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SUN INTERNATIONAL ANNUAL REPORT ’10 INTRODUCTION B-BBEE is an integrated and coherent socio-economic process that directly contributes to the economic transformation of South Africa and brings about significant increases in the number of black people that manage, own and control the country’s economy as well as significant decreases in income inequalities. Sun International supports and participates in B-BBEE as an inclusive and integrated approach. The DTI codes of good practice for B-BBEE is the framework on which government policy is being rolled out. In this regard, targets have been set for the group in terms of contribution levels, with the target for the end of 2012 to be a level 3 contributor and a level 2 contributor in 2015. A formal verification will be conducted by the group by the first quarter of 2011. In the meantime, a self assessment using the Top Empowerment Companies/Financial Mail survey gives an indication of progress made by Sun International on B-BBEE, which indicates that the targeted level 4 contribution status was achieved. In order to achieve Sun International’s Transformation Vision, policies have been crafted which serve as guidelines and directives to all our units. The policies are intended to give direction on the various pillars and to enable achievement of the targets that have been set for B-BBEE. OWNERSHIP The group’s overall BEE shareholding is estimated at 43% using the methodologies suggested by the codes. The BEE ownership of the Sun International group is calculated by adding the BEE ownership of the underlying South African subsidiaries of the group and the BEE ownership directly in Sun International Limited, which is then divided by the aggregate value of all of the group’s South African operations. The direct BEE ownership in Sun International is calculated excluding the 40% mandated investments allowable in terms of the BEE codes. Share options In terms of the various casino licence bid undertakings, the group had granted share options over the respective casino company shares to its empowerment partners. The options enable the empowerment partners to increase their economic interest in the appropriate company after the initial capital subscription. 76 The table below sets out the group’s economic interest and amount of that interest that is still subject to dilution: Category % economic interest % under option Teemane 75.1 27.8 Mangaung 70.0 9.0 Boardwalk licence SISA has agreed to dispose of a 15% interest in Emfuleni to a local BEE Trust and to provide the Trust with vendor funding. In addition, Afrisun Leisure will dispose of 14.3% of its current shareholding in Zonwabise in order to further increase the Eastern Cape based BEE participation in Emfuleni. Following the above two disposals, which will be based on a DCF valuation of Emfuleni, the group’s effective interest in Emfuleni will decrease from 78% to 62%. Dinokana shareholding in Sun International As at 30 June 2010, Dinokana owned 6 989 759 ordinary shares in Sun International (a 7% interest). During the year, Dinokana sold 1 395 677 shares in Sun International in order to reduce its debt to the maximum allowed in terms of its funding agreements with Nedbank. In addition to the reduction in debt and as approved by shareholders, Sun International provided Nedbank a R60 million guarantee in respect of Dinokana’s obligations to Nedbank. Nedbank’s funding of Dinokana is due to be repaid in December 2010, while the Dinokana lock-in structure only expires in December 2014. Nedbank has, however, offered to extend their financing to the end of the lock in period on the agreement that Dinokana reduces its debt to R436 million by 1 December 2010, maintains a minimum share cover ratio of 1.4 and that Sun International shareholders agree to provide a R60 million guarantee in support of the structure. Post year end Dinokana sold 270 000 Sun International shares in order to reduce its debt to below R436 million.
The table below sets out the direct BEE shareholding in the group and its subsidiaries: Company Empowerment partner Sun International Limited* SIEST SIBEMT Dinokana (excluding SIEST) Subsidiaries SunWest GPI GPI (through RAH) SIEST Other PDI minorities Afrisun Gauteng Afrisun East Rand Community Trust SIEST GPI (through RAH) Afrisun KZN Dolcoast Afrisun KZN Community Development Trust SIEST GPI (through RAH) Other PDI minorities Emfuleni Zonwabise SIEST GPI (through RAH) Meropa Domba SIEST Teemane Meriting SIEST Mangaung Etapele Thabo Community Development Trust SIEST JOINT REPORT OF THE CHIEF EXECUTIVE AND CHIEF FINANCIAL OFFICER continued Sun International Employee Share Trust Trust formed for the benefit of Sun International senior black managers Broad-based North West province BEE grouping led by Lereko Broad-based Western Cape empowerment grouping Trust formed for the benefit of the local community Broad-based KwaZulu-Natal BEE grouping Trust formed for the benefit of the local community Broad-based Eastern Cape empowerment grouping 8. TRANSFORMATION % holding 9.3 0.7 5.9 30.0 4.3 3.3 1.1 3.4 3.5 6.6 22.4 9.3 3.5 4.2 3.1 20.3 3.5 2.5 Polokwane based BEE grouping 28.9 3.5 Northern Cape based BEE grouping 21.4 3.5 Free State based BEE grouping Trust formed for the benefit of the communities in the Thaba’Nchu and Botshabelo areas effected after transfer of the Thaba’Nchu casino licence to Bloemfontein Transkei Mbizana Community Development Trust Trust formed for the benefit of the Mbizana community Worcester GPI GPI (through RAH) SIEST Other PDI minorities * The empowerment shareholding in Sun International has been calculated excluding the 40% mandated investments in terms of the BEE codes. 15.4 11.1 3.5 30.0 36.7 2.3 3.5 7.7 77 77
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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
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
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Page 49 and 50: OUR OBJECTIVES IN THIS SECTION: JOI
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Page 55 and 56: AT A GLANCE WHAT WE ACHIEVED Final
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Page 61 and 62: CONCESSIONAIRES Our concessionaires
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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: OUR OBJECTIVES JOINT REPORT OF THE
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
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Page 109 and 110: Board meetings A minimum of four bo
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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
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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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