Transformation

OUR GROUP B-BBEE SCORECARD

The Department of Trade and Industry (dti) published the revised broad-based black economic empowerment (B-BBEE) codes at end 2013 to come into effect in May 2015. In 2014, the Group conducted its fourth formal B-BBEE verification exercise using the current dti generic codes. The verification exercise was conducted by Empowerdex. The Company asked Empowerdex to also do the indicative verification based on the new dti codes and the indicative scores will be finalised in September 2014. The Group maintained its Level 2 B-BBEE status.

Four units managed to improve their score from Level 3 to Level 2, being Carousel, Carnival City, Morula and Wild Coast. The balance of the units maintained their Level 2 status. Sun City remained Level 3. All business units scored full points (15) on enterprise development.

  B-BBEE  
Element  
Targets   Sun City   Carousel   Sibaya   Golden Valley   Flamingo   Boardwalk   GrandWest   Carnival City   Meropa   Windmill   Morula   Wild Coast   Table Bay   SI Group  
Consolidated  
  100 – Own   20   21.05   21.05   21.60   19.80   19.40   19.50   20.20   17.20   19.00   21.00   21.20   18.80   19.31   21.76  
  200 – MC   10   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60   7.60  
  300 – EE   15   7.49   5.24   8.90   11.30   6.97   9.28   5.86   9.39   15.30   12.40   8.38   5.16   8.49   9.24  
  400 – SD   15   9.91   13.42   8.53   11.40   12.30   14.20   12.20   12.20   12.20   11.90   12.30   11.40   16.50   12.42  
  500 – PP   20   18.04   18.21   20.00   18.73   20.00   19.10   20.00   20.00   20.00   20.00   18.25   20.00   20.00   20.00  
  600 – ED   15   15.00   15.00   15.00   15.00   15.00   15.00   15.00   15.00   15.00   15.00   15.00   15.00   10.00   15.00  
  700 – SED   5   3.93   5.00   5.00   5.00   5.00   5.00   5.00   5.00   5.00   3.76   5.00   5.00   9.00   5.00  
  Overall score   100   83.02   85.52   86.60   89.40   86.70   90.70   85.10   89.20   94.60   91.40   87.60   85.80   86.03   91.02  
  Rating level     3   2   2   2   2   2   2   2   2   2   2   2   2   2  

* Scored against the Transformation Charter  

OWNERSHIP

Sun International Employee Share Trust (SIEST)

The SIEST enables employees to share in the success of the Group, empowering our people and encouraging a spirit of ownership. All permanent full-time and permanent scheduled southern African employees with at least six months’ Group service are eligible. No directors, executives or senior managers, who already participate in Group share incentive schemes, are eligible to be beneficiaries of the SIEST.

The SIEST now has more than 8 000 employees as beneficiaries who benefit by way of income distributions. These distributions are made in equal shares, irrespective of seniority or length of service, to eligible employees at the date of distribution. Biannual dividend distributions are paid net of loan repayments. The estimated value of the SIEST shareholdings net of debt at 30 June 2014 is R753 million, or R89 540 per employee.

    Total distribution   Dividend per participant  
  October 2013   15 677 826   1 893  
  April 2014   9 942 984   1 182  
  Total for the 2014 financial year   25 620 810   3 075  
  October 2012   14 401 414   1 773  
  April 2013   14 797 280   1 840  
  Total for the 2013 financial year   29 198 694   3 613  
  October 2011   12 093 325   1 495  
  April 2012   11 796 223   1 453  
  Total for the 2012 financial year   23 889 548   2 948  
  Total since inception   244 425 716   32 251  
Sun International Black Executive Management Trust (SIBEMT)

The SIBEMT was established as part of the Group’s commitment to the economic empowerment of black people and to retain and attract black executive management. The SIBEMT has an effective 0.4% interest in Sun International through Dinokana, in which it has a 6% interest.

Dinokana shareholding in Sun International

As at 30 June 2014, Dinokana owned 6 719 759 ordinary shares in Sun International – a 6.5% interest. The Dinokana lock-in expires in December 2014. In terms of Dinokana’s funding arrangement, it is required to maintain a minimum share cover ratio of 1.4.

BEE shareholding in the Group and its subsidiaries:

  COMPANY     EMPOWERMENT PARTNER       %  
HOLDING  
  Sun International Limited*    
  • SIEST
  Sun International Employee Share Trust   8.9  
     
  • SIBEMT
  Trust formed for the benefit of Sun International’s senior black managers   0.7  
     
  • Dinokana (excluding SIEST
    and SIBEMT)
  Broad-based North West province
BEE grouping led by Lereko Investments  
5.5  
  SUBSIDIARIES            
  SunWest    
  • GPI
  Broad-based Western Cape empowerment grouping   25.1  
     
  • SIEST
    3.3  
  Afrisun Gauteng    
  • Afrisun East Rand Community Trust
  Trust formed for the benefit of the local community   5.4  
     
  • SIEST
    3.5  
  Afrisun KZN    
  • Dolcoast
  Broad-based KwaZulu-Natal BEE grouping   22.4  
     
  • Afrisun KZN Community Development Trust
  Trust formed for the benefit of the local community   9.3  
     
  • SIEST
    3.5  
     
  • Other PDI minorities
    0.6  
  Emfuleni    
  • Zonwabise
  Broad-based Eastern Cape empowerment grouping   20.3  
     
  • Eastern Cape Community Trust
  Trust formed for the benefit of Eastern Cape based BEE   15.0  
     
  • SIEST
    3.5  
  Meropa    
  • Domba
  Polokwane-based BEE grouping   29.0  
     
  • SIEST
    3.5  
  Teemane    
  • Meriting
  Northern Cape-based BEE grouping   21.4  
     
  • SIEST
    3.5  
  Mangaung    
  • Etapele
  Free State based BEE grouping   15.4  
     
  • Thabo Community
    Development Trust
  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   11.1  
     
  • SIEST
    3.5  
  Transkei    
  • Mbizana Community
    Development Trust
  Trust formed for the benefit of the Mbizana community   30.0  
  Worcester    
  • GPI
    25.1  
     
  • SIEST
    3.5  

* The empowerment shareholding in Sun International has been calculated in terms of the B-BBEE codes including mandated investments. The Group’s effective BEE shareholding in terms of the B-BBEE codes is approximately 33%.

EMPLOYMENT EQUITY

Although employment equity (EE) is included in the dti B-BBEE codes, the Company is also required to comply with the standalone Employment Equity Act. As per the Act, the Company is required to submit an EE plan with EE targets to the Department of Labour (DoL). Our current plan expired at the end of July 2014 and we are required to submit another plan for the next three years. As a result of the section 189A restructure of our workforce, the Company engaged with the DoL and has now submitted a one-year plan for 2014/15 year. After the completion of the restructure, a three-year plan will be submitted. This makes it difficult to set realistic targets as it is unclear what the racial demographic split of the workforce will look like after the section 189A process is completed.

The Group views employment equity as a critical component of business strategy, being integral to both employee relations and talent management initiatives.

Racial demographic profile of our workforce:

  Male   Female   Foreign   
Nationals  
  Grand 
Total  
 
Occupational level   A   C   I   W   A   C   I   W   M   F        
1 Top management   1   1   2   9   1   –   1   –   2   –     17    
2 Senior managment   7   4   14   26   9   4   9   13   8   –     94    
3 Professionally qualified and experienced specialists and mid-management   27   10   14   81   22   7   10   42   18   7     238    
4 Skilled technical and academically qualified workers, junior managment, supervisors, foremen and superintendents   550   155   98   227   431   118   55   161   35   23     1 853    
5 Semi-skilled and discretionary decision making   1 361   264   80   75   1 849   345   86   119   14   15     4 208    
6 Unskilled and defined decision making   157   24   –   1   185   19   –   –   7   2     395    
Permanent total   2 103   458   208   419   2 497   493   161   335   84   47     6 805    
Temporary employees   96   19   2   23   142   29   7   31   7   3     359    
Grand total   2 199   477   210   442   2 639   522   168   366   91   50     7 164    

SKILLS DEVELOPMENT

For the fourth consecutive year the skills development score exceeded the set target, with a verified score of 12.42 points against a set target of 12.00.

Skills development score:  

Skills development indicator    TARGET   
LEVEL  
TARGET   
SCORE  
VERIFIED   
LEVEL  
VERIFIED   
SCORE  
Spend on black staff as a % of leviable amount   3.00%   6.00   3.09%   6.00  
Spend on disabled staff as a % of leviable amount   0.00%   0.00   0.04%   0.42  
Category B–D programmes for black staff          
as a% of total staff   5.00%   6.00   5.28%   6.00  
Total score     12.00     12.42  

The amended codes of good practice increase the skills development expenditure target from the current 3% to 6% of leviable payroll on spend on training black people. The target score on category B-D programmes (learnerships and experiential work-based programmes) has also increased from the present 6 points to 13 points, inclusive of 5 bonus points for the absorption of black unemployed learners.

One of our key initiatives is to identify suitable jobs that can reasonably accommodate disabled individuals and roll out disabled learnerships across the Group. This will also enable the Group to meet our employment equity objectives as submitted to dti.

PREFERENTIAL PROCUREMENT

The Group continues to show a year-on-year improvement, demonstrating our commitment to driving preferential procurement.

As a leading empowered hospitality group, we are embracing the challenges presented by the new B-BBEE Codes of Good Practice, and will be coordinating our efforts to conform to the requirements.

As a Group, we need to focus on driving viable procurement strategies that will assist us in reaching the stringent new targets and in harvesting business relationships with entities that support the growth and development of the South African economy.

2014 year to date performance:
  • R840 million was spent on emerging micro enterprises (EME) and qualifying small enterprises (QSE) suppliers, comprising 24% of our measured spend.
  • Levels 1 to 4 rated suppliers comprise 64% of our measured spend.
  • 20% of our measured spend is with black-owned companies and 8% of that is with black female-owned companies.
  • Sun International has supported 6 400 suppliers in the 2014 period.




ENTERPRISE DEVELOPMENT

As discussed above, we are preparing for the introduction of an enterprise and supplier development pillar of the draft revised Codes of Good Practice. To this end, we are in the process of formalising the enterprise development component of our B-BBEE strategy.

In addition to this, our corporate website provides an opportunity for potential enterprise development beneficiaries to present their proposals to Sun International.

Sun International will move away from only emphasising early settlement towards meaningful enterprise development projects. To this end, we will conduct a review of our supply chain at each property to identify opportunities.