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SUN INTERNATIONAL ANNUAL REPORT ’10 INTERNATIONAL EXPANSION Chile Two months after the ‘official’ opening of our Monticello Grand Casino and Entertainment World in Chile in December 2009, the southern part of the country was hit by its second largest ever recorded earthquake, measuring 8.8, turning the region into a national disaster area. After extensive repairs, the casino re-opened on 30 June. 54 THE EARTHQUAKE AT MONTICELLO Fortunately for the 4 500 guests and staff who were at Monticello when the quake struck, there was no loss of life and all were evacuated within 15 minutes, after which security shut down the power and water. Transport to the complex – normally a 45 minute trip from Santiago – was transformed into a four-hour ordeal across collapsed roads. The road infrastructure has been restored. While the damage to the complex amounted to US$8.2 million, there was no significant structural damage to the buildings. Four months after repair works began, Monticello reopened its doors to the public on the last day of the financial year. It has traded strongly in the first two months after reopening and indications are that it will continue to do so. Structurally the buildings withstood the earthquake but the water from the fire system caused major damage to carpets and shopfittings. The force of the quake resulted in major cosmetic damage, cracking marble fittings, tiles, ceilings, drywalling and architectural finishes. It took Monticello management a week to complete a basic cleanup in consultation with the insurers. In spite of significant challenges such as a lack of building materials, a depleted labour force and escalated prices following the quake, the casino doors reopened to the public on 30 June, with many customers queuing for up to 90 minutes in anticipation of re-entering their favourite casino and entertainment destination. Nigeria In Lagos, Nigeria, we opened the new casino at the Federal Palace Hotel. In the first month of operations, more than 3 000 guests visited the casino’s 200 slot machines and eight gaming tables. The hotel’s 500-seater permanent marquee was completed and bookings have exceeded expectations. We invested US$2.5 million in a swimming and recreation club, another first for Lagos. This included the refurbishment of the existing Olympic-sized pool and the addition of water park slides, tennis courts, an outside exercise park, jogging track, miniature golf, a children’s play area, a food and beverage outlet and a merchandising stall. The club opened at the end of September 2010. The Federal Palace acquisition was completed on 26 May 2010 with the group now owning 49% of the company. Prior to this date, the 29% investment was held as an associate. The group has invested US$28 million in equity and advanced a loan of US$15 million to the company. Southern Africa A R145 million refurbishment of the Lesotho Sun commenced in March 2010 and in July, work began on a R85 million refurbishment of the Kalahari Sands in Windhoek, Namibia. We continue to explore other opportunities in Africa and South America. SOUTH AFRICA Following the award of the casino licence for the Wild Coast Sun, an extensive R400 million refurbishment programme commenced in September 2009. This included an upgrade of the casino, existing conference facilities, all hotel bedrooms, the reinstatement of 150 bedrooms from 50 Vacation Club units, the refurbishment of the buffet restaurant, lounge bar and Aloha Village restroom facilities, a new world-class water park, a new generator and a R1 million contribution towards improvements at the Cultural Village. The programme is scheduled for completion at the end of June 2012. We completed a R25 million softs refurbishment of the Palace of the Lost City at Sun City in time for the World Cup. Construction of the new Windmill Privé area commenced in May 2010 and should be completed by December 2010. The total capital expenditure on this project is estimated at R35 million and includes both smoking and non-smoking facilities, a lounge and separate entrance from a new private parking area. A R12 million conversion of staff units into additional hotel accommodation at the Carousel property was completed in June 2010 and a R1 million refurbishment of The Table Bay Hotel’s Pavilion Room was completed at the end of May.
CAPITAL COMMITMENTS Capital commitments at 30 June 2010 totalled R2 155 million as follows: JOINT REPORT OF THE CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER continued 4. STRATEGIC GROWTH AND EXPANSION Commitments To be spent in 2011 2012 South Africa expansion projects Boardwalk 986 150 836 Windmill 35 35 – 1 021 185 836 Major upgrades and refurbishments of properties Wild Coast Sun 309 150 159 Kalahari Sands 80 80 – Zambia 23 23 – Carnival City 18 18 – Federal Palace 14 14 – Lesotho 6 6 – 450 291 159 On-going asset replacement and minor refurbishments Casino equipment replacement 183 135 48 IT equipment 76 56 20 Other 425 313 112 684 504 180 Total 2 155 980 1 175 Funding of capital expenditure will be sourced from both existing and new loan facilities as well as internally generated funds. The Palace of the Lost City Federal Palace 55 55
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ANNUAL REPORT 2010
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ABOUT THE INTEGRATED REPORT This re
Page 5 and 6: Carnival City AFRISUN GAUTENG 85% 8
Page 7 and 8: Monticello
Page 9 and 10: KEY STRATEGIC IMPERATIVES 3. OUR CU
Page 11 and 12: Energy management Communities Publi
Page 13 and 14: Non-Executive Directors MP (MIKE) E
Page 15 and 16: KH (Kele) Mazwai (41) / GROUP HUMAN
Page 17 and 18: INTRODUCTION This past year has onc
Page 19 and 20: Morula APPRECIATION On behalf of th
Page 21 and 22: AT A GLANCE FINANCIAL HIGHLIGHTS Wi
Page 23 and 24: TRADING AND GROUP OPERATING PERFORM
Page 25 and 26: Operational overview - Casinos and
Page 27 and 28: GrandWest JOINT REPORT OF THE CHIEF
Page 29 and 30: Gaming taxes by province and countr
Page 31 and 32: DIVIDENDS 1. SHAREHOLDER DELIVERY T
Page 33 and 34: JOINT REPORT OF THE CHIEF EXECUTIVE
Page 35 and 36: The Royal Livingstone 33
Page 37 and 38: AT A GLANCE 2. PROTECT OUR BUSINESS
Page 39 and 40: By the end of February, the number
Page 41 and 42: WILD COAST SUN The local community
Page 43 and 44: Our market share South Africa Gamin
Page 45 and 46: We estimate that the group’s shar
Page 47 and 48: Carnival City 45
Page 49 and 50: OUR OBJECTIVES IN THIS SECTION: JOI
Page 51 and 52: FEEDBACK ON THE CM INITIATIVES/PROJ
Page 53 and 54: 51 51
Page 55: AT A GLANCE WHAT WE ACHIEVED Final
Page 59 and 60: AT A GLANCE JOINT REPORT OF THE CHI
Page 61 and 62: 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 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
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The chief executive is mandated and
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Board meetings A minimum of four bo
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The audit committee is primarily re
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The committee has adopted a written
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The key risks that are identified,
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Internal control The board of direc
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The group has continued to actively
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Group 2010 2009 2008 2007 2006 2005
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Group statistics 2010 2009 2008 200
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Types of shareholders at 30 June 20
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principles of inclusivity, material
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The board and the remuneration comm
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Prior to the commencement of the re
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the travel and leisure sector that
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Share plan Date of grant Grant pric
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Emoluments Executive directors’ r
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for the year ended 30 June NOTES TO
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The annual financial statements whi
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TO THE MEMBERS OF SUN INTERNATIONAL
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HOLDING COMPANY The company has no
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which the entity operates (the func
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elating to certain firm commitments
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expenditure represents the total co
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government and other government rel
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GROUP STATEMENTS OF FINANCIAL POSIT
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Notes GROUP STATEMENTS OF CHANGES I
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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 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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