1. Basis of preparation

The summarised consolidated financial statements for the year ended 31 March 2016 have been prepared in accordance with the requirements of the JSE Limited Listings Requirements and the requirements of the Companies Act of South Africa applicable to summarised consolidated financial statements. The Listings Requirements require summarised consolidated financial statements to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards and the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and to also, as a minimum, contain the information required by IAS 34 Interim Financial Reporting.

Chief Financial Officer, RB Huddy CA(SA), supervised the preparation of the summarised consolidated 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 those applied in the previous consolidated annual financial statements as at 31 March 2015 other than as mentioned below. The summarised consolidated financial statements should be read in conjunction with the audited annual financial statements for the year ended 31 March 2016, which were approved by the board on 1 August 2016 and are available online or can be requested from the Company Secretary.

The summarised consolidated annual financial statements are extracted from audited information, but are not themselves audited. 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 2016, dated 1 August 2016, is available for inspection at the registered office of the company and is included in the audited annual financial statements available online.

2. Change in accounting policies and interpretations

The group has adopted all the new, revised or amended accounting standards as issued by the IASB which were effective for the group from 1 April 2015 as noted. The adoption of the improvements made in the 2010 - 2012 cycle and 2011 - 2013 cycle require additional disclosures in the group's annual financial statements. Other than that the adoption of these amendments did not have any impact on the current period or any prior period and is not likely to affect future periods. No other changes to accounting standards had any impact on the current period or any prior period and are not likely to affect future periods.

3. Financial instruments

The group fair values its interest rate swaps as shown below, together with its available-for-sale listed investments. The fair values of all other financial assets and financial liabilities approximate their carrying amounts.

Interest rate swaps
The group has interest rate swaps, being level 2 fair value measurements. The fair value of the interest rate swap asset of R72 million (2015: R90 million liability) is calculated as the present value of the estimated future cash flows based on observable yield curves.

Available-for-sale investment
During August 2015, the group acquired 55% of HPF's, a listed entity on the Johannesburg Stock Exchange, B-linked units for R252 million (currently 27.3% of the voting rights) which equated to the investment's fair value at 31 March 2016 based on the entity's listed share price at that date. This investment is classified as a level 1 fair value measurement. This acquisition has been accounted for as an available-for-sale investment as the group currently has no board representation nor any significant influence over the financial and operating decisions of HPF. The outcome of the fulfilment of the conditions precedent may impact on the classification of this investment in future periods.

Put option
During the prior year the group entered into a call option over Liberty's 40% shareholding in Cullinan and Liberty has a corresponding put option, both exercisable at the fair value of the shares. A financial liability for the put option and a corresponding debit to transactions with non-controlling interest was recognised on initial recognition. At the end of each reporting period the liability is remeasured and the increase or decrease recognised in the income statement. The non-current liability, included in derivative financial instruments, has been remeasured to R492 million at 31 March 2016 (2015: R485 million) with the increase of R7 million (2015: R8 million decrease) recognised in finance costs. A discounted cash flow valuation was used to estimate the liability.

4. 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'). Management has determined the operating segments based on the reports reviewed by the chief operating decision maker. 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.

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 earnings adjustments, impairments and fair value adjustments on non-current assets and liabilities and other exceptional items. 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.

5. Business combinations

The group entered into management and lease agreements for the Holiday Inn Sandton and the Crowne Plaza Rosebank hotels currently owned by HPF. The group acquired the shares in Majormatic 194 Proprietary Limited (the lessee) and the management contracts from Extrabold Hotel Management Proprietary Limited for R15 million, being the fair value of the net assets acquired resulting in no goodwill arising on the transaction. The effective date of the transaction was 1 March 2016.

6. Accounting policies

The board has committed a total of R4.9 billion for maintenance and expansion capital items at its gaming and hotel properties of which R2.8 billion is anticipated to be spent during the next financial year. R506 million of the committed capital expenditure has been contracted for.