BTL INTERNATIONAL ‘STRICTLY PRIVATE & CONFIDENTIAL INFORMATION MEMORANDUM. | | A two star hotel located in the Beitbridge Town, Zimbabwe 31 December 2013 Property Owners Hotel Operators through a Lease ae a Dawn Properties Limited RICAN Dawn Properties Limited (Incorporated in Zimbabwe) Ordinary share code DAWN ISIN 2.000901 188 4 Atican Sun Limited (incorporated in Zimbabwe) Ordinary share code: ASUN ISIN Z\V 000 901 208 0 Prepared by BT! INTERNATIONAL Disclaimer This Private & Confidential Report has been prepared by BTI Intemational Limited ("Company") and is intended only for One and Only Hotel Group. Accordingly, If you have raoaived this report but are not the intended addressee, please return it immediately to the Company, BTIINTERNATIONAL LIMITED 1003 Alesander House 35 thine Cybercity, Mauritius Tek (230) 466 9171 - Fac 230) 465 0132HIGHLIGHTS Hotel Description Hote! opened in 1998 -Equ-lstant between Harare and Jonannesburg Zimbabwe/ South Africa boarder post § klometres away City’s main oad less than 1 kiometre away Accommodation 104 express rooms with Two double beds Shower Single tot ‘Shaver socket outlet Amenities utcoor swimming poo! Businoss contro Full conference and banqueting facitios ‘Same-day laundry service Indoor games aveilale a reception. Zimbabwe/ South Africa boarder post (5 kilometres away) Zimbabwe's busiest gatoway Open 24 hours 4.000 poopie access the post daly +10 000 people during peak times es BRIDGE BORDER POST Operational Highlights 2010 2011 2012 2018 Revenue (USD) 4210738 1351,486, 1,392,480 1388:942 Occupancy (6) st 58 52 “« RevPAR (USD) is as af ar ADR (USD) 87 85 m 76 2ipase BTI INTERNATIONAL PRIVATE AND CONFIDENTIAL‘TRANSACTION OVERVIE Opportunity BT Intemational has identified an opportunity to take operational control of the Beitoridge Express Hotel through @ cash transaction wth Afcan Sun Limited and Dawn Properties Limited 1 International wil act as an Advisor to the Seles i their disposal of 100% property value from Dawn Properties Limited and 100% of the operating lease trom Arcan Sun Limite. Indicative torms ae Hq eee ~ Seiler) Valuation Slate ‘Deal Vowume (USD ma} (USD mn) parang Lease ‘ican Sun Lined 25 Too0% 25 Property ‘awn Properties Lied er 100.0% oF ‘Transaction Terms ~ Operating Lease BT Intemational proposes the Sellers dispose 100% ofthe respective property value and operating lease from Dawn Properties and African Sun Limited through the following transactions ‘+ 100.0% from Afscan Sun Limited against a cash payment of USD [25 millon; and + 100.0% from Dawn Properties Limited against a cash payment of USD [67 mition] Exact terms of the lease are to be negoticted amongst Dawn Properties Limited, African Sun Limited and the Purchaser. Terms wil cleary stipulate responsibities interme of maintenance, refurbishing ang other renovation, as well as acceptable management fees, overnead costs and other protective rights forthe profit share Process For African Sun Limited, the transaction is more than 10% but less than 20% of ts market cap and therelore falls into Category 3 of the ZSE Listing Requirements. A Category 3 transaction requires that upon conclusion of the transection terms, the listed company publishes a press statement giving such detais ofthe transaction For Dawn Properties Limited, the transaction is more than 20% but less than 30% of i market cap and therefore {alls into Category 2 ofthe ZSE Listing Requirements. A Category 2 transaction requires that upon conclusion ofthe {transaction terms, the listed company pubshes a press statement giving such details ofthe transaction and further notfy within the same press statement that @ circular to shareholders wil be issued, Within 28 days this cizcular to ‘sharohotirs should be dispatched {BTI Intemational wil coordinate the preparation ofthe press releases and shareholder evculat BT! INTERNATIONAL, al Page PRIVATE AND CONFIDENTIALCONTENTS PAGE HIGHLIGHTS. TRANSACTION OVERVIEW. DEFINITIONS EXECUTIVE SUMMARY PART | - THE BEITBRIDGE EXPRESS HOTEL... 1.1. Introduction. 1.2 Sales Mix. 1.3 Competitor Performance. 1.4 Valuation... PART Il COMPETITOR PERFORMANCE 2.1. Londa Hotel and Conference centre 2.2 Beitbridge Rainbow Hotel PART Ill -THE BEITBRIDGE TOWN... APPENDIX A— AFRICAN SUN APPENDIX B ~ DAWN PROPERTIES. BTI INTERNATIONAL, PRIVATE AND CONFIDENTIAL a a & 7 AlpageDEFINITIONS ‘The folowing defintions apply throughout this document unless the context requires otherwise, ADR Afican Sun AHN ARI ARP sew EH Capex BRE cos, cpm Dawn EBITDA EBITDA EPS ozH HIB HK HSL LR Ledge Londa MPI Nav PAT RevPAR RGI TBR TKAVE TVFH Yo TI INTERNATIONAL, Average Dally Rato ‘African Sun Limited, a company incorporated inthe Republic of Zimbebwe under registration number 642/197' and isted on the Zimbabwe Stock Exchange (Code: ASUNZW), “Amber Hotel Muta ‘Average Rate Index ‘Average Revenue Per Room ‘Arian Sun Limited, a company incorporated inthe Republic of Zimbabwe under registration number 643/1971 and lsted onthe Zimbabwe Stock Exchange (Code: ASUNZW) Brainworks Capital Management Beitbridge Express Hotel Capital Expenditure CB Richard Elis now Dawn Property Consultancy Cost of Sales Crowne Plaza Monomatap2 ‘Dawn Properties Limited, 2 company incorporated in the Republic of Zimbabwe and listed on the Zimbabwe Stock Excnange (Code: ASUN ZW): Earnings Before interest, Taxes, Depreciation and Amortization Earnings Before Interest, Taxes, Depreciation, Amortization and Rent Earnings Per Share Great Zimbabwe Hote! Hobday inn Bulawayo Hobday inn Harare: Hwange Safari Lodge Limpopo River Lodge Beitbritge Londa Lodge Market Penetration Indox Net Asset Value Occupancy Rate Profit Ater Tax Proft Before Tax Revenue Per Available Room Revenue Generating Index Return on Sales Troutbeck Resort ‘The Kingdom At Victoria Falls ‘The Victoria Falls Hotel, United States dliar Yearon Year sl Page PRIVATE AND CONFIDENTIALEXECUTIVE SUMMARY Purpose of the Information Memorandum + Prepared to assist in evaluating the possible acquisition of the Beitbridge Exprese Hotel property and ‘operating lease from Dawn Properties Limited and African Sun and Limited respectively. Opportunity + Aeuir a hotel elmostequsistant between Horare and Johannesburg + Beitritge Express Hotels win 5 klometers ftom the Berge Border Post + The Beibridge border post is Zimbabwe's busiest gateway wth crea 4.000 people accessing he post dally + The Beitbridge Express Hotel enjoys a disproportionately higher market share and operates a higher ADR than its competitors with a RevPAR 37% higher. ‘Operating Lease Valuation: + Base Case: The valuation based on the forecast performed and driven by Strategic Interventions resulting in improved cost rationalization and an improving environment reflects @ DCF valuation of USO2, 450, 769 + Comparable Value: Based on the market trading comparable values of hotel mangement companies, we valued the Beltbridge Express Hotel using a discounted EVIEBIDTA multpie of 11.18 to come up wih a valuation of USD2, 478, 421 Property Valuation: + Replacement Cost: This is the current replacement cost of the asset, less accumulated deprecation calculated to reflect the already consumed or expired future economic benefits of the asset. Tho methodology reflects a value of USD7, 302, $00. + Net Asset Valuation: This isthe carying value 's the value ofthe property and is based on the original cost ofthe hotel less any depreciation, amorization or impairment costs that were made. The valuation has been calculated to be USDB, 000, 000. + Yield Based Valuation: The Yield Based valuation is based on the actual rental pai by African Sun Limited to Dawn Properties Limite at a capitalisation rate of 8% The valuation came up to USDB, 893, 605, ‘The Sellers + Afriean Sun Limited oAlfican Sun is a Zimbabwe Stock Exchange listed hotel management company, majority owned and controled by Lengrah Investments v/a BCM Hotels and Real Estate, ‘oAfican Sun pertfio consists of 13 hotel operating leases in Zmbabwo, 1 operating lease in ‘Ghana and 4 management contracts in Nigeria. + Dawn Properties Limited ‘Dawn Properties Limited is a Zimbabwe Stock Exchange listed investment property holding ‘company and contoled by BCM through a direct sharenolsing and pooling agreement with ‘Afican Sun Limited (© The Dawn Properties Limited portfolio is skewed in favour of tourism related asses (+1,000 room capacity) geographically spread out in all major tourist destnations inthe country. The company ‘also owns residential end commercial zoned land in addition to providing property management felated services, BTI INTERNATIONAL, 6|Page PRIVATE AND CONFIDENTIALPART |- THE BEITBRIDGE EXPRESS HOTEL 1.4 Introduction ‘Amost equidistant between Herare and Johannesburg, lies the Beitbridge Express Hotel, 8 convenient and ‘moderately priced stopover 2 star hotel. The new hotel which opened in 1998 was origmally branded as Holiday Inn Express and postioned to provide minimum service, Very well located, the Beitbridge Hotel is within 5 kilometers from the Beitridge Border Post. The hotel has 104 rooms, 48 of which are non-smoking. Owing to the express concept of the hota, the rooms do not have bath tubs and cnly have showers. Since the hotel is an express offering a limted service, all 104 rooms are the same and ofer the same services below. “Two double bods Shower ‘Single toilet ‘Shaver socket outlet Individually controlled air conditioning Hairéryer Mineral water ‘Smoke detectors & sprinkler system Seltocking secunty doors Telephone Television Satelite television Coffee and tea making facies Work desk and lamp Ice machine on all foors Beitordge xpress Hotel i also an ideal destination for conferences of reasonable size. The hotel houses two ‘conference rooms from an impromptu huddle of 18, a taining programme of 150, product launches and even interviews, Mahosi meeting room can accommodate 15 people while with @ capacity of up-o 160 delegates, the ‘Verda room has long been a preerted conference destination fr small to medium corporate events ‘The hotel offers full conference and banqueting facilites and the packages on offer can be customized according to the services that the clent requires. The packages include all meals including morring and afternoon teas. The hotel ‘an also host cocktail parties and wedding celebrations in the Venda conference room including al the catering for the functions Whether guests need a place to safely siore luggage or simply to relax and rejuvenate, the hotel has @ range of services and facilis which include: = Apoot ‘© Luggage room = Laundry service + Giy tour © Free parking BTI INTERNATIONAL 7IPage PRIVATE AND CONFIDENTIAL“The hotel has one restaurant and one bar which overiook the poo! area. They are also conveniently located close to the reception area and guests have an option of eating and drinking by the poolside in a refreshing almosohere. The restaurant ofers butlet breakfast and the other meals depend on eccupancy of the hotel so when there i high Ceecupancy t wil serve buffet lunch and dinner and when its low there wll be an ala carte menu, 1.2 Sales Mix gues expressed io % toms T | markctSeomont __| __Actuatzntt ___Actuat 202 | __Actual2ni2__| Foracast-2014_| Comacata 10 + 4 | ndiualsransent m “a 0 Noo’ a a | ousiGovermen __| 18 7 1a 7 4 4 Lconforancn Busi 44 4 . 10 Table 1 Sais Mx ‘Typical of a transit located business, the hotel is curently driven by individuals with over 40% contribution. Quasi Goverment, corporates and conference businesses contribute a combined circa 40% of the business. The remaining contribution is from Government and Non-Governmental Organisations (NGOs). Growth and development ofthe town wil boost corporate business while dualization of the highway will provide improved access to the town, 4.3 Competitor Performance pomarat | roome | 966 | ADR] Fal share | maet | ym) amy | gar | ROPAR “Ben wi] | os {| __a5| soz] 168) a7 2 Conia <0] «| «| "| | on] om] ow] 7 LR Lodge 7 wat 19 23. 117 082 0.99 20 ineae uty || aos] [ve] 100] om] om v0 Teble 2 Competitor Performance Beitbridge Express is the best performing hotel in Beitbridge town with a favourable disproportionate market share of ‘The ARR achieved is aggressively ahead ofthe competitor set. In order to remain ahead of competion BEH would eed todo the fotewing Complete the soft refurbishment process in order to compete withthe upcoming Rainbow Hotel + implement the express breakfast concept asa selling strategy in progress + implement @ sales and marketing thrust to be volume focused whilst taking 2 low cost positon at pricing levels that are dificult to replicate + Introduce executive suites BTI INTERNATIONAL. a[Poge PRIVATE AND CONFIDENTIAL4.4 Valuation ‘Summary Property Company (Dawn Properties Limited) ‘Methodology ‘Source Valuation (USD 000s) Net Asset Valuation (NAV) Dawn 2013 Annual Report ‘8,000 2 Replacement Cost Valuation BRE 7908 2. Yield Based Valuation en 3.804 ‘Average 702 Table 3: Dawn Proporta Valuation Operating Company (African Sun Limited) Methodology Source Valuation (USD "0008) 1 Discounted Cashfiow Valuation BT! 2481 2 EVIESITDA Multiples BT 2478 ‘Average 2.488 Table 4 Operating Lease Valuation Detailed Valuation Depreciated Replacement Cost Valuation This is the cost to replace the asset property of Boitridge Express Hotel at the same or equ value. The Deprecated Replacement Cost as analyzed by CB Richard Elis in their report as at Stst march 213 and the African Sun Limtad Immediate Maintenance and Capex adjustments as atthe 24th of September 2013 have been sed in this regard. Property Valuation Analysis item USD (0008) (Curent Replacement Cost (CBRE) 8.104 Less: Depreciation ~ Refurbishment (CBRE) ont Curent Not ae 7282 Ad: immediate Major Maintenance ( Afcan Sun Limitee) 50 Total Valuation 7903 Table &: Property Valuation Analysis Immediate Capital Expenditure Requirement item (S000) Repairs tothe Lightning arestor system 6 Purchase and installation ofa water purification plant 20 ‘Construction of atematve trance to conference room tolls 5 Kitchen extract canopy re suppression system required 5 Replacement of wom out canvas fre hoses 4 Tota! 0 Table € immediate Capital Expenditure Requirement BEH js in a generally good state of repair however the immediate capital expenditure will defend the current position of the hotel in the node and is necessary in negotiating the requisite business. BTI INTERNATIONAL PRIVATE AND CONFIDENTIAL 9|Pageww Yield Based Valuation The Yield Based Valuation is based on the projected rental pad in FY18 by Afican Sun Limite to Dawn Properties (eased on te revised lease contract of 25% of roomrevenves and 7% of any other revenues). The capitalization rate is 8% (adapted from CBRE) is based on: “+ Risktothe security 4+ Raguiaty of income ‘+ Secutty ofthe captal “+ Liquidity ofthe capital “+ Opportunity forfurthor growth in revenus for a Major Hot! ina transit driven Beitbridge Town. Rental income FY “18 - (USO 000s) : ey CCapitatzation Rate ™% Capital Value of Hotel Property - (USD 0008) nee Table 7: Capitasation method t0|Page BTIINTERNATIONAL PRIVATE AND CONFIDENTIALDiscounted Cash Flow Valuation Projected Income Statement ~ USD (‘000s) rio FYit) | FYa2FYIS FVM FYSOFYIG FYI. FYB Revenue 1638 1,869,187 1,658 1,900-24189 2288 2.990 M8 Aocommodation 9901170 1,16¢ 0271.88 1688 1,782 1.800030 Fas a omer 7 6 “ 3 3 a 4 4 4 cos wr 92182155280 kk Food 198 hts ttt Boverago a 4 0) 2 15 6 16 7 8 Fas 7 7 48 10 7 7 7 8 8 Otter Bm 3 10 10 " " Gross Profit, 1434877 16071801 1.778 490320232 2.279 Expenses a a a Payroll me wT amas wT SISA General 238807 Property 3 wD 2 64 57 eo Marketing ma 2 8 20 30 3 BF Unites cr a Operating Prot == «-725.—= ODS ST wesw 8B .020 1402 ManagementFee «167,—= 223288 206287286 USD Royaty Fee 6 88888) 18 es Dp 2m 2 EBITDAR 494928655] wT 187 EBITDA zs a2 75 kB] Table & Discounted Valuahon Matiod Assumptions FY'13 figures Based on actual results (Revenue and EBITDA) obtained from ASL Management. Occupancy ~ Projected to increase by @ moderate 2% per annum between FY18 and FY18. This takes into account the projected business growah in the Bestodge town, RevPAR — Projected to increase by an average 6% per annum between FY'14 and FY'18 to offset the projected Imported ination rate through procurement from South Afica, Food Cosis ~ Projected to grow proportionate to Accommodation Revenue ie. historic average of 12% of ‘Accommodation Revenue have been used}. Beverage Cost — Projected to grow at historic cost base of 3% of Food and Beverage Cost. Payrll, Other Expenses ~ Increases at an average of 5% per annum. Marketing — Projected to orow proportionate toa historic base of 1% of Total Revenue. Heat, Light & Power -Projecte to grow propotionte toa historic base of 7% of Total Revenve. BT! INTERNATIONAL a[page PRIVATE AND CONFIDENTIAL° PART )MPETITOR PERFORMANCE 2.4 Londa Hotel and Conference centre Londa Hotel end Conference cent is a 30 room establishment located within 800 metres from the Beit Bridge border post on the Harare Belt Brdge highway. The hotel boasts of 4 conference halls and a 40 office park block. within the premise housing 32 office tenants. The rooms are standard wit ‘The hotel has 2 restaurant and a bar with a capacty to accommodate about 50 diners. Other facilities at the hotel include: WIFI Access: Satelite TV; En suite bathroom; Safe; and Minibar Git shop; Spa/Beauty, Chia rena, (CafelRestaurent Braaifaciltios Babysitng Wheelchair access; Catering Conference contr; and Laundry BTI INTERNATIONAL PRIVATE AND CONFIDENTIAL | P22.2 Beitbridge Rainbow Hotel CCurtenty under construction, the 3 star, 2storey hotel, willbe the fit almost totally non-smoking hotel n Zimbabwe. ‘The hete! wil have approximately 144 rooms, comprising # 70standard twin rooms © 59 standard double reams + 4interteading rooms #2 standard sutes ‘¢Iiplomatic suite “The hetel wil have a casino, a6 wall as @ gym and ewimming pool, Other facilites wil include: ‘© an office black, gym; a gazebo; several bars; cotfes shops; 2 restaurant and {wo conference rooms (150 people maximum capacity each) ‘According to market reports provision is being mado for the casino to have @ private section for the convenience of those who prefer to gamble discreetly, away from the public eye and for 2 banks te offer a banking service within the hotel 13| Page BTI INTERNATIONAL PRIVATE AND CONFIDENTIALnm THE BEITBRIDGE TOWN Beitordge is the Zimbabwean town at the border between South Africa and Zimbabwe, with Musina as its South ‘African equivalent. Beitbridge Is located in the province of Matabeleland South, 683km from Harare, 322 ilometies from Bulawayo and $86 kilometes for Masvingo. The town has a population of around 42,000 an 's dominated by the local Venda people. Beitbridge town les just north of the Limpopo River about 1 km fom the Alfred Beit Road Bridge which spans the Limpopo River between South Aca and Zimbabwe. Betoridge is @ dry and hot area with rainfall of less than 400mm per annum. Summer highs are typically over 33. agrees ftom November to March, but can reach as high as 40 degrees centigrade. Whist winter day time temperatures only fll to about 15 degrees in June anc July, nights can be as cold as 8 degrees, The Beitbridge / Musina border is Zimbabwe's busiest border and as such Beitbridge is essentaly known as a border town and trading post. The border is now open to tourists 24 hours 3 day weekdays, weekends and on Public holidays. A high volume of freight transits through the town with customs authorites on duty from BamtoS pm (On the South Afican side the NI Highway, a direct toll road, offers quick and hassle fee transit to the main economic centies of Pretoria (462 ken) and Johannesburg (521 kr), via Musina whichis just 16 km away. In Zimbabwe access to Bulawayo is via the AS that runs northwest, eventually arriving st Victoria Falls, The Ri to Harare is practically drectly north, passing through Masvingo. Apart trom the intial dit road within the fist mile of leaving Beitbrge the roads are generally god and criving is easy, ‘Three raitway lines meet at Betordge: the South African Spoomet line to Polokwane; the National Railways of Zimbabwe line to Gweru, via Rutenga; the privately owned Baitoidge Bulawayo Railway. BTI INTERNATIONAL PRIVATE AND CONFIDENTIAL aaiPageAPPENDIX A — AFRICAN SUN Introduction. African Sun Limited (ASL) isa leading player inthe tourism and hospitality industry commanding 24% market shere ‘fom ts operations portiolio curently comprising 13 hotels and resorts across the nation Resort hotels + Elephant Hils Resort and Conference Centre + The Kingdom at Victoria Falls +The Victoria Falls Hotel, + Troutbeck Resort * Cantbbean Bay * Great Zimbabwe Hotel Safari Lodge “+ Hwange Safar Lodge + Fothergil island City hotels InterContinental Hotels Group (HG) aflisted brands) * Crowne Plaza Monomotapa, + Holiday Inn Harare + Holiday Inn Bulawayo, Home grown brands * Affican Sun Amber Hotel Mutare * Beitaidge Express Hote Im Zimbabwe, the company boasts of a strategic aliance with ts leaser Dawn Properties which ensures securty of tenure nd superior brand uelty from the InterContinental Hotels Group (IHG) and Holiday Inn affiated brends. ‘Outside Zimbabwe, the Group has presence in Nigeria and is due to resume operations in Ghana, In Nigeria, ASL. ‘operates under management contacts, Obudu Mountain Resort in Cross River Slate, Nike Lake Resort in Enugu ‘Slale, Best Weatern Ikeja in Lagos, Bast Western Homevile in Benin City, Edo State and AMtican Sun Amber Residence in GRA, keja, Lagos Hotel Performance TURNOVER Bide BRITOA Dobe ECUPANY% MOTEL | priz rvs Stange | vez rvtaOtanae | viz vig henge crm | Tas vans] eee CSS wa | 77 ree) | tes tos |e tt sex | ter tor a | setts | mw ren | sz sons | sats ts ot | or wt we | so sent | ots so | ner | eos 7a © 19 | asst | ett meave | os 732 07 | | ow anu | az 2803) | 200 50185 | mows ter | 252 258 ©) | 20s ass | at | oz 1392 1,989 @ 159 120 2) 52 49 2 cor | 236 220 © @) «| 2 ts ws) | a8 nst__| 1425 _145__4 | 73 7 5 | a 1 4 Table 9 Aincan Sun Hota perfomance Five hotels (HIM, TVFH, HIB, CPM, and AHM) accounted for 82% of the FY13 EBITDA earnings and 54% of the Revenue, The remaining hotels contributed 18% of EBITDA and 46% of Revenue. The disproportionate revenue BTI INTERNATIONAL. PRIVATE AND CONFIDENTIAL 15|Pagemy ‘and EBITDA contribution of the bottom hotels reflects improvements in operational efficiencies that need to be ‘addressed in services delivery. EHR, HIB and TVFH ere the key performers mainly because of oronth in market shate and business retuns {G2itis facing increase in pressure cue to discounting by competion in their respective competion sets ‘COR's market snare is improving but has low ROS (Return on Sales) Due to low ROS, TKAVE recorded « marginal revenue inteace but ROS moved down significantly owing to higher ‘operating costs. Key opportunities for TKAVF incluse softening of reations with source country markets, increased seats! air access into Vitoria Falls and growth inthe Zimbabwean economy BTI INTERNATIONAL 16|Page PRIVATE AND CONFIDENTIALTable 10. Afican Sun Financials — FY13 Performance Review INCOME STATEMENT (USD) are ats pavers 54426,751 96.275679 eet 90,580,699 40973.648 Other income 12717.940 Adminsrabve Expences (05,500.40) (06,724,788) Operating Proft Bore Etraocinary ms And intrest 4771209 248,600 Finance Cost (@.056,567) 072.767) ‘Operating Prot Before Entraorcinay items va2t.r02 1.176.103 eraornary tems 12823) (7.118698) pian meanest 1978879 (6.930.595) Tax (675820) (620,782) Prot Ater Tax 1.002.081 (6376.375) BALANCE SHEET (USD) 2012 2013 Non-curent assets 44920 209 49 808 482 Curent assets 14515847 +4856 000 Non-curent assets held forsale 4354381 TOTAL ASSESTS 59 438 098 0 028 843 Total eauity 23 050384 16080677 Non-curent abies 10.580 092 16167305 Curt ttitos 25 785 840 27777 900 TOTAL EQUITY AND LIABILITIES —_ Bere 59 436 098 60 025042 Revenue forthe 2013 financial year was up 3.4% to $56.3 millon despite a drop in occupancy fam 2% to 48%, The ‘drop in occupancies was largely due to the refurbishment in various properties ané the decreased occupancies were mitigated by an incroase inthe gross margin from 71% in 2012 to 73% during the year. Cost to income ratio remained high at 61%, marginally down for last year of 65%. Operating income was up 14% from the previous period. This was despite a once off income of $1.7 milion in 2012 ‘tom the ext of its management contract in Ghana, Holiday Inn Accra. Excluding the once offincome, ‘Airican Sun would have recorded a 39% increase in operating income, ‘The company posted an 11% increase in earnings before intrest, deprecation and amortization compared with the Prior year 2012, This was however significantly reduced by 2 once off agjustment in fair value ofthe disposal of 12% ‘shareholding in Dawn Properties end the impairment of the remaining 16 64% shareholding in Dawn Properties by ‘Acar Sun, “The impaimnent was as a result of the change in accounting pelcy on Dawn Properties investment, previously as an associate to fair value accounting ‘Tolal far value adjustment and ingaiment amounted to USS7.6 milion and fnanco costs cf USS3.2 millon resulting In 2 loss attributable to shareholders of USS6.6 milion. Without the adjustments, the company recorded a proft of around $2.0 milion, an increase of 115% compared tothe same period last year. apa BTI INTERNATIONAL : PRIVATE AND CONFIDENTIALAPPENDIX B ~ DAWN PROPERTIES Introduction Dawn Properties limited, a variable loan stock company listed on the Zimbabwe Stock Exchange, incorporates potfallo of & hotels, 2 unused properties and land banks, The core business of the company is that of a tourism investment propery noléing company (+1,000 room capacty) of assats geographically spread out in all majr tourist destinations. ‘Through its propery consuitancy division, Dawn Property Consultancy, the company also provides property related services such as: + Agency and sé + Property management; + Projet management and + Valuation advisory services, = Property Portfolio ROOMS LOCATION _ PROPERTY VALUE yiELo Hotel Property (Operational) Cantbea Bay Sun 83 Kariba 3,400,000 oe ‘Carbea Bay Marina na kerba 2,700,000 ‘Crowne Plaza Monometapa 25 Harare 16,800,000 40% Elephant His Resort 278 Vitoria Falls 28,200,000 20% Beitridge Express 10s Beige 6,000,000 28% Great Zinbabe Hotel cy asvingo +,800,000 92% ‘Amber Hotol Mutaro 6 Mutare 4,400,000 asm Hwange Safa Lodge 108, Hwange 4,200,000 35% ‘Troutbeck Sun n yang 4,100,000 3% 73,600,000 38% Hotel Property (Non - Operational) Lake View Sun 2 ara 650,000 wa Brondesbury Park 38 uasdale 41975,000 a 2,626,000 la Land Banks Farm land Mazowe a Mazowe zan701 53% Farm land Matberough a Harare 7.463.000 a Baines Avenue stand nia Harare 321254 wa Glenlome stand a Horace 60371 wa 072.816 0% TOTAL VALUE 24,207.16 33% Table 77 Discounted Vawation Matrod ‘The hotels are all leased to African Sun Hotels, @ hotel management and opersting company representing diverse brands and with operations in Zimbabwe and other regions in Aiic, BTI INTERNATIONAL PRIVATE AND CONFIDENTIAL 1|PageFinancials INCOME STATEMENT HIGHLIGHTS 3eMertt SMart? atMarta Tote Income: 6.994.161 5.405.523 9688.350 ‘Adminstratve Expenses (073700) (8.995363) (3670204) Operating Profit 5,908,161 aziz 624,209 Prot before income tax 5.887.923 1,200,906 1,650,878 Los for tne year rom eiscontinued operations cass (1.882.748) (1.811082) Proftoss) for the year 11,380,208 (193,003) 2s1er BALANCE SHEET HIGHLIGHTS atMartt — atMart2at.Mart3 Total Assets arz218s1—esse12t0 87232570 uty 77388582 77,260,134 (84,486,918 Nen-curent abies 8977008 883.227 2,317,503 Table 12: Dawn Properties Historical Financial Fighights eee ‘The Group achieved a tumover of USO5.7 milion in FY13 with USD2.6 milion atrutable to the hotel portfolio and the remainder coming from property consultancy. ‘The hotel portfolio however achieved a yield of 3.4% whic is stil well below the market yield of 8%; consequently the portfolio willbe diversified at the earliest opportunity. ‘The PET was USD1.6 millon on continuing operations with @ PAT of USOO2 millon as USDO.8 milion was ‘consumed by the loss on disposal ofthe Agro subsiaiary ‘The carrying valve ofthe hotel investment property is USD74.3 milion,