The summary Group financial statements derived from the audited Group financial statements of Rainbow Tourism Group Limited for the year ended 31 December 2014 are consistent, in all material respects, with those financial statements, on the basis described in note 2 to the summary Group financial statements. The audit opinion on the Group financial statements is unqualified. There is an emphasis of matter regarding the negative working capital position of the Group. These summary Group financial statements should be read in conjunction with the complete set of Group financial statements for the year ended 31 December 2014. The auditors’ report on the Group financial statements is available for inspection at the company’s registered office.

Grant ThorntonChartered Accountants (Zimbabwe)Registered Public AuditorsHarare

26 March 2015

ABRIDGED CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME for the year ended 31 December 2014 Group Group 31.12.2014 31.12.2013 Note US$ US$ Audited Audited (Restated) Revenue 4 30 715 846 29 322 787 Cost of sales (10 234 917) (9 399 542)Gross profit 20 480 929 19 923 245 Other operating income 51 575 112 915 Operating expenses 5 (19 639 841) (15 697 483)Earnings before interest, tax, depreciation and amortisation 892 663 4 338 677 Depreciation and amortisation (1 731 089) (1 552 853)(Loss)/profit from operations (838 426) 2 785 824 Finance costs (2 109 308) (1 776 166)(Loss)/profit before tax (2 947 734) 1 009 658 Income tax 1 591 812 216 331 (Loss)/profit after tax from continuing operations (1 355 922) 1 225 989 Loss from discontinued operations, net of tax - (167 145) (Loss)/profit for the year (1 355 922) 1 058 844 Other comprehensive income: Items that will not be reclassified subsequently to profit or loss Gain on property revaluation, net of tax 1 728 103 - Items that will be reclassified subsequently to profit or loss - - Exchange loss arising from translation of foreign operations (32 980) (40 271)Total comprehensive income for the year 339 201 1 018 573 Earnings per share Basic (loss)/ earnings per share 6.1 (0.072) 0.065 Headline (loss)/ earnings per share 6.2 (0.073) 0.065

CHAIRMAN’S STATEMENT1. INTRODUCTION The increase in international tourist arrivals in 2014 has ensured that tourism remains a strong and resilient economic activity

worldwide. According to the UNWTO World Tourism Barometer, international tourist arrivals grew by 4.7% in 2014 from the previous year. These arrivals are expected to grow by between 3% and 4% in 2015. Africa recorded 2% growth in 2014 and is projecting growth of between 3% and 5% in 2015. The growth recorded in 2014 is mainly attributed to the increased demand in tourism from traditional source markets.

In Zimbabwe, the year 2014 continued to be challenging for the broader economy. Slow economic activity has led to continued tightening of credit conditions resulting in a shrinking market. Notwithstanding this broader picture, signs of recovery can be gleaned in the tourism sector.

In the second half of the year, the Ebola Virus Disease outbreak affected the tourism sector due to misperceptions about the transmission of the virus and the geography of Africa. While the outbreak was limited to West Africa, RTG resort hotels registered cancellations worth over $0.5 million.

2. PERFORMANCE REVIEW The Group revenues increased by 5% to $30.7 million from $29.3 million achieved in the same period last year. The growth

in revenues was mainly driven by foreign business. The continued focus on foreign revenue streams has paid dividends to the Group. This revenue line grew by $1.2 million (equivalent to 16%) compared to the same period last year, bringing the contribution of foreign revenues to 28% from 26%.

Zimbabwe operations revenues excluding the newly opened Rainbow Beitbridge Hotel (RBBH) increased by $0.1 million from

$27.7 million to $27.8 million. The Zimbabwe operations revenues were given a boost by innovative programs such as Stay Now Pay Later (SNPL) and RTG Mobile. These programs contributed $0.4 million to revenue growth. The city hotels recorded a $0.7 million decline in revenues during the year 2014. However, it is pleasing to note that this reduction came against the backdrop of once-off large events hosted in 2013 such as the referendum and national elections which generated business worth $2.5 million. This is evidence of a strengthening revenue base.

The Mozambique business experienced reduction in revenues of $0.2 million due to the impact of the refurbishment works which were ongoing during the period under review.

The Group redesigned its pricing model with the objective of promoting domestic tourism thereby enhancing activity in its hotels. This strategy resulted in dilution of the Average Daily Rate (ADR) from $81 to $75 compared to prior year, led by RBBH, which was introduced to the market at the rate of $49. Consequently, the Group’s RevPAR decreased by 8% to $36 from $39 recorded in 2013.

During the year, the Group also launched a series of promotions including weekender rates and festive season specials.

Cost of sales per room sold dropped by 5.3% compared to prior year thereby reflecting greater efficiencies in the procurement and operating processes.

The EBITDA margin declined to $0.9 million in 2014 compared to $4.3 million in the corresponding period last year as a result

of the following:

I. The once-off impairment charge of $2.8 million. This charge was made up of:

• The $1.9 million held up at Capital Bank, which was meant for the refurbishment of Rainbow Towers Hotel and Conference Centre (RTHCC). The bank is now non-operational after the cancellation of its banking licence by the Reserve Bank of Zimbabwe (RBZ) in June 2014. The Group has provided for this amount in full. However, we are optimistic of the outcome of the impending liquidation process.

• Overdue management fees of $0.9 million owed by Savoy Hotel in Zambia.

II. Retrenchment of staff at central office and RTHCC. This amounted to $0.9 million and has an eleven-month payback period.

III. The RBBH recorded a loss of $0.6 million for the year against initial projections of a $1.0 million loss. This loss was mainly due to start-up costs, which is expected of a hotel in its first year of operation.

The Group’s borrowing position as at 31 December 2014 reduced to $22.2 million (Dec 2013: $23.9 million) representing a reduction of 7%. The effective cost of debt remained at 11% since beginning of the year.

Included in the borrowings is a $10 million loan from National Social Security Authority (NSSA) which will be payable by 31 December 2015. The loan was meant to provide the Group with some relief from pressure exerted by short term borrowings at exorbitant interest rates during the 3-year turnaround period starting from 1January 2013 to 31 December 2015. The loan will be reviewed during the third quarter of 2015 and restructured accordingly.

3. PRODUCT UPGRADES During the year under review, the Group outlayed $2.1 million towards capital expenditure. The funding was mainly towards

renovation of hotels through internally generated cash flows. The Group continues to pursue the completion of the Rainbow Towers Hotel and Conference Centre refurbishment project. The project is now 50% complete with the remaining works projected to be complete by the end of year 2015. The project was stalled by the $1.9 million project funds held up at the now non-operational Capital Bank.

A significant achievement during the year was the completion of the refurbishment of Rainbow Hotel Mozambique. The

refurbishment included rooms, public areas, elevators and painting the exterior of the hotel. The hotel is expected to generate notable revenue growth in 2015.

Bulawayo Rainbow Hotel was also given a face-lift during the first half of 2014. We are now engaged in the final phase of

the refurbishment, which will position it as the preferred business hotel in Bulawayo.

4. CORPORATE SOCIAL INVESTMENT During the course of the year, the Group invested in environmental awareness campaigns in partnership with Environment

Africa. In this regard, the Group successfully hosted the 18th Environmental Reporter awards. RTG will therefore continue to advocate for the sustainable use of the environment.

In support of the Zimbabwe National Army (ZNA), RTG donated blankets and linen towards Tsanga Lodge, which is the rehabilitation centre for the army.

Going forward, RTG will continue to invest in corporate social value programs that enhance the livelihoods of local communities.

5. DIVIDENDS In view of our strategic focus on growing the business and consolidating the financial position of the Group, the board

resolved to not declare a dividend for the year 2014.

6. DIRECTORATE There were no changes to the directorate since the last reported position as at 30 June 2014.

7. ACKNOWLEDGEMENTS On behalf of the Board, I would like to thank all RTG stakeholders, business partners and shareholders for their continued

support and commitment during this period of recovery.

The Directors express their appreciation for the contribution made by the employees to the improvement of the operations of the business and our loyal customers.

…………………... J. M. CHIKURA CHAIRMAN

25 March 2015

HIGHLIGHTS• Revenue 5% ▲ from $29.3 million in 2013 to $30.7 million in 2014.• Occupancy increased to 48% from 47%.• RevPAR 8% ▼ from $39 to $36.• EBITDA ▼ from $4.3 million during same period last year to $0.9 million due to the impairment of debts worth $2.8

million.• Resultant loss for the year of $1.4 million in 2014 ▼ from a profit for the year of $1.1 million in 2013.• Gearing ▼ 56% from 59% in December 2013.

ABRIDGED CONSOLIDATED STATEMENT OF FINANCIAL POSITIONas at 31 December 2014 Group Group 31.12.2014 31.12.2013 Note US$ US$ Audited AuditedASSETS Non current assets Property and equipment 7 40 889 538 38 233 817 Intangible assets 8 154 829 180 635 41 044 367 38 414 452 Current assets Inventories 10 2 693 061 2 379 733 Accounts receivable 11 6 123 938 6 111 029 Other financial assets 12 14 367 5 847 Cash and cash equivalents 13 498 447 4 015 719 9 329 813 12 512 328

Total assets 50 374 180 50 926 780 EQUITY AND LIABILITIES Capital and reserves Share capital 187 055 187 055 Share premium 4 477 500 4 477 500 Non distributable reserves 16 711 500 16 711 500 Foreign currency translation reserve (71 753) (38 773)Revaluation reserve 2 985 217 1 257 114 Accumulated losses (7 162 755) (5 806 833)Total equity 17 126 764 16 787 563 Non current liabilities Borrowings 14 8 211 579 19 878 518 Deferred tax 9 1 010 367 2 100 317 9 221 946 21 978 835 Current liabilities Borrowings 14 13 238 095 3 000 000 Accounts payable 15 10 019 406 8 043 861 Tax payable - 122 524 Bank overdraft 13 767 969 993 997 24 025 470 12 160 382

Total liabilities 33 247 416 34 139 217 Total equity and liabilities 50 374 180 50 926 780

ABRIDGED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY for the year ended 31 December 2014 Foreign Non currency Share Share distributable translation Revaluation Accumulated Total capital premium reserve reserve reserve losses equity US$ US$ US$ US$ US$ US$ US$ Balance at 1 January 2014 187 055 4 477 500 16 711 500 (38 773) 1 257 114 (5 806 833) 16 787 563 Total comprehensive (loss)/ income for the year - - - (32 980) 1 728 103 (1 355 922) 339 201 Balance at 31 December 2014 187 055 4 477 500 16 711 500 (71 753) 2 985 217 (7 162 755) 17 126 764 Balance at 1 January 2013 164 555 - 16 711 500 1 498 1 257 114 (6 865 677) 11 268 990 Rights issue of shares 22 500 4 477 500 - - - - 4 500 000 Total comprehensive (loss)/ income for the year - - - (40 271) - 1 058 844 1 018 573 Balance at 31 December 2013 187 055 4 477 500 16 711 500 (38 773) 1 257 114 (5 806 833) 16 787 563

Directors: John M. Chikura (Chairman),Tendai M. Madziwanyika (Chief Executive), Napoleon K. Mtukwa (Finance Director), Shingirayi N. Chibanguza, Ian C. Haruperi, Douglas Hoto, Douglas Mavhembu, Thandiwe T. Mlobane, Shadreck C. Vera

AUDITORS’ STATEMENT

www.rtgafrica.com

NOTES TO THE ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS for the year ended 31 December 2014 1 General information

Rainbow Tourism Group Limited, is a company incorporated and domiciled in Zimbabwe. The Group is in tourism services industry as hoteliers, tour operators and providers of conference facilities. Its registration number is 4880/91. The Group is listed on the Zimbabwe Stock Exchange(ZSE).

2 Basis of preparation of the abridged consolidated financial statements The abridged consolidated financial statements for the year ended 31 December 2014 have been prepared in

accordance with International Accounting Standard 34, “ Interim Financial Reporting”. These abridged consolidated financial statements should be read in conjunction with the audited annual financial statements for the year ended 31 December 2014, which have been prepared in accordance with the International Financial Reporting Standards(IFRSs), the Companies Act(Chapter 24:03) and relevant statutory instruments SI 33/99 and SI 62/96. These financial statements are based on statutory records that are maintained under the historical cost convention,except for land and buildings that are maintained at fair value.

3 Significant accounting policies and estimates These abridged consolidated financial statements were approved for issue by the Board of Rainbow Tourism Group

Limited on 25 March 2015.

3.1 Voluntary change in accounting policy During the year, the Group changed its accounting policy with respect to the recognition of direct operating expenses

and direct labour as cost of sales in addition to direct raw materials. In accordance with International Accounting Standard 8, “Accounting Policies, Changes in Accounting Estimates and Errors”, the abridged consolidated financial statements have therefore been prepared on the basis of a retrospective application of a voluntary change in accounting policy. The previous accounting policy was to charge direct raw materials used in production as cost of sales. The new accounting policy was adopted on 30 June 2014 and has been applied retrospectively including full year 2013 audited financial statements and its comparatives. The Group believes that the new policy closely aligns the cost of sales to clearly show the business direct costs related to the revenue generated.

As Reported Adjustments Restated FY,2013 FY,2012 FY,2013 FY,2012 FY,2013 FY,2012 US$ US$ US$ US$ US$ US$

Revenue 29 322 787 27 570 966 - - 29 322 787 27 570 966 Cost of sales (3 131 887) (3 008 238) (6 267 655) (6 766 451) (9 399 542) (9 774 689)Gross Profit 26 190 900 24 562 728 (6 267 655) (6 766 451) 19 923 245 17 796 277 Other operating income 112 915 212 787 - - 112 915 212 787 Operating expenses (21 965 138) (24 161 131) 6 267 655 6 766 451 (15 697 483) (17 394 680)Earnings before interest, tax, depreciation and amortisation 4 338 677 614 384 - - 4 338 677 614 384

The reclassification of a portion of operating expenses to cost of sales in accordance with the new accounting policy will not result in change of the profit or loss before tax position in the current year or any years included within these abridged consolidated financial statements. Group Group 31.12.2014 31.12.2013 US$ US$

4 Revenue Rooms 14 379 450 14 088 680

Food, beverages and conferencing 15 515 336 14 284 537 Other operating activities 821 060 949 570 30 715 846 29 322 787

5 Operating expenses

Administrative expenses 12 678 789 9 293 129 Distribution expenses 2 168 843 1 259 863 Other operating expenses 4 792 209 5 144 491 19 639 841 15 697 483 6 Earnings per share

Number of shares (000s) Authorised shares of 0.01 cents each 2 500 000 2 500 000

Issued and fully paid shares of 0.01 cents each 1 870 496 1 870 496

ABRIDGED CONSOLIDATED STATEMENT OF CASH FLOWS for the year ended 31 December 2014 Group Group 31.12.2014 31.12.2013 Note US$ US$ Audited Audited CASH FLOWS FROM OPERATING ACTIVITIES Operating profit before working capital changes 16 750 601 3 980 687 Increase in inventories (313 328) (412 309)Increase in accounts receivable (12 909) (422 232)Increase/(decrease) in accounts payable 1 853 021 (250 673)Cash generated from operations 2 277 385 2 895 473 Interest received 58 796 108 154 Investment income 51 575 124 768 Interest paid (2 168 104) (1 884 320)Income tax paid (48 928) (117 177)Exchange losses on translation of foreign operations 32 980 40 271 Net cash inflow from operating activities 203 704 1 167 169 CASH FLOWS FROM INVESTING ACTIVITIES Payments on purchase of property and equipment 7 (2 109 707) (4 208 122)Proceeds from sale of property and equipment 38 426 233 190 Proceeds from sale of held for trading investments 5 177 19 441 Net cash outflow from investing activities (2 066 104) (3 955 491) CASH FLOWS FROM FINANCING ACTIVITIES (Repayments of)/proceeds from borrowings (1428 844) 2 509 391 Proceeds from rights issue of ordinary shares - 4 500 000 Net cash (outflow)/inflow from financing activities (1 428 844) 7 009 391 NET (DECREASE)/ INCREASE IN CASH AND CASH EQUIVALENTS (3 291 244) 4 221 069 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 3 021 722 (1 199 347) CASH AND CASH EQUIVALENTS AT END OF YEAR 13 (269 522) 3 021 722

ABRIDGED INCOME STATEMENT FOR DISCONTINUED OPERATIONS for the year ended 31 December 2014 Group Group 31.12.2014 31.12.2013 US$ US$ Revenue - - Cost of sales - - Gross profit - - Operating expenses - (116 243)Loss before interest, tax, depreciation and amortisation - (116 243) Depreciation - (50 902) Loss from operations before tax for the year - (167 145) Income tax - - Loss after tax from discontinued operations - (167 145)

www.rtgafrica.comDirectors: John M. Chikura (Chairman),Tendai M. Madziwanyika (Chief Executive), Napoleon K. Mtukwa (Finance Director), Shingirayi N. Chibanguza, Ian C. Haruperi, Douglas Hoto, Douglas Mavhembu, Thandiwe T. Mlobane, Shadreck C. Vera

NOTES TO THE ABRIDGED CONSOLIDATED FINANCIAL STATEMENTS (continued) for the year ended 31 December 2014 Group Group 31.12.2014 31.12.2013 US$ US$

6.1 Basic earnings per share (continuing operations) (Loss)/profit attributable to shareholders (1 355 922) 1 225 989 Weighted average number of shares in issue(000s) 1 870 496 1 870 496 Basic (loss)/earnings per share(US cents) (0.072) 0.065 6.2 Headline earnings per share (continuing operations) (Loss)/profit attributable to shareholders (1 355 922) 1 225 989 Profit on sale of assets (7 068) - (1 362 990) 1 225 989 Weighted average number of shares in issue(000s) 1 870 496 1 870 496 Headline (loss)/earnings per share(US cents) (0.073) 0.065 7 Property and equipment Opening carrying amounts 38 233 817 35 814 057 Additions to property and equipment 2 109 707 4 208 122 Revaluation surplus 2 282 656 - Depreciation charge (1 705 284) (1 527 047) Carrying amounts of disposed assets (31 358) (261 315) Closing carrying amounts 40 889 538 38 233 817 8 Intangible assets Opening carrying amounts 180 635 206 441 Amortisation charge (25 806) (25 806) Closing carrying amounts 31 December 154 829 180 635 9 Deferred tax reconciliation Balance at beginning of year 2 100 317 2 295 798 Temporary differences on property and equipment (1 131 438) 2 381 443 Deferred tax from revalued assets 554 553 - Originating differences on assessed losses (513 065) (2 576 924) Balance at end of year 1 010 367 2 100 317 10 Inventories Food and beverage 368 850 642 721 Service stocks 1 906 445 758 149 Other stocks 417 766 978 863 2 693 061 2 379 733

11 Accounts receivable Trade receivables 4 556 427 5 253 090 Prepayments and other 1 567 511 857 939 6 123 938 6 111 029

12 Other financial assets 12.1Held for trading investments

Quoted shares Balance at beginning of year 5 847 25 288

Disposals ( 5 177) ( 19 441) Balance at end of the year 670 5 847

12.2Held to maturity investments Treasury bills Balance at beginning of year - -

Recovery of foreign currency accounts balances 13 697 - Balance at end of the year 13 697 -

Total 14 367 5 847

The Treasury Bills (TBs) were issued in 2014 by the Government of Zimbabwe(GoZ) in settlement of indebtedness with regards to Foreign Currency Accounts(FCAs) balances transferred to the Reserve Bank of Zimbabwe(RBZ) under Exchange Control Directive RI : 303 of 2007. These balances accumulated prior to 2009 before adoption of the multi-currency regime. The TBs were issued with effect from 10 April 2014 with maturity tenors of 3, 4 and 5 years and the GoZ will redeem the TBs in equal installments beginning in year 3 with the final installment to be redeemed in year 5. With effect from date of issue, the TBs will attract the interest rate of 2% per annum and a half yearly coupon will be paid.

13 Cash and cash equivalents For the purpose of the statement of cash flows, cash and cash equivalents comprise the following: Cash and bank balances 498 447 4 015 719 Bank overdraft (767 969) (993 997) (269 522) 3 021 722

The bank overdrafts are unsecured. The interest rates range between 15% and 16% per annum.

14 Borrowings Long term borrowings Foreign 4 594 941 6 923 581 Local 3 616 638 12 954 937 8 211 579 19 878 518

Short term borrowings Local 13 238 095 3 000 000

The $10 million NSSA loan is due and payable in December 2015. The loan has been reclassified to short term liabilities.

15 Accounts payable Trade payables 8 170 260 5 958 573 Provisions and other payables 1 849 146 2 085 288 10 019 406 8 043 861

16 Operating profit before working capital changes (Loss )/profit for the year (1 355 922) 1 058 844 Adjustment for non cash items 1 691 041 1 486 766 Recovery of bad debts (50 439) - Investment income (51 575) (124 768) Finance costs 2 168 104 1 884 320 Income tax (1 591 812) (216 331) Finance income (58 796) (108 154) Cash generated from operating activities 750 601 3 980 687

17 Segment analysis

Segmental performance by region for the period ended December 2014 Revenue Zimbabwe 29 347 709 27 731 289 Outside Zimbabwe 1 368 137 1 591 498 30 715 846 29 322 787 Earning before interest,tax,depreciation and amortisation

Zimbabwe 793 095 3 894 989 Outside Zimbabwe 99 568 443 688 892 663 4 338 677 (Loss)/profit before tax and interest Zimbabwe (869 458) 2 552 527 Outside Zimbabwe 31 032 233 297 (838 426) 2 785 824 Assets Zimbabwe 49 013 102 48 159 435 Outside Zimbabwe 1 361 078 2 767 345 50 374 180 50 926 780 Liabilities Zimbabwe 32 977 523 33 894 144 Outside Zimbabwe 269 893 245 073 33 247 416 34 139 217

18 Negative working capital As at 31 December 2014, the Group had a negative working capital of $14,695,658. This is attributable to the NSSA loan

of $10,000,000 which is due for repayment in December 2015. The loan facility is being reviewed and is expected to be restructured in the current year.

19 Capital expenditure commitments Contracted 2 300 000 7 500 000 Authorised but not contracted 2 009 398 8 053 143

4 309 398 15 553 143

20 Events after the reporting date There were no events after the reporting date that require additional or separate disclosure.

21 Dividend declaration There were no dividends declared during the year.

Refreshing hotels, Amazing experiences