7/27/2019 ASUN Unaudited results for HY ended 31 Mar 13 - republished.pdf

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A F R I C A N S U N L I M I T E D 1 1 2 9

Group Statement of Changes in Shareholders’ Equity

Group Supplementary Information

Message to Shareholders

EPUBLICATION OF THE 6 MONTHS ENDED 31 MARCH 2013 INTERIM FINANCIAL REPORTention is brought to all the shareholders, that this report is a republication of the six months ended 31 March 2013 previouslyblished on 26 June 2013. The republication has been necessitated following a review of the initial publication by thembabwe Stock Exchange (ZSE) Review Committee who has requested that further details relating to prior period errors beluded and in addition certain disclosures be expanded as part of the ongoing transitions for listed entities to enhance financial

orting publication.re details have been provided in the body of this message, as well as in note 2 of the interim financial statements.

VERVIEWe performance for the period was pleasing, as results demonstrated a consistent growth in key performance indicators.ITDA grew by 65% to $3.59 million from $2.17 million achieved in same period last year. This was largely underpinned by anprovement in Average Daily Rate (ADR) and cost efficiencies realised in the period under review. Consequently, cashneration from operations improved to $3.53 million up from $0.58 million achieved in the prior period. The growth informance was however diluted by a high increase in financial charges in this period, resulting in a net profit of $1.23 millionwn from $1.50 million realised in the prior period.

e first phase of the refurbishment program has started to yield posit ive results, with the ADR for the refurbished hotelsreasing by an average of 11%. The refurbished Holiday Inn Bulawayo was commissioned to the market during the periodder review. Crowne Plaza Monomotapa and Holiday Inn Harare are expected to be complete by end of July 2013.furbishment of the Group’s three Victoria Falls properties has started and will be substantially complete in time for the

NWTO conference scheduled for August 2013.

USINESS ENVIRONMENTrld travel is expected to continue growing in 2013 averaging 3-4%. Growth will predominantly be driven by Asian Pacific andican markets. However, inbound travel from our major source markets has been strong compared to last year with foreignvals surging by 13.75%, dominated by the Americas who registered the highest increase of 42%.

mestic travel was constricted due to the adverse liquidity situation that has persisted in the economy and reduced roomailability due to our on-going refurbishment program. Resultantly, domestic room nights into our hotels declined by 12.2%mpared to the prior period. The reduction resulted in an almost flat growth in revenues from same period, prior year.

NANCIAL REVIEWvenue grew by 2% to $26.6 million in comparison to same period last year. The marginal growth was attributable to a 6%wth in ADR, at the back of a reduction in total room nights by 6% from same period last year. The drop in occupancy

ulted in a 5% slump in RevPAR to $44 from $46 achieved same period last year. However, business is expected to reboundm the domestic market as we enter our peak period. The recovery of room capacity is imminent, as we are nearing

mpletion of our refurbishment program for Crowne Plaza Monomotapa and Holiday Inn Harare.

st of sales and Administrative expenses were down 5% and 3% respectively, driving a 65% growth in EBITDA to $3.59lion (13% margin) from $2.17 million (8% margin) achieved same period last year.

erest expense increased by 84% from same period last year to close at $1.55 million following an increase in short-termns and the average cost of borrowing.

e Group posted a profit before tax of $1.23 million from a profit of $1.50 million in the prior period. Excluding prior year otherome and other expenses which were non-recurring, profit before tax grew by 303% from $0.3 million to $1.23 million.

t debt closed at $16.13 million, a 4% increase as a result of capital expenditure on refurbishment. As a result, gearing slightly

reased to 40% from 39% reported in September 2012.GNIFICANT ACCOUNTING MATTERS

or period errors

e company adjusted for two errors during the six months ended 31 March 2013.

e first error pertains to items of Freehold Properties (staff houses) and Leasehold Properties (time shares cottages) whichre omitted from the valuation performed in 2009 upon dollarisation. The restated amount of these assets is $6,711,452 split$4,654,309 for Freehold Properties and $2,057,143 for Leasehold properties. A revaluation of the assets was carried out onFebruary and 15 April 2013, and results have been restated back to 2011 as it was impractical to restate to 2009 (see furthercussion in the notes to the interim financial report).

e second error relates to the incorrect accounting for equity accounted earnings from associate (Dawn Properties Limited).to 30 September 2012, the Group would eliminate a portion of rentals paid to Dawn Properties proportionately to its

areholding from the associate’s profit after tax. This method is a departure from IAS 28, “Investment in Associates”, anduld have resulted in a perpetual loss to the Group as Dawn’s Revenue is predominantly rentals from African Sun. This errors been corrected retrospectively to 2009 as it was practical to do so. The correction of the error resulted in an aggregaterease in assets (investment in associate) of $1,416,161 (see note 3 of the interim financial report)

UTLOOKe various initiatives reported on previously, which are targeted at reducing both the cost and level of debt have advancednificantly, with a conclusion expected before close of the financial year in September 2013.

e UNWTO conference, in August 2013, will provide the tourism sector with a unique marketing platform, which will enhancevisibility of the destination going forward. The resurgence of our national airline is also expected to increase volumes intoBulawayo and Victoria Falls hotels, through domestic conference based business.

e Group is expecting to achieve a full year EBITDA margin of at least 12% and revenue growth of at approximately 8% in theancial year 2013.

RECTORATEere were no changes to the Directorate during the period under review.

VIDEND DECLARATIONview of the need to conserve cash for the operations and the on-going refurbishment, the Board has resolved not to declareinterim dividend for the six months ended 31 March 2013.

PRECIATIONould like to commend management, staff and my fellow directors for their continued commitment throughout the period.

look forward to an improved performance in the second half, riding on the cost reduction initiatives implemented and ourcessful refurbishment.

L Nkomoairman 24 June 2013

Unaudited Interim Financial ReportFor the six months ended 31 March 2013 (Republished)

Group Statement of Comprehensive IncomeHalf Year Ended Half Year Ended

31 Mar 2013 31 Mar 2012figures in US$ Note Unaudited Restated

enue 7 26,602,651 26,192,855 t of sales (7,606,415) (8,024,598)ss profit 18,996,236 18,168,257 er income - 1,715,677ministrative Expenses 15 (16,660,329) (17,095,645)er expenses - (525,354)rating profit/ (loss) 2,335,907 2,262,935ncing costs - net 11 (1,546,592) (839,543)re of profit from associate 444,756 73,285fit before taxation 7 1,234,071 1,496,677me tax charge 9 (319,639) (495,568)

it for the period 914,432 1,001,109

er comprehensive loss net of tax: ign currency translation reserve (328,493) (216,103)

al other comprehensive loss (328,493) (216,103)

TAL COMPREHENSIVE INCOME FOR THE PERIOD 585,939 785,006

fit attributable to: ners of company 914,432 1,001,109

al comprehensive income attributable to: ners of company 585,939 785,006

nings per share: cents c earnings basis 10 0.11 0.12dline earnings basis 10 0.11 0.12

TDA RECONCILIATION it before taxation 1,234,071 1,496,677

d Backer income - (1,715,677)reciation 1,252,535 1,096,537ncing costs 1,546,592 839,543er expenses - 525,354re of profit from associate (444,756) (73,285)

nings before interest, depreciation and amortisation 3,588,442 2,169,149

Group Statement of CashflowsHalf Year Ended Half Year Ended

31 March 2013 31 March 2012All figures in US$ Note Unaudited Restated

Cash flows from operating activities Profit before interest and tax 2,780,663 2,336,220Depreciation and other non cash items 828,738 1,023,252Changes in working capital 1,993,587 (1,847,149)Cash generated from operations 5,602,988 1,512,323Finance costs paid 11 (2,076,868) (861,623)Income tax paid - (71,957)Net cash generated from operating activities 3,526,120 578,743

Cash flows from investing activities Additions to property, equipment and motor vehicles 12 (2,388,563) (3,502,185)Disposals of property, equipment and motor vehicles 12 13,100 13,400Increase in loans and other investments 12 - (229,792)Net cash used in investing activities (2,375,463) (3,718,577) Cash flows from financing activities Proceeds from long-term borrowings 1,800,000 3,422,406Proceeds from short-term borrowings 3,513,074 8,798,558Repayment of long-term borrowings (1,247,262) -Repayment of short-term borrowings (4,772,863) (8,164,598)Cash (used) / generated from financing activities (707,051) 4,056,366

Net increase in cash and cash equivalents 443,606 916,532Cash and cash equivalents at beginning of the period 1,462,942 4,657,480Exchange loss on cash and cash equivalents (33,514) (16,363)Cash and cash equivalents at end of the period 13 1,873,034 5,557,649

roup Statement of Financial Position

Directors: B.L. Nkomo (Chairman), S.A. Munyeza (Group Chief Executive)*, D. W. Birch, E.A. Fundira, V.W. Lapham, A. Makamure,N. Mangwiro (Group Finance Director)*, N.G. Maphosa, N.R. Ramikosi. *Executive Directors

Group Company Secretary: E.T. Shangwa

Registered Office: 17th Floor, Office N o. 1708, Crowne Pla za Monomotap a, 54 Park Lane, P.O. Box CY 1211 Causeway,Harare, Zimbabwe.

Transfer Secretary: Corpserve (Private) Limited, 4th Floor, Intermarket Centre, Cnr Kwame Nkrumah Avenue/ First Street,P.O. Box 2208, Harare, Zimb abwe.

Auditors: PricewaterhouseCoopers, Building No.4, Arundel Office Park, Norfolk Road, Mount Plveasant, P.O. Box 453,Harare, Zimbabwe.

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

Revenue+2%

$26.60m

ADR

+6%$93

EBITDA

+65%$3.59m

Basic Earnings Per Share

-9%0.11cents

Occupancy

-5%47%

REVPAR

-4%$44

Gearing

40%+3%

Pro t Before Tax

-18%$1.23m

1 BASIS OF PREPARATION

The interim financial report for the six months ended 31 March 2013 has been prepared in accordance with IAS 34 "InterimFinancial Reporting", the Companies Act (Chapter 24:3) and the Zimbabwe Stock Exchange Listing Requirements.

2 ACCOUNTING POLICIES

The accounting policies and methods of computation applied in the preparation of these reviewed condensedconsolidated results for the period under review, which are based on reasonable judgements and estimates, are inaccordance with International Financial Reporting Standards (IFRS) and are consistent with those applied in thepreparation of the Group's annual financial statements for the year ended 30 September 2013.

3 PRIOR PERIOD ERROR

Property, equipment and motor vehicles

The Group omitted in error the valuation of staff houses (freehold property) and time shares cottages (leasehold property)upon the adoption of the multi-currency system in 2009. The valuation of these assets was done on 28 February 2013 and15 April 2013 respectively.

The staff houses which are located away from the hotels, include 142 houses in the Victoria Falls area and 9 houses inKariba. The time shares cottages include 11 blocks in Kariba and 24 blocks in Nyanga. The staff housesare occupied bystaff members from our 3 hotels in The Victoria Falls area and one in Kariba. There are no rentals associated with theoccupation of these houses. Maintenance is generall y conducted by the staff occupying each house .

The revenue associated with the timeshares was received prior to dollarisation as most of the timeshare weeks were soldin 1999 for 20 years at inception. The remaining lives of the booked weeks range between 3-5 years. Maintenance of thetime share facilities is the responsibility of the timeshare owners association on a day to day basis and not the hotel.

The comparative figures have been appropriately restated from 2011 even though the error occurred in 2009 as there isinadequate information currently available to support a valuation in 2009. Given this position, the Directors are of theopinion that, the use of information before 2011 may be misleading as it would not be reflective of the market conditionsprevailingat the time.

The effect of the correction of the error on the results for September 2012 is as follows:

Year Ended Half Year Ended Year Ended30 September 2012 31 March 2012 30 September 2011

All figures in US$ Audited Unaudited AuditedIncrease in depreciation (278,508) (139,254) (742,689)Decrease in deferred tax expense 71,716 35,858 191,242Decrease in profit (206,792) (103,396) (551,447)

ASSETS Increase in property, equipment and motor vehiclesbrought about by; - - 6,711,452

-restatement of the Group's freehold property(staff houses) - - 4,654,309-restatement of the Group's leasehold property(timeshare cottages) - - 2,057,143

Equity and liabilities (Decrease) or increase in equity - annual depreciation / non-distributable reserves (278 508) (139 254) 5,193,783(Decrease) or increase in liabilities - deferred tax liability (71 716) (35 858) 1,517,669

Total equity and liabilities (206 792) (103 396) 6,711,452

Investment in Associate

The adjustment relates to incorrect computation of profit from associate. Where previously the Group would eliminatea portion of the rentals paid to Dawn Properties Limited (Dawn), proportionately to its shareholding from theassociate's profit, it has been corrected and no such deduction will be done going forward.

Given that, a significant portion of Dawn's Revenue is from African Sun's rentals, the Group's share of associate wasgoing to continuously reflect a loss by adopting this method. The method was also a departure from what is prescribedin IAS 28,"Investment in Associates" which states that, share of results of an associate is the proportionate share of theinvestee's profit or loss to the investor's shareholding in the investee.

The error has been corrected retrospectively from 2009, as it is practical to do so, and comparative figures have beenappropriately restated.

The effect of the correction of error on the results of 2012 is as follows:

Year Ende d Year Ended Year Ended Year Ended30 September 2012 30 September 2011 30 September 2010 30 September 2009

All figures in US$ Audited Audited Audited Audited

Increase in profit from associate 539,754 402,171 296,552 177,684Increase in profit 539,754 402,171 296,552 177,684

ASSETS Increase in investment in associate 539,754 402,171 296,552 177,684

Equity and liabilities Increase in equity 539,754 402,171 296,552 177,684

4 BORROWINGSHalf Year Ended Half Year Ended Year Ended

31 March 2013 31 March 2012 30 September 2012All figures in US$ Unaudited Unaudited Audited

NON-CURRENT: Foreign 6,996,119 6,836,540 6,443,381

CURRENT: Foreign loans 2,500,000 1,500,000 2,500,000Bank overdrafts 659,240 - 2,395,757Local loans 9,230,850 8,798,558 8,754,125Total current 12,390,090 10,298,558 13,649,882

TOTAL BORROWINGS 19,286,209 17,135,098 20,093,263

Despite the persistent liquidity challenges in the market, the Group is well placed to grow revenue through on-going hotelrefurbishments and new management and lease contracts in West Africa. The Group has sufficient assets on the statement offinancial position that can be converted to cash, subject to regulatory approval, to pay off current borrowings.

No loan terms and covenants were breached during period

5 AVAILABLE-FOR-SALE FINANCIAL ASSETS

At 1 October - 10,000Written off during the year - (10,000)At 31 March - -

The US$10,000 was written off to other expenses during the year ended 30 September 2012 in a set-off transaction with EverwayNominees. Everway Nominees were used by the parent company, African Sun Limited to manage the treasury shares portfolio. Themanagement costs on date of set-off had accumulated to US$10,000 (see 2012 annual report).

6 SEASONALITY OF THE BUSINESS

The first half of our financial year is relatively slower than the second half. This has been the trend for the past 3 years, with the firsthalf contributing between 45% and 48% of the full year Revenue. The second half dominates because it is the beginning of ourinternational arrivals peak season as well as an increase in corporate and conferencing business.

The Directors are of the opinion that the cycle or trend discussed will continue and believe that, the Revenue for the second half (sixmonths ending 30 September 2013) will be higher than that achieved during the six months under review.

As at As at As at As at31 Mar 2013 31 Mar 2012 30 Sept 2012 30 Sept 2011

figures in US$ Note Unaudited Restated Restated Restated

ets-current assets erty, equipment and motor vehicles 28,664,077 25,392,893 26,650,207 23,042,850ogical assets 274,678 234,937 274,678 234,937stment in associate 19,082,326 12,772,447 18,637,570 13,060,408r receivables 596,455 765,304 238,665 535,512

48,617,537 39,165,581 45,801,120 36,873,707

rent assets ntories 1,495,629 1,464,181 1,472,627 1,324,690e and other receivables 7,991,479 7,327,484 8,436,132 7,342,790ns - 123,620 - 1,130,504lable-for-sale financial assets 5 - 10,000 - 10,000

h and bank balances 3,258,736 5,557,649 4,607,088 4,657,48012,745,844 14,482,934 14,515,847 14,465,464

ts of a disposal group classified as held for sale - - - 1,847,87112,745,844 14,482,934 14,515,847 16,313,335

l assets 61,363,381 53,648,515 60,316,967 53,187,042

ity and liabilitiesty attributable to owners of the company e capital 8,239,409 8,239,409 8,239,409 8,239,409

e premium 24,056,421 23,006,435 24,056,421 23,701,165-distribut able reserves 6,520,784 6,520,784 6,520,784 6,520,784ign currency translation reserve (1,275,075) (1,832,671) (946,582) (1,616,568)aluation reserve 430,871 406,808 430,871 406,808umulated losses (13,403,020) (15,614,619) (14,317,452) (16,584,534)l equity 24,569,390 20,726,146 23,983,451 20,667,064

ilities-current liabilities owings 4 6,996,119 6,836,540 6,443,381 4,914,134rred income tax liability 4,422,925 4,247,319 4,103,286 3,823,708

11,419,044 11,083,859 10,546,667 8,737,842

rent liabilities e and other payables 11,865,113 9,515,171 10,718,894 10,941,593isions and other liabilities 1,119,744 2,024,781 1,418,073 3,676,484owing 4 12,390,090 10,298,558 13,649,882 8,164,598

25,374,947 21,838,510 25,786,849 22,782,675 ilities of a disposal group classifiedeld for sale - - - 999,461

25,374,947 21,838,510 25,786,849 23,782,136

l liabilities 36,793,991 32,922,369 36,333,516 32,519,978

l equity and liabilities 61,363,381 53,648,515 60,316,967 53,187,042

Foreign

Non- currency Total

Share Share distributable translation Revaluation Accumulated shareholders'

All figures in US$ capital premium reserve reserve reserve losses equity

Balance at 30 September 2011 8,239,409 23,701,165 1,327,001 (1,616,568) 406,808 (16,909,494) 15,148,321

Correction of prior period errors (note 2) 5,193,783 324,960 5,518,743

Restated balances at 30 September 2011 8,239,409 23,701,165 6,520,784 (1,616,568) 406,808 (16,584,534) 20,667,064

Comprehensive income

Profit for the year (restated) - - - - - 2,987,015 2,987,015

Other comprehensive income

Currency translation differences - - - 669,986 - - 669,986

Shareofassociate'sothercomprehensiveincome - - - - 24,063 - 24,063

Transactions with owners

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

Balance at 30 September 2012 8,239,409 24,056,421 6,520,784 (946,582) 430,871 (14,317,452) 23,983,451

Comprehensive income

Profit for the year - - - - - 914,432 914,432

Other comprehensive income / (loss)

Currency translation differences - - - (328,493) - - (328,493)

Balance at 31 March 2013 8,239,409 24,056,421 6,520,784 (1,275,075) 430,871 (13,403,020) 24,569,390

7 SEGMENT ANALYSISHalf Year Ended Half Year Ended

31 March 2013 31 March 2012All figures in US$ Unaudited Unaudited Revenue Zimbabwe 26,443,465 26,059,327Nigeria 159,186 133,528

26,602,651 26,192,855

Earnings before interest,tax,depreciation and amortisationZimbabwe 3,477,444 2,196,317South Africa 58,118 (63,484)Ghana (6,887) -Nigeria 59,767 36,316

3,588,442 2,169,149

Profit before tax Zimbabwe 1,125,612 (174,741)South Africa 56,466 (63,484)Ghana (6,887) 1,715,677Nigeria 58,880 19,225

1,234,071 1,496,677

Total Assets Zimbabwe 58,652,298 51,356,296South Africa 1,761,862 1,400,931Ghana 395,560 -Nigeria 553,661 891,288

61,363,381 53,648,515

Total liabilities Zimbabwe 34,333,751 29,337,813South Africa 2,065,600 3,405,145Nigeria 394,640 179,411

36,793,991 32,922,369

The profit before tax from Ghana in 2012 includes a once off payment received of US$1,636, 943 million in lieu of the Ghanamanagement contract exit (see 2012 annual report). Included in the Zimbabwe segment assets is an investment in associate (Dawn Properties Limited) of US$19,082,327 (2012:US$12,772,447). There are no differences from the last annual financial statements in the basis of segmentation or in the basis of measurement ofsegment profit or loss.

8 EQUITY ACCOUNTED EARNINGS Equity accounted earnings are based on estimated results of the Group's associate, Dawn Properties Limited (Dawn). Final full yearDawn results will be released and published at the same time as the Group's half year report. The share of associate's full yearresults will be corrected or amended in the Group's full year results for the year ended 30 September 2013, if need be.

9 TAXATION EXPENSE

Current - -Withholding Tax - (71,957)Deferred income tax (319,639) (459,469)Charge for the period (319,639) (531,426)

10 BASIC AND HEADLINE EARNINGS PER SHARES

Profit attributable to owners of the company 914,432 1,001,109

Headline earnings 914,432 1,001,109

Number of shares in issue 823,940,874 823,940,874Weighted average number of shares in issue 823,940,874 823,940,874

Basic earnings per share: cents 0.11 0.12Headline earnings per share: cents 0.11 0.12

As at 31 March 2013, there were no conditions outstanding which may lead to dilution of the current issued shares. Consequently,the diluted earnings per share and the diluted headline earnings per share is the same as the basic earnings per share and headlineearnings per share respectively.

11 FINANCE COSTS PAID

For the purposes of the statement of cashflows, finance costs paid were computed as follows;

Finance costs per income statement 1,546,673 839,543Accrued finance costs from prior year paid 167,670 22,080Finance costs paid and capitalised 362,525 -Finance costs paid as per statement of cashflows 2,076,868 861,623

12 INVESTING ACTIVITIES

Assets additions and disposalsAdditions Normal replacements 546,767 394,493Refurbishment 1,841,796 3,107,692

2,388,563 3,502,185

Disposals Cost, reconciled as; 67,007 22,651-accumulated depreciation 32,947 7,998-cash received 13,100 13,400-loss on disposal charged to the income statement 20,960 1,253

Assets additions under normal replacements relate to standard hotel assets replacements/additions and are financed from free cashflows. Assets additions under refurbishment relate mainly to the refurbishment of our three main ci ty hotels, that is Crowne PlazaMonomotapa, Holiday Inn Harare and Holiday Inn Bulawayo. Financing of the refurbishment program was through a US$10 million 5year loan from Afreximbank (see more details in 2012 annual report).

Disposal of assets has been mainly auctioning of replaced items of furniture, fittings and equipment under the on-goingrefurbishment.

Decrease / (increase) in loans and other investments - (229,792)

The increase in loans and other investments of nil (2012: US$229,792) in the statement of cashflows relates to vehicle loans whichwere advanced to staff during the year. The loans are payable over 5 years. The carrying amount of the loans a pproximate their fairvalues as balances a s at 30 September 2012, adjusted for any repayments have been used. As at 30 September 2012, the staffreceivables were accounted for based on cash flows discounted using the Group's average cost of borrowing of 16%.

13 CASH AND CASH EQUIVALENTS

For the purposes of the statement of cashflows, cash and cash equivalents comprise the following;

Half Year Ended Half Year Ended Year Ended31 March 2013 31 March 2012 30 September 2012

All figures in US$ Unaudited Unaudited Audited Cash and bank balances 3,258,736 5,557,649 4,607,088Bank overdraft (659,240) - (2,395,757)Restricted cash (726,462) - (748,389)Cash and cash equivalents at the end of the period 1,873,034 5,557,649 1,462,942

The restricted cash amount of US$726,462 has been deducted from cash and bank balances to determine cash and cashequivalents as the use of the cash is restrictive in nature and is not available within a 90 day period. The cash is held in an offshoreaccount by Afreximbank as part of the security to the US$10 million refurbishment loan. The amounts is 8% of the outstanding loan.Cash from this restricted account is available only to the extent that the balance is more than 8% of the loan outstanding.

14 RELATED PARTY TRANSACTI ONS

(i) Lease rentals paid to Dawn Properties Limited (Dawn) 1,082,701 1,222,224

African Sun Limited owns 28.54% (2012: 16.54%) of the shares in Dawn. Dawn has been accounted for as an associate based onshareholding and other qualitative factors (see 2012 annual report). As such, the transactions between the two companies have beentreated as related party transactions.

Lease rentals relate to the leases of 8 hotels rented from Dawn. All leases with Dawn are at normal commercial terms andconditions.

(ii) Balances arising from transactions with related partiesPayables - rentals 265,224 170,270

The payables are to Dawn Properties Limited and they are arose in the normal course of business. The rentals a re due one monthafter billing. The payables bear no interest.

15 EXPENSES BY NATUREHalf Year Ended Half Year Ended

31 March 2013 31 March 2012All figures in US$ Unaudited Unaudited Cost of sales 7,606,415 8,024,598Depreciation, usage and amortisation 1,252,535 1,096,537Operating lease costs 2,747,965 2,639,670Repairs and maintenance 1,228,265 1,175,621Other expenses 11,431,564 12,183,817Total cost of sales and administrative expenses 24,266,744 25,120,243

There was no write down or write back of inventory.

16 PROVISIONS

The provision balance is made up of the following:

Balance at Balance at30 September Current Utilised Reversed 30 March

All figures in US$ 2012 Provision Provision Provision 2013Leave pay 556,978 312,562 (160,891) - 708,649Liquidated damages 450,000 - - (450,000) -Legal costs 411,095 - - - 411,095

1,418,073 312,562 (160,891) (450,000) 1,119,744

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

Liquidated damages Negotiations with InterContinental Hotel Group (IHG) have been successful (refer to 2012 annual report) and the provision thereforereversed.

17 CAPITAL COMMITMENTS

Authorised by Directors and contracted for 1,052,181 2,399,998Authorised by Directors, but not contracted for 6,115,173 3,183,026

7,167,354 5,583,024 Capital expenditure relates to acquisition of property and equipment. The greater part of capital expenditure will be financed fromlong-term financing ranging between 3 and 5 years and partly from free cash flows.

18 EVENTS AFTER REPORTING DATE

There were no events after the reporting date requiring additional or separate disclosure.