Notes to the summarised consolidated financial statements


Basis of preparation


The summarised consolidated annual financial statements for the year ended 31 March 2014 have been prepared in accordance with the recognition and measurement criteria of IFRS, the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council and are presented in terms of IAS 34 Interim Financial Reporting, the Companies Act of South Africa and the JSE Listings Requirements. Chief Financial Officer, Rob Huddy CA(SA), supervised the preparation of the summarised consolidated annual financial statements.

The accounting policies applied in the preparation of the audited consolidated financial statements, from which the summarised consolidated financial statements were derived, are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the previous audited consolidated financial statements other than as mentioned below. The summarised consolidated annual financial statements should be read in conjunction with the audited annual financial statements for the year ended 31 March 2014, which were approved by the board on 12 June 2014 and are available online or can be requested directly from the Company Secretary.

The unmodified audit report of PricewaterhouseCoopers Inc, the independent auditors, on the consolidated and separate company annual financial statements for the year ended 31 March 2014, dated 12 June 2014, is available for inspection at the registered office of the company and is included in the audited annual financial statements available online.


Changes in accounting policies


An amendment to IAS 19 Employee Benefits requires service costs and net interest to be allocated to profit or loss, while all remeasurements are to be allocated to other comprehensive income. Previously the group allocated the adjustment to profit or loss by applying the corridor method allowed in IAS 19 which has subsequently been withdrawn. The 31 March 2013 comparative numbers in the income statement, statement of other comprehensive income and cash flow statement, and 31 March 2012 comparative numbers in the balance sheet and statement of changes in equity have accordingly been restated.

Previously IAS 16 Property, Plant and Equipment permitted spare parts and servicing equipment to be classified as inventory and the group previously classified all of its operating equipment as inventory. The impact of the amendment to IAS 16 required the group to perform an assessment on all operating equipment used by the casino and hotel operations to determine which items are used for more than one period and met the definition of property, plant and equipment.

The above mentioned changes in accounting policies have been applied retrospectively and have reduced earnings per share by 0.2 cents from 148.5 cents per share to 148.3 cents per share for the year ended 31 March 2013. Other than the above mentioned changes in accounting policies, the accounting policies have been consistently applied with those of the annual financial statements for the year ended 31 March 2013, as described in those annual financial statements.

The monetary effects have been disclosed as footnotes to the summarised statements.


Segment information


In terms of IFRS 8 Operating Segments the chief operating decision-maker has been identified as the group’s Chief Executive Officer (‘CEO’) and the group executive committee (‘GEC’) (previously the group’s board of directors). The group’s CEO and the GEC review the group’s internal reporting in order to assess performance and allocate resources. Management has determined the operating segments based on the reports reviewed by the group’s CEO and GEC which are used to make strategic decisions.

The group’s CEO and GEC consider the business from both a business type and geographical basis, being hotels and gaming. All gaming segments and the South African hotels division conduct business in South Africa, with the offshore hotels division operating in other African countries, the Middle East and the Seychelles. Other gaming operations consist mainly of the Sandton Convention Centre, the StayEasy Century City hotel and head office costs. The corporate segment includes the treasury and management function of the group.

Although the offshore hotels segment does not meet the quantitative thresholds of IFRS 8, management has concluded that the segment should be reported as it has a different risk and reward profile. It is closely monitored as it is expected to materially contribute to group revenue in the future.

The reportable segments derive their revenue and income from hotel and gaming operations.

The group’s CEO and GEC assess the performance of the operating segments based on Ebitdar. The measure excludes the effects of long-term incentives and the effects of non-recurring expenditure. The measure also excludes all headline adjustments, impairments and fair value adjustments on non-current assets and liabilities. Interest income and finance costs are not included in the result for each operating segment as this is driven by the group treasury function which manages the cash and debt position of the group.

Other than as mentioned above, there has been no change in the basis of segmentation or in the basis of measurement of segment profit or loss from the last annual financial statements.


Capital commitments

  As at 31 March 2014 the board had committed a total of R4.5 billion for maintenance and expansion capital items at its gaming and hotel properties of which R2.4 billion is anticipated to be spent during the financial year ending 31 March 2015.


Subsequent events

  The directors are not aware of any matter or circumstance arising since the end of the financial year, not otherwise dealt with in the financial statements, that would significantly affect the operations or results of the company or the group. Refer to the inorganic growth section here and note 51 of the group annual financial statements for details of events occurring after the balance sheet date relating to:
  • the acquisition of businesses by Cullinan;
  • the acquisition of fixed assets by Cullinan;
  • the acquisition of an additional equity interest in Cullinan by SSHI;
  • the acquisition of a 25% interest in RedefineBDL Group Limited;
  • the acquisition of a 40% interest in both SunWest International Proprietary Limited and Worcester Casino Proprietary Limited;
  • the opening of the 353-roomed Southern Sun Abu Dhabi under management contract in the United Arab Emirates; and
  • the share buy-back.