COMMENTARY

• Chairman’s Message
• Chief Executive’s Review
• Financial Director’s Report
• Directorate and management

• CORPORATE OVERVIEW
  • Vision and mission
  • Highlights and graphs
  • Four-year financial review
• COMMENTARY
• GOVERNANCE AND SUSTAINABILITY
  • Corporate governance report
  • Group structure
  • Sustainability report
• ANNUAL FINANCIAL STATEMENTS
  • Directors' approval
  • Company secretary
  • Independent auditor's report
  • Directors' report
  • Income statements
  • Balance sheets
  • Group statement of changes in equity
  • Company statement of changes in equity
  • Cash flow statements
  • Notes

 

Message from the Chairman | Hassen Adams

The environment

A year has passed since Grand Parade Investments Limited (“GPI”) listed on the Johannesburg Stock Exchange (“JSE”) and our maiden year as a listed company has come at an extremely challenging economic period. The South African economy has seen its first recession in 17 years. The hotel industry saw its occupancies slump and gaming revenues did not escape the downturn’s wrath as disposable income declined.

Financial performance

Given this environment, we are particularly pleased that we have been able to grow our earnings and perhaps most importantly the reported value of GPI’s shares. Consequently, GPI has been positive throughout this period and has been quite resilient in ensuring that the company remains a sound investment. GPI’s healthy portfolio of highly cash-generative assets has placed us in a position to honour our commitment of being dividend active and has also allowed us to seek further opportunities in the gaming and leisure sector.

GPI will be paying a sizeable dividend to our shareholders and in the context of the challenging environment in which GPI has traded, where some companies are not declaring dividends at all, this is a most pleasing outcome.

Sustainability and governance

During this period we have maintained our commitment to investing in transformation, sustainability and an integrated approach to good governance, which is over and above the standard financial and regulatory requirements of corporate governance. I am pleased to report that the board-appointed sub-committees have performed their duties competently and diligently during this past year.

In terms of our focus on sustainability, I am especially pleased to see the communities benefit from GPI’s investments, the most significant of them being SunWest, which has, since inception, made significant contributions to corporate social investment and enterprise development.

The local and national economies have also benefited handsomely from SunWest’s activities and, importantly, the commitments we gave when the licence was secured. It’s pleasing, then, to note the passion and vigour of the shareholders, board, management and staff of SunWest in ensuring the exceptional delivery of these commitments.

GPI’s sustainability report highlights this important economic contribution, which has been significantly boosted by the gaming tax rates in place in the Western Cape, which are substantially higher than the rates applicable in the rest of South Africa. In this regard, the regulatory and government role-players should be complimented for the gaming structure in place in the Western Cape that underpins this incredibly positive economic impact. What is possibly most satisfying to all stakeholders in the industry is the fact that it has been achieved without leading to an overstimulation of the latent demand for gambling in the province, a critically important founding principle governing the process of legalising the South African gaming industry.

Gaming licence

GrandWest Casino and Entertainment World’s (“GrandWest”) gaming licence was issued by the Western Cape Gambling and Racing Board and is a licence issued in perpetuity. GrandWest was granted exclusivity for a 75 km radius from the Cape Town City Hall for a duration of 10 years which will be reviewed in December 2010.

All the other casino licences in the Western Cape also enjoy the benefit of exclusivity in their respective demarcated zones.

Major events

During the financial year under review, we bought back GPI shares at an excellent price and increased our direct stake in SunWest. We also further increased our indirect stake in Sibaya Casino and Entertainment Kingdom (“Sibaya Casino”) and Thuo Gaming KwaZulu-Natal (Pty) Limited (“Thuo KZN”). In addition, I am pleased to report that we commenced with the implementation of our key employee share incentive scheme.

In this regard we have established a scheme that is scaleable and will provide for the incentivisation of key staff at GPI for years to come, as well as taking into account our planned growth from an operational perspective. In this regard, we issued our first tranche of shares to our Chief Executive, Financial Director and Group Financial Manager during the year, the details of which can be found elsewhere in this report (refer to the directors’ report).

Looking ahead

We are confident of the year ahead and, as demonstrated in the past year, we will continue to grow GPI in a responsible way. We plan to increase our footprint in the gaming and leisure sector to the extent that we will endeavour to create opportunities that bring our management skills to bear on future projects, while also allowing us to be in control of operations.

It is our continued intention to achieve our stated mission of becoming a major force in the gaming, tourism and leisure industry in Africa. GPI is on the move!

In appreciation

Special thanks are due to our attorneys, Bernadt Vukic Potash & Getz Attorneys, to Leaf Capital our advisers and to PSG, our sponsor, for their loyal service and wise counsel. I must also record our gratitude to our shareholders, funders, our fellow directors and, in particular, our staff for their ongoing dedication and commitment to the success of GPI in these difficult times.

Hassen Adams
Chairman

Cape Town
23 September 2009

The Board | 2009

Standing: Richard Hoption, Anthony Bedford, Charl Williams, Hassen Adams, Ralph Freese.
Seated: Dr Norman Maharaj, Nombeko Mlambo, Adrian Funkey, Alexander Abercrombie