http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/RSS.ashxAfrican Annual Reports PagesMon, 23 Mar 2009 15:10:05 +0100http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=1http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=1Annual Report 2008 OUR VISION TAKES WING2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=2http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=2The Kingdom2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=3http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=3CONTENTS Company Profile Financial Highlights Statement of Vision Our Vision Takes Wing Historical Highlights To our Shareholders and Partners Business Review Report of the Directors Accounting Philosophy Directors' Responsibility for Financial Reporting Certificate by the Company Secretary Report of the Independent Auditors Financial Statements Five-Year Financial Review Supplementary Information Group Structure Shareholders' Analysis Directorate Management Corporate Governance Notice of Annual General Meeting Shareholders' Diary Contact Information Detachable – Proxy Form for the Annual General Meeting 2 4 5 8 9 10 14 20 22 23 25 26 28 62 65 68 69 72 73 76 79 81 82 83 The Victoria Falls Hotel Elephant Hills Resort African Sun Limited 2008 12009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=4http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=4African Sun Limited COMPANY PROFILE A frican Sun Limited, ‘African Sun’ is the fastest growing hospitality group in sub-Saharan Africa, operates the Great Zimbabwe Hotel in Masvingo, which is located within walking distance from the Great Zimbabwe National Monument. Regionally, the Group has properties in South Africa, Nigeria and Ghana. In South Africa, operations consist of The Grace in Rosebank and The Lakes Hotel and Conference Centre in Benoni, both in Gauteng. In Nigeria, the Group operates under management contracts, Obudu Mountain Resort, Utanga Lodge and Amber Tinapa, all in Cross River State, Nike Lake Resort in Enugu State as well as a specialised spa boutique hotel in Lagos named the Clear Essence California Wellness Centre and Boutique Hotel. In Ghana, we operate the Holiday Inn Accra Airport. All these developments are supported by a management team comprising seasoned hotel and business managers providing the intellectual capital needed to up-scale the business. Also under its wing, African Sun Limited holds a 17.72% equity interest in Dawn Properties Limited, an investment property holding company formed and then listed on the Zimbabwe Stock Exchange in 2003 when the Group spunoff wholly-owned property interests to concentrate on the hotel management business. Dawn Properties owns nine of the properties that African Sun Limited leases and operates in Zimbabwe. with interests in Zimbabwe, South Africa, Nigeria, and Ghana. Established in 1968, the Group, then known as Zimbabwe Sun Limited, was part of Delta Corporation, and has evolved significantly from being just a Zimbabwebased hospitality management company into a truly pan-African operation. In Zimbabwe, African Sun Limited is the leading player in the tourism and hospitality industry, with the Zimbabwe operations forming the largest business within the African Sun Limited group of companies. The Zimbabwe operations portfolio currently comprises various city hotels and resorts across the nation. Three resort hotels are in the town of Victoria Falls, namely Elephant Hills Resort, The Kingdom at Victoria Falls and The Victoria Falls Hotel, the latter jointly managed with Kingdom Meikles Africa Limited. Close to Victoria Falls, in Hwange, is African Sun Limited's safari operation, Hwange Safari Lodge. Other resort hotels in the Group are Troutbeck in Nyanga and Caribbea Bay and Fothergill Island Safari Lodge, both located in Kariba. The city hotels in Zimbabwe include three Intercontinental Hotels Group (IHG) affiliated brands, the Crowne Plaza Monomotapa in Harare, the three Holiday Inn branded hotels in Harare, Bulawayo, and Mutare, and the Express by Holiday Inn Beitbridge. In addition to these, the Group also Caribbea Bay Obudu Mountain Resort The Grace in Rosebank 2 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=5http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=5As part of its strategic thrust, African Sun Limited places significant importance on its human capital base, and this has resulted in the strengthening of its training division, the Hospitality Training Academy (HTA). The main role of the training academy is to ensure and maintain excellent service delivery within the Group through the implementation of appropriate training programmes for our staff. the region, our brand strategy will focus on the use of Intercontinental Hotels Group (IHG) brands, namely Holiday Inn, Crowne Plaza and Express by Holiday Inn in emerging markets. IHG brands are tried and tested with great brand equity and awareness, especially for foreign and business travellers, who have a high international brand awareness. African Sun Limited will use its own brands in markets Through the Hospitality Training Academy (HTA), African Sun Limited will replicate its excellent service standards through the installation of satellite training academies in west and east Africa, the two main areas of expansion plans in sub-Saharan Africa. Growing the brands regionally is a fundamental factor in the Group's continued quest to establish brand leadership through which African Sun Limited will dominate other brands and become the benchmark for other players in the region. As African Sun Limited expands into where the Group has already gained recognition. These are: Five Star Luxury: Five Star City: Mid range: Value: Long stay: The Mulberry Platinum Amber Adrenalinn MyPlace All these investments serve to enhance the Group's core business which is to extend the provision of other leisure activities reflective of a lifestyle that is unforgettable! Obudu Mountain Resort Troutbeck Resort African Sun Limited 2008 32009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=6http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=6FINANCIAL hIGhLIGhTS For the year ended 30 September 2008 41% ROOM OCCUPANCY 54% OPERATING PROFIT MARGIN Z$706.13 bASIC EARNINGS PER ShARE GROUP Historical Cost 2008 $ GROUP SUMMARY Revenue Profit before tax Attributable earnings Total assets Market capitalisation 811 829 069 449 539 629 628 295 473 336 928 670 16 593 398 526 134 82 556 088 480 000 173 48 35 1 176 19 145 2007 $ SHARE PERFORMANCE ($) Earnings per share - Basic earnings basis - Fully diluted earnings basis Net asset value per share Market price per share 706.13 706.13 18 678 120 000 – – – – FINANCIAL STATISTICS Return on equity (%) Interest cover (times) 4 136 4 53 ROOMS UNdER MANAGEMENT 3 500 3 000 zIMbAbwEAN STORY 400 000 Local roomnights Number of rooms Foreign roomnights 2 500 2 000 Roomnights 300 000 1 500 Zimbabwe 1 000 Africa * Forecast 200 000 100 000 500 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2007 2008 2009* 4 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=7http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=7Statement of Vision VISION The Lifestyle Company creating unforgettable leisure experiences. MISSION We exist to create wealth in a sustainable manner by anticipating and meeting the needs of our stakeholders, through the provision of seamless leisure services in our chosen markets. WE DO SO bY: • Developing intimate and emotional relationships, as we reach out to hearts and minds. • Exceeding guest expectations. • Having a formalised unique sequence of doing things. • Implementing innovative techniques that seek to continuously re-invent African Sun Limited in order to maintain excellence in everything we do. • Creating opportunities for personal growth and balanced lifestyles for all staff to enable them to positively impact lives around them. FOCUS We have re-defined our business as encompassing all aspects of the tourism chain. We are committing ourselves to expanding our operations throughout Africa through direct investment, equity participation and strategic alliances. We will provide a holistic hospitality and leisure product that will meet the needs and exceed the expectations of our guests. These include the integration and co-ordination of: • Seamless delivery of guests to and from the destination. • Co-ordination of an exciting suite of activities and attractions. • Provision of appropriate high quality accommodation and amenities. 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 celebrate life together. African Sun Limited 2008 52009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=8http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=8African Sun Values ThE AFRICAN SUN WAY SHAREd VISION – We will always seek to have a buy-in whilst providing leadership. SHAREd VALUES – Our values are the glue that binds us together. TIMEOUS ExECUTION ANd CLOSURE – It is not done until there is closure. EFFECTIVENESS – We will deliver beyond expectations. AdAPTAbILITY – We will be flexible without losing our strategic intent. EFFICIENCY – We will be disciplined in utilizing resources in all we do. CONNECTIVITY – It is our responsibility to get the message to the other party. "Come to the Edge We might fall Come to the Edge It's too high! Come to the Edge And they came And he pushed And they flew" – Christopher Logue Caribbea Bay Resort Obudu Mountain Resort The Grace in Rosebank 6 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=9http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=9Obudu Mountain Resort African Sun Limited 2008 72009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=10http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=10Our Vision Takes Wing T here comes a moment when the young eagle knows instantly that it is time to fly. For a long period it flaps with the wind behind us, will follow this direction with dedication and commitment. AN EYE ON THE FUTURE The eagle builds its nest with care and skill. From this After 40 years of stability and growth, we are now spreading our wings across Africa, with a new vision, seeking out opportunities and focusing on quality of service, people and hospitality across different brands. SOARING TO NEw HEIGHTS It has taken perseverance and tenacity to carry us through stormy times. Like the eagles gliding over our resorts, we have used the wind of the storm to lift us above the clouds and view a landscape of great possibilities. We have set ourselves important and far-seeing objectives to expand into new and unfamiliar markets, and now lofty eyrie it can view its kingdom and explore its world. We too have viewed the terrain with careful detail and laid well-constructed plans to become the largest lifestyle and hospitality Group right across the African continent. A SYMbOL OF POwER ANd TEAMwORk Certain eagle species are more successful when they hunt in a team of two. This is particularly true of Zimbabwe's own majestic black eagle, which has a dense population in the Matopos Hills. Team spirit is one of African Sun Limited's core values, and one of the reasons for our growth and success. This is our time to fly. and strengthens its wings, then suddenly takes off into the sublime air. This is such a time for African Sun Limited. 8 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=11http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=11Historical Highlights OUR jOURNEY ThUS FAR • 1952 – Rhodesia and Nyasaland Hotels (Private) Limited is formed as a wholly-owned subsidiary of Rhodesian Breweries • 1968 – Sable Hotels (Private) Limited is established • 1973 – Rhodesian Government grants first casino licence for the Victoria Falls Hotel • 1974 – Development of first four world class hotels: Monomotapa Hotel in Salisbury, The Wankie Safari Lodge, Caribbea Bay at Kariba, and the Elephant Hills Country Club in Victoria Falls • 1979 – Meikles Southern Sun Hotels is established, becoming the largest hotel chain in southern and eastern Africa, with control of thirteen major properties in the country • 1980 – Meikles Southern Sun Hotels changes its name to Zimbabwe Sun Hotels after Zimbabwe’s Independence • 1988 – Zimbabwe Sun Hotels merges with Touch the Wild safari operations, later selling it to Rainbow Tourism Group (Private) Limited on 30 April 1998 • 1990 – 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% • 1990 – Opening of the timeshares built in Troutbeck, Nyanga and at Caribbea Bay, which received “Gold Crown Resorts” status from the RCI in 1999 • 1991 – First Holiday Inn franchise in Harare • 1991 – The Elephant Hills Resort hosts the Commonwealth Heads of Government meeting, officially opening in 1992 • 1994 – First regional office for reservations is established in Johannesburg • 1998 – The construction of Express by Holiday Inn in Beitbridge is completed • 1999 – Zimbabwe Sun Limited acquires 40% equity and management of Baio Do Paraiso • 1999 – Makasa Sun is re-developed into The Kingdom at Victoria Falls • 2002 – Zimbabwe Sun Limited is unbundled from Delta Corporation • 2003 – Zimbabwe Sun Limited owns 100% shares in the timeshare operation in Vilanculos, Mozambique • 2003 – Dawn Properties Limited is listed as the first property entity on the Zimbabwe Stock Exchange • 2003 – The Hospitality Training Academy (HTA) is re-launched • 2003 – First negotiations for management of Holiday Inn Accra Airport, Ghana • 2004 – 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 • 2008 – Zimbabwe Sun Limited adds The Lakes Hotel and Conference Centre, in Johannesburg, South Africa to its portfolio • 2008 – Zimbabwe Sun Limited rebrands its name to African Sun Limited • 2008 – African Sun Limited adds Obudu Mountain Resort to its regional portfolio • 2008 – African Sun Limited takes over management of Holiday Inn Accra Airport The Victoria Falls Hotel 1972 Johannesburg 1898 Monomotapa Hotel 1973 African Sun Limited 2008 92009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=12http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=12To our Shareholders & Partners A s we take flight and look into the future, we must acknowledge the events of the past that have given strength and provided the launch pad for African Sun Limited to soar into the future. I must hasten to add that the past is not a dwelling place but a reference point, and on that note, I must spend a little time on our not-too-distant past which has provided the building blocks for the future of the Group. African Sun Limited, formerly Zimbabwe Sun Limited, changed ownership in 2002, thus beginning a strategic journey to attain blue chip status for the Group. 10 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=13http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=13dE-MERGER OF THE PROPERTY INTERESTS The restructuring and unbundling of Zimbabwe Sun Limited's property interests to form Dawn Properties Limited was undertaken to preserve the value of these assets and drive more value for the shareholders in line with international trends. It also allowed the Group to focus its management strength on its hospitality and leisure business. Dawn Properties Limited was listed on the Zimbabwe Stock Exchange (ZSE) and is currently the largest listed property company on this bourse. REGIONAL ExPANSION ANd INCORPORATION OF AFRICAN SUN LIMITEd The strong belief by the Group’s executives that they could create a legacy of hospitality excellence and leadership not only in Zimbabwe, but in Africa, created a deliberate effort to spread the Group's risk geographically in order to maximise yields and foreign currency earnings. This led to the registration of African Sun Limited PCC in Mauritius as a wholly-owned subsidiary of African Sun Limited to drive the regional expansion initiative. The Grace in Rosebank, Johannesburg, South Africa was the Group’s first hotel outside Zimbabwe and the regionalization drive thus became a reality in February 2003. The Grace in Rosebank was to set a precedent for the Group’s drive to achieve hospitality excellence and brand leadership in the region. With many international accolades (ranked the Ninth Best Hotel out of the Top 25 hotels in Africa and the Middle East, and 47th of the best 100 hotels worldwide by Travel & Leisure, a United States of America-based hospitality magazine), The Grace in Rosebank is aptly dubbed more than a gracious home, as it epitomizes the finest in hospitality and service. RE-LAUNCH OF THE HOSPITALITY TRAINING ACAdEMY The success of the Group was largely dependent on its skilled manpower and the quality of its human capital; thus the hospitality training institute was re-launched in 2003 as the Hospitality Training Academy (HTA). This was a strategic decision aimed at ensuring that the quality of the Group's human capital would remain relevant to the Group's growth and superior service delivery strategies. FINANCIAL SUFFICIENCY ANd HOSTING CULTURE The Group focused on its strategy to increase revenue generation, manage cash flows and costs, and increase productivity from 2004 to 2008. Prudent and financial management saw the Group emerge as a ‘Blue Chip’ entity through increased market capitalization; the Group has paid dividends consistently. The gap between service expectations and service delivery was recognised and in 2007 focus on this key area gave impetus to a service culture that had previously not been experienced in the Zimbabwean hospitality industry. This was the introduction of the How May I Serve You? (HMISY) service culture campaign. In this campaign, the Group Chief Executive Officer held himself accountable for the service performance of the whole Group and responded directly to any issues of service failure from the public. This raised the bar for hospitality operations in Zimbabwe and the Group emerged as a market leader. RE-bRANdING In May 2008, Zimbabwe Sun Limited re-branded to African Sun Limited in order to re-position the Group as a leading brand of hospitality in Africa; the name encapsulates the synergies within the Group’s operations in sub-Saharan Africa as we emerge as a pan-African hospitality Group within the tourism chain. As we look into the future we must remember that we have achieved our success as a result of processes Victoria Falls Hotel The Grace, Johannesburg Troutbeck Resort African Sun Limited 2008 112009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=14http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=14and initiatives that have been carefully crafted and executed, in order to derive maximum yields and create sustainable wealth. INCREASE OUR CAPACITY: GROw ROOMS UNdER MANAGEMENT FROM CURRENT 2500 TO 8500 bY 2012 Research in sub-Saharan Africa has shown that Africa has a critical need for five times more rooms in the hospitality sector than there are available. As such, African Sun Limited has targeted to increase rooms under management in Africa from the current 2 500 to 8 500 by 2012. This pathway will clearly set the pace for brand dominance in the sub-region and will see the bulk of the Group’s business deriving from west, east and southern Africa. Zimbabwe will contribute 28% of total rooms by 2012. This expansion highlights diversification and spread of risk managed by country and region. and superior for both the Group and the industry at large. The Group’s human skills base is its greatest asset, and is a key strategic aspect of the regionalisation strategy. To this end, satellite training academies will be set up in east, west and southern Africa in order to maintain standards and replicate the processes that have given African Sun Limited its winning formula. CREATING SUSTAINAbLE wEALTH A relevant business model is key to our operations. In keeping with modern trends, the Group’s portfolio is largely dependent on a good mix of key revenue drivers together with identification of locations for expansion, based on sound business practice. The Group’s target will be primary growth in mega cities in Africa, resources rich countries (oil and minerals) and leisure enclaves. Focus will be on the profitable core business (rooms, food EMPLOYER OF CHOICE The Group continues in its quest to become an employer of choice by providing competitive remuneration, an enabling and winning environment driven by personal learning and development. In the year under review, the Group has retained the bulk of its employees, with staff movements below international trends. Remuneration remains in the upper quartile in the hospitality industry, with regional benchmarks being the yardstick throughout the Group. The role profiling and brand alignment exercise was conducted across the Group resulting in staff being ideally placed in their roles. A mentorship programme was implemented in order to replicate the DNA across the Group as a way of maintaining high standards. As Human Capital is a key aspect of the expansion strategy, the Group has resourced and strengthened its Hospitality Training Academy (HTA) in order to provide a ‘one-stop’ shop for all training requirements in hospitality and to ensure that its human capital base remains relevant and beverage, conferencing, casinos and entertainment), and any linkages that will anchor its core. However, in order to reach critical mass and maintain a competitive edge in a wider range of regions the Group will maximize return through pursuing a fee-based model which includes Leasing, Management and Franchise contracts to maximize revenue opportunities. Ultimately, the long term vision is to create a franchise business from our own brands, allowing leases and management contracts to anchor the Group as we work on our goal to achieve a market capitalisation of US$1billion. In addition, ownership of hotels will be considered in key strategic locations such as Cape Town, Johannesburg, Lagos and Nairobi. The re-modelling of the Group’s distribution channels through the introduction of channel management will help decrease reliance on third party intermediaries to drive sales, hence resulting in higher yields. Availability to a wider market segment makes it possible to manage The Grace in Rosebank Hwange Safari Lodge Crowne Plaza Monomotapa 12 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=15http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=15rates and inventory at the point of purchase and will offer a direct selling approach on the back of a dynamic pricing strategy so that the hotel knows where and who the client is at the time of booking. GROwING OUR bRANdS REGIONALLY The Group continues in its quest to establish brand leadership in which African Sun Limited will dominate other brands and become the benchmark for other players in the region. As African Sun Limited goes into the region, combined brand strategy of the use of Intercontinental Hotels Group (IHG) brands, namely Holiday Inn, Crowne Plaza and Express by Holiday Inn in emerging markets, is key. IHG brands are tried and tested with great brand equity and awareness, especially for foreign and business travellers. In markets where we have gained recognition, we will use our own brands. Not only will the Group be able to generate higher average daily rate (ADR), occupancy and revenue per available room (REVPAR), the high international brand awareness will facilitate the securing of funding as and when this may be required. bRANd VALUE AddITION In its on-going quest to create sustainable wealth and unlock shareholder value, the Group will seek a dual listing on another major bourse by 2010. Through these plans and developments, African Sun Limited has successfully planted its footprint in strategic target markets. We will continue to increase our presence across Africa and make growth objectives for wealth, creative brand dominance, capacity and legacy a reality. IN CLOSING I am pleased to say that that the continental thrust into west, east and southern Africa, is a totally co-ordinated exercise based on potential projects that will fulfill laid down investment criteria. Our Group's investment strategy is endorsed by these acquisitions to date:         The Grace in Rosebank, South Africa The Lakes Hotel and Conference Centre, South Africa Holiday Inn Accra Airport, Ghana Obudu Mountain Resort, Nigeria Utanga Lodge, Nigeria Clear Essence California Wellness Centre and Boutique Hotel, Lagos, Nigeria Nike Lake Resort, Nigeria Amber Tinapa, Nigeria    Pipeline projects nearing completion include: Holiday Inn Kano, Nigeria with 200 rooms Holiday Inn Arusha, Tanzania, with 198 rooms Mongomo Hotel, in Bala, with 74 rooms and Hotel 3 Augusto in Malabo, with 45 rooms, both in Equatorial Guinea. Much of this report on the Group has been intentionally focused on the future and, as a consequence, comment on the financial results will be found in the Business Review Report. dIRECTORATE Mr D Mamvura and Mrs P Murombedzi resigned from the Board on 30 August and 30 September 2008, respectively. Their valued contribution to the Board over the years is much appreciated. FINAL dIVIdENd dECLARATION In light of the Group's satisfactory performance, I am pleased to report that the Board of Directors has declared a final dividend of $229.72 per share payable out of the profits of the company for the period ended 30 September 2008. Shareholders will be able to receive dividends wholly in cash or take a script dividend in the form of ordinary shares. The offer price will be determined by taking the closing price of the African Sun Limited shares on 30 September 2008. Dividend warrants will be posted and cheque payments made to shareholders on or about 12 February 2009. APPRECIATION As Chairman I would like to commend the management and staff for the efforts made during the year and their ability to adapt to the ever-changing business environment. Much appreciation also goes to my fellow directors for their support and contribution to the business of the Group over the past year. E M Makonese Chairman 12 February 2009 African Sun Limited 2008 132009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=16http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=16Business Review I am pleased to share with you some of the highlights that have made this year exciting. African Sun Limited re-branded in May and this gave realization to a bigger vision which has seen the Group’s thrust to increase its rooms under management in sub-Saharan Africa take wing. The Group attained an additional 1 100 rooms in the year under review, which when averaged, reflected an opening of a new hotel every six weeks! This has taken place under some global challenges which have affected the hospitality industry in various ways. On the African front, this has included the Zimbabwe elections scenario, and on a worldwide scale the global credit crunch which dampened arrivals from some of our source markets in Europe and America. More recently, the bombings in Mumbai, India have also affected international travel. Going forward, African Sun Limited's stance has been to adopt a growth mode instead of merely operating 14 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=17http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=17The Grace in Rosebank The Grace on survival mode. This has paid off handsomely as the business model, geared at growth, has enabled the company to meet some of its targets in pursuance to the quest to become big in Africa. The Group has also taken a position to ensure standardization in the way of doing business and has called this the African Sun Way. This was adopted at the annual Management Conference and will see predictability being an integral part of the business regardless of physical location. The African Sun way entails the following: SHAREd VISION – We will always seek to have a buy-in whilst providing leadership SHAREd VALUES – Our values are the glue that binds us together TIMEOUS ExECUTION ANd CLOSURE – It is not done until there is closure EFFECTIVENESS – We will deliver beyond expectations AdAPTAbILITY – We will be flexible without losing our strategic intent EFFICIENCY – We will be disciplined in utilizing resources in all we do CONNECTIVITY – It is our responsibility to get our message across to the other party zimbabwe The economy has continued to deteriorate, resulting in a reversal of growth trend in foreign arrivals experienced over the last two years. Governments of some of the international source countries downgraded the country as a destination, in the aftermath of the elections resulting in significant cancellations by foreign guests. African Sun Limited 2008 152009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=18http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=18Foreign room nights therefore recorded a 6% decrease compared to prior year. However, hotel occupancy increased to 41% from 39% last year, on the back of an upsurge in domestic patronage, albeit at lower yields due to the regulated prices. Yields achieved by African Sun Limited's hotels remained suppressed compared to similar properties in other regional countries. Cost containment measures continued to be used with the effect of improving the suppressed margins caused by the skewed pricing structure. This assisted in cushioning the Group from the inflationary environment. The new pricing structure which came into effect in October 2008, which allows hotels to peg rates in hard currency, should however assist in improving yields in the future. South Africa Economic growth continues to be spurred by fixed capital formation as the 2010 Soccer World Cup draws near. Prospects for travel therefore remain positive after FIFA endorsed South Africa to host the Confederations Cup in 2009 just before the World Cup. Contribution to Group turnover from South African operations increased to 27%, compared to 15% in the prior reporting period, owing to the acquisition of a long term lease on the operations of the 151 roomed The Lakes Hotel and Conference Centre in Johannesburg and the 37% improvement in the average daily rate (ADR) at The Grace in Rosebank. Nigeria Nigeria’s economy benefited from high oil prices experienced in the first half of 2008 and the resultant economic growth has translated directly into increased hotel rates and occupancies within Nigeria’s top destinations. In May 2008, African Sun Limited assumed management of Obudu Mountain Resort, a leading leisure facility in Cross River State, having agreed a plan with the state government to bring the resort to its full operational potential through an improvement in access and regional marketing initiatives. Ghana Macroeconomic stability, an increasingly business friendly environment and the recent discovery of oil in Ghana, will spur growth and demand for accommodation. African Sun Limited assumed management of the Holiday Inn Accra Airport on 15 August, 2008. The hotel performed above industry average, achieving a revenue per available room (RevPAR) of US$124 in the first few months of opening, which was 11% ahead of the hotel’s competitive set.      FINANCIAL PERFORMANCE Group Hotel occupancy remained steady at 41% compared to 40% achieved in 2007, whilst operating margins grew to 53.5% compared to 29.5% in 2007, owing to the contribution of exchange gains on debtors and foreign currency denominated balances. Operations in the rest of Africa, which constitute 11% of current room capacity, contributed US$8.7million in turnover, up from US$5.5million in the prior period. This represents 27% of consolidated turnover in comparison to a contribution of 15% in the previous financial year. Zimbabwe hotels, which constitute 89% of the current room capacity contributed 73%. The growth in operations in the rest of Africa, revaluation of Plant and Equipment and the surge in fair value of the investment in Dawn Properties Limited and other approved hedging instruments, contributed to the significant growth of the Statement of Financial Position. bUSINESS MOdEL As African Sun Limited pursues its expansion, the Group will target primary and growth cities in Africa to establish hotel operations. These are cities where operations are likely to thrive owing to the great potential inherent in their resources and people. Hotel operations run by the Group will continue to focus on rooms, food and beverage, casinos, conferencing and entertainment. As the company’s own brands are set to dominate on the African continent, the Group is able to earn franchise fees to augment main line business activities of lease and management contracts. The Group will seek to obtain lease and management contracts as it expands into Africa so as to minimize risk, but ownership will be considered in strategi2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=19http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=19Hwange Safari Lodge Hwange Safari Lodge Express by Holiday Inn Beitbridge REVIEw OF THE STRATEGIC GOALS 1. Capacity Growth At the beginning of the 2008, the Group had 73 rooms under management outside Zimbabwe, but as our vision took wing we closed the year with nearly 1 100 rooms and eight operational hotels. The Group has experienced exponential growth with the addition of a total of 877 rooms in West Africa, namely, Obudu Mountain Resort in Cross River State, Nigeria with 159 rooms and Holiday Inn Accra Airport with 168 rooms. These came on board in July and August 2008 respectively. Of these 877 rooms, 548 came on board in the latter part of the year and were effectively under Africa Sun Limited Management between November and December 2008. These are Utanga Lodge with 90 rooms and Amber Tinapa with 243 rooms, both in Cross River State, Nigeria. In addition, Nike Lake Resort in Enugu State, also in Nigeria added 215 rooms to the portfolio. In South Africa, The Lakes Hotel and Conference Centre with 144 rooms came on board in August 2008. Going forward, the Group will see West Africa having the largest number of rooms under management given the potential that is represented by that region. Projected regional contributions by 2012 will be as follows: West Africa East Africa Southern Africa Zimbabwe 2. 35% 7% 33% (excluding Zimbabwe) 25%      excellence remain the dominant factor in our strategy. Initiatives such as role profiling for all staff as well as brand alignment were embarked upon to ensure that the correct people are aligned to the correct job and the correct hotel to ensure high service delivery at all times. With the growth that the Group is experiencing, it is paramount that service standards are adhered to. This has been addressed by the inclusion of the Hospitality Training Academy (HTA) in all pre-openings of new properties to ensure that the gap between new units and the African Sun way of doing things is closed. In existing properties, the Hospitality Training Acacemy (HTA) will focus on Service Revitalization Programmes group wide through strategic alliances with industry leaders in training such as Cornell University and Swiss Hotel School. Attention will be paid to the following: Service Quality Quality Control The African Sun Way People Brand As the expansion drive comes to fruition, a sustainable service support system is imperative and this has been addressed through the introduction of satellite training academies in both West Africa and Equatorial Guinea in order to manage the service gaps and provide continuous training which is a vital component of the hospitality industry. The main Hospitality Training Academy in Zimbabwe will Human Resources and Hospitality Training Academy (HTA) People continue to be the backbone of African Sun Limited and as the Group grows, it is imperative that systems are put in place to ensure that skills development and service continue to seek strategic alliances with other accredited institutes of higher learning in order to upgrade the level of qualifications. The Hospitality Training Academy will not only provide training for African Sun Limited hotels in Zimbabwe, but for the industry as a whole. African Sun Limited 2008 172009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=20http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=203. Market Capitalization Research conducted by Renaissance Capital has valued African Sun Limited at US$0.54 per share (Market Capitalization of US$389 million assuming confirmed rooms of 3500 including the existing rooms). According to this research, and taking into account the target of 8500 rooms, African Sun Limited value grows to US$762 million, a clear indication of the attainability of our goal to reach US$1 billion market capitalization by 2012. in selected areas with linen and crockery. In addition, the Group has partnered with World Vision Zimbabwe to assist in their eradication of poverty and hunger programme with specific reference to identified children who have been orphaned as a result HIV and AIDS. LOYALTY PROGRAMMES Loyalty Programmes, notably Sunset Club and Sun Rewards mainly active in the Zimbabwe market continue to add value to the business, and in the period under review have contributed significantly to room nights to Zimbabwe operations. Sunset Club achieved a contribution of 13% to room nights and Sun Rewards contributed 40% room nights for the period ending 30 September 2008. As the pan-African expansion programme takes shape, loyalty programmes will be adopted to gain market share as well as develop customer allegiance to the African Sun Limited brands. CONCLUSION This year the Group made a conscious decision to increase rooms and grow brand equity. This has largely been successful as evidenced by the many accolades received throughout 2008. The Grace in Rosebank continued to raise high the African Sun Limited Flag and was named the Best Hotel in Johannesburg in the United States based Condé Nast Traveller Choice Readers awards.The Victoria Falls Hotel was given the accolade of Zimbabwe’s leading resort by the World Travel Awards awarded at Indaba held in Durban in May 2008. In addition, African Sun Limited was recognised by the Institute of Personnel Management (Zimbabwe) for its keen interest and success in Human Resource Development in the training of its personnel across the Group. It has indeed been an exciting year which will be used as the launch pad to soar higher in the quest to achieve the stipulated goals. In conclusion, I would like to acknowledge my executive team, management and staff for their valued contribution and direction. In addition, I would like to express my utmost appreciation for the leadership shown by the board and my fellow directors which has enabled our Group to attain the success it has seen this year. 4. brand Leadership The Group is on course with its quest of establishing brand leadership in the areas within which it has chosen to operate. The period under review saw the introduction of African Sun Limited's own mid range brand, Amber, in Tinapa, Cross River State, Nigeria. On the Zimbabwean front, the plans for building an Amber branded hotel in the border town of Beitbridge were signed off which will introduce a total of two African Sun Limited Amber branded hotels within the group, in the period under review. African Sun Limited continues to expand its IHG branded properties with the addition of Holiday Inn Accra Airport in Ghana. This hotel performed 11% ahead of its peers within its first few months under management by African Sun Limited. CORPORATE SOCIAL RESPONSIbILTY As African Sun Limited, the Group has a robust corporate social investment programme which has several initiatives under the banner of its Suncare Corporate Responsibility Programme. The basis of the African Sun Limited social responsibility programme is in line with the United Nations eight Millennium Development Goals which cover the following areas of need throughout the world:         Eradicate Extreme Poverty and Hunger Achieve Universal Primary Education Promote Gender Equality Reduce Child Mortality Improve Maternal Health Combat HIV and AIDS, Malaria and Other Diseases Ensure Environmental Stability Develop a Global Partnership for Development. African Sun Limited has adopted the2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=21http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=21Caribbea Bay Elephant Hills Resort The Grace in Rosebank Obudu Mountain Resort African Sun Limited 2008 192009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=22http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=22Clear Essence California Wellness Centre and Boutique Hotel Report of the Directors The Directors present their Annual Report and the Audited Financial Statements of the Company and the Group for the twelve months ended 30 September 2008. YEARS' RESULT Profit attributable to shareholders Dividends Interim: $556.40 (old currency) per share paid in August 2008. Final: $229.72 (revalued) per share paid in November 2008. CAPITAL ExPENdITURE Capital expenditure for the twelve months to 30 September 2008 on properties and operating assets amounted to $120 711 871 625.00. The programmed capital expenditure for the year to 30 September 2009 totals $1 138 019 250 000.00, of which $548 125 000 000 has been set aside for Product Improvement, Safety and Essential Services and new projects. HISTORICAL COST $ 473 336 928 670 20 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=23http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=23INVESTMENTS The Group holds equity investments in the following organisations to the extent indicated below: African Sun Limited PCC (Mauritius) African Sun Zimbabwe (Private) Limited RCI (Zimbabwe) (Private) Limited Dawn Properties Limited SHARE CAPITAL 100% 100% 24% 17,72% The issued share capital was increased, by the issue of 43 035 081 ordinary shares, to 687 967 404 ordinary shares. The shares were issued in terms of share option schemes and interim scrip dividend. Accordingly, the issued share capital and share premium totals $8 832.00. There are no unexercised shares under the current employee share option scheme. RESERVES The movement in the reserves of the Group are shown in the Group Statement of Comprehensive Income, Group Statement of Changes in Shareholders’ Equity and in the Notes to the Financial Statements. dIRECTORS Messrs N Mangwiro, T N Chiganze and L T Kapungu retire by rotation. All being eligible, they will offer themselves for re-election at the Annual General Meeting. AUdITORS Members will be asked to re-appoint PricewaterhouseCoopers as auditors to the Group for the ensuing year. ANNUAL GENERAL MEETING The Thirty-Seventh Annual General Meeting of members of the Company will be held on Friday 27 March 2009 at 12:00 at Holiday Inn Harare. by the order of the board: E M Makonese Chairman S A Munyeza Group Chief Executive Officer E T Shangwa Company Secretary 12 February 2009 African Sun Limited 2008 212009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=24http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=24Accounting Philosophy ACCOUNTING PhILOSOPhY A frican 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, The International Accounting Standards Board and The International Federation of Accountants. The Group is committed to 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 the 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. During the year, the Group early adopted 1FRS 8 Operating Segments for its half-year results. This was an endeavour to adhere to the standards of disclosure of all relevant information so as to influence economic decisions by all of our shareholders. For the final results, International Accounting Standard 1 (IAS1) – Presentation of Financial Statements (revised) was also adopted early in the year. This resulted in significant changes in primary statements being changed from Income Statement, Balance Sheet, Cash flow Statement and Statement of Changes in Equity, to Statement of Comprehensive Income, Statement of Financial Statement, Statement of Cash flow and Statement of Changes in Equity respectively. This is to disclose fully the financial effect of non-owners' increase in equity in the Statement of Comprehensive Income so that only changes resulting from shareholders' contributions will be recognised directly in equity. This therefore enhances reliability and relevance of the Groups' financial information. 22 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=25http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=25Financial Reporting DIRECTORS' RESPONSIbILITY FOR FINANCIAL REPORTING African Sun Limited's Directors are required by the Companies Act (Chapter 24:03) 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 and 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 22. The Group’s Risk and Audit Committee has met the The Directors have reviewed the Group’s budget and cash flow forecast for the twelve months to 30 September 2009. 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 26 and 27. 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. There is S A Munyeza Group Chief Executive Officer 12 February 2009 E M Makonese Chairman The historical cost financial statements for the twelve months ended 30 September 2008 which appear on pages 28 to 61 have been approved by the Board of Directors and are signed on its behalf by: internal and 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 can 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. a Risk and Audit Committee of the Board of Directors, which 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 auditors and the 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. 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. African Sun Limited 2008 232009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=26http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=26Hwange Safari Lodge Clear Essence California Wellness Centre and Boutique Hotel Hwange Safari Lodge Express by Holiday Inn Beitbridge 24 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=27http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=27Company Secretary CERTIFICATE bY ThE COMPANY SECRETARY I, the undersigned, in my capacity as Company Secretary, hereby confirm to the best of my knowledge and belief that for the financial year ended 30 September 2008, the Company has 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. E T Shangwa Company Secretary 12 February 2009 African Sun Limited 2008 252009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=28http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=28PricewaterhouseCoopers Building Number 4, Arundel Office Park Norfolk Road Mount Pleasant Po Box 453 Harare Zimbabwe REPORT OF ThE INDEPENDENT AUDITORS TO ThE MEMbERS OF AFRICAN SUN LIMITED W e have audited the accompanying financial statements of African Sun Limited set out on pages 28 to 61, which comprise the statements of financial position as at 31 December 2008 and the statements of comprehensive income, cash flows and changes in equity for the year then ended and a summary of significant accounting policies and other explanatory notes. dIRECTOR'S 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 the provisions of the Zimbabwe Companies Act (Chapter 24:03). This responsibility includes designing, implementing and maintaining internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement whether due to fraud or error, selecting and applying appropriate accounting policies, and making accounting estimates that are reasonable in the circumstances. AUdITOR'S RESPONSIbILITY Our 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 whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain 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. bASIS FOR AdVERSE OPINION ON COMPLIANCE wITH INTERNATIONAL FINANCIAL REPORTING STANdARdS The Zimbabwe economy is recognised as being hyperinflationary for purposes of financial reporting. As discussed under Accounting Policies Note 1.3, the accompanying financial statements have been prepared on the historical cost basis and, therefore, have not been stated in terms of a measuring unit current at 30 September 2008 as required by IAS 29 'Financial Reporting in Hyperinflationary Economies'. That Standard requires that financial statements that report in the currency of a hyperinflationary economy should be stated in terms of the measuring unit current at the year-end date. The non-compliance with IAS 29 arises from the unavailability of official inflation indices, and the difficulty to reliably measure inflation, as explained under Accounting Policies Note 1.3. However these financial statements would form the basis of the adjustments required in terms of IAS 29. 26 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=29http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=29AdVERSE OPINION ON NON-COMPLIANCE wITH INTERNATIONAL FINANCIAL REPORTING STANdARdS In our opinion, because of the effects of the matter referred to in the Basis for Adverse Opinion paragraph, the accompanying financial statements do not give a true and fair view of the financial position of African Sun Limited company and group as at 30 September 2008 and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards. REPORT ON LEGAL ANd REGULATORY REqUIREMENTS These financial statements have been prepared in accordance with the accounting policies set out on page 34 to 43, and comply with the disclosure requirements of the Zimbabwe Companies Act (Chapter 24:03). EMPHASIS OF MATTER Without further qualifying our opinion, we draw attention to Note 32 to the financial statements, in respect of the following: • TheZimbaweoperationsof theGrouphavebeensignificantlyaffectedbytheadverseeffectsof thecountry’s unfavourable economic environment characterised by, inter-alia, chronic hyperinflation, the erosion of the purchasing power of the local currency, multiple exchange rates and pricing mechanisms and significant distortions in the market. • Giventhechronichyperinflation,thetimelapsebetweentheyear-endandreportingdatesmayrenderthe financial information presented in the financial statements less useful and relevant for making economic decisions. CHARTEREd ACCOUNTANTS (zIMbAbwE) HARARE 12 February 2009 African Sun Limited 2008 272009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=30http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=30STATEMENT OF FINANCIAL POSITION As at 30 September 2008 GROUP Historical Cost ASSETS Non-current assets Property, plant and equipment Intangible assets Biological assets Investments in associate Other investments Receivables Deferred income tax asset 2 3 4 5.1 5.2 6 17.2 7 736 692 907 318 281 105 379 180 90 693 000 000 6 815 892 994 859 – 147 129 696 000 15 111 529 101 15 086 625 506 458 643 49 – 307 16 – 1 1 016 Notes 2008 $ 2007 $ Current assets Financial assets at fair value through profit or loss Inventories Trade and other receivables Cash and cash equivalents 7 8 9 10 28 250 242 727 74 597 183 769 859 588 144 734 544 337 448 446 1 506 773 019 676 – 23 82 55 160 Total assets 16 593 398 526 134 1 176 EqUITY ANd LIAbILITIES Equity Share capital Share premium Share option reserve Other reserves Retained earnings Total equity 13.1 11 12 – 8 832 – 12 376 289 715 079 473 336 925 033 12 849 626 648 944 – 1 1 768 35 805 LIAbILITIES Non-current liabilities Deferred income tax liability 17.2 2 418 353 197 146 197 Current liabilities Trade and other payables Borrowings 14 16 1 286 490 951 448 38 927 728 596 1 325 418 680 044 152 22 174 Total equity and liabilities 16 593 398 526 134 1 176 These financial statements were approved by the board on the 12th of February 2009 and signed on its behalf by: E M Makonese Chairman S A Munyeza Group Chief Executive Officer 28 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=31http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=31STATEMENT OF FINANCIAL POSITION As at 30 September 2008 COMPANY Historical Cost ASSETS Non-current assets Property, plant and equipment Investments in subsidiaries Investments in associate 26 27 5.1 543 707 424 857 13 6 815 892 994 859 7 359 600 419 729 31 13 307 351 Notes 2008 $ 2007 $ Current assets Financial assets at fair value through profit/loss Trade and other receivables 28 29 60 212 237 23 048 678 83 260 915 – 1 1 352 Total assets 7 359 683 680 644 EqUITY ANd LIAbILITIES Equity Share capital Share premium Share option reserve Other reserves (Accumulated losses)/Retained earnings Total equity 13.2 11 12 – 8 832 – 7 193 585 319 041 (14 147 235 065) 7 179 438 092 808 – 1 1 332 3 337 Non-current liabilities Deferred income tax 30 167 548 948 659 8 Current liabilities Trade and other payables Amounts owing to group companies Borrowings 31 4 241 087 086 8 455 507 644 44 447 12 696 639 177 1 6 – 7 Total equity and liabilities 7 359 683 680 644 352 These financial statements were approved by the board on the 12th of February 2009 and signed on its behalf by: E M Makonese Chairman S A Munyeza Group Chief Executive Officer African Sun Limited 2008 292009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=32http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=32STATEMENT OF COMPREhENSIVE INCOME For the year ended 30 September 2008 GROUP Historical Cost Notes 2008 $ 811 829 069 449 (24 048 687 832) (5 126 818 650) (138 027 147 999) (208 739 325 961) 18 19 435 887 089 007 109 248 997 036 (1 990 493 631) 542 462 346 (4 058 426 463) 539 629 628 295 17 (66 292 699 625) 473 336 928 670 2007 $ 173 (38) (1) (31) (52) 51 – (2) – (1) 48 (13) 35 Revenue Materials and consumables used Depreciation, amortisation and impairment charges Staff costs Other operating expenses Operating profit Other income Share of loss of associate Interest income Interest costs Profit before taxation Taxation Profit for the year Other comprehensive income net of tax: Exchange differences on translating foreign operations Gains on property revaluation Share of other comprehensive income of associate Other comprehensive income for the year net of tax 388 504 605 870 5 169 901 620 283 6 817 883 488 158 12 376 289 714 311 54 411 300 765 TOTAL COMPREHENSIVE INCOME FOR THE YEAR 12 849 626 642 981 800 Profit attributable to: Company and subsidiaries Associated companies 473 336 928 670 475 327 422 301 (1 990 493 631) 35 37 (2) Total comprehensive income attributable to: Company and subsidiaries Associated companies 12 849 626 642 981 6 031 743 154 823 6 817 883 488 158 800 500 300 Earnings per share ($) Basic earnings basis Fully diluted earnings basis 20 20 706.13 706.13 – – 30 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=33http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=33STATEMENT OF CAShFLOWS For the year ended 30 September 2008 GROUP Historical Cost Notes Cash flows from operating activities 2008 $ 2007 $ Cash generated from trading Interest paid Cash generated from operating activities 21 674 375 610 778 (4 058 426 463) 670 317 184 315 35 (1) 34 Cash flows from investing activities Investments to maintain operations: - Interest received - Replacement of property, plant and equipment 542 462 346 (120 351 526 448) (119 809 064 102) Investment to expand operations: - Property, plant and equipment additions Net cash utilised in investing activities (360 345 177) (120 169 409 279) (1) (34) – (33) (33) Cash flows from financing activities Increase in short term loans Net cash generated from financing activities 38 927 728 574 38 927 728 574 22 22 Net movement in cash and cash equivalents during the year Cash and cash equivalents at the beginning of the year Exchange (gains)/losses on cash and cash equivalents Cash and cash equivalents at the end of the year 589 075 503 610 55 (44 738 055 219) 544 337 448 446 22 – 33 55 Represented by: Cash on hand and balances with banks 10 544 337 448 446 55 African Sun Limited 2008 312009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=34http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=34STATEMENT OF ChANGES IN EqUITY For the year ended 30 September 2008 GROUP Share capital $ Share premium $ Share option reserve $ HISTORICAL COST Balance at 30 September 2006 Recognition of share based payments Dividends paid Issue of shares Total comprehensive income for the year – – – – – – – – – 1 – – 1 – – – 1 Balance at 30 September 2007 1 Recognition of share based payments Dividends paid Issue of shares Total comprehensive income for the year balance at 30 September 2008 – – – – – – – 8 831 – 8 832 (1) – – – – 32 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=35http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=35Revaluation reserve $ Foreign currency translation reserve $ Fair value reserve $ Retained earnings $ Total shareholders' equity $ 2 – – – 411 – – – – 54 1 – – – 300 – – – – 35 3 1 – 1 800 413 54 301 35 805 – – – 5 169 901 620 283 5 169 901 620 696 – – – 388 504 605 870 388 504 605 924 – – – 6 817 883 488 158 6 817 883 488 459 – (3 672) – 473 336 928 670 473 336 925 033 (1) (3 672) 8 831 12 849 626 642 981 12 849 626 648 944 African Sun Limited 2008 332009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=36http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=36STATEMENT OF ACCOUNTING POLICIES For the year ended 30 September 2008 1. ACCOUNTING POLICIES The following paragraphs set out the principal accounting policies of the Group in compliance with International Financial Reporting Standards promulgated by the International Accounting Standards Board (IASB) (International Financial Reporting Standards incorporate all International Accounting Standards previously issued by the IASB). Unless otherwise stated, these are consistent with prior years. 1.1 bASIS OF PREPARATION The financial statements of the Group are prepared in accordance with International Financial Reporting Standards (IFRS),exceptforcompliancetoInternationalAccountingStandard (IAS) 29 'Financial Reporting in Hyperinflationary Economies', which require for purposes of fair presentation that historical information be restated for changes in the general purchasing power of the Zimbabwe Dollar. Inflation-adjusted financial statements could not be produced for reasons outlined in 1.3. The preparation of financial statements in conformity with International Financial Reporting Standards (IFRS) requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the consolidated financial statements, are disclosed in Policy 23. 1.2 AdOPTION OF STANdARdS Standards and amendments early adopted by the Group IAS 1, 'Presentation of financial statements'. IFRS 8, 'Operating segments replaces IAS 14'. Interpretations effective in 2008, but not relevant IFRIC 11, 'IFRS 2 – Group and treasury shared transactions'. IFRIC 12, 'Service concession arrangements'. IFRIC 13, 'IAS 18 – Customer loyalty programmes'. IFRIC 14, 'IAS 19 – The limit on a defined benefit asset'. Standards, amendments and interpretations to existing standards that are not yet effective and have not been early adopted by the Group IAS 23 (Amendment), 'Borrowing costs' (effective 1 January 2009). IFRS 2 (Amendment), 'Share-based payment' (effective 1 January 2009). IAS 32 (Amendment), 'Financial instruments'. 2. 1.3 INFLATION AdJUSTMENT IAS 29 requires that Financial Statements prepared in the currency of a hyperinflationary economy be stated in terms of a measuring unit current at the year-end, and that corresponding figures for previous periods be stated in the same terms to the latest reporting date. At the time of producing these financial statements, the Central Statistical Office (CSO) had not released the August and September 2008 consumer price indices. Further, due to the existence of multiple economic factors and market distortions which are pervasive to the Zimbabwean economic environment inflation cannot be accurately measured by other means. As a result, inflationadjusted financial statements have not been produced. SEGMENT REPORTING A business segment is a group of assets and operations engaged in providing products or services that are subject to risks and returns that are different from those of other business segments. A geographical segment is engaged in providing products or services within a particular economic environment that is different from those of segments operating in other economic environments. Interpretation and amendments to existing standards that are not yet effective and not relevant for the Group's operations IAS 20 (Amendment), 'Accounting for government grants and disclosure of government assistance' (effective 1 January 2009). IFRIC 15, 'Agreements for construction of real estates' (effective 1 January 2009). IFRS 1 (Amendment), 'First time adoption of IFRS'. IAS 27, 'Consolidated and separate financial statements' (effective 1 January 2009). IAS 28 (Amendment), 'Investments in associates'. IAS 32, 'Financial instruments: Presentation'. IFRS 7, 'Financial instruments: Disclosures'. IAS 36 (Amendment), 'I2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=37http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=373. CONSOLIdATION Subsidiaries are all 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. 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 purchase method of accounting is used to account for the acquisition of subsidiaries by the Group. The cost of an acquisition is measured as the fair value of the assets given, equity instruments issued and liabilities incurred or assumed at the date of exchange, plus costs directly attributable to the acquisition. Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair values at the acquisition date, irrespective of the extent of any non-controlling interest. The excess of the cost of acquisition over the fair value of the Group’s share of the identifiable net assets acquired is recorded as goodwill. If the cost of acquisition is less than the fair value of the net assets of the subsidiary acquired, the difference is recognised directly in the Statement of Comprehensive Income. Inter-company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also eliminated but considered an impairment indicator of the asset transferred. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. 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. Investments in associates are accounted for by the equity method of accounting and are initially recognised at cost. The Group's investment in associates includes goodwill (net of any accumulated impairment loss) identified on acquisition. The Group's share of its associates' post-acquisition profits or losses is recognised in the Statement of Comprehensive Income, and its share of post-acquisition movements in reserves is recognised as comprehensive income. The cumulative postacquisition movements are adjusted against 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 obligations or made payments on behalf of the associate. Unrealised gains on transactions between the Group and its associate are eliminated to the extent of the Group's interest in the associates. Unrealised losses are also eliminated unless the transactions provide evidence of an impairment of the asset transferred. 4. FOREIGN CURRENCY TRANSLATION 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 consolidated financial statements are presented in Zimbabwe Dollars, which is the Company's functional currency. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the 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, except when deferred in equity as qualifying cash flow hedges and qualifying net investment hedges. Translation differences on non-monetary financial assets and liabilities are reported as part of the fair value gain or2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=38http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=38STATEMENT OF ACCOUNTING POLICIES Continued 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 comprehensive income. 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. 5. CAPITALISATION OF FINANCING COSTS ANd ExCHANGE dIFFERENCES Financing costs and exchange differences, to the extent that they are considered to be finance costs which specifically relate to funds raised to finance the construction of new projects or re-development of existing hotels, are capitalised as part of the asset up to the date of commissioning of the asset. 6. PROPERTY, PLANT ANd EqUIPMENT Hotel properties are maintained as a matter of company policy by an ongoing programme of refurbishment and repair. Property, plant, equipment and vehicles are stated at fair value based on periodic, but at least biennial, valuations by the Directors or independent external valuers, less subsequent accumulated depreciation and impairment losses, apart from land and buildings, which are shown at indexed cost less accumulated depreciation. 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, plant and equipment is 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, plant and equipment is transferred directly to retained earnings when the asset is de-recognised. Subsequent costs are included in the assets' carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with The restoration is limited to the value which would have been recorded had the impairment adjustment not taken place. Surpluses or deficits arising on the disposal of property, plant, Service division assets and cash flows are allocated to operating divisions as appropriate. Discount rates used are the medium term expected pre-tax real rates of return, adjusted in the case of historical financial information to take account of inflation. 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. 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 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 a realisable value or a value in use. Value in use is determined using discounted cash2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=39http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=39equipment and vehicles are determined by comparing proceeds with the carrying amount. These are included in the Statement of Comprehensive Income. 7. HOTEL EqUIPMENT Hotel equipment, comprising standard service stock, is not depreciated but the annual charge for usage is recognised in the Statement of Comprehensive Income. fair values for the stages of forest development. Livestock Livestock are measured at their fair value, less estimated point-of-sale costs. The fair value of livestock is determined by the Directors based on the quoted market price in an active market. 10. IMPAIRMENT OF NON-FINANCIAL ASSETS 8. INTANGIbLE ASSETS Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on acquisition of subsidiaries is included in ‘intangible assets’. Separately recognised goodwill is tested annually for impairment and carried at cost, less accumulated impairment losses. Impairment losses on goodwill are not reversed. Gains and losses on the disposal of an entity include the carrying amount of goodwill relating to the entity sold. Goodwill is allocated to cash-generating units for the purpose of impairment testing. Each cash-generating unit represents the Group's investment in each country of operation by each primary reporting segment. brand names and trademarks Brand names and trademarks are shown at cost, less accumulated amortisation. Amortisation is calculated using the straight-line method to allocate the cost of brand names and trademarks over their estimated useful lives. Brand names and trademarks are reviewed for impairment on an annual basis and the carrying amount of an asset is written down to its recoverable amount immediately, if the carrying amount is greater than the estimated recoverable amount. Assets that have an indefinite useful life 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. 11. FINANCIAL ASSETS Classification The Group classifies its financial assets in the following categories: loans and receivables, at fair value through profit or loss, held to maturity and available for sale. The classification depends on the process for which the financial assets were acquired. Management determines the classification of its financial assets at initial recognition. At year end the company only had loans and receivables and fair value through profit/(loss). Loans and receivables Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an in agricultural activity through active market. They are included in current assets, except for maturities greater than 12 months after the reporting date. These are classified as non-current assets. The Group's loans and receivables comprise "trade and other receivables" and cash equivalents in the Statement of Financial Position. 9. bIOLOGICAL ASSETS The Group engages management of the biological transformation of biological assets for sale as agricultural produce or transformation into additional biological assets. Timber plantation Timber plantations are measured at their fair value, less estimated point-of-sale costs. The fair value of timber plantations is determ2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=40http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=40STATEMENT OF ACCOUNTING POLICIES Continued category if acquired principally for the purpose of selling in the short-term. 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 for all financial assets not carried at fair value through profit or loss. Financial assets carried at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the Statement of Comprehensive Income. Financial assets are de-recognised 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 and financial assets at fair value through profit or loss are subsequently carried at fair value. Financial assets at fair value through profit or loss are subsequently carried at fair value. Loans and receivables are carried at amortised cost using the effective interest method. Gains or losses arising from changes in the fair value of the ‘financial assets at fair value through profit or loss’ category are presented in the Statement of Comprehensive Income within ‘other (losses)/gains – net’ in the period in which they arise. Dividend income from financial assets at fair value through profit or loss is recognised in the Statement of Comprehensive Income as part of other income when the Group’s right to receive payments is established. 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. The Group assesses at each reporting date whether there is objective evidence that a financial asset or group of financial assets is impaired. An impairment loss is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount classified as available for sale; a significant or prolonged decline in the fair value of the security below its cost is 15. 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 14. CASH ANd CASH EqUIVALENTS 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. Bank overdrafts are shown within net interest bearing debt on the Statement of Financial Position. 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 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. 13. TRAdE RECEIVAbLES Trade receivables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest rate method, less provision for impairment. 12. INVENTORY 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 a "first-in, first-out" basis. Net realisable2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=41http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=41termination 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 pretax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. The increases in the provision due to passage of time is recognised as interest expense. 16. REVENUE RECOGNITION Revenue is derived from the following sources: sales of goods and services in leased properties, management fees and other revenues which are ancillary to the Group's operations. Revenue represents sales (excluding value added tax and similar taxes) of goods and services and net of discounts, provided in the normal course of business and recognised when services have been rendered. Revenue is measured at the fair value of the consideration received or receivable. The following is a description of the composition of revenues of the Group: Leased Primarily derived from hotel operations, including the rental of rooms, food and beverage sales from leased hotels operated under the Group's brand names. Revenue is recognised when rooms are occupied and food and beverages are sold. Management fees Management 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, and an incentive fee, which is based on a fixed or variable per cent 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 an interim period and at year end incentive fees are recognised as if they were due had the contract been terminated at the end of the period. Timeshare revenue The extended reservations system involves the advance sale of time modules for use during the next twenty-five years of apartments owned by the company. At the end of this period, all rights in the apartments revert to the company. Revenue is taken to account when a time module sale contract is concluded. 17. 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, plant 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 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, plant and equipment acquired under finance leases are depreciated over the shorter of the useful life of the asset and the lease term. 18. 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. 19. CURRENT ANd dEFERREd INCOM2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=42http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=42STATEMENT OF ACCOUNTING POLICIES Continued which applicable tax regulations are subject to interpretation; it establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. The present value of the defined benefit obligation is Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated 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 reporting 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 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 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. 20. EMPLOYEE bENEFITS Pension obligations The Group has a defined benefit and 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. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependant on one or more factors such as age, years of service and compensation. bonus plans The liability recognised in the Statement of Financial Position in respect of defined benefit pension plans is the present value of the defined benefit obligation at the reporting date, less the fair value of plan assets, together with adjustments for unrecognised acturial gains or losses and past service costs. The defined benefit obligation is calculated 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 contractually obliged or where there is a past practice that has created a constructive obligation. 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 either terminating the employment of current employees according to a detailed formal plan without possibility of withdrawal, or providing termination benefits as a result of an offer made to encourage voluntary redundancy. Benefits falling due more than 12 months after the reporting date are discounted to their present value. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to Statement of Comprehensive Income in the period in which they arise. Past-service costs are recognised immediately in income, unless the changes to the pension plan are conditional on the employees remaining in service for a specified period of time. In this case, the past-service costs are amortised on a straight-line basis over the vesting pe2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=43http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=43Share-based compensation The Group operates an equity-settled share-based compensation plan under which the entity receives services from employees as consideration for equity instruments 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, excluding the impact of any non-market service and performance vesting conditions, for example, profitability, sales growth targets and remaining an employee of the entity over a specified time period. Non-market vesting conditions are included in assumptions about the number of options that are expected to vest. The total amount expensed is recognised over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied. At each reporting date, the entity revises its estimates of the number of options that are expected to vest, based on the non marketing vesting conditions. It recognises the impact of the revision to original estimates, if any, in the Statement of Comprehensive Income, with a corresponding adjustment to equity. The proceeds received net of any directly attributable transaction costs are credited to share capital and share premium when the options are exercised. 21. 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 tax, from the proceeds. 23. CRITICAL ACCOUNTING ESTIMATES ANd JUdGEMENTS Estimates and judgements 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. The Group makes estimates and assumptions concerning the future. 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 disclosed below. Value of "The Grace" brand name The value of the brand name "The Grace" has been determined by assuming the hotel maintains certain average room rates and occupancy levels over a projected time period. If revised estimated average room rates and occupancy levels were lower than management's estimates at 30 September 2008, the Group would need to reduce the carrying value of the brand name accordingly. Estimated impairment of goodwill Goodwill was recognised when The Grace was purchased, which was determined as the excess of the cost of the business combination over the net fair value of the identifiable assets, liabilities and contigent liabilities recognised. The Group tests annually whether goodwill has suffered any impairment, in accordance with the accounting policy stated in note 10. As of the 30th of September 2008, the recoverable amount 22. bORROwINGS Borrowings are recognised initially at fair value, net of transaction costs incurred. Borrowings are subsequently stated at amortised cost; any difference between the proceed – 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 prepayment 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 sett2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=44http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=44STATEMENT OF ACCOUNTING POLICIES Continued 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 income tax liability by $77 252 103 and the deferred tax liability by $6 552 017 859, if unfavourable, or decrease the income tax liability by $77 252 103 and the deferred tax liability $6 552 017 859, if favourable. Revenue recognition The Group has recognised revenue during 2008 from Pre-Opening Services Agreements (POSA) in various African countries. The Group believes that payment will be received in full and therefore no corresponding provision against revenue is recognised. Foreign operations The Group has operations outside of Zimbabwe where it is primarily domiciled. This entails that the functional currency of the foreign operations has to be translated to the reporting currency of the reporting entity based on IAS 21 'Effects of Changes in Foreign Exchange Rates'. Due to the multiple foreign currency rates prevailing in Zimbabwe, Directors had to set the foreign exchange rates they deemed reasonable at the time of reporting. Useful lives and residual values of property, plant and equipment The Group assesses the useful lives and residual values of property, plant and equipment each year taking into account past experience and macroeconomic changes. Going concern Despite the challenging operating environment, and after the assessment of going concern, the Directors have no reason to doubt that the Group will continue to operate for the foreseeable future. Management strategies have been put in place to mitigate all the challenges the Group is facing and the Group's ability to pay its maturing obligations. Exchange rates It is the view of the Directors that the translation of balances and transactions from Zimbabwe dollars to United States dollars should be based on an exchange rate that is aligned to the market forces and fairly presents the fair value of the balances and transactions when translated. It should be emphasised that the policy is for fair presentation purposes only and does not indicate an intention of the Group to Price risk The Group is exposed to equity securities price risk because of 24.1 MARkET RISk Foreign exchange risk The Group operates regionally and is exposed to foreign exchange risk arising from various currency exposures, primarily with respect to the United States Dollar and the South African Rand. Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities and net investments in foreign operations. Foreign exchange risk arises when future commercial transactions or recognised assets and liabilities are denominated in a currency that is not the entity's functional currency. 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 managed primarily through borrowings denominated in the relevant foreign currencies. 24. FINANCIAL RISk MANAGEMENT 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 adverse effects of the Group's financial performance. Risk management is carried out by Group Treasury under policies approved by the Board of Directors. Group Treasury identifies, evaluates and hedges financial risks in close cooperation of the Group's operating units. The Board provides principles for overall risk management as well policies covering specific areas such as foreign exchange risk, interest rate risk, credit risk an2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=45http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=45investments held by the Group and classified on the Statement of Financial Position at fair value through profit or loss. The Group through the treasury department disposes equity securities when prices would disadvantage the Group's position and acquires equity securities when gains are anticipated. 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 borrowings. Borrowings issued at variable rates expose the Group to cash flow interest rate risk. Borrowings issued at fixed rates expose the Group to fair value interest rate risk. Borrowings are repaid immediately if interest rates are unfavourable and the Group negotiates with lenders' favourable rates and tenures to avoid both cashflow and fair value interest rate risk. 24.2 CREdIT RISk Credit risk is managed on a Group basis. Credit risk arises from cash and cash equivalents, derivative financial instruments and deposits with banks and financial institutions, as well as credit exposures to wholesale and retail customers including outstanding receivables and committed transactions. Management assesses the credit quality of the customer, taking into account its financial position, past experience and other factors. Individual risk limits are set based on internal or external ratings in accordance with limits set by the Board. The utilisation credit limits are regularly monitored. 24.3 LIqUIdITY RISk Prudent liquidity risk management includes maintaining sufficient cash and marketable securities, the availability of funding from an adequate amount of committed credit facilities and the ability to close out market positions. Due to the dynamic nature of the underlying businesses, Group Treasury maintains flexibility in funding by maintaining availability under committed credit lines. As disclosed in Note 15 and in terms of the Group's management of financial risks, management believes that the Group does not have significant exposure to financial risk. 25. dEFINITIONS Taxed interest payable This is calculated by taxing interest payable at the standard rate of taxation. Interest cover times This is the ratio which the aggregate of operating income, non-recurring items and equity accounted earnings bears to interest payable (including capitalised interest). Net assets These are equivalent to shareholders' equity. Pretax return on total assets This 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 share The 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 share Diluted earnings per share are calculated by dividing the profit/(loss) shown above by the adjusted weighted average number of ordinary shares, assuming conversion of all dilutive potential ordinary shares. The company has share options and a calculation is done to determine the number of shares that could be acquired at fair value based on the monetary value of the subscription rights attached to the outstanding share options. The amount calculated above is compared with the number of shares that would have been issued assuming the exercise of the share options. Financial gearing ratio This represents the ratio of interest bearing debt, less cash to total shareholders' equity. African Sun African Sun Limited formerly Zimbabwe Sun Limited. 26. COUNTRY OF INCORPORATION ANd REPORTING CURRENCY All Group companies are incorporated in Zimbabwe, except for African Sun Limited PCC, which is incorporated in Mauritius an2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=46http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=46NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 1. GROUP SEGMENTAL REPORTING The Group operates in four main geographical areas and its adminstrative functions are carried out from Zimbabwe. The area of operation principally comprise of city and resort hotels. zimbabwe $ Historical cost 2008 Revenue 596 083 424 127 South Africa $ Other $ Eliminations $ Consolidated $ 206 956 878 963 76 943 310 537 (68 154 544 178) 811 829 069 449 Segment out-turn Segment operating profit/(loss) 427 700 646 179 (5 579 162 167) 14 398 767 044 (633 162 049) 435 887 089 007 Other income Share of loss of associates Net interest (cost)/income Taxation Profit/(loss) after tax 109 248 997 036 (1 990 493 631) (2 714 855 010) (65 520 178 587) 466 724 115 987 – – (1 059 263 328) (772 521 038) (7 410 946 533) – – 258 154 221 – 14 656 921 265 – – – – (633 162 049) 109 248 997 036 (1 990 493 631) (3 515 964 117) (66 292 699 625) 473 336 928 670 Other information Capital additions Depreciation Amortisation 107 346 372 413 – – 11 138 369 400 4 240 143 598 885 997 986 2 227 129 812 – – – – – 120 711 871 625 4 240 143 598 885 998 017 Assets Segment assets Investment in associate Financial assets at fair value through profit/loss Consolidated total assets 28 250 258 651 14 461 542 193 310 – 1 297 698 049 021 – 834 158 283 803 – – 28 250 258 651 16 593 398 526 134 7 617 398 939 800 6 815 892 994 859 1 297 698 049 021 – 834 158 283 803 – – – 9 749 255 272 624 6 815 892 994 859 Liabilities Segment liabilities Borrowings Consolidated total liabilities (2 409 378 897 982) – (2 409 378 897 982) (590 188 374 162) (38 927 728 596) (629 116 102 758) (705 276 876 450) – (705 276 876 450) – – – (3 704 844 148 594) (38 927 728 596) (3 743 771 877 190) 44 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=47http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=47NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 1. GROUP SEGMENTAL REPORTING zimbabwe $ Historical cost 2007 Revenue 144 Mozambique $ South Africa $ Other $ Eliminations $ Consolidated $ – 29 6 (6) 173 Segment out-turn Segment operating profit/(loss) Share of loss of associates Taxation Profit/(loss) after tax 61 (2) (13) 46 – – – – 3 – (1) 2 – – – – (13) – – (13) 51 (1) (13) 35 Other information Capital additions Depreciation 32 – – – 2 (1) – – – – 34 (1) Assets Segment assets Associates Investments and loans Consolidated total assets 724 307 4 1 035 – – 16 16 93 – – 93 35 – 115 150 – – (118) (118) 852 307 17 1 176 Liabilities Segment liabilities Borrowings Consolidated total liabilities 264 8 272 – – – 32 13 46 53 – 53 – – – 349 22 371 African Sun Limited 2008 452009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=48http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=48NOTES TO FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP 2. PROPERTY, PLANT & EqUIPMENT Historical cost Freehold properties $ Leasehold properties $ Plant and equipment $ Hotel equipment $ Vehicles $ Total $ At 30 September 2006 Cost/valuation Accumulated depreciation Net book amount – – – – – – 2 – 2 – – – – – – 3 – 3 Period ended 30 September 2007 Opening book amount Additions Revaluation surplus Exchange differences Depreciation charge Closing net book amount – – – – – – – 14 19 7 – 40 2 16 512 5 (1) 534 – 1 – – – 1 – 3 64 – – 67 3 34 595 12 (1) 643 At 30 September 2007 Cost/valuation Accumulated depreciation Net book amount – – – 40 – 40 535 (1) 534 1 – 1 67 – 67 644 (1) 643 Year ended 30 September 2008 Opening book amount Additions Revaluation surplus Exchange differences Hotel usage Depreciation charge Closing net book amount – – – – – – – 40 5 871 897 676 091 – – (303 260 907) 871 594 415 230 534 110 034 418 126 6 239 661 899 257 138 793 898 205 – (3 702 328 165) 6 484 787 887 957 1 360 345 177 – – (340 621 557) – 19 723 621 67 10 317 108 317 370 208 326 653 – – (234 554 526) 380 290 880 511 643 120 711 871 625 7 481 767 902 001 138 793 898 205 (340 621 557) (4 240 143 598) 7 736 692 907 318 At 30 September 2008 Cost/valuation Accumulated depreciation Net book amount – – – 871 897 676 136 (303 260 907) 871 594 415 230 6 488 490 216 123 (3 702 328 166) 6 484 787 887 957 19 723 621 – 19 723 621 380 525 435 037 (234 554 526) 380 290 880 511 7 740 933 050 918 (4 240 143 599) 7 736 692 907 318 The Group's property, plant and equipment was revalued by an independent valuer on 30 September 2008. Valuations were made by reference to an active market. The revaluation surplus net of deferred income taxes was credited to revaluation reserve through comprehensive income. If property, plant and equipment were stated on the cost basis, the amount would be nil as a result of the revaluation of the Zimbabwean Dollar by the Reserve Bank of Zimbabwe in August 2008 which resulted in the removal of ten zeros. 46 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=49http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=49NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 3. INTANGIbLE ASSETS Goodwill and brand names Cost Accumulated amortisation Exchange differences Net carrying value 49 (899 650 448) 282 005 029 579 281 105 379 180 – – 49 49 2008 $ 2007 $ Goodwill: At the beginning of the period Exchange differences At the end of the period Goodwill is allocated to the Group's cash generating unit in South Africa. No impairment charge was recognised for the year as the recoverable amount from the cash generating unit, based on value-in-use calculations, is in excess of the carrying amount of goodwill brand names: At the beginning of the period Amortisation charge Exchange differences At the end of the period Brand names consist of the brand name "The Grace" and its registered trademark. The brand name is amortised using the straight-line method over a period of 20 years Total intangible assets 281 105 379 180 49 19 (885 997 986) 108 192 373 548 107 306 375 580 – – 19 19 30 173 799 003 570 173 799 003 600 – 30 30 4. bIOLOGICAL ASSETS At the beginning of the period Gain from changes in fair value less estimated point of sale costs Write-off of biological assets At the end of the period – 569 954 250 001 (479 261 250 001) 90 693 000 000 – – – – Biological assets consist of timber plantations and horses. Fair value for plantations has been determined by an independent valuer based on the stages of forest development. Horses are valued by the Directors based on reference to quoted market prices. During the year a veld fire destroyed part of the plantations at Troutbeck in Inyanga valued at $479 261 250 001 African Sun Limited 2008 472009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=50http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=50NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 5. INVESTMENTS 5.1 Investments in associate Dawn Properties Limited 17.72% (2007: 18.02%) At the beginning of the period Share of loss of associate Equity movements: fair value reserve At the end of the period 307 (1 990 493 631) 6 817 883 488 183 6 815 892 994 859 1 (2) 307 307 2008 $ 2007 $ Total investments in associate African Sun Limited has a 17.72% share in Dawn Properties Limited, a listed company. The market value of its investment amounts to $7.7 trillion. Dawn Properties Limited has a 31 March financial year end. The share of results for Dawn Properties Limited is based on an aggregation of six months of the audited financials for the year ended 31 March 2008 with the unaudited interim financials for the six months ended 30 September 2008 The summarised pro-forma financial statements of Dawn Properties Limited are as follows: Income Statement Revenue Operating expenses Fair value adjustment to financial assets Operating profit Other (losses)/gains Profit before taxation Taxation Net profit for the period 6 815 892 994 859 307 7 785 640 000 (5 536 653 000) 42 426 971 807 000 42 429 220 794 000 (6 871 286 000) 42 422 349 508 000 (13 113 592 879 499) 29 308 756 628 501 9 (12) 2 467 2 463 1 2 464 (764) 1 700 balance sheet Total assets 53 880 214 484 000 2 483 Total liabilities Equity 15 415 905 234 000 38 464 309 250 000 53 880 214 484 000 769 1 715 2 483 A significant portion of the profits of Dawn Properties Limited arises from fair value gains on investment property. The investment properties of Dawn Properties Limited mainly constitute hotel properties leased and occupied by African Sun Limited (formerly Zimbabwe Sun Limited). The properties are therefore classified as owner occupied from a Group perspective. As a result the Group's portion of the fair value gains on investment properties, which are accounted for in the income statement of Dawn Properties Limited, are credited to a fair value reserve in the consolidated financial statements. 48 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=51http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=51NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 2008 $ 5.2 Other investments Investment in joint venture Investment in Clube Paraiso Limitada (10%) At beginning of period Write-off on disposal At end of period The 10% investment in Clube Paraiso Limitada was disposed of during the year 6. NON-CURRENT RECEIVAbLES Security deposit African Sun SA (Pty) Limited entered into a lease agreement in terms of which a security deposit was payable. The non-current receivable has been recognised at amortised cost using the effective interest method. The effective interest rate applied is 12% per annum. 7. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS Listed equity securities at market value 28 250 242 727 – 147 129 696 000 – 16 (16) – – 16 16 2007 $ 8. INVENTORIES Food and beverage Shop merchandise Consummable stores Maintenance stock 19 418 669 480 22 733 756 54 219 829 094 216 846 439 74 597 183 769 19 – 2 2 23 9. TRAdE ANd OTHER RECEIVAbLES Trade receivables Less: provision for impairment of receivables Trade receivables – net Payments Other receivables 211 154 891 267 (5 435 637 278) 205 719 253 989 44 318 628 861 609 550 261 884 859 588 144 734 39 – 39 11 32 82 African Sun Limited 2008 492009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=52http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=52NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 2008 $ 544 337 448 446 2007 $ 55 10. CASH ANd CASH EqUIVALENTS Cash on hand and at bank GROUP ANd COMPANY Historical Cost 11. SHARE CAPITAL Authorised Ordinary shares of $0.0000000000001 Issued and fully paid Ordinary shares of $0.0000000000001 At 30 September 2007 Issued during the period At 30 September 2008 644 932 323 43 035 081 687 967 404 638 153 323 6 779 400 644 932 323 1500 000 000 1 500 000 000 2008 Number of shares 2007 Number of shares Unissued shares Subject to the limitations imposed by the Companies Act (Chapter 24:03), in terms of an Ordinary Resolution of the Company in a general meeting, the unissued share capital of $nil ($812 093 old currency) has been placed at the disposal of the Directors to allot and dispose of the shares in terms of the Companies Act (Chapter 24:03) and the Securities Commission Act. Shares under option The Directors are empowered to grant share options to certain employees of the Company. These options are granted for a period of ten years at a price determined by the middle market price ruling on the Zimbabwe Stock Exchange on the day on which the options are granted. Movements in the number of share options were as follows: Movements in the number of share options as at 30 September 2008 2008 Number of shares Movements for the period As at 30 September 2007 New options granted Options forfeited Options exercised As at 30 September 300 000 32 246 616 – (32 546 616) – 3 778 429 – (3 078 429) (400 000) 300 000 2007 Number of shares Outstanding Share Options – 300 000 In terms of the Group share option scheme, options were granted during the period ended 30 September 2008. The Group recognised total expenses of $nil in respect of share options granted as all shares were issued at market value. No credits were recognised to the share option reserve as there were no unexercised shares at year-end. 50 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=53http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=53NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 directors' shareholdings At 30 September 2008, the Directors held directly the following number of shares in the company, of which the total issued shares are 687 967 404 Executive directors N Mangwiro S Munyeza Non Executive directors E Makonese B Nkomo E Chitiga L Kapungu F Rwodzi D W Birch T Chiganze 2008 Number of shares – – 2007 Number of shares – – 2 631 852 – 5 074 – – 7 588 – 2 644 514 2 596 763 – 5 006 – – – – 2 601 769 Messrs F Rwodzi, T N Chiganze, S A Munyeza and N Mangwiro held indirectly shares in the company through controlling interest in the following companies: Names Company Shareholding in African Sun Limited % 2008 F Rwodzi / T Chiganze S A Munyeza Msasa Nominees Riustrix Investments (Pvt) Ltd Criben Investments (Pvt) Ltd Total shareholding N Mangwiro Ganlake Investments (Pvt) Ltd N K Rehoaboth Investments (Pvt) Ltd Total shareholding 14.62 25.31 1.84 27.15 0.33 0.69 1.02 2007 17.59 26.09 1.97 28.06 0.75 – 0.75 African Sun Limited 2008 512009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=54http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=54NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 2008 $ 12. SHARE PREMIUM At the beginning of period Arising on issue of shares At end of period 1 8 831 8 832 – 1 1 2007 $ 13. RETAINEd EARNINGS 13.1 Group At beginning of period Profit for the period Dividend paid At end of period 35 473 336 928 670 (3 672) 473 336 925 033 – 35 – 35 Retained in: Group Associated companies 475 327 418 664 (1 990 493 631) 473 336 925 033 37 (2) 35 13.2 Company At beginning of period (Loss)/profit for the period Dividends paid At end of period 3 (14 147 231 396) (3 672) (14 147 235 065) – 4 (1) 3 Retained in: Company Associated companies (12 156 741 434) (1 990 493 631) (14 147 235 065) 5 (2) 3 14. TRAdE ANd OTHER PAYAbLES Trade payables Amounts due to related parties Accruals, provisions and other creditors 118 825 339 716 16 206 107 432 1 151 459 504 300 1 286 490 951 448 100 1 50 152 52 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=55http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=55NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 15. NET CURRENT ASSETS Current assets: Financial assets at fair value through profit or loss Inventories Trade and other receivables Cash and cash equivalents 28 250 242 727 74 597 183 769 859 588 144 734 544 337 448 446 1 506 773 019 676 – 23 82 55 160 2008 $ 2007 $ Current liabilities: Trade and other payables Borrowings 1 286 490 951 448 38 927 728 596 1 325 418 680 044 152 22 174 Net current assets/(liabilities) 181 354 339 632 (14) Rates of 16. CURRENT bORROwINGS Foreign loans United States Dollar loan Short term loans Standard Chartered Bank Zimbabwe Stanbic Bank Barclays Bank of Zimbabwe Limited 2 900.00 2 500.00 1 600.00 – – – – Other Nedbank (South Africa) loan Nedbank (South Africa) current portion of long-term loan Total current borrowings 12.00 13.50 38 927 728 596 – 38 927 728 596 – 13 22 2 2 3 7 10.00 – 2 Interest (%) The outstanding balance on the loan from Nedbank as at 30 September 2008 was R1 272 148 (Z$38 927 728 596). This loan is secured by a Swift Demand Guarantee. The fair value of current borrowings equals their carrying amount, as the impact of discounting is not significant. The fair values are based on cash flows discounted using the rates based on the applicable rates. The carrying amounts of the borrowings approximate their fair value African Sun Limited 2008 532009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=56http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=56NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 17. TAxATION 17.1 Taxation charge Current taxation Deferred taxation 772 521 038 65 520 178 587 66 292 699 625 Reconciliation of rate of taxation Standard rate Adjusted for: Capital allowances in excess of depreciation Other adjustments including permanent differences Effective rate 12.14 (30.76) 12.28 26.85 (29.9) 27.85 30.9 30.9 – 13 13 2008 $ 2007 $ 17.2 deferred taxation Deferred taxation is calculated in full on temporary differences under the liability method using a prinicipal tax rate of 30.9% (2007:30.9%) 17.2.1 Deferred taxation asset - Assessed tax losses 15 111 529 101 15 111 529 101 The movement on deferred income tax asset is as follows: - Balance at 30 September 2007 - Charge to income statement - Exchange differences 1 (456 645 501) 15 568 174 601 15 111 529 101 17.2.2 Deferred income tax liability Accelerated wear and tear on property, plant and equipment Prepayments Assessed losses 2 418 353 197 146 – – 2 418 353 197 146 The movement on the deferred income tax liability is as follows: - Balance at 30 September 2007 - Charge to the income statement - Charge to equity Balance on 30 September 2008 197 65 976 824 088 2 352 376 372 861 2 418 353 197 146 196 3 (2) 197 – – 2 1 1 1 – 13 184 197 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The deferred tax asset and liability of the Group pertain to different tax jurisdictions and therefore have not been offset against each other. 54 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=57http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=57NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 Historical 2008 Tax (charge) credit $ before tax $ 2007 Tax (charge) credit $ 17.3 Tax effects on components of other comprehensive income Fair value gains: - Property, plant and equipment Share of other comprehensive income of associates Currency translations differences Other comprehensive income before tax $ After tax $ After tax $ 7 481 767 902 001 9 866 691 010 358 562 235 319 638 17 910 694 231 997 (2 311 866 281 718) (3 048 807 522 201) (173 730 713 768) (5 534 404 517 687) 5 169 901 620 283 6 817 883 488 158 388 504 605 870 12 376 289 714 310 595 434 78 1 107 (184) (134) (24) (342) 411 300 54 765 GROUP Historical Cost 18. OPERATING PROFIT Operating profit is stated after charging/(crediting) the following: Depreciation of property, plant and equipment Amortisation of brand name Auditors' remuneration Net lease expense Impairment of trade debtors 4 240 143 598 885 997 986 – – 5 435 637 278 1 – – 4 – 2008 $ 2007 $ Average number of employees 2 232 2 083 19. OTHER INCOME Profit on disposal of investments Gain from changes in fair value less estimated point of sale costs Write-off of biological assets Exchange gains 1 451 066 940 569 954 250 001 (479 261 250 001) 17 104 930 096 109 248 997 036 – – – – – 20. EARNINGS PER SHARE basic earnings basis Profit attributable to shareholders 473 336 928 670 35 Weighted average number of ordinary shares 670 323 021 642 538 000 basic earnings per share ($) 706.13 – diluted earnings per share Profit attributable to shareholders 473 336 928 670 35 Weighted average number of ordinary shares Adjustments for share options Weighted average number of ordinary shares for diluted earnings per share 670 323 021 – 670 323 021 642 538 000 300 000 642 838 000 diluted earnings per share ($) 706.13 – African Sun Limited 2008 552009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=58http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=58NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 21. CASH GENERATEd FROM TRAdING 2008 $ 435 887 089 007 2007 $ 51 Operating profit Adjustments for: - Depreciation and hotel equipment usage - Amortisation of brand name - Fair value gains in biological assets - Fair value gains in investments and loans - Fair value gains in intangible assets Changes in working capital - Increase in inventories - Increase in trade and other receivables - Increase in trade and other payables 4 240 143 598 885 997 986 (90 693 000 000) (28 250 258 633) – 1 – – (18) (49) (74 597 183 746) (859 588 128 730) 1 286 490 951 296 674 375 610 778 (23) (79) 152 35 22. dIRECTORS EMOLUMENTS For service as Directors For managerial services 164 859 323 6 452 745 171 312 068 – 1 1 23. COMMITMENTS FOR CAPITAL ExPENdITURE Authorised by Directors but not contracted for 1 138 019 250 000 318 The capital expenditure is to be financed out of the Group's own recources and existing borrowing facilities 56 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=59http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=59NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 24. PENSION FUNdS The company and all employees contribute to one or more of the following independently administered pension funds: 24.1 African Sun Limited Pension Fund This fund is a fully funded, uninsured, consolidated scheme consisting of a defined benefit scheme and a defined contribution scheme. All employees, except those who are members of the Catering Industry Pension Fund and African Sun Limited, are members of this fund. 24.2 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. 24.3 African Sun SA (Pty) Ltd The subsidiary company has a defined contribution provident fund, of to R371 862 (Z$11 470 515 604). 24.4 National Social Security Authority Scheme The Company and all its employees based in Zimbabwe contribute to the National Social Security Scheme, promulgated under the National Social Security Act 1989. The company's obligations under this scheme are limited to specific contributions legislated from time to time. which full time employees of the company are members. The subsidiary company's contribution to the provident fund for the year amounted GROUP Historical Cost 2008 $ 24.5 Pension costs recognised as an expense for the period African Sun Limited pension funds Catering Industry Pension Fund National Social Security Authority Scheme 11 904 158 246 34 755 385 81 864 961 12 020 778 592 1 – 1 2 2007 $ African Sun Limited 2008 572009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=60http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=60NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 GROUP Historical Cost 2008 25. RELATEd PARTY TRANSACTIONS The following transactions were carried out with related parties 25.1 Purchase of goods and services Dawn Properties Limited Rent paid African Sun Limited owns 17.72% (18.02%:2007) of the shares in Dawn Properties Limited. All commercial transactions with Dawn Properties Limited were at arm's length. 25.2 Year end balances arising from transactions with related parties: Dawn Properties Limited: - Payable (rentals) 16 206 107 432 1 2 306 745 915 4 $ 2007 $ 25.3 key management compensation Salaries and other short term employee benefits Termination benefits 3 711 304 332 – 3 711 304 332 25.4 Loans to key management Beginning of the period Loans advanced during the period Loan repayments received during the period At the end of the period 2 17 349 (1 427) 15 924 3 (1) 2 5 – 5 The fair values of loans advanced to key management approximate their carrying amounts. No provisions for impairment have been made against related party balances for the periods ended 2007 and 2008. 58 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=61http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=61NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 COMPANY Freehold properties $ 26. HISTORICAL COST At 30 September 2006 Cost/valuation Accumulated depreciation Net book amount – – – – – – – – – – – – – – – Leasehold properties $ Plant and equipment $ Vehicles $ Total $ Period ended 30 September 2007 Opening book amount Revaluation surplus Closing net book amount – – – – 9 9 – – – – 22 22 – 31 31 At 30 September 2007 Cost/Valuation Accumulated depreciation Net book amount – – – 9 – 9 – – – 22 – 22 31 – 31 Year ended 30 September 2008 Opening book amount Disposals Revaluation surplus Closing net book amount – – – – 9 – 447 082 424 848 447 082 424 857 – – – – 22 (2) 96 624 999 980 96 625 000 000 31 (2) 543 707 424 828 543 707 424 857 At 30 September 2008 Cost/Valuation Accumulated depreciation Net book amount – – – 447 082 424 857 – 447 082 424 857 – – – 96 625 000 000 – 96 625 000 000 543 707 424 857 – 543 707 424 857 The company's property, plant and equipment was revalued by an independent valuer Knight Frank on 30 September 2008. Valuations were made by reference to an active market. The revaluation surplus net of deferred income taxes was credited to revaluation reserves in shareholders' equity. If property, plant and equipment were stated on the cost basis, the amount would be nil as a result of the revaluation of the Zimbabwean Dollar by the Reserve Bank of Zimbabwe in August 2008 which resulted in the removal of ten zeros. African Sun Limited 2008 592009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=62http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=62NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 COMPANY Historical Cost 2008 27. INVESTMENTS IN SUbSIdIARIES African Sun Limited (Mauritius) 100% $ 2007 $ Loan: At the beginning of the period Fair value adjustment 13 – – 13 At the end of the year 13 13 28. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT/LOSS Listed equity securities at market value 60 212 237 – 29. TRAdE ANd OTHER RECEIVAbLES Other receivables 23 048 678 1 The fair value of the receivables is as stated above 60 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=63http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=63NOTES TO ThE FINANCIAL STATEMENTS For the year ended 30 September 2008 COMPANY Historical Cost 2008 $ 30. dEFERREd TAxATION Deferred taxation is calculated in full on temporary differences under the liability method using a principal tax rate of 30.9% (2007:30.9%) deferred taxation liability Accelerated wear and tear on property, plant and equipment 167 548 948 659 167 548 948 659 8 8 2007 $ The movement on the deferred income tax liability is as follows: Balance 30 September 2007 Release to the income statement Charge to equity Balance at 30 September 2008 8 – 167 548 948 651 167 548 948 659 – (1) 10 8 31. TRAdE ANd OTHER PAYAbLES Accruals, provisions and other payables 4 241 087 086 1 32. OPERATING ENVIRONMENT During the period under review, the Zimbabwe operating environment deteriorated further driven by chronic levels of hyperinflation, multiple and distorted exchange rates, distorted pricing mechanisms, fast deteriorating local currency unit and significant distortions in the market. The Group's Zimbabwe operations have therefore been significantly affected by these conditions. Given the chronic hyperinflation, the time lapse between the year-end and reporting date may also render the financial information here-in less useful and relevant for making economic decisions. Not withstanding the above, the operating environment is set to improve remarkably due to the following: • • • Theliberalisationof theZimbabweaneconomyledtotheremovalof pricecontrolsandforeigncurrencyexchange controls. Pricing will be a function of fundamental market forces of supply and demand. Theusestablecurrenciesasabasisof allpricingdecisionswillwitnesstheeradicationof hyperinflationasinflationin Zimbabwe will align to inflation from the source countries of the currencies being used. ThenewpoliticaldispensationwhichusheredinGovernmentof NationalUnity(GNU)inZimbabwewillaidthe perception of the country as a safe tourist destination. Despite the challenging operating environment, and after the assessment of going concern, the Directors have no reason to doubt that the Group will continue to operate for the foreseeable future. Management strategies have been put in place to mitigate all the challenges the Group is facing and the Group's ability to pay its maturing obligations. African Sun Limited 2008 612009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=64http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=64FIVE YEAR FINANCIAL REVIEW Historical Statistical Information 30 September 2008 $ 5 year Compound growth % p.a. INCOME STATEMENTS Revenue Operating profit Other income Equity accounted earnings Net financing costs Profit before tax Taxation Profit after tax Ordinary dividend Retained income 370 114% 811 829 069 449 435 887 089 007 109 248 997 036 (1 990 493 631) (3 515 964 117) 539 629 628 295 (66 292 699 625) 473 336 928 670 (3 672) 473 336 925 033 173 51 – (2) (1) 48 (13) 35 – 35 – – – – – – – – – – – – – – – – – – – – – – – – – – – 30 September 2007 $ 31 March 2006 $ 31 March 2005 $ 31 March 2004 $ – – bALANCE SHEETS Shareholders' equity Capital employed Assets Non-current Current Total assets Liabilities Non-current Interest free liabilities Borrowings Total liabilities Employment of capital 189 065% (1 973 202 590) (3 702 870 946 004) (38 927 728 596) (3 743 771 877 190) 12 849 626 648 944 (197) (152) (22) (371) 805 – – – – – – – – – – – 1 – 1 1 960 845% 561 052% 844 316% 15 114 875 765 109 1 478 522 761 025 16 593 398 526 134 1 018 158 1 176 – – – – – – – – – 972 432% 972 432% 12 849 626 648 944 12 849 626 648 944 805 805 – – – – – – SHARE PERFORMANCE Per share ($) Basic earnings Diluted earnings Net asset value Closing market price 706.13 706.13 18 678 120 000 – – – – – – – – – – – – – – – – Share information In issue (000's) Market capitalisation (millions) ZSE industrial index 687 964 82 556 088 89 494 552 644 932 19 145 388 686 638 154 32 2 483 579 969 12 347 579 969 16 179 62 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=65http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=65FIVE YEAR FINANCIAL REVIEW Historical Statistical Information 30 September 2008 30 September 2007 31 March 2006 31 March 2005 31 March 2004 RATIOS ANd RETURNS Revenue generation Room occupancy (%) 41 42 35 38 42 Profitabiliy Return on equity (%) Income after taxation to total capital employed (%) Taxed operating return (%) Pretax return on total assets (%) 4 3.0 3.25 3 4.3 3.0 4.1 4.1 2.3 2.1 2.2 2.1 21.8 9.8 20.5 9.8 23.7 23.1 41.2 10.4 Solvency Financial gearing ratio (%) Interest cover (times) Total liabilities to total shareholders' funds (%) – 136 29 19.70 52.70 46.30 0.39 75.90 5.20 9.60 0.10 113.40 2.60 3.10 127.20 Liquidity Current assets to interest free liabilities and short term borrowings 0.39 0.42 1.16 0.88 0.83 Productivity Turnover per employee Turnover to payroll (times) 363 723 5.25 1 5.60 – 3.98 – 3.28 – 4.87 Other Number of employees Number of shareholders 2 232 5 992 2 083 4 547 1 874 4 279 1 607 4 539 1 442 4 539 African Sun Limited 2008 632009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=66http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=66Obudu Mountain Resort 64 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=67http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=67SUPPLEMENTARY INFORMATION2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=68http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=68SUPPLEMENTARY INFORMATION For the year ended 30 September 2008 30 September 2008 US$ 000's STATEMENTS OF COMPREHENSIVE INCOME Revenue Operating Income Equity accounted earnings Net interest (costs)/income 26 312 12 972 (65) (114) 21 614 8 089 – (132) 27 342 9 182 217 113 25 052 2 070 (6) (646) 30 September 2007 US$ 000's 31 March 2006 US$ 000's 31 March 2005 US$ 000's Profit before tax 12 793 7 956 9 512 1 418 STATEMENTS OF FINANCIAL POSITION Shareholders' equity Interest bearing debt 33 244 – 16 948 483 29 728 171 6 599 1 613 Total equity 33 244 17 431 29 899 8 211 Assets Non-current Current Total assets 32 982 5 996 38 978 17 056 3 749 20 806 29 529 1 860 31 389 8 087 7 075 15 162 Current liabilities (5 734) (3 375) (1 490) 15 162 Net assets 33 244 17 431 29 899 8 211 HIGHLIGHTS Revenue Attributable earnings Total assets Rooms available/day Occupancies % Return on sales % 26 312 12 793 38 978 2 060 41 49 21 614 7 956 20 806 1 926 42 37 27 342 9 512 31 389 1 926 35 35 25 052 1 418 15 162 1 926 38 6 66 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=69http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=69SUPPLEMENTARY INFORMATION For the year ended 30 September 2008 NOTES TO ThE SUPPLEMENTARY INFORMATION 1. GROUP SEGMENTAL REPORTING The Group operates in four main geographical areas and its adminstrative functions are carried out from Zimbabwe. The area of operation principally comprises of city and resort hotels. zimbabwe US$ 000's South Africa US$ 000's Other US$ 000's Eliminations US$ 000's Consolidated US$ 000's Revenue 17 109 6 709 2 494 – 26 312 Profit/(loss) before tax 12 533 (277) 537 – 12 793 Assets Segment assets Associates Investments and loans Consolidated total assets 22 377 9 597 486 32 461 3 180 – _ 3 180 3 336 – 2 204 5 541 – – (2 204) (2 204) 28 893 9 597 486 38 978 2. ExCHANGE RATES Supplementary information has been presented in United States Dollar (US$), which is not the reporting currency of the Group. Owing to the unprecedented hyperinflation conditions prevailing in Zimbabwe and the impact of these and other conditions on the Zimbabwe Dollar reporting, the Directors are of the opinion that the supplementary information in US$ will offer more useful information to stakeholders. The Zimbabwean economy has been characterised by multiple foreign currency exchange rates. It is the view of the Directors that the translation of balances and transactions from Zimbabwe Dollar to US$ for this purpose should be based on an exchange rate that is aligned to the market forces and fairly presents the value of the transactions and balances when translated. It should be emphasised that this translation is for fair presentation purposes only. The exchange rates used for this purpose are the lower of the Old Mutual Implied Rate (OMIR) and the market rate. In preparing the supplementary information, the Group did not comply to International Accounting Standards (IAS) 21: 'The Effects of Changes in Foreign Exchange Rates'. Therefore, this information should not be relied on as the primary information. African Sun Limited 2008 672009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=70http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=70Group Structure GROUP STRUCTURE AFRICAN SUN LIMITEd AFRICAN SUN zIMbAbwE (PRIVATE) LIMITEd 100% dAwN PROPERTIES LIMITEd 17.72% RCI (zIMbAbwE) (PRIVATE) LIMITEd 24% AFRICAN SUN LIMITEd PCC (MAURITIUS) 100% ShAREhOLDER STRUCTURE 1.18 35.52 25.31 14.62 23.37 Riustrix Investments (Private) Limited Old Mutual Msasa Nominees Public Investors African Sun Limited Employee Share Participation 68 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=71http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=71ShAREhOLDERS' PROFILES SHAREHOLdER PROFILE AS AT 30 SEPTEMbER 2008 bY SIzE Range of holdings 1 5 001 10 001 25 001 50 001 100 001 500 001 to to to to to to to Over TOTAL SHAREHOLdER PROFILE AS AT 30 SEPTEMbER 2008 bY TYPE Local Companies Nominees Local Insurance Companies Local Individual Residents Investments and Trusts Pension Funds Other Organisations Non Residents Fund Managers Employee Share Participation Trust New Non Residents Banks Nominee Foreign Deceased Estates Undefined Executive Share Participation Trust Former Resident Total SHAREHOLdER PROFILE AS AT 30 SEPTEMbER 2008 bY TYPE (SUMMARISEd) Shareholder Type Public Directors *Other Non Public . 5 920 6 66 5 992 98.80 0.10 1.10 100 331 980 464 303 624 867 52 356 999 687 967 404 48.26 44.13 7.61 100 375 155 12 4 598 448 43 60 232 25 8 9 9 5 10 1 1 1 5 992 6.26 2.59 0.20 76.74 7.48 0.72 1.00 3.87 0.42 0.13 0.15 0.15 0.08 0.17 0.02 0.02 0.02 100 286 695 858 122 442 009 105 404 582 80 861 294 58 334 895 22 075 338 4 960 238 2 915 925 2 327 462 1 393 471 228 643 216 086 57 438 34 249 16 896 1 824 1 196 687 967 404 41.67 17.8 15.32 11.75 8.48 3.21 0.72 0.42 0.34 0.20 0.03 0.03 0.03 – – – – 100 5 000 10 000 25 000 50 000 100 000 500 000 1 000 000 1 000 000 4 502 468 488 153 131 159 23 68 5 992 75.13 7.81 8.15 2.55 2.19 2.65 0.38 1.14 100 4 857 236 3 216 534 7 263 812 5 320 035 8 934 684 32 926 305 16 566 731 608 882 067 687 967 404 0.7 0.47 1.06 0.77 1.3 4.79 2.41 88.5 100 Number of Shareholders % Issued Shares % *Non public include the African Sun 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 organizations. * Directors means Company Directors who hold shares in the Company directly and indirectly. African Sun Limited 2008 692009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=72http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=72TOP TEN SHAREHOLdERS Shareholder Riustrix Investments (Private) Limited Old Mutual Msasa Nominees (Private) Limited Criben Investments (Private) Limited Kingdom Nominees (Private) Limited Chikata Trust Bretwin Investments (Private) Limited Penblet Investments (Private) Limited Scaiflow Investments (Private) Limited Nezungai Innocent Zimbabwe Sun Employee Share Participation Trust Other TOTAL Shareholding 2008 % Shareholding 2007 % 174 123 042 160 784 409 100 602 056 12 664 980 11 288 100 10 997 779 10 983 571 10 219 379 9 596 281 9 569 809 – 177 137 998 687 967 404 25.31 23.37 14.62 1.84 1.64 1.60 1.60 1.49 1.39 1.39 – 25.75 100 168 273 237 158 478 798 113 499 659 12 466 794 11 581 091 9 576 887 – 8 334 765 9 446 115 9 442 220 8 000 000 135 832 757 644 932 323 26.09 24.57 17.59 1.97 1.77 1.48 – 1.29 1.47 1.46 1.24 21.07 100 ShARE PRICE INFORMATION MId MARkET PRICE AT: Friday 28 September 2007 Sunday 30 September 2007 Monday 31 December 2007 Monday 31 March 2008 Monday 30 June 2008 Tuesday 30 September 2008 PRICE RANGE Highest: 30 September 2008 Lowest: 28 September 2008 12 000 000 cents (Revalued) 1 600 000 cents (Not Revalued) 1 600 000 cents (Revalued) ZSE closed for trade 35 000 000 cents (Not Revalued) 250 000 000 cents (Not Revalued) 1 500 000 000 cents (Revalued) 12 000 000 cents (Revalued) 70 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=73http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=73bUSINESS COMPOSITION The company operates in the hospitality and leisure industry through a number of hotels, resorts, casinos and timeshare operations throughout Zimbabwe, two city hotels in South Africa, three resorts in Nigeria and a hotel in Ghana. South Africa The Grace in Rosebank The Lakes Hotel and Conference Centre Nigeria Clear Essence California Wellness Centre and Boutique Hotel Obudu Mountain Resort Nike Lake Resort Ghana Holiday Inn Accra Airport zimbabwe Crowne Plaza Monomotapa Express by Holiday Inn Beitbridge Holiday Inn Bulawayo Holiday Inn Harare Holiday Inn Mutare Lake View Sun (closed for re-development) Troutbeck Resort Caribbea Bay Resort Great Zimbabwe Hotel Elephant Hills Resort and Conference Centre Hwange Safari Lodge The Kingdom at Victoria Falls The Victoria Falls Hotel Partnership (50%) Fothergill Island Safari Lodge Sun Casinos Caribbea Bay Sun Casino Makasa Sun Casino Harare Sun Casino Bulawayo Sun Casino Redcliff Sun Casino Sun Vacations Caribbea Bay Resort Troutbeck Resort South Africa Namibia Angola Zambia Zimbabwe Botswana Mozambique Madagascar Cote d'Ivoire Ghana Equatoria Guinea Kenya DRC Tanzania Malawi Nigeria Cameroon Uganda Ethiopia OUR FOOTPRINT Egypt African Sun Limited 2008 712009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=74http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=74Front row from left to right: Ms E Chitiga, Mr E M Makonese, Mr S A Munyeza and Mr F Rwodzi back row from left to right: Mr N Mangwiro, Dr L T Kapungu, Mr B L Nkomo, Mr D W Birch and Mr T N Chiganze Corporate information DIRECTORATE Chairman E M Makonese Risk and Audit Committee B L Nkomo (Chairman) S A Munyeza Executive directors S A Munyeza N Mangwiro Human Resources and Non-Executive directors B L Nkomo E Chitiga L T Kapungu F Rwodzi D W Birch T N Chiganze  Mr D Mamvura and Mrs P T Murombedzi resigned from the African Sun Limited Board on 31 August 2008 and 30 September 2008, respectively. Finance and Investments Committee F Rwodzi (Chairman) B L Nkomo T N Chiganze S A Munyeza N Mangwiro D W Birch N Mangwiro Remuneration Committee D W Birch (Chairman) L T Kapungu Ms E Chitiga S A Munyeza Marketing Committee B L Nkomo (Acting Chairman) Ms E Chitiga S A Munyeza 72 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=75http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=75MANAGEMENT Executive Committee S A Munyeza N Mangwiro T Madziwanyika M S Manyumwa E T Shangwa G Taputaira T Maswiswi C Nyahunda T Chaora E Cameron F Mangwende Group Chief Executive Officer Chief Financial Officer Commercial Director Managing Director – Zimbabwe Operations Company Secretary / Finance Director Zimbabwe Operations Development Director Human Resources Director Operations Director – Regional Operations Investments Executive Managing Director – African Sun Limited PCC (Mauritius) Corporate Communications Manager (ex officio) HOTEL ANd RESORT GENERAL MANAGEMENT Property General Managers South Africa B Frolich M Lourens Nigeria TBA G Manyumwa D Kanyandu JM Patterson Ghana B Porter zimbabwe I Katsidzira T Macheka S Dube T Mutyandasvika M Zulu C Yapp T Hwingwiri I Kasozi B Chimanga D Kung I Kufa K Snater Sun Casinos R Choto P Munodawafa L Sibanda B Chiutare N Matebwe P Fumhanda W Magaya Casino General Manager Sales and Public Relations Manager Makasa Sun Casino Harare Sun Casino Bulawayo Sun Casino Caribbea Bay Casino Redcliff Sun Casino Holiday Inn Harare Crowne Plaza Monomotapa Holiday Inn Mutare Holiday Inn Bulawayo Express by Holiday Inn Beitbridge Hwange Safari Lodge Elephant Hills Resort Troutbeck Resort Caribbea Bay Resort The Kingdom at Victoria Falls Great Zimbabwe Hotel The Victoria Falls Hotel Partnership Holiday Inn Accra Airport Clear Essence California Wellness Centre and Boutique Hotel Obudu Mountain Resort Nike Lake Resort Amber Tinapa The Grace in Rosebank – Johannesburg The Lakes Hotel and Conference Centre – Johannesburg African Sun Limited 2008 732009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=76http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=7674 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=77http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=77The Kingdom at Victoria Falls Caribbea Bay Holiday Inn Mutare Hwange Safari Lodge African Sun Limited 2008 752009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=78http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=78Corporate Governance ThE AFRICAN SUN CODE A frican Sun Limited personnel are committed to a long-published code of ethics. This incorporates the INTERNAL CONTROL The 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 MEETINGS The 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 Officer, which, inter alia, covers 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. STAkEHOLdERS For 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 and in accordance with the code of Corporate Practices and Conduct contained in the Cadbury and King’s Reports “I” and “II” on Corporate Governance. dIRECTORATE The Board of Directors of African Sun Limited is constituted with an equitable ratio of executive to non-executive Directors and meets at least quarterly. The African Sun Limited Board is chaired by a non-executive Director. dIRECTORS' INTERESTS As 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. 76 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=79http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=79operations, 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 COMMITTEES The Board is authorised to form committees to assist in the execution of its duties, powers and authorities. The Board has four standing committees, namely, Risk and Audit, Human Resources and Remuneration, Finance and Investments and Marketing. 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 COMMITTEE The Risk and Audit Committee of the Board deals, inter alia, with compliance, internal control and risk management. It is regulated by specific terms of reference, is chaired by a non-executive Director, has a majority of non-executive Directors and incorporates the Group Chief Executive Officer and Group Chief Financial Officer 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 COMMITTEE The Group has a Human Resources and Remuneration Committee and it is made up of a non-executive Chairman, the Group Chief Executive Officer and two nonexecutive Directors. The Committee acts in accordance with the Board’s written terms of reference to review the remuneration of all African Sun Limited Executive Directors, senior management and other members of staff. THE FINANCE ANd INVESTMENTS COMMITTEE The Group has a Finance and Investments Committee and it is made up of a non-executive Chairman, the Group Chief Executive Officer, Group Chief Financial Officer and three non-executive Directors. The Committee is responsible for the review and preliminary approval of the major investment decisions of the Company. THE MARkETING COMMITTEE The Group has a Marketing Committee and it is made up of a non-executive Chairman, the Group Chief Executive Officer and two non-executive Directors. The Committee is responsible for the review of all sales and marketing programmes of the Group. THE NOMINATION COMMITTEE The Nomination Committee is an ad hoc Committee which sits as and when it is necessary. NATIONAL wORkS COUNCIL ANd wORkERS' COMMITTEES The 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. African Sun Limited 2008 772009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=80http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=80ANALYST bRIEFING The Group reports formally to shareholders twice a year when its haIf year and full year results are announced. The Group Chief Executive Officer and the Group Chief Financial Officer 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 MEETING The Annual General Meeting provides a useful interface with private shareholders, many of whom are also customers. The Chairman of the Board and the Group Chief Executive Officer 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 2008 Individual 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 has 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 E M Makonese T N Chiganze B L Nkomo S A Munyeza N Mangwiro E Chitiga L T Kapungu D W Birch P T Murombedzi D Mamvura F Rwodzi * by invitation / – not a member 4 4 4 3 4 4 3 2 4 4 2 3 4 *2 4 4 4 4 – – – – 2 3 4 *2 – 3 4 *3 1 – – – 3 – 4 *2 – 4 4 4 – – 4 4 – – 4 *3 – – 4 – 1 2 4 – – – 78 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=81http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=81Annual General Meeting NOTICE OF ANNUAL GENERAL MEETING Notice is hereby given that the Thirty-Seventh Annual General Meeting of members of African Sun Limited will be held in the Kariba Room at Holiday Inn Harare, Corner 5th Street and Samora Machel Avenue, Harare on 27 March 2009 at 12 noon for the following purposes: ORdINARY bUSINESS 1. To receive and adopt the financial statements for the year ended 30 September 2008, together with the report of the Directors and Auditors therein. 2. To confirm the total dividend of $229.72 (interim dividend $556.40 before revaluation) declared for the 12 months months ended 30 September 2008. 3. To appoint Directors. Messrs N. Mangwiro, T. N. Chiganze and L.T. Kapungu retire by rotation. All being eligible, they will offer themselves for re-election at the Annual General Meeting. 4. To determine the Auditors’ remuneration for the past audit. PricewaterhouseCoopers have indicated their willingness to continue in office. SPECIAL bUSINESS 5. Directors' fees. To review fees payable to the Chairman and Non Executive Directors. by order of the board E T Shangwa Company Secretary 17th Floor, Crowne Plaza Monomotapa 54 Park Lane, Harare zimbabwe 12 February 2009 African Sun Limited 2008 792009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=82http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=82Elephant Hills Elephant Hills Resort Victoria Falls 80 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=83http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=83Shareholders Diary ShAREhOLDERS' DIARY dIVIdENd INFORMATION FOR THE YEAR Interim Dividend announced Dividend paid FINAL Dividend announced Dividend paid Analyst Briefing Annual Report Published Thirty-Seventh Annual General Meeting INTERIM REPORTS 6 months to 31 March 2009 FINAL Dividend announced Dividend paid Analyst Briefing Thirty-Eighth Annual General Meeting November 2009 February 2010 November/December 2009 February 2010 28 November 2008 11 February 2009 3 December 2008 February 2009 March 2009 ANTICIPATEd dATE May 2009 20 June 2008 8 August 2008 African Sun Limited 2008 812009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=84http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=84Contact Information ADMINISTRATION African Sun Limited Incorporated in the Republic of Zimbabwe Registration number: 643/1971 Registered office 17th Floor Crowne Plaza Monomotapa 54 Park Lane P .O. Box CY 1211 Causeway Harare Zimbabwe Telephone: +263 4 250501/7 or +263 4 700521/4 edwinsh@africansun.co.zw www.africansunhotels.com Auditors PricewaterhouseCoopers Chartered Accountants Principal bankers MBCA Bank Limited Telephone Numbers For reservations: Central Reservations Office Johannesburg (PACRO) Central Reservations Office Harare Corporate Headquaters Sub Corporate Office in Johannesburg The Grace in Rosebank Lakes Hotel and Conference Centre Obudu Mountain Resort Amber Tinapa Clear Essence California Wellness Centre and Boutique Hotel Holiday Inn Accra Airport The Victoria Falls Hotel Elephant Hills Resort The Kingdom at Victoria Falls Troutbeck Resort Caribbea Bay Hwange Safari Lodge Great Zimbabwe Hotel Crowne Plaza Monomotapa Holiday Inn Harare Holiday Inn Bulawayo Holiday Inn Mutare Express by Holiday Inn Beitbridge +27 11 442048827 +263 4 700521 4 or +263 4 250501 7 or +263 4 705110/94 +263 4 250501 or +263 4 700521 4 +27(0) 11 447 9369 +27(0) 11 280 7200 +27(0) 11 421 5310 +234 803 550 625 or +234 803 364 8209 or +234 803 550 6252, +234 803 364 8209 or +234 803 472 9327 +234 703 898 4298 +234 087 806 5555 +233 21 785324 or 888 465 4329 +263 13 44751/60 or +263 13 44203/5 +263 13 44793/9 +263 13 44275 or +263 13 42358 +263 298 881 or +263 298 883/6 +263 61 2452/4 +263 18 331/6 +263 39 262274, +263 39 265427 or +263 39 264187 +263 4 704501/30 +263 4 251200/14 or +263 4 795610/38 +263 9 252464, +263 9 257211 or +263 9 252460/9 +263 20 64431 +263 86 23001/4 or +263 86 23371/2 Legal Practitioners Dube, Manikai and Hwacha Legal Practitioners Investor Relations Internet: www.africansuninvestor.com Transfer Secretaries Corpserve (Private) Limited 2nd Floor ZB Bank Centre cnr Kwame Nkrumah Avenue / First Street P .O. Box 2208 Harare Zimbabwe Telephone: +263 4 751559/61 busi@corpserve.co.zw 82 African Sun Limited 20082009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=85http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=85PROxY FORM FOR ThE ANNUAL GENERAL MEETING For use at the Thirty-Seventh Annual General Meeting to be held on Friday 27 March 2009 at Holiday Inn Harare, cnr 5th Street and Samora Machel Avenue, Harare. I/We, the undersigned Of Being registered holder/s of Hereby appoint Or failing him, Or failing them, the Chairman of the meeting as my/our proxy to act for me/us and vote for me/us on my/our behalf as indicated below at the Annual General Meeting of the company to be held on Friday 27 March 2009 at 12:00 and at any adjournment thereof. ordinary shares PROXY (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 and vote and speak in their place at the meeting. A proxy need not 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. Signed at this Day of 2009 Signature of Shareholder PLEASE NOTE If the address on the above envelope of this letter is incorrect, please fill in the correct details below and return to the Company Secretary Name Address2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=86http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=86The Company Secretary African Sun Limited 17th Floor – Office 1708 Crowne Plaza Monomotapa Hotel 54 Parklane, Harare P .O. Box CY 1211, Causeway Harare, Zimbabwe2009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=87http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=872009-03-23T15:10:05+01:00http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=88http://ipaper.ipapercms.dk/AfricanShareHolder/zw/AFRICANSUN/2008/?Page=88Corporate Head Office African Sun Limited 17th Floor – Office 1708 Crowne Plaza Monomotapa 54 Parklane, Harare PO Box CY 1211, Causeway, Harare, Zimbabwe +263 4 250501/7 or +263 4 700521/4 Email: edwinsh@africansun.co.zw www.africansunhotels.com Regional Office African Sun Hotels SA (Pty) Ltd. 54 Bath Avenue, Rosebank, Johannesburg, South Africa PO Box 2772, Saxonworld, 2132 Tel: +27 11 442 0488 Fax: +27 11 442 6672 Email: info@africansunhotels.co.za www.africansunhotels.com2009-03-23T15:10:05+01:00