______== s U-~_ S INTERNATIONAL LIMITED DIRECTORATE AND ADMINISTRATION

BoardofDireetolS CHAIRMAN R. J. Goss C.A (SA) Director of: South African Mutual Life Assurance Society Barlow Rand Limited Nedbank Group Limited DEPUTY CHAIRMAN C. W. Fiddian-Green MA (OXON.) Chairman of Rennies Consolidated Holdings Limited NON EXECUTIVE DIRECTORS B.Corte Managing Director of Southern Sun Hotel Holdings Limited F. J. Davin B. COM.M. Managing Director of South African Mutual Life Assurance Society D. A. Hawton F,C.I,S. Director of Rennies Consolidated Holdings Limited W. S. MacFarlane C.A (SA). F,C.A. Director of The South African Breweries Limited M. de W. Marsh B. COMM. F.C.I.S., AC.MA. Chairman of South African Marine Corporation Limited E. Steyn C.A (SA). F,C.A Deputy Chairman of Rennies Consolidated Holdings Limited EXECUTIVE DIRECTORS S. Kerzner cs: (SA) Managing Director P.Bacon Deputy Managing Director K. A. Rosevear cs: (SA) Deputy Managing Director J. S.Banner D. G. Caras c.A. (SA). MB.A. J. V. Corbishley GA. (SA) E. N. Joannides GA. (SA), MB.A M. Stabinsky J. J. Zimrnennann Group secretary and registered office S. A. McLaughlin 35 St. Thomas Street London SEl9SN

Auditors Price Waterhouse

Sun Hotels International Limited is incorporated m CONTENTS the United Kingdom and consequenUy its finanoa.. statements and group [mancial statements are Page prepared in sterling and are lodged with the relevant authorities in London. These financial Financial Highlights 1 statements have been prepared for the Current Projects 2 infonnation of South Airicsn investors and as suci: are not the official [mancial statements of the Summary of Group Hotels 4 company and its subsidiaries. Management Structure 6 Price Waterhouse, London have issued an Executive Directors 7 unqualified audit opinion on the sterling finanoa:. 8 statements, copies of which may be obtained tra: Chairman's Statement the registered office of the company in London Group Hotels by Region 12 from House, 123 Rivonia Road Group Financial Statements 21 Sandton, South Afnca. H.

for the 9 months ended 30th]une 1984 1984 ROOO'S

Trading Turnover 175585 Operating profit 53259 Profit on ordinary activities after tax 36264 Attributable earnings 24526 Shareholders' funds Ordinary Shareholders' Funds 106064 Total Shareholders' Funds 175381 Capital expenditure 26895

Ordinary shareholders Earnings per share R245,26 Dividends per share R171,34 Net Assets per share RI060,64 Employees 7569

Five year trading review of operations comprising the newly formed group ROOO's Average annual D Turnover compound growth rate over o Operating Profit past five years Turnover 55% Profit 56%

1984 Annualised results taking seasonal factors into account.

1980'to 1983 Based on the aggregate results for the past 4 years of the various interests acquired,

-

, it1980 1981 1982 1983 1984

Opening Wild Coast Hotel- December 1981 /__!_--- Opening Entertainment Centre - July 1981 INTERNATIONAL LIMITED The spectacular Also coming on stream R43 million Cascades Hotel at Sun City in 1985 is the R25 million Thaba 'Nchu opens in February 1985. In addition to Sun situated in the south of increasing room capacity at the three Bophuthatswana. The cleverly hotels to close on 900, the Cascades designed architecture incorporates with its exciting rock and waterscape an African theme and marries it with features will add a new dimension of superb modern facilities and Innovation and glamour and sophistication to the attractions. Thaba 'Nchu Sun will be a flair characterise new resort. Another exciting innovation will first class conference centre and developments be the inauguration of the futuristic resort. sky train. With true Sun City flair, the sky train will transport visitors between the car park, the hotels and the entertainment centre.

Development ..... Director D.Caras

Food & Beverage ,.... Director J. Zinunennann Deputy Managing ..... Director P.Bacon - Group Entertainment Manager I- H.Feldman

Director of Strategic Planning & Group Legal Advisor - Development - E. Joannides

Managing Director S. Kerzner C.A (SA) Managing Director. Age 49. 22 years in the hotel industry. Founded the Southern Sun Hotel chain in association with Casino Operations the South African Breweries Limited in ..... Director 1969. Served as Managing Director of M. Stabinsky Southern Sun Hotels and Director of The South African Breweries until the formation of Sun Hotels International in October 1983.

Financial Director - J. Corbishley

Deputy Managing ~ Director ,_. K. Rosevear

Marketing Director - S.Banner

General Manager - Hotel Operations M. Price

Regional General Managers A. Chiaranda G. Collins P.Jones P. Wagner Eugene [oannides c.s. (SA), MB.A. Strategic Planning and Development Director. Age 38. 8 years in the hotel industry initially as Group Financial Manager of Southern Sun Hotels progressing to Director of Corporate Planning. Prior to joining Southern Suns, had several years experience auditing hotels. Joined Sun Hotels International in June 1984. Miron Stabinsky Casino Operations Director. Age 45. 16 yeaxs in the casino industry, joining the Royal Swazi Casino in 1968 and rising to the position of Holiday Inns' Casino Operations Director in 1977. Joined Southern Sun Hotels in 1978 as Group General Manager - Casino Operations and joined Sun Hotels International in October 1983 on the company's formation

PeterBacon Jamt Deputy Managing Director. Age 38. 21 years in the hotel industry, joining Southern Sun Hotels in 1973 as Group Personnel Manager having spent six years Stewart Banner with Trust House Forte in London. In Marketing Director. Age 51. Southern Suns he progressed to Director 4 years in the hotel industry, joining Holiday responsible for Hotel Operations, and took Inns in 1980 as Marketing Director. Joined over as Managing Director from Mr Sun Hotels International in October 1983 on Kerzner in 1983. Joined Sun Hotels the company's formation. International in August 1984.

John Zimmennann Food and Beverage Director. Age 46. 30 years in the hotel industry, beginning with Western International Hotels in Seattle, USA and later moving to CARA Operation in Toronto Canada where he was appointed Corporate Manager of Standards. Joined Southern Sun Hotels in 1974 as Group Food and Beverage Manager and moved to Sun Hotels International on the company's formation.

Ken Rosevear c.s. (SA) jomt Deputy Managing Director.Age 35. 3 years direct experience in the hotel John Corbishley c»: (SA) rndustry having joined Southern Sun Hotels Financial Director. Age 33. ill 1982 as Group Financial Manager. but Associated with the hotel industry for 8 having been involved in the Southern Sun years. Joined Holiday Inns in 1979 as audit for the previous II years, Joined Sun Personal Assistant to the Managing Director Hotels International in October 1983 on the and became Financial Director in 1983. company's formation, Joined Sun Hotels International in December 1983.

Delano Caras c.s. (SA), M.B.A. Development Director. Age 39. 5 years in the hotel industry, joining Southern Sun Hotels as Financial Controller, in 1980. Moved into development and became Group Development Manager in 1983. Joined Sun Hotels International in October 1983 on the company's formation. CHAIRMAN S STA TEMENT Q

R. J. Goss Chairman

Sun Hotels International is a newly formed company registered in the United Kingdom. The company was founded by Mr Sol Kerzner in October 1983 to acquire control of the hotel-casino interests of Southern Sun Hotels and Rennies Consolidated Holdings in Southern Africa and Mauritius. Today Sun Hotels International comprises 18 hotels with over 3 000 rooms, and casino rights in those countries in which it operates. The Group operates in Bophuthatswana, Botswana, Ciskei, Lesotho, Swaziland, , Venda and on the Capital island of Mauritius. It is the fastest growing group of its kind in the Southern investment in Hemisphere with an annual turnover exceeding R220 million. SWl City rises The largest and most widely acclaimed internationally of the Group's to R139 operations is Sun City in Bophuthatswana. This premier resort, which opened in 1979 million. with 340 rooms and extensive gaming, entertainment and sporting facilities, has grown at an unprecedented rate. Over the past five years the capital investment has risen from an initial R28 million to R139 million. Sun City's gaming operations rank as the largest in the southern hemisphere and the number of guest rooms now total approximately 900. The complex includes a 6 000 seat multi-purpose superbowl and convention centre which has featured numerous international superstars and been the setting for major world class sporting events. During the past five years the turnover of the casino-resort industry in Exciting Southern Africa, which consisted of all the operations acquired by Sun Hotels attractions International, grew at a spectacular compound growth rate in excess of 50% per result in annum. This strong growth was partly attributable to an increase in the number of dramatic casino licences granted during that period. The main thrust however came from the market dramatic growth of the market; this was achieved by offering the consumer unusually growth. varied and exciting attractions packaged and promoted in a highly innovative manner. Many of the key people who were responsible for this remarkable achievement have now been brought together under the umbrella of Sun Hotels International. So while the company is new, its executive and senior management can lay claim to more than a decade of success in a wide range of hotel and gaming operations. The Company's principal shareholders are Kerzner & Associates, Safren (the holding company of the proposed merged Safmarine and Rennies group) and Southern Sun Hotels with joint control vested in Kerzner & Associates and Safren. As this is our first annual report, a brief review of events leading up to the company's formation is relevant. In 1969, having already achieved considerable success as an hotelier, Sol Kerzner and The South African Breweries Limited joined forces to form Southern Sun Hotels. During the following 14 years a strong management team under the leadership of Mr Kerzner built Southern Sun into one of the most successful hotel groups in the Earnings world, generating a compound growth in earnings per share of over 30% per annum. exceed After tax profits increased from RO,4 million in 1969 to R31, 1 million in 1983. When budget by Southern Sun was listed on the Stock Exchange in 1979 the company's 20%. offer of shares to the public was 30 times oversubscribed. By 1983 Southern Sun's market capitalisation exceeded R333 million and the group operated a chain of 30 luxury hotels comprising over 5 000 rooms. Over time Mr Kerzner's interest focused increasingly on the resort hotel• casino developments. In September 1983 he offered his shareholding in Southern Sun to The South African Breweries and simultaneously made a successful bid for control of Southern Sun's casino-hotel operations. Soon thereafter Sun International acquired the casino-hotel interests of the Rennies Group which had been operated under the Holiday Inns franchise in Southern Africa. Operating results I am pleased to report highly satisfactory results for the nine month period to 30 June 1984. The Group achieved attributable profits of R24,5 million on a turnover of R175,6 million. These earnings, equal to R245,26 per share, exceeded budget by over 20%. A final dividend of Rl15,50 per share has been recommended which, together with the interim dividend, brings the total dividend for the period to R 171,34. The effective tax rate of 28% for this first nine month period is not expected to increase significantly in the medium term in view of tax relief to be obtained on new 30% return on developments in Southern Africa. shareholders' equity. All of the Group's operating units performed well during the period under review which is all the more remarkable when considered against the prevailing poor economic climate. This good performance is the result of improved turnover achieved through effective marketing as well as the implementation of stringent control over costs. As Sun Hotels International is a new company, no comparative financial data has been included in the financial statements. However the aggregate turnover and operating profit of all the individual operating units increased by 33% and 55% respectively compared to the corresponding period of the previous year. The Group's annualised return on shareholders' equity was an impressive 30% which substantially exceeded the minimum target of 20% per annum set by the Board. CHAIRMAN'S STATEMENT

Capital expenditure and finance The balance sheet reflects a strong position with assets totalling R282 million and interest bearing debt amounting to only 19% of total shareholders' funds. Interest payments were covered 20 times and the aggregate of interest and lease costs were more than 5 times covered, highlighting the Group's capacity to service substantial additional debt. Assets totalled. R282 million. Capital expenditure during the period under review totalled R26,9million, of which R9,2 million was spent on upgrading and refurbishment programmes, R6,O million on extensions to the Wild Coast Sun and Arnatola Sun and Rl1,7 million on construction of the new Cascades hotel at Sun City. These projects were funded from the Group's own resources. The Board has approved an amount of R74 million for capital projects in the current year to be financed by retained earnings and loans which have already been secured. Low gearing and high The capital expenditure programme includes R30,9million for the interest cover. completion of the Cascades hotel and R 13, 0 million for the construction of a monorail at Sun City which will link the car park to. the various hotels and entertainment centre. An amount ofR25,Omillion will be spent on a new 120 room hotel and casino at Thaba 'Nchu in Bophuthatswana. Cascades is scheduled to open in February 1985 and Thaba 'Nchu Sun in September 1985. Approximately R 11,2 million has been provided for upgrading and refurbishing the Group's properties during the coming year. Sun Hotels International has secured with effect from 1 October 1984 the management of the 240 room Hilton Casino Hotel in Maseru, Lesotho, to be renamed the Lesotho Sun. Furthermore the Group is also planning a new development along the Ciskei coast as well as major extensions to the Wild Coast Sun. Group operating philosophies Standards A major Group objective is to provide the highest standards of accommodation, cuisine, R74million entertainment and service to its guests. Considerable resources are therefore committed approved for to ongoing staff training programmes designed to maintain a motivated and efficient capital workforce. projects in Marketing current year. Creative marketing programmes and highly visible promotional campaigns are continually being devised to expand the market and strengthen the Group's commanding position in the regions in which it operates. Employment code Sun Hotels International strongly subscribes to the policy of providing equal opportunity for all it's employees without regard to sex, race, colour or creed. To ensure that this policy is a meaningful one the Group recognises the need for it's employees to maximise their true potential by participating in specially designed development programmes. Community responsibility The Group has major resorts in the countries where it operates and as such is mindful of it's social responsibilities to the communities of those countries. It will therefore actively participate and contribute towards educational, social, sporting and environmental programmes as well as endeavouring to improve the lifestyle and economic status of it's employees. Investment & financing policy Sun Hotels International's strength clearly lies in the development and management of hotels, resorts and gaming operations and it intends to confine future investments to these fields.

In addition to the Group's investment programme in Southern Africa, a Major substantial effort will be made during the current year to expand internationally. As emphasis on already mentioned Sun Hotels International has considerable financial capacity to make international meaningful acquisitions. expansion. The Group's policy on the extent of equity participation in anyone project is flexible but consideration would not be given to any new project which did not give Sun Hotels International overall management responsibility. Interest bearing debt to total shareholders' funds will be limited to 90% while interest costs will be maintained at a minimum cover of 4 times. On this basis, the Group has the capacity to borrow an additional Rl26 million without exceeding any of its Considerable self imposed constraints. finance Dividend policy capacity for The Board has agreed to distribute 70% of attributable earnings. meaningful acquisitions. Future prospects The general economic conditions in Southern Africa are expected to remain depressed during the twelve months to June 1985. Hotel occupancies and casino earnings could corne under pressure. Despite these adverse conditions your directors expect a moderate improvement in earnings for the year compared to the annualised earnings for the preVIOUS year. Appreciation The formation of Sun Hotels International and the success it achieved during the first nine months of operation carne about through the commitment and dedication of management and staff. To all of these individuals and also my colleagues on the board, I extend my Growth sincere thanks and gratitude. predicted in I would also like to express my appreciation to the various governments of year ahead. the countries in which we operate and their agencies for their valued co-operation and support during the year.

!~ (J /

R.}. Goss SUN HOTELS INTERNATIONAL LIMITED

Sun City - the internationally acclaimed entertaiDment capital

The combination of a magnificent natural setting, world-class entertainment, superb sports facilities and international superstar shows has made Sun City the internationally acclaimed entertainment capital of Southern Africa. In its first year of operation, Sun City, set in the beautiful Pilanesberg Mountains surrounded by a 60 ()()() hectare game park, attracted a million visitors, which by 1983, had increased to more than 2,5 million. Sun City boasts the largest and busiest convention centre in Southern Africa, capable of accommodating more than 1 000 delegates. Since July 1981 when opened the 6 OOO-seat superbowl, Sun City has presented more than 35 superstar shows to audiences totalling more than 1 million. International star attractions include Liza Minelli, Shirley Bassey, Olivia Challenge played at the Gary Player Newton-John, Rod Stewart and Elton Country Club. The contest attracts John - pictured together on the stage - players like Jack Nicklaus, Lee Trevino George Benson, Julio Iglesias and the and Seve Ballesteros. rock group Queen. Spectacular Extravaganza shows, rivalling those at The superb sports the Paris Lido play to capacity facilities at Sun City are a major audiences in the intimate 600-seat hotel drawcard. In addition to the theatre; in four years more than championship golf course, there is a 1 million people have attended the tennis ranch, bowling greens, ten-pin 2 000 performances .. bowling and Waterworld offering a wide range of waters ports. Each year, the world's golfing greats come to Sun City to take part in the Million Dollar Golf

HOTELS INTERNATIONAL LIMITED development of a second hotel is now course was designed by Robert Trent being planned to cater for increased Jones and is rated as one of the finest in demand. Southern Africa. In addition, guests can 'Wild Coast Sun - The setting of this resort enjoy a variety of waters ports on two a spectacular Indian Ocean hotel, on miles of unspoilt beaches natural lagoons, first-class deep-sea setting surrounded by the superb countryside fishing, tennis and sailing. of the Wild Coast is spectacular. Wild To cater for demand, the Since its opening in Coast Sun offers the added drawcard of conference facilities and gaming areas December 1981, occupancy at Wild an excellent casino, combined with were considerably enlarged during Coast Sun has been in excess of superbly varied restaurants and top the past year. 80 percent, and for this reason, the class entertainment in the theatre and bars. The challenging 18-hole golf • SUN HOTELS INTERNATIONAL LIMITED Holiday-makers from In common with these around the globe are attracted to Sun two, La Pirogue Sun offers spectacular International's three hotels on the island holiday extras like splendid cuisine, top of Mauritius. Superb locations, on sporting facilities including the full spectacular white beaches combined range of watersports. Casinos operate with the friendliness and hospitability of at Saint Geran Sun and La Pirogue Sun. the Mauritians are major drawcards Sun International's Because of the high key role in tourism Saint Geran Sun, rated as demand for accommodation from all development in Mauritius one of the top five resorts in the world is over the world, extra rooms will be visited regularly by international added at all three resorts, which will celebrities who enjoy its superb cuisine bring the total number of rooms offered and service, the idyllic setting and by Sun International on Mauritius to 500. sparkling nightlife. Le Touessrok Sun (main picture) is surrounded by spectacular beaches, and small boats ferry guests to their own private island pleasure paradise. SUN HOTELS INTERNATIONAL LIMITED

The Royal Swazi Sun built in the picturesque Ezulwini Valley Sun International's three hotels clustered in Swaziland's peaceful Ezulwini Valley offer an excellent conference venue. A modern and fully• equipped convention centre features a revolving stage, fully raked auditorium and a series of function rooms catering for conferences of all sizes. Within the Royal Swazi Sun complex are the Ezulwini and Lugogo Sun Cabanas which bring the otal rooms to 470. Extensive leisure acilities are offered, including a splendid casino, a championship golf course attracting international players ·0 its annual classic tournament, plus an extensive range of other sporting amenities. There are sophisticated restaurants and bars and the resort's unique mineral spring spa is flanked by a well-equipped health centre and sauna. I SUN HOTELS INTERNATIONAL LIMITED o

GROUP FINANCIAL STATEMENTS Page Report of the directors 23 Group profit and loss account 24 Balance sheets 25 Source and application of funds statement 26 Notes to the Group financial statements 27

SPECIAL PURPOSE AUDITOR'S REPORT To the members of Sun Hotels International Limited We have examined the financial statements of Sun Hotels International Limited and its subsidiaries set out on pages 23 to 32 which have been prepared based on the sterling financial statements of Sun Hotels International Limited and its subsidiaries on which Price Waterhouse, London, expressed an unqualified audit opinion on 13 August 1984. In our opinion these financial statements: The casinos are a leading - have been properly translated from attraction at the Lesotho Sun and the sterling amounts at the Gaborone Sun both of which are approximate rates of exchange ruling Gaming is an important conference centres. at the balance sheet date, - conform to generally accepted important aspect of many Sun The Sun City casino, accounting standards in . International Hotels featured in the main picture is the largest of the group's gaming facilities Sun International is the with more than 65 tables and 750 slots ..c:gest casino operator in the Southern occupying an area of about 40 000 :';:smisphere, operating a total of 12 square feet. ::-=smos with more than 240 tables and Roulette, blackjack, slots. Approximately 1 000 people Price Waterhouse craps, punto banco and chemin de fer Chartered Accountants sre employed by the casino division. are played in the main casino and the 1900 Anglo American Life Centre salon prive. 45 Commissioner Street Johannesburg 2001 13th August 1984 HOTELS INTERNATIONAL LIMITED

Close to the Ciskei capital of Bisho, in the foothills of the Amatola Mountains is the Amatola Sun, a favourite weekend getaway and holiday resort, and also an important rendezvous for businessmen and diplomats. Amatola Sun's casino was recently extended, incorporating some of the latest gaming facilities. The Venda Sun, located in the nation's capital, is used extensively by business travellers and is a favourite meeting place for the local people. REPORT OF THE DIRECTORS i>r the period ended 30th June 1984

The directors have pleasure in and Rennies Consolidated Holdings Mr 1. N. Matthews also served on the submitting their report to Limited, the extensions to the board during the period 21st shareholders together with the Amatola Sun, Wild Coast Sun and October 1983 to 2nd May 1984. Sun City, and the normal programme financial statements. The company S. M. Allen was a director of the of capital expenditure on was incorporated on 4th May 1983 company from the date of and remained dormant until it improvements. incorporation until her resignation on acquired the casino-hotel interests of 21st October 1983. Southern Sun Hotel Holdings Limited Share capital and Rennies Consolidated Holdings During the period 100 000 ordinary None of the directors had a material Limited on lst October 1983. These shares of £ I, 00 (R I, 70) each were interest in any contract with the accounts therefore represent the first issued. A share incentive scheme company or any of its subsidiaries nine months trading to 30th June has been formed for the beneficial during the period under review. interest of senior employees, 1984. Interests of the directors in the share including directors, and allotted 2,6% and loan capital of the ultimate Group results and dividend of the company's issued share capital. holding company at 30th June 1984 Group profit on ordinary activities are set out in note 32 to the financial before tax for the period under Turnover and attributable profit statements. The directors had no review totalled R50,6 million whilst Turnover and attributable profit are interests in the share and loan capital earnings attributable to ordinary solely generated from the operation of any of the company's subsidiaries shareholders amounted to R24,5 of casino-hotel resorts in Southern at 30th June 1984. million, or R245,26 per share. The Africa and Mauritius. directors recommend the payment Donations f a final dividend of R 115,50 per Change of name The company was incorporated as Charitable donations granted during share making a total dividend for the the period under review amounted period ofR171,34 per share. Crensdene Limited. Pursuant to a resolution on 21st October 1983 the to R174 000. No political donations were made. Principal activity of the group name was changed to Sun Hotels International Limited. The main activity of the group during Auditors e period under review was the Price Waterhouse, auditors of the peration of hotels, the majority of Directors On 21st October 1983 Messrs R.]. company since their appointment by rhich incorporated casinos and Goss (Chairman), C. W. Fiddian• the directors on 23 September 1983 entertainment facilities. A list of the Green (Deputy Chairman), S. retire from office at the forthcoming ;rroup's hotels is set out on page 4. Kerzner (Managing Director), P. D. annual general meeting. Special Bacon, W. S. MacFarlane, M. de W. notice pursuant to section 15(l)(c) of Review of business and future Marsh, K. A. Rosevear and E. Steyn the Companies Act 1976 has been developments were appointed as directors. received and resolutions concerning ~tailed comments on the activities, their re-appointment and acquisitions and future Messrs B. Corte, F. ]. Davin and D. A. remuneration will be submitted to cevelopmcnts of the group are set Hawton were appointed to the board the annual general meeting. :ut in the chairman's statement on on 16th May 1984. pages 8 to 11. On 13th August, 1984, Messrs]. S. Banner, D. G. Caras, ]. V. Corbishley, Fixed assets and investments E. N. Joannides, M. Stabinsky and]. ]. By order ofthe board 3roup capital expenditure on fixed Zimmermann were appointed to the S. A. McLaughlin assets during the period under board. Group Secretary review amounted to R225,6million . ~ includes the cost of acquiring All the above directors retire but :2:.e casino hotel interests from being eligible offer themselves for = cuthern Sun Hotel Holdings Limited re-election. 13th August 1984 Note o

Turnover 2 175585 Net operating costs 3 122326

Operating profit 53259 Interest and lease finance costs 4 2652

Profit on ordinary activities before tax 50607 Tax on profit on ordinary activities 5 14343

Profit on ordinary activities after tax 36264 Minority interests 11738 Profit before extraordinary item attributable to shareholders 24526 Extraordinary item - goodwill written off • 98

Profit for the financial period 6 24428 Dividends paid and proposed 7 17134

Profit retained for the period 7294

Earnings per share 8 R245,26 Dividends per share R171,34 Dividend cover (times) 1,4 Interest cover (times) 20,1 Hotels International Limited Group Company subsidiaries 1984 1984 Note ROOO's ROOO's

Employment of funds Fixed assets Intangible assets 9 846 Tangible assets 10 217365 Investments 11 23602 13526 Investments in subsidiaries 12 71378 241813 84904

Current assets 39446 29422 Stocks 1411 Debtors 13 9033 Cash on deposit and in hand 14 29002 [i] 8 Creditors: Amounts falling due within one year 77 754 13013 Bank overdrafts 2709 Creditors and provisions 15 39122 512 Short term loans 16 5933 Taxation 18440 951 Proposed dividend 11550 11550 Net current assetsl(liabilities) (38308) 16409 Total assets less current liabilities 203505 101313 Creditors: Amounts falling due after more than one year 17 24129 170 Provision for liabilities and charges 18 3995 175381 101 143 Funds employed Capital and reserves Called up share capital 19 170 170 Share premium account 20 1821 1821 Other reserves 21 96779 96779 Profit and loss account 22 7294 2373 Shareholders' equity 106064 101 143 Minority interests 69317 (l 175381 101 143 .0n . Goss S. Kerzner 13th August 1984 Group 1984 ROOO's

...... , .... Profit 6tdi:nary actiVitieS be1bl' 50607 DepreaatiOn and loss on sale offiXed assets 6766 Funds generated from trading operations 57373 Other reserves (Note 21) 96779 Shares ISSued at a premium 1991 Term loans raised 2446 Investment loans realised 2473 Sale of fixed assets 565 Minority equity contribution 125 Total source of funds 161752 Application of funds Purchase of net assets of subsidiaries 94620 Purchase of fixed assets 26895 Investments and loans 7414 Taxation paid 2415 Dividends paid: To shareholders 5584 To minorities in subsidiaries 7083 Term loans repaid 7027 Increase/(decrease) in working capital 10714 Total application of funds 161752 Increasel(decrease) in working capital Bank, cash and overdraft 19744 Debtors 1656 Creditors (10686) 10714 Net assets of subsidiaries acquired: Intangible fixed assets 1 171 Tangible fixed assets 197478 Investments 18661 Stocks 1411 Debtors 7377 Cash 6549 Creditors (70541) Minority interest (67584) Net assets acquired 94522 Goodwill arising 98 Purchase consideration 94620 Fixed Assets and Depreciation Interest and certain direct costs related Freehold ]and JS included. at cost. to hotel properties are capitalised Freehold and leasehold buildings are during the period of development or revalued by the directors periodican.y at construction the lower of depreciated replacement Pre-opening expenses are written-off cost or market value, such value having over a period of five yeaIS from the date been detennined by reference to the of the commencement of operations. earnings potential of each property. Fixed assets other than those dealt with Stocks as indicated below are depreciated or Stocks, comprising mainly food and amortised on such bases as are deemed beverage stock, are valued at the lower appropriate to reduce book values to of cost and net realisable value on a fiISt• estimated residual values during their in, first-out basis. useful lives. Turnover Depreciation is not provided on freehold 'I'l)is includes revenue derived from hotel properties because it is the group's hotel trading, casino winnings which are practice to maintain the hotels in a accounted for on a cash received basis, continual state of sound repair and to entertainment revenues, fees and rental extend and improve selected hotels income. from time to time and accordingly the directors consider that the lives of hotel post-acquisition results of associate Taxation buildings are so long, and residual _palni'es are included on an equity Current taxation is determined after values so high, that their depreciation is from the effective dates of taking into account investment insignificant. ":qUJ·ISi·tion and up to the effective dates allowances on capital expenditure, disposal, unless in the opinion of the Hotel operating equipment is valued income and expenditure which is not I.GHectors circumstances indicate that it is substantially at actual cost on a first-in, subject to taxation or is taxed in another ent to account for income from such first -out basis. year and assessed or estimated tax :mvestments only as and when received. losses brought forward from prior years. Fixed assets of newly acquired Deferred taxation has been set aside on Fcreign Currencies subsidiaries are brought to account at the liability method taking into account reign currency differences arising on respective costs or valuations. the effect of credits and charges, mrmal trading activities are dealt with Surpluses and deficits arising on the including depreciation, attributable to arriving at the profit for the accounting disposal of fixed assets as part of the periods other than the current year. oct. operating activities of the business are Deferred taxation is not set aside on the recoupable value of allowances claimed consolidation the assets, liabilities included in operating profit. for tax purposes on hotel buildings and results of foreign subsidiaries are related fixed plant as it is anticipated zanslated at the approximate rates of that either the allowances will not be caanoe ruling at the balance sheet recouped and taxed, because disposals J:!. e. Differences arising are dealt with of any hotel properties would normally _~ugh reserves. be made by the sale of shares in the hotel-owning company, or the amounts are not considered significant. Oaaap 1_ ROOO's solely attributable to the operatiOn of casino-hotel ~ 8lSoulbem AfIica and Mauritius. 3- "1111 ,\twCIIDIItB Raw materiaJsand other consumables 16132 Other operating charges 67620 Staff cosIs- wages and salaries 21726 - other payroll and pensron cosIs 8192 DeprecJatiOn and amortimtiOn offixed assets 6481 Income from associate COmpanIeS: (3391) Dividends received Share of profit before tax ~ 7) Interest received on call deposits (2817) Leasing charges: 8824 Operating - properties - plant, vehicles and equipment 33 Financial- plant, vehicles and eqwpment [lJ Auditors' remuneratiOn. 374 Audit fees Fees for other semces Expenses []]2 Loss on sale of fixed assets 286 122326 4- IDteI'aIIt aad leaIIe ibumce COIdII Intezest paid on borrowings: 2611 Long term Repayable within five years ~ 8 Lease finance costs --- 41 2662 5. TaxatioD Overseas normal tax 12104 Current Deferred ~ 8 Withholding taxes 1733

Associate Companies 506 Total charge for the period 14343 Estimated tax losses of certain subsidiaries available for set-off against future taxable income amount to 1489 The overseas normal tax charge has been reduced to 24,2% primarily by incentive allowances, utilisation of the tax losses brought forward from prior years and non-taxable dividends received. After taking into account other taxes and prior year adjustments, the effective tax rate is 28,3%. 6. Profit for the financial period. Sun Hotels International Limited has not produced its own profit and loss account as permitted by Section 149 of the United Kingdom Companies Act 1948. The amount of the consolidated profit for the financial period dealt with in the accounts of Sun Hotels International Limited is R19,5 million. 7. Dividends paid and proposed Interim R55,84 per share paid 15 March 1984 5584 Final Rl15,50 per share payable 3 September 1984 11550 17134 8. Earnings per share The calculation of earnings per share is based on profit before extraordinary items attributable to members of the holding company and on 100 000 ordinary shares which were in issue throughout the period. 9. Intangible fixed iUIII8tB Pre-opening expenses: Cost: Subsidiaries acquired Additions At the end of the penod Accwnulated depreciation: Subsidianes acquired Charge for the period At the end of the period Net book value at the end of the period

10. Tangible iUIII8tB Group Land and buildings Plant Fixtures, Capital Freehold Leasehold and fittings and work in Longtenn Shorttenn machinery equipment progress Total ROOO's ROOO's ROOO's ROOD's ROOD's ROOD's ROOD's Cost: Subsidiaries acquired 38172 132215 170 5922 35859 2585 214924 Additions 3269 243 241 222 12243 10611 26828 Disposals (56) (4) (3) (1613) (1676) At end of period 41441 132402 407 6141 46489 13196 240076 Accumulated depreciation: Subsidiaries acquired 731 46 1926 14742 17446 Charge for the period 967 7 452 4663 6089 Disposals (3) (820) (824) At end of period 1698 53 2375 18585 22711 Net book value at end of period 41441 130704 354 3766 27904 13196 217365

Fixed assets are depreciated as follows: Leasehold buildings: Over the period of the lease or 50 years whichever is the shorter. Plant and machinery: 10%-15% Furniture, fittings and equipment: 15%-33,33% Group Company 1984 1984 ROOO's ROOD's 11. Investments Interest in associate companies: Cost of shares at lst October 1983 7061 6766 Increase ill equity since acquisition Distributable reserves 1982 960 Current accountmg period: Profit before tax 3391 1611 Tax (505) (271) Dividend paid during period (904) (380) 9043 7726 Loans 7801 370 Share of net tangible assets 16844 8096 Other unlisted investments and loans: Shares 898 85 Loan to share incentive scheme 4995 4995 Other non-current loans 865 350 6758 5430 23602 13526 12. Investments in subsidiaries Shares at cost less amounts written-off 71378 13. Debtors Trade debtors 4167 Amounts owed by holding companies 257 165 Other debtors 2733 17 Prepayments 1876 Amounts owed by subsidiaries 29062 9033 29244 0...... , 18fM ROOO's 251393. 178 -asOOi - 178 -3638 a 374 406 21031 106 5048 8762 --39122 612 5069 864 5933

7832 21366 170 29198 170 Less: Repayable within one year (Note 16) 6069 24129 170 Repayable over the following financial years: Secured: 1986 ~ 298 1987 1874 1988 1048 1989 646 1990 onwards - by instalment 1769 6636 Unsecured: 1986 3700 1987 2882 1988 3115 186 1989 2930 1990 onwards - by instalment 4583 -otherwise f 400 17610 186 24145 186 Net book value of assets encumbered by secured loans are as follows: Land and buildings 32441 Moveables 2328 34769 Weighted average interest rate: 9,5% Secured loans Unsecured loans Average interest rates have been arrived at by taking the rates ruling at 30 June 1984 weighted by the balance outstanding on each loan at that date. The interest rates on the majority of the loans are fixed and not linked to prime overdraft rates. A register of long term loans is available for inspection at the registered offices of the company. 18. Provision for liabilities and charges Deferred taxation Provision is made for deferred tax, which is anticipated to be payable within the foreseeable future, as follows: Accelerated tax depreciation 1876 Other timing differences 2119 3995 Had it been deemed appropriate for deferred taxation to be provided in full, an additional amount of R3 337 000 would have been charged in the current period and the liability for deferred taxation at 30 June 1984 would have amounted to R9 072 000 (Company - Nil), of which R6 954 000 is attributable to accelerated tax depreciation. Gmap Company 1984 1984 ROOO's ROOO's 19. Called up &bale capital Allotted and fully paid: 200 000 ordinary sharesof£l (R1,70)each 340 340 Authorised: 100 000 ordinary shares of £1 (R1,70)each 170 170 During the period 100000 ordinary shares were issued on formation of the company. The aggregate nominal value of these shares was £100 000 and the consideration received £1571000. Share incentive scheme At 30 June 1984, a share incentive scheme had been established in terms of which 2574 shares were issued to a trust fund for the benefit of senior employees, including directors. 20. Sluue premium acecnmt Premium on shares issued 2500 2500 Formation costs (679) (679) Balance at the end of the period 1821 1821 21. Other reserves Capital contribution 96779 96779 Currency translation differences Balance at the end of the period 96779 96779 22. Profit and loss ac:ccnmt Retained profit for the period 7294 2373 Balance at the end of the period 7294 2373 Comprising: Company 2374 Foreign subsidiaries 2939 Associate companies ---1981 7294 Distributions by certain subsidiary and associate companies are subject to withholding taxes, at rates varying between 12,5% and 15%. 23. Contingent liabilities Guarantees in respect of associate companies 8113 8113 Guarantees in respect of subsidiaries 43109 Other 550 550 8663 51772 Certain of these guarantees are in respect of property rentals and have been quantified on the basis of the net present value of the full leases discounted at 20 percent per annum. 24. Future capital expenditure Contracted for 36426 Authorised by the directors but not contracted for 46137 82563 To be spent in current year 74563 To be spend in future years 8000 82563 Future capital expenditure will be financed out of existing facilities and funds generated from operations. 25. Financial lease commitments The future minimum commitments in terms of lease agreements for plant, vehicles and equipment are: Due within one year 4870 Thereafter 16241 21 III 26. Pension commitments The group operates a pension scheme which is available to all its employees including the executive directors, and is financed by group and employee contributions to a separate, trustee• administered fund. Group contributions to this fund, which are charged against profit, are based upon actuarial advice following the periodic valuation of the fund. At balance sheet date the pension scheme was fully funded. E GROUP FINANCIAL STATEMENTS

Company 1984 Rooo's D. r ,..,... erage nwnber of persons employed by the group dunng the period m Southern Africa and Mauntius was 7 569. 28. DiIecton' emolameDts Directors' fees 27 Paid by subsidiaries 231 258 29.Loaaa House purchase loans amounting to R313 000, bearing interest at 10% p.a and repayable on termination of employment, were outstanding at 30th June 1984. These loans include advances to senior employees, some of whom were appomted as directors on 13th August 1984. 30. Cammt COIIt &CC01IDts In July 1984, the accounting standards committee in the United Kingdom issued an exposure draft, ED35, dealing with its proposals for givmg current cost information in financial statements. ED35 does not require current cost information for private companies. Although Statement of Standard Accounting Practice No. 16 has not been withdrawn, in view of the proposals of ED 35 and the time that would be taken to produce current cost accounts, no current cost informationhas been included in these financial statements. 31. mtimate holdingc:ompany The directors consider Sun Renrues Investment Holdings (Pty) Limited incorporated in the Republic of South Africa, to be the ultimate holding company. 32. DirectOlB share interests The effective interests of directors in the shares of the ultimate holding company as at 30th June 1984 and the date of this report were: S. Kerzner 14,8% R J. Goss 7.5% No other directors have interests in excess of 1%. 33. PriD.cipal sabsidiary compaDies Country of Direct interest Beneficial incorporation and in ordinary interest operation share capital All of the following either operate casino-hotel resorts or hold the shares of casino-hotel resorts: Sun International Bophuthatswana (Pty) Limited* Bophuthatswana 50% 50% Sun International (Wild Coast) (Pty) Limited Transkei 75% 75% Sun International (Ciskei) (Pty) Limited* Ciskei 50% 50% Swazispa Holdings Limited Swaziland 50% Sun International (Botswana) (Pty) Limited Botswana 80% Sun International of Lesotho (Pty) Limited * Lesotho 50% 50% Venda Sun (Pty) Limited* Venda 50% 50% Aberdeen Management Limited Guernsey 100% 100% Sun International Limited South Africa 100% 100% Sun Hotels International (Bermuda) Limited Bermuda 100% 100% Sun International Management Limited Bermuda 100% 100% St. Vincent Investments Limited Swaziland 100% 100% Far Eastern African Holdings Limited Guernsey 100% 100% 'Overall management control is exercised by Sun Hotels International Limited. 34. .Associate CompaDies Country of incorporation and Direct interest Beneficial Principal activity operation in ordinary interest share capital Sun Financing Bophuthatswana (Pty) Limited Bophuthatswana 25% 50% Asset leasing Mzarnba Development (Ply) Limited Transkei 46% 46% Fixed property Transgames (Ply) Limited Transkei 34% Slot machine operations Bophuthatswana Commercial Radio (Ply) Limited Bophuthatswana 20% 20% Radio station Casino de Maurice Limited Mauritius 33% Casino operations Designed by Webb, White Design Associates. Printed by Hemiltons Printers. Reproduction by Beith Process and Phototype.