to pay employees for their annual leave days. Current provision is expensed in profit or loss under administrative expenses

(b) 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 rise to any loss beyond the legal costs provided at 30 September 2013.

(c) Liquidated damages The provision was reversed in the year following discussions between Intercontinental Hotels Group and management. The libility has been presented as a contingent under note 17 (ii). 16. CAPITAL COMMITMENTS
Authorised by Directors and contracted for Authorised by Directors, but not contracted for 630,042 4,872,268 5,502,310 1,504,563 6,532,363 8,036,926

Group Statement of Cashflows

All figures in US$ Cash flows from operating activities (Loss) / profit before tax Net finance costs charged in statement of comprehensive income Adjustment for non-cash items; Depreciation and usage Fair value adjustment on non-current assets held for sale Impairment of investment on associate Share of (income) / loss from associate Other non-cash items Operating cash flow before changes in working capital Changes in working capital Cash generated from operations Interest paid Income tax paid Net cash generated from operating activities Cash flows from investing activities Additions to property, equipment and motor vehicles Disposals of property, equipment and motor vehicles Purchase of shares in associate Deferred Expenditure (pre-opening expenses on new project) Interest received Increase in non-current receivables Net cash used in investing activities Cash flows from financing activities Proceeds from long-term borrowings Proceeds from short-term borrowings Deposit utilised from / (paid to) debt service reserve account Repayment of long-term borrowings Repayment of short-term borrowings Cash generated from financing activities Net increase / (decrease) in cash and cash equivalents Cash and cash equivalents at beginning of the year Exchange losses on cash and cash equivalents Cash and cash equivalents at end of the year Note Year ended 30 Sept 2013 (5,939,593) 3,072,787 2,225,845 3,210,684 4,417,211 (331,034) (101,371) 6,554,529 4,757,910 11,312,439 (3,748,217) 7,564,222 (6,625,394) 62,821 (2,360,797) 5,723 (486,095) (9,403,742) 3,871,000 3,049,807 195,691 (2,494,524) (2,581,594) 2,040,380 200,860 1,462,942 (52,635) 1,611,167 As at 30 Sept 2012 Restated 1,678,879 2,855,597 2,327,706 242,823 1,173,721 8,278,726 (3,207,066) 5,071,660 (3,252,900) (80,369) 1,738,391 (7,754,548) 2,191,227 (3,710,442) 123,405 (9,150,358) 8,754,125 6,500,000 (748,389) (2,108,741) (8,164,598) 4,232,397 (3,179,570) 4,657,480 (14,968) 1,462,942

Despite the persistent liquidity challenges in the market, the Group is well placed to grow revenue through on-going hotel refurbishments and new management and lease contracts in West Africa. The Group has recentlly disposed of part of its investment in associate on 2 October 2013 to settle borrowings amounting US$4.1 million. No loan terms and covenants were breached during the financial year.

Capital expenditure relates to acquisition of property and equipment. The greater part of capital expenditure will be financed from free cashflows following completion of the greater aspects of our refurbishment.

17. CONTINGENCIES (i) Legal case against dismissed employees

Since 2009, the Group has been defending a legal case brought by dismissed employees from one of the hotels in the Group. The Group has disclaimed the liability. It is not anticipated that any material liabilities will arise from the contingent liability other than those provided for.

6. SEASONALITY OF THE BUSINESS

The first half of our financial year is relatively slower than the second half. This has been the trend for the past 3 years, with the first half contributing between 45% and 48% of the full year Revenue. The second half dominates because it is the beginning of the peak season for both international arrivals, corporate and conferencing business. During the year under review, the first six months of the Groups operations posted 47% of the total Revenue, with the last six months contributing 53%.

(ii) InterContinental Hotel Group (IHG) liqudated damages

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7.

SEGMENT ANALYSIS
All figures in US$ Revenue Zimbabwe Nigeria Earnings before interest, tax, depreciation and amortisation Zimbabwe South Africa Botswana Ghana Nigeria Profit / (loss) before tax Zimbabwe South Africa Botswana Ghana Nigeria 2013 55,967,643 308,036 56,275,679 6,560,808 222,677 (236) (24,570) 215,765 6,974,444 (6,348,091) 219,299 (236) (24,570) 214,006 (5,939,592) 2012 54,139,869 286,882 54,426,751 6,284,111 (101,798) 65,474 40,943 6,288,730 116,715 (196,841) 31,856 1,689,651 37,498 1,678,879

In 2012 the Group discontinued the use of IHG brands on two hotels. However, the discontinuence was done giving short notice to IHG and this gave rise to liqudated damages amounting to US$598 791 being claimed by IHG. Part of the amount was included in 2012 provisions. However, following discussions with IHG, Directors are of the opinion that the matter will be resolved without paying the damages. The prior provision of US$450 000 was reversed during the year.

18. 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 during the month of October 2013. The proceeds were used to settle US$4 138 078 worth of borrowings and the difference was used to settle transaction costs.

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(b) Final drawdown on the Ecobank Ghana facility (c) Opening of a new hotel in Accra, Ghana

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. The Group opened its first leased hotel in Accra, Ghana effective 10 December 2013. The Hotel is operating under one of the Groups internally generated brands(Amber). The hotel is called Amber Accra Airport Hotel.

(d) Exiting of the Obudu Mountain Resort Management Contract (e) Change in shareholding structure

The Group has exited the Obudu Mountain Resort management contract following its expiry on on 13 November 2013. 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.

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Directors: B.L. Nkomo (Chairman), S.A. Munyeza (Group Chief Executive)*, D. W. Birch, E.A. Fundira, V.W. Lapham, A. Makamure, N. Mangwiro (Group Finance Director)*, N.G. Maphosa, N.R. Ramikosi. *Executive Directors | Group Company Secretary: E.T. Shangwa | Registered Office: 17th Floor, Office No. 1708, Crowne Plaza Monomotapa, 54 Park Lane, P.O. Box CY 1211 Causeway, Harare, Zimbabwe. | Transfer Secretaries: Corpserve (Private) Limited, 4th Floor, Intermarket Centre, Cnr Kwame Nkrumah Avenue/ First Street, P.O. Box 2208, Harare, Zimbabwe. | Auditors: Pricewaterhouse Coopers, Building No.4, Arundel Office Park, Norfolk Road, Mount Plveasant, P.O. Box 453, Harare, Zimbabwe.

For investor information visit us on our website: www.africansuninvestor.com / www. africansunhotels.com

ASL 1197

Audited Financial Repor t to Shareholders