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SUN INTERNATIONAL ANNUAL REPORT ’10 114 CORPORATE GOVERNANCE REPORT CONTINUED Each risk has been measured in terms of its potential impact upon statements of comprehensive income items and the group’s statements of financial position. The group’s propensity for risk tolerance is used to guide decisions for risk mitigation. The risk committee intends to formalise a recommendation regarding the group’s appetite for risk, for consideration by the board. The process of enterprise risk management is embedded at a strategic level and the process has been cascaded to the group’s major subsidiaries. The board has adopted and disseminated a Risk Policy Framework outlining the group’s framework and processes of risk management. The group has developed a strong culture of managing risk, with a significant number of embedded processes, resources and structures in place to address risk management needs. These range from internal audit systems; insurance and risk finance; IT security and governance; compliance processes; quality management; and a range of other line management interventions. The Risk Policy Framework provides an integrated framework through which the group’s risk management efforts are maximised. All operations are required to follow the policy’s directives in terms of risk assessment, risk monitoring and risk reporting. At operational level, there are numerous risk management processes, including functions such as safety management, health and environment responsibilities, security, fire, defence, fraud detection, food hygiene controls and quality management. Each of these functions includes processes for the identification of risk, the implementation of risk mitigations, and compliance with relevant legislation. Risks are monitored and reported upon at quarterly management and divisional meetings. There is a comprehensive system of incident reporting that allows for exception reporting to executive management. The group’s operational risk control functions have performed well. The group’s annual internal audit plan incorporates the outcomes of the enterprise risk management process and the top risks in the group have been incorporated into the internal audit plan and internal audit investigates the effectiveness of risk controls. These risks are addressed by the plan at least once a year. The director of internal audit attends risk committee and divisional and management meetings where risk is addressed in order to verify that the risk management process is appropriate. The internal audit function formally reviews the effectiveness of the group’s risk management processes once a year and reports on its findings to the risk committee and the audit committee. As such, internal audit provides a high profile risk management facilitation role, but without assuming responsibility for risk management which remains the responsibility of line management. The board is satisfied with the process of identifying, monitoring and managing significant risks and internal controls and that appropriate systems are in place to manage the identified risks, measure the impact thereof and that these are proactively managed so that the company’s assets and reputation are suitably protected. Accordingly, the board has elected not to appoint a single chief risk officer, as recommended by King III, as the risk function is comprehensively embedded throughout the group. ACCOUNTABILITY AND AUDIT Internal audit The internal audit department is designed to serve management and the board of directors through independent evaluations and examinations of the group’s activities and resultant business risks. The purpose, authority and responsibility of the internal audit department is formally defined in an internal audit charter which is reviewed by the audit committee and approved by the board. This charter is reviewed on an annual basis and revised as necessary. The internal audit department is designed to respond to management’s needs while maintaining an appropriate degree of independence to render impartial and unbiased judgements in performing its services. The scope of the internal audit function includes performing independent evaluations of the adequacy and effectiveness of group companies’ controls, financial reporting mechanisms and records, information systems and operations, reporting on the adequacy of these controls and providing additional assurance regarding the safeguarding of assets and financial information. Internal audit is also responsible for monitoring and evaluating operating procedures and processes through, inter alia, gaming compliance, Responsible Gambling Programme compliance, operational safety and health and environmental audits. Risk assessment is co-ordinated with the board’s assessment of risk through interaction between internal audit, the audit and risk committees which also minimises duplication of effort. The director of internal audit reports at all audit and risk committee meetings and has unrestricted access to the chairmen of the company and the audit and risk committees. The appointment or dismissal of the director of internal audit is with the concurrence of the audit committee. In accordance with the group’s policy of conducting an independent assessment every three years, KPMG Inc has been engaged to conduct an independent assessment of the effectiveness of the internal audit function, in the forthcoming financial year. External audit The external auditors provide the board and the audit committee with their independent observations and suggestions on the group’s internal controls, as well as suggestions for the improvement of the financial reporting and operations of the business. The external auditors’ audit approach is risk-based, requiring them to continually identify and assess risks throughout the audit processes. The external auditors are reliant on the operating procedures and place emphasis on understanding how management obtains comfort that the business is generating reliable information and then evaluating and validating the basis of this comfort. This approach aligns the way they work closely with the organisational structures and risk management processes. There is close co-operation between internal and external audit and reliance is placed, where possible, on the work of internal audit, therefore minimising the duplication of effort. The annual external audit plan is placed before the audit committee for review and approval. The external auditors attend all shareholder meetings of the company.
Internal control The board of directors is responsible for the group’s systems of internal control. These systems are designed to provide reasonable but not absolute assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of its assets and to detect and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations. The controls throughout the group concentrate on critical risk areas. All controls relating to the critical risk areas in the casino and hotel control environments are closely monitored by the directors and subjected to internal audit reviews. Furthermore, assessments of the information technology environments are also performed. Internal audit will be in a position to provide its opinion on the internal financial controls in the forthcoming financial year. Continual review and reporting structures enhance the control environments. Nothing has come to the attention of the directors to indicate that a material breakdown in the controls within the group has occurred during the year. Meropa CORPORATE GOVERNANCE REPORT continued FINANCIAL INTELLIGENCE CENTRE ACT Money laundering remains a global concern. Due to the increasing sophistication of technical and electronic financial systems, opportunities for money laundering have increased. This has led to renewed attention by governments to put in place additional legislation to curb this. In terms of South African anti-money laundering and anti-terrorist financing legislation, being the Financial Intelligence Centre Act (FICA) and the Protection of Constitutional Democracy against Terrorist and Related Activities Act (POCDATARA) the group has an obligation to assist the country in preventing and curbing attempts at money laundering and terrorist financing. In terms of its legislated obligations, Sun International meets all its obligations and requirements in respect of reporting procedures, specific controls and administration, and staff training. As a member of the CASA, Sun International remains in liaison with other member companies in the industry to ensure that industry wide compliance with the legislated requirements are met and maintained. It is of utmost importance to the group to maintain and protect its corporate reputation both in society and in the regulatory environment. This is of particular relevance to the gaming industry in which the group operates and is linked to the requirements of its casino licences with which the group observes regulatory compliance. 115
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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
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AT A GLANCE IN THIS SECTION: JOINT
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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 and 114: The committee has adopted a written
Page 115: The key risks that are identified,
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
Page 165 and 166: 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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