Sustainability Report

Introduction

GPI owes its existence to the outcome of a meaningful commitment to empowerment and sustainability. It is now a substantially empowered, black-controlled listed company but it grew from small beginnings. That is why its commitment to triple bottom line reporting is so strong and its economic, social and environmental impact so positive. Indeed, sustainability is central to its vision, mission and business purpose. A key part of this strategy is the channelling of resources into entities where GPI is able to exercise significant influence.

From this position GPI is able to encourage its underlying investments to grow in a sustainable manner, mindful of the interests of all its stakeholders.

BEE Credentials

From a black economic empowerment perspective GPI has impeccable credentials. GPI’s preliminary score, which is reflected in the table below is in the final stages of assessment. Western Cape’s independent BEE verification agency, SERA is in the process of verifying GPI’s score of 98%.

This score was derived using GPI’s four strongest categories of empowerment and is due to the fact that GPI is classified, based on its reported revenues for 2009, as a qualifying small entity.

  2009
  %
Ownership 25,00
Management and control 24,95
Employment equity 25,00
Preferential procurement 23,31
Skills development –
Social development –
Enterprise development –
Total 98,26

employment equity

GPI’s underlying investments operate employment equity committees. They ensure that employment equity and succession planning strategies are focused on the businesses core functions. The employment equity plans for 2010 reflect the plans in place to aid with recruitment and development. This doubles as a departmental measurement and guide towards ensuring that employment equity targets are attained.

Table Bay CSI marine outing

Table Bay CSI marine outing

Shareholder empowerment

GPI is a business with 100% black origins and was therefore transformed at “birth”. GPI is SunWest’s biggest local stakeholder in terms of shareholder empowerment: it now owns an effective stake of 33,52% in SunWest, thus fulfilling the terms of the original bid to secure the licence for the Western Cape-based operation. GPI now has 6 300 direct shareholders, most of whom are members of historically disadvantaged communities. The founding consortia themselves account for thousands of previously disadvantaged shareholders which means that indirectly the previously disadvantaged shareholder base of GPI is substantially more.

These shareholders invested their savings in GPI and have since been rewarded with a substantial return on their investment. GPI now holds over 50% of the SunWest voting shares and will use this position to ensure that shareholder interests are maintained over the long term.

As mentioned above, GPI’s continued participation in the benefits flowing from the activities of SunWest is central to SunWest’s sustainability strategy. It is for this reason that GPI has managed to achieve a BEE lock-in of more than 28% of its share capital until at least 2012.

Economic impact

GPI’s portfolio of assets has contributed substantially to the local economies within which it operates, the biggest contributor being the Western Cape-based SunWest investment.

Economic impact of SunWest
SunWest has made a significant economic contribution to the province and the country, making a cumulative contribution to Gross Domestic Product (“GDP”) between 1997 and 2008 of over R15,8 billion.

In 2008 SunWest contributed over R2,8 billion to GDP.

This comprised the following:

  • R338,7 million from ongoing capital expenditure at GrandWest due to the expansion of the facilities;
  • R1,46 billion from the running of GrandWest;
  • R148,3 million from the concessionaires operating at GrandWest;
  • R13,6 million from ongoing capital expenditure at the Table Bay Hotel;
  • R253,6 million from the running of the hotel;
  • R5.7 million from the concessionaires operating at the hotel; and
  • R645,5 million from the Cape Town International Convention Centre (Pty) Limited (”CTICC“). This last part of the contribution has a variety of sources and includes construction and maintenance expenditure, operational expenditure, spending by exhibitors, spending by delegates and induced tourism spending.

In addition, by 2008, SunWest had contributed over R600 million to Gross Geographic Product (“GGP”). This is made up of the following:

  • R61,6 million in ongoing capital expenditure at GrandWest;
  • R252,2 million from the running of GrandWest;
  • R27,7 million from the concessionaries operating at GrandWest;
  • R2,5 million from ongoing capital expenditure at The Table Bay Hotel;
  • R44,9 million from the running of the hotel;
  • R1,0 million from the concessionaires operating at the hotel; and
  • R210,9 million from the CTICC.

To summarise, between 1997 and 2008, SunWest made a cumulative contribution to GGP of nearly R3,2 billion.

Furthermore, in 2008 SunWest paid R429,1 million in casino levies and VAT, R287,2 million in other forms of direct taxes (such as income and corporate tax) and R24,4 million in licence fees. This resulted in a total of R740,7 million being paid into the fiscus in various forms of direct taxes, while an additional R286,1 million in indirect taxes was also generated during that year.

Job creation
SunWest has, since its inception, spawned many new business opportunities and created employment for thousands of people from its surrounding communities and beyond. Sustainable jobs created include employment provided by the CTICC, which SunWest played a pivotal role in launching by providing considerable intellectual and financial support. The spin-off benefit of this world-class international convention centre to Cape Town and South Africa has been substantial and is continuing to grow over time.

In 2001, at the peak of the construction of GrandWest, SunWest created or sustained 7 102 direct jobs and 7 455 indirect jobs, resulting in a total of 14 558 jobs created or sustained. By 2008 SunWest activities was sustaining 5 781 direct jobs and 5 235 indirect jobs. This is a total of 11 017 sustainable jobs due to the activities of SunWest.

In addition, GrandWest has 27 concessionaires ranging from fast food outlets and restaurants to entertainment and retail. These provide jobs for over 1 000 people. At the same time, there are eleven outsourced service providers, with the largest being the providers of catering, security and cleaning services. In total these service providers employ more than 1 600 people, most of whom never had jobs before.

The Table Bay Hotel has two concessionaires who employ a total of 37 people and five service providers who employ in excess of 400 people. The CTICC currently has five concessionaires and 22 service providers.

In the 2008 financial year, GrandWest spent over R130 million in purchasing goods and services in the local economy, and because 60% of tracked procurement was placed with the BEE sector, GrandWest has substantially advanced the provincial government’s agenda in respect of transformation in the Western Cape leisure industry.

Economic impact of Worcester Casino
In 2009 Worcester Casino made the following contributions to GDP:

  • R8 million from ongoing capital expenditure;
  • R104 million from running the casino and lodge in 2009; and
  • Total capital investment for the lodge and casino was R225 million.

Worcester Casino currently employs 135 direct staff and has appointed three major service providers in the categories of catering, cleaning and security, creating employment for 214 people.

Greening of schools

Greening of schools

Economic impact of LPM Investments
Over the past year, Thuo Gaming WC and Thuo Gaming KZN have made a substantial economic impact. All venues through which the LPM machines are operating are subject to strict regulations and accordingly fall within the tax net. Many of the venues received substantial upgrades and the activities associated with these upgrades provided an important economic benefit.

The nature of route operations is that they are geographically dispersed throughout the provinces within which they operate and accordingly the benefit of the network is shared as opposed to being concentrated for the exclusive benefit of the big urbanised cities.

An updated economic assessment of the economic benefits of these operations is under way and through this we will be able to confirm and provide a report on how the actual benefit stacks up against the projected benefits at the inception of these businesses.

Corporate social investment

GPI’s most important investment, SunWest, has built up an enviable track record in terms of its focus on sustainability, as has Thuo Gaming WC. Both entities allocate a substantial percentage of their profits to corporate social investment and the uplifting of the communities within which they operate.

GrandWest communicare launch

GrandWest communicare launch

SunWest
GrandWest’s Corporate Social Investment (“CSI”) contribution has become increasingly prominent in the social investment landscape of Cape Town and the operation boasts numerous CSI projects and achievements in its portfolio.

GPI can take much of the credit for SunWest’s achievements in this regard through its representation on the SunWest board and the role of Western Cape Manco, which is jointly controlled by GPI and Sun International. Western Cape Manco is responsible for the management of SunWest’s empowerment policy, which covers all aspects of empowerment including community empowerment, shareholder empowerment, procurement empowerment and, importantly, employee empowerment.

By 2007 GrandWest’s CSI committee, under the guidance of GPI representatives who serve on the Western Cape Manco board, had overseen the allocation of R25 million to social investment projects. The expansion at GrandWest further increased CSI spending by an additional R1,7 million, which is set to rise to a potential R14,7 million in 2015.

Since 2000, GrandWest CSI has invested its R25 million CSI budget in local community projects and programmes, concentrating on those that are viable and sustainable in the long term and those that empower local communities.

The allocation of CSI is managed across different category types which are weighted according to needs and community priorities.

Some of the projects and programmes that have benefited from GrandWest CSI include:

  • Blisters for Bread – a charity family fun walk which raises money to feed hungry Cape Peninsula schoolchildren: more than 15 000 walkers take part;
  • Ruyterwacht Community Learning Centre - a wireless network facility with computers and internet where the people of Ruyterwacht are able to acquire skills, tuition, life skills training, career guidance and also have access to employment opportunities;
  • Zeekoevlei Environmental Education programme - enabling disadvantaged children to acquire environmental and social life skills and receive a certificate at the end of the course;
  • Soundtrack 4 life – GrandWest CSI's successful life skills programme which uses theatre to empower learners with the behavioural skills necessary to deal with social issues such as HIV: the programme has already reached over 100 000 Cape Peninsula learners;
  • Red Cross Society – GrandWest CSI has provided field kitchens which offer relief to poor Western Cape communities devastated by floods, fire and other natural disasters;
  • The GrandWest CSI-SHAWCO mobile community health clinics – these provide primary health care to an ever-increasing number of Cape Metropole citizens. R5,1 million has been spent to date on this project;
  • SHARE Literacy Project – an adult basic education project in Somerset West providing real life experience training;
  • Noluthando School for the Deaf – based in Khayelitsha, this school also accommodates learners with other physical challenges: GrandWest CSI funded the equipping of a sewing room;
  • Western Cape Primary Science programme - the teaching of science is a problem area in schools: GrandWest CSI funded the translation of a series of books into Xhosa, as well as the production of a DVD that would benefit both educators and learners;
  • Ntwasahlobo Primary, Litha Primary, Siyanda Educare and Siphamandla Educare – GrandWest CSI funded reading materials, mattresses, educational toys, musical instruments, tables and desks;

  • GrandWest's CSI committee has always recognised and valued the immense part education plays in transforming our society, and supports a number of education-related projects and programmes in the Western Cape.

    Motivated by the announced shortage of skilled engineers and scientists in the province, the GrandWest CSI Bursary Fund was launched in August 2007 aimed at Western Cape tertiary students studying in the disciplines of mathematics, science or technology, as well as FET (Further Education and Training) students who are bridging towards a university education. The Bursary Fund makes R5 million’s worth of bursaries available over a five-year period.

    To date the GrandWest CSI Bursary Fund has awarded bursaries to 150 students and many of these early bursars are already achieving impressive academic results at their various institutions;

  • SOS Children's Village, Thornton - GrandWest CSI adopted House 13 and House 15 in 2005 and besides initially purchasing appliances, from time to time has taken care of the two homes’ needs: SOS children are also included in Christmas parties, visits to the Aquarium, shows at the Grand Arena and other activities;
  • Home of Hope - this project is involved with child protection and the provision of safety, well-being and protection of all children in communities such as Table View, Du Noon, Joe Slovo and Doorbach: GrandWest CSI responded to the Homes’ need for a vehicle to transport social workers and provide supplies to areas of need.

The Table Bay Hotel
In the 2009 financial year, The Table Bay Hotel spent over R133 000 on corporate social investment, with this being fairly evenly spread between health and welfare projects, educational projects and community development.

The Golden Valley Casino and Lodge
Although The Golden Valley Casino is not yet in a profit-generating position, the unit is assisting the local community with meal and accommodation vouchers, as well as a considerable amount of management’s time and energy. In 2009 Golden Valley made a cash contribution of R50 000 to the Pioneer Rally. The main beneficiary of the Rally is the Pioneer School for the Blind in Worcester. At a gala banquet an additional R200 000 was raised.

LPM Investments/Thuo Gaming
Thuo Gaming WC has committed to invest at least 5% of its pre-tax profits on CSI projects. Priority is given to programmes which uplift and support the communities in the categories of community development, health and welfare, and education. Those which benefited during the past year are:

  • The Somerset Hospital, to whose board a donation of R1 million was made to rebuild their trauma unit. The new unit will be three times larger and is expected to be completed by March 2010. Thuo’s contribution will aid short-term job creation during the construction phase and long-term employment for doctors, nurses and hospital administrative staff. The facility will furthermore be a training ground for intern doctors.
  • The Chaeli Campaign, which will use their R200 000 donation to enable people with various disabilities to support themselves. Programmes offered by Chaeli include:
    • physiotherapy and occupational therapy to children with various disabilities;
    • a resource centre for parents, siblings, students and visitors;
    • therapist training;
    • family and parent support groups and social worker services; and
    • upkeep of therapy equipment.
  • Noah, which received an amount of R30 000 as sponsorship of a home for the aged in Atlantis for a period of one year.
  • Girls' & Boys' Town, who were recipients of a R20 799 donation that will cover the cost of education for three youngsters for a period of one year.
  • The Marsh Memorial Home, which offers sanctuary to abused and neglected children placed there by the court. The home has received R18 709.
  • The St George's Home for Girls also received R18 709 for continued well-being of girls placed in the Home’s care.

Thuo Gaming KZN is still in its start-up phase and is accordingly not in a profit-making position yet. We are confident that this business will become profitable in the next two years and will therefore commence making a meaningful contribution to community social development and enterprise development in the short to medium term.

Enterprise development

GPI is reviewing its investment in community projects and will be reprioritising the allocation of a portion of GrandWest’s funding to enterprise development initiatives, in accordance with the new code.

Environmental sustainability

GrandWest
GrandWest first implemented the National Heritage Environmental Management System in May 2006, for which the complex was awarded a Silver rating. In March 2009 GrandWest was awarded a Gold rating.

In addition to improving on set targets for the elimination of waste and the reduction of the company’s carbon footprint, refuse and any wasteful use of water and energy, GrandWest is also committed to applying its environmental policy principles to surrounding areas. These include Goodwood, Thornton and Ruyterwacht.

Table Bay Hotel
Among its most important conservation efforts are electricity, gas, water and waste saving. Energy-saving electric light bulbs have been fitted and water is saved with the introduction of dual-flushing toilet tanks and showerheads that mix the.

In just under two years of adhering to the principles of the National Heritage Programme, The Table Bay Hotel’s Silver status was upgraded to Gold. In its audit report on the hotel, the Heritage Programme said that one of the most impressive aspects of the hotel’s conservation work was the degree to which suppliers were advised of the hotel’s environmental policies.

Worcester Casino
Worcester Casino is also a member of the National Heritage. Environmental Management System. The property’s efforts are focused on reducing water and energy consumption at the complex in order to safeguard Africa’s most precious resources.

The way forward

GPI will continue to ensure that its underlying investments focus on excellence with respect to the triple bottom line. GPI firmly believes that, over the long term, shareholder value will be optimised through this focus on sustainability.