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SUN INTERNATIONAL ANNUAL REPORT ’10 RISK MANAGEMENT, ACCOUNTABILITY AND AUDIT Risk management 112 CORPORATE GOVERNANCE REPORT CONTINUED The board has adopted the following risk management policy. Through a process of communication and application to all business units this policy has been successfully embedded throughout the group: ‘The directors of Sun International Limited have committed the company to a process of risk management that is aligned to the principles of the King III code. The features of this process are outlined in the company’s Risk Policy Framework. All group business units, divisions and processes are subject to the Risk Policy Framework. Effective risk management is imperative to a company with our risk profile. The realisation of our business strategy depends on our being able to take calculated risks in a way that does not jeopardise the direct interests of stakeholders. Sound management of risk enables us to anticipate and respond to changes in our business environment, as well as take informed decisions under conditions of uncertainty. An enterprise-wide approach to risk management has been adopted by the company, which means that every key risk in each part of the group is included in a structured and systematic process of risk identification and management. All key risks are managed within a unitary framework that is aligned to the company’s corporate governance responsibilities. Risk management processes are embedded in our business systems and processes, so that our responses to risk remain current and dynamic. All key risks associated with major change and significant actions by the company also fall within the processes of risk management. The nature of our risk profile demands that Sun International adopts a prudent approach to corporate risk, and our decisions around risk tolerance and risk mitigation reflect this. Nonetheless it is not the intention to slow down the group’s growth with inappropriate bureaucracy. Controls and risk interventions are chosen on the basis that they increase the likelihood that we will fulfil our intentions to stakeholders. Every employee has a part to play in this important endeavour and we look forward to continuing to work with you in achieving these aims.’ The group pursues strategies aimed at maximising long term shareholder value taking cognisance of the need for sustainable business practices. The risks to which the group’s existing businesses are exposed are continuously identified and mitigated in terms of a group process that allocates responsibility, determines the action to be taken and monitors compliance with that action. This involves managing existing businesses in a dynamically changing and challenging environment as well as pursuing new business opportunities locally and internationally. Any new business opportunity which exposes the group to risk results in a risk analysis being carried out by management as a pre-requisite to board consideration and approval. This ensures the overall level of risk is assessed in relation to the potential returns. The board is responsible for monitoring and reviewing the risk management strategy of the group and remains committed to the group’s process of enterprise risk management. The group risk committee assists the board in fulfilling this responsibility and in the discharge of its duties relating to corporate accountability and associated risk in terms of management, assurance and reporting. The effectiveness, quality, integrity and reliability of the group’s risk management processes have been delegated to the risk committee, whose primary objective is to monitor, develop and communicate the processes for managing risks across the group. During the year, the company’s risk register comprising the top 42 risks was updated and each risk reviewed, re-ranked and documented. The review process also explored the possibility of new risks having entered the risk environment, and these were defined and ranked in the same way as existing risks. The register continues to be updated on an annual basis, or as often as circumstances necessitate. Ownership of each risk remains the responsibility of assigned senior executives, who report on progress made with agreed action plans and existing internal controls. The identified risks are monitored by the SIML board on a quarterly basis. The SIML board submits a risk management report to the risk committee twice a year focusing on the top 20 risks. Each division drafts a risk management submission to the SIML board quarterly, focusing on the top 10 risks facing the division. Divisional risk management committees and operational risk management committees at each unit review their risks at their risk committee meetings once a quarter and minute any risk developments and losses ensuring that mitigating actions are being pursued. This structure is depicted alongside.
The key risks that are identified, monitored and managed are: More restrictive policy and/or regulation in the gaming industry impacting on revenue; The relative maturity of the gaming industry in South Africa as well as the limited opportunities for the group in South Africa; The expiry of exclusivity (in the Cape Metro) of the GrandWest casino licence; Increased taxes and impost, particularly on casino revenue; The requirements of empowerment codes in South Africa and particularly achieving the requirements of management transformation; Losses or excessive costs incurred in unsuccessful international expansion or diversification; Failure to fully exploit new market opportunities – notably the emerging black market in South Africa and online gambling; Implementing a new enterprise gaming system; Managing the group’s liquidity and statement of financial position; Relationships with organised labour and lack of labour flexibility; and Threats to standards of service and offerings particularly in the current economic environment which has resulted in significant cost pressures. Risk committee Insurance and risk finance Resorts Divisional risk committee Unit operational risk Remuneration committee SUN INTERNATIONAL LIMITED Board of directors IT Governance committee Nomination committee Gaming north Divisional risk committee Unit operational risk SIML Board of Directors CORPORATE GOVERNANCE REPORT continued Audit committee Internal audit Gaming south Divisional risk committee Unit operational risk 113
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ANNUAL REPORT 2010
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ABOUT THE INTEGRATED REPORT This re
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Carnival City AFRISUN GAUTENG 85% 8
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Monticello
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KEY STRATEGIC IMPERATIVES 3. OUR CU
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Energy management Communities Publi
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Non-Executive Directors MP (MIKE) E
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KH (Kele) Mazwai (41) / GROUP HUMAN
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INTRODUCTION This past year has onc
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Morula APPRECIATION On behalf of th
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AT A GLANCE FINANCIAL HIGHLIGHTS Wi
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TRADING AND GROUP OPERATING PERFORM
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Operational overview - Casinos and
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GrandWest JOINT REPORT OF THE CHIEF
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Gaming taxes by province and countr
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DIVIDENDS 1. SHAREHOLDER DELIVERY T
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JOINT REPORT OF THE CHIEF EXECUTIVE
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The Royal Livingstone 33
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AT A GLANCE 2. PROTECT OUR BUSINESS
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By the end of February, the number
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WILD COAST SUN The local community
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Our market share South Africa Gamin
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We estimate that the group’s shar
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Carnival City 45
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OUR OBJECTIVES IN THIS SECTION: JOI
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FEEDBACK ON THE CM INITIATIVES/PROJ
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51 51
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AT A GLANCE WHAT WE ACHIEVED Final
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CAPITAL COMMITMENTS Capital commitm
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AT A GLANCE JOINT REPORT OF THE CHI
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CONCESSIONAIRES Our concessionaires
Page 63 and 64: AT A GLANCE IN THIS SECTION: JOINT
Page 65 and 66: In line with global trends for lead
Page 67 and 68: JOINT REPORT OF THE CHIEF EXECUTIVE
Page 69 and 70: Beneficiaries of training 2010 Bene
Page 71 and 72: Training investment model JOINT REP
Page 73 and 74: JOB PROFILING Also forming part of
Page 75 and 76: Occupational hygiene and legionella
Page 77 and 78: OUR OBJECTIVES JOINT REPORT OF THE
Page 79 and 80: The table below sets out the direct
Page 81 and 82: MANAGEMENT JOINT REPORT OF THE CHIE
Page 85 and 86: GOLDEN VALLEY CASINO & LODGE’S EN
Page 87 and 88: INCIDENTS JOINT REPORT OF THE CHIEF
Page 89 and 90: Efforts to establish the Nedbank Go
Page 91 and 92: Our property ratings Rm 2010 2009 2
Page 95 and 96: AT A GLANCE JOINT REPORT OF THE CHI
Page 97 and 98: SHAWCO - This student-run NGO at th
Page 99 and 100: REGULATORY COMPLIANCE The South Afr
Page 101 and 102: OUR COMMITMENT CORPORATE GOVERNANCE
Page 103 and 104: Principle Action Outcome Independen
Page 105 and 106: The group’s governance is facilit
Page 107 and 108: The chief executive is mandated and
Page 109 and 110: Board meetings A minimum of four bo
Page 111 and 112: The audit committee is primarily re
Page 113: The committee has adopted a written
Page 117 and 118: Internal control The board of direc
Page 119 and 120: The group has continued to actively
Page 121 and 122: Group 2010 2009 2008 2007 2006 2005
Page 123 and 124: Group statistics 2010 2009 2008 200
Page 125 and 126: Types of shareholders at 30 June 20
Page 127 and 128: principles of inclusivity, material
Page 129 and 130: The board and the remuneration comm
Page 131 and 132: Prior to the commencement of the re
Page 133 and 134: the travel and leisure sector that
Page 135 and 136: Share plan Date of grant Grant pric
Page 137 and 138: Emoluments Executive directors’ r
Page 139 and 140: for the year ended 30 June NOTES TO
Page 141 and 142: The annual financial statements whi
Page 143 and 144: TO THE MEMBERS OF SUN INTERNATIONAL
Page 145 and 146: HOLDING COMPANY The company has no
Page 147 and 148: which the entity operates (the func
Page 149 and 150: elating to certain firm commitments
Page 151 and 152: expenditure represents the total co
Page 153 and 154: government and other government rel
Page 155 and 156: GROUP STATEMENTS OF FINANCIAL POSIT
Page 157 and 158: Notes GROUP STATEMENTS OF CHANGES I
Page 159 and 160: for the year ended 30 June Operatin
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14. PROPERTY, PLANT AND EQUIPMENT (
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15. INTANGIBLE ASSETS (continued) S
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for the year ended 30 June 18. RETI
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for the year ended 30 June NOTES TO
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for the year ended 30 June 27. PROV
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for the year ended 30 June 28. CASH
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29. FINANCIAL INSTRUMENTS (continue
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32. RELATED PARTY TRANSACTIONS Key
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32. RELATED PARTY TRANSACTIONS (con
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NOTES TO THE GROUP FINANCIAL STATEM
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COMPANY STATEMENTS OF FINANCIAL POS
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COMPANY STATEMENTS OF CHANGES IN EQ
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NOTES TO THE COMPANY FINANCIAL STAT
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Notice is hereby given that the twe
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Litigation statement The directors
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SUN INTERNATIONAL LIMITED (Incorpor
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SUN INTERNATIONAL LIMITED Incorpora
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