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Report of the audit committee

for the year ended 30 June 2011

The audit committee has pleasure in submitting this report to shareholders as required by the Companies Act, 2008 and as recommended by King III.

Committee membership

The audit committee appointed by the board and approved by shareholders in respect of the financial year ended 30 June 2011 comprised Mr GR Rosenthal (chairman), Ms ZBM Bassa and Messrs MP Egan, DM Nurek and E Oblowitz ("the committee"). The committee members are all independent non-executive directors of the company and have the requisite financial skills and experience to contribute to the committee's deliberations

During the review period the members of the committee were nominated by the board for re-election as members of the committee subject to shareholder approval at the 2011 annual general meeting. Messrs Egan and Oblowitz will not be proposed for re-election as members of the audit committee as a result of each of them stepping down from the board with effect at the 2011 annual general meeting. Ms B Modise has been proposed by the board as a member of the committee with effect from 1 September 2011, subject to the approval of her election as a director and member of the committee by shareholders at the 2011 annual general meeting. .

Committee mandate and terms of reference

Details of the committee's mandate and terms of reference, as approved by the board, have been set out in the corporate governance report and include both its statutory duties and the duties assigned by the board. The committee is satisfied that it has considered and discharged its responsibilities in accordance with its mandate and terms of reference during the year under review.

Statutory duties

The committee is satisfied that in respect of the financial year it has performed all the functions required by law to be performed by an audit committee, including as set out by section 270A (1) (a) to (h) of the Companies Act, 1973 (as amended) and section 94(2) of the Companies Act, 2008. In this regard the committee has:

♠	evaluated the independence and effectiveness of the external auditors, PricewaterhouseCoopers Inc., and is satisfied that the external auditors are effective and independent of the company, having given due consideration to the parameters enumerated under section 94(8) of the Companies Act, 2008. The committee accordingly nominates PricewaterhouseCoopers Inc. as independent auditors to continue in office until the conclusion of the 2012 annual general meeting, noting that Mr D von Hosselin rotates as the individual registered auditor, in terms of section 92 of the Companies Act, 2008. Accordingly Mr ER MacKeown is appointed as the individual registered auditor and member of the aforegoing firm who will undertake the audit;
♠	considered and approved the audit fee payable to the external auditors in respect of the audit for the year ended 30 June 2011 ahead of the annual audit as well as their terms of engagement, taking into consideration factors such as the timing of the audit, the extent of work required and the scope of the audit;
♠	ensured and satisfied itself that the appointment of the external auditors, the designated auditor and IFRS advisor are in compliance with the Companies Act, 2008, The Auditing Profession Act, 2005 and the Listings Requirements of the JSE Limited; and
♠	considered and pre-approved non-audit services provided by the external auditors and fees relative thereto in terms of a policy established in conjunction with the external auditors in terms of which the nature and extent of all non-audit services provided by the external auditors are reviewed and approved in advance, ensuring that the independence of the external auditors is not compromised.

The committee did not receive any complaints relating to the accounting practices or auditing of the Group or any related such matters.

Expertise and experience of the chief financial officer and the finance function

The committee has also considered and satisfied itself of the appropriateness of the expertise and experience of the chief financial officer, Mr RP Becker.

The committee having conducted a review of the appropriateness, skills and resourcing of the Group's finance function, has satisfied itself on the overall adequacy and appropriateness of the finance function.

Internal financial controls

The Group's internal audit function, which is more fully detailed in the corporate governance report provided the board with assurance on the key areas of the Group's internal financial controls. These systems are designed to provide reasonable but not absolute assurance as to the integrity and reliability of the financial statements and to safeguard, verify and maintain accountability of its assets, as well as to detect and minimise significant fraud, potential liability, loss and material misstatement while complying with applicable laws and regulations.

The committee is of the opinion after having considered the assurance provided by the internal audit function that the Group's system of internal financial controls in all key material aspects is effective and provides reasonable assurance that the financial records may be relied upon for the preparation of the annual financial statements.

Sustainability reporting

The committee supported the appointment of an external assurance provider, SustainabilityServices to perform an independent assurance exercise on the sustainability content of the integrated annual report.

The committee is satisfied with the results of the independent assurance exercise and in addition has reviewed the sustainability information set out in the integrated annual report and is satisfied that the sustainability information is reliable and consistent with the information contained in the annual financial statements.

Recommendation of the integrated annual report

The committee having fulfilled the oversight role regarding the reporting process and the integrated annual report and having regard to material factors that may impact on the integrity of the integrated annual report, recommended the integrated annual report and the consolidated annual financial statements for approval by the board of directors.

GR Rosenthal

Chairman

Sun International Limited audit committee

21 October 2011

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