Carlton Investments Limited
Annual Report 2020

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2020 ANNUAL REPORT CARLTON INVESTMENTS LIMITED (A publicly listed company limited by shares, incorporated and domiciled in Australia) ABN 85 000 020 262 Financial Report FOR THE YEAR ENDED 30 JUNE 2020 Directors Alan G Rydge (Chairman) Anthony J Clark AM Murray E Bleach Group Secretary Peter W Horton Auditor Bank Registered Office Share Registrar KPMG National Australia Bank Limited Level 15, 478 George Street, Sydney NSW 2000 Telephone: (02) 9373 6732 Email: info@carltoninvestments.com.au Website: www.carltoninvestments.com.au Computershare Registry Services Pty Ltd Level 3, 60 Carrington Street, Sydney NSW 1115 Telephone: 1300 855 080 Facsimile: (02) 8235 8150 Home Stock Exchange The company is listed on the Australian Securities Exchange (Sydney) Limited. Stock Exchange Code CIN Controlled Entities Carlton Hotel Limited (ACN 000 010 266) Eneber Investment Company Limited (ACN 000 014 540) The Manly Hotels Pty Limited (ACN 000 004 473) Annual General Meeting The 2020 Annual General Meeting will be held virtually at 10.00am on Tuesday 20th October 2020. Instructions are included with the notice of meeting. 1 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 chairman’s report to shareholders I present to you the Group’s consolidated results for the year ended 30 June 2020. Group’s operations and results Profit for the year ended 30 June 2020 was $38,115,000 compared to $45,526,000 for the 2019 financial year, a decrease of $7,411,000 or 16.3%. The prior year result benefited from a significant increase in special dividends received, which totalled $3,567,000. Special dividends in the year to 30 June 2020 totalled $1,138,000, a decrease of 68%. Dividends and distributions received, before special dividends, decreased by $4,590,000 (10.6%) from $43,251,000 to $38,661,000. This fall in dividends received largely occurred in the last quarter of the financial year when the COVID-19 outbreak caused several companies to conserve funds and either significantly reduce or defer dividend payments. The major impact on the Group’s profit from this reduction or deferral of dividends came from the Group’s bank investments. The prior year second six months results included dividends received or receivable from banks totalling $6.4 million, as against $2.2 million received or receivable in the six months to 30 June 2020. With lower interest rates, interest income decreased from $465,000 in the prior to $360,000. The weighted average interest rate on term deposits decreased from 2.53% in the prior year to 1.88% and there was a small increase in average funds on deposit during the year of $0.4 million. Administration expenses were $916,000, compared to $870,000 in the previous year. The management expense ratio (MER) for the year ended 30 June 2020 was 0.10%. Earnings per ordinary share Basic and diluted earnings were $1.440 per ordinary share for the year to 30 June 2020 compared to $1.720 per share for 2019. Dividends On 21 August 2020 the directors declared a final fully franked dividend of 56 cents per ordinary share, payable on 21 September 2020. Total dividends paid and payable in respect of ordinary shares for the financial year ended 30 June 2020 amount to $1.11 per share, a decrease of 14 cents per share, not taking into account the special dividend of 8 cents per ordinary share paid in respect of the prior year. An interim dividend of 55 cents per ordinary share was paid in March 2020 and was consistent with the prior year interim dividend. A final preference share dividend of 7 cents per share fully franked is also payable on 21 September 2020. The record date for both the ordinary and preference final dividends is 2 September 2020. The Dividend Reinvestment Plan remains suspended. Net tangible asset backing The net tangible asset backing for each issued ordinary share at 30 June 2020, prior to the payment of the final dividend noted above and before provision for estimated capital gains tax in respect of unrealised investment portfolio gains, was $28.50 (2019: $36.68). Although the Board has no present intention of disposing of any of the Group’s equity investments, the net tangible asset backing per share after provision for tax on unrealised capital gains was $24.65 (2019: $30.66). The relevant figures as at 31 July 2020 were $27.42 and $23.88 respectively. 2 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 The Group continues to hold its equity investments for the long term and does not act as a share trader nor does it invest in speculative stocks. Outlook With a high level of uncertainty regarding the degree to which the economic impact of COVID-19 will persist, it is difficult to accurately predict future earnings. For the 2021 financial year it is anticipated that dividend income will be well down on that received during the 2020 financial year, as businesses take a conservative approach to the payment of dividends. Event Hospitality & Entertainment has announced that they do not currently intend to pay a final dividend for the year ended 30 June 2020 or an interim dividend for the half year ending 31 December 2020 and the dividend prospects from investments in a number of other industry sectors are in question. We also consider that there will be continuing high market volatility that will require a patient approach in identifying new long term investment opportunities. We believe that given the quality of the businesses in the investment portfolio, they will persist through the current economic impacts of the COVID-19 pandemic. A G RYDGE Chairman 21 August 2020 Investments The market value of the equity investment portfolio as at 30 June 2020 was $731,517,000 compared to $945,446,000 at the prior year end. Short term cash holdings and term deposits totalled $23,581,000 at 30 June 2020 (2019: $23,211,000). The Board’s policy is to acquire additional investments in equities that meet the criteria of providing high levels of income through predominantly fully franked dividends and have the potential for long term capital growth. The cost of equity investments purchased during the year to 30 June 2020 totalled $10,554,000 (2019: $8,314,000). Acquisitions above $500,000 during the year were: BHP Group Fortescue Metals Group Iluka Resources Link Administration Pendal Group Rio Tinto Santos Tabcorp Woodside Petroleum $1,005,000 $1,485,000 $999,000 $1,009,000 $500,000 $1,492,000 $2,009,000 $503,000 $1,002,000 During the period the Groups holding in Dulux was subject to a takeover offer and was disposed of for consideration of $5,076,000. There was one other disposal resulting from a takeover, bringing the total consideration received from disposals to $5,106,000. Capital returns received during the period totalled $301,000 (2019 $113,000). The second six months of the 30 June 2020 financial year has seen market values for most of the Group’s investments fall with the outbreak of the COVID-19 pandemic impacting on the global and Australian investment markets. Over the second six months we have seen the market value of the group’s investments fall by 25.2%. Restrictions to suppress the spread of COVID-19 have had a significant impact on the businesses of the Group’s largest investment, Event Hospitality & Entertainment. The market values of the Group’s investments in banks have also seen large falls due the general economic impact of the pandemic. The market value of the Group’s investment portfolio, after adjusting for investment acquisitions and capital returns, decreased during the year by $219 million or 23%. The S&P/ASX 200 Index decreased by 10.9% over the financial year. On a total portfolio return basis (measured by the movement in NTA per share assuming dividends are reinvested), the return for the twelve months was negative 19.4% compared with an decrease in the S&P ASX 200 Accumulation Index over period of 7.7%. 3 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 50 45 40 35 30 25 20 15 10 5 0 140 120 100 80 60 40 20 0 $m TEN YEAR SUMMARY OF NET PROFITS 31.58 32.40 29.30 37.42 35.26 41.81 39.67 41.66 45.53 38.12 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CPS FULLY FRANKED DIVIDENDS PER ORDINARY SHARE 7 114 116 121 8 125 111 108 100 84 78 92 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Ordinary dividend Special dividend 78.0 % DIVIDENDS PAID AS A PERCENTAGE OF NET PROFIT 76.4 76.6 77.4 76.9 77.3 77.1 75.2 75.1 76.0 74.0 72.0 70.0 70.6 70.5 68.0 66.0 4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 The directors present their report together with the consolidated financial report of Carlton Investments Limited (“the Company”) and its controlled entities for the year ended 30 June 2020 and the auditor’s report thereon. Mr Murray E Bleach CA, GAICD, BA(Fin), MApFin. Member of the Institute of Chartered Accountants in Australia and Graduate of the Australian Institute of Company Directors. Directors The directors of the Company in office at any time during or since the end of the financial year are: Mr Alan G Rydge Chairman of Directors since 1980. Non-Executive director. Broad experience as a director of various listed and private entities, formerly Deputy Chairman of Australia Post. Director (since 1978) and Chairman (since 1980) of Event Hospitality & Entertainment Limited. Also a director of Enbeear Pty Limited, Alphoeb Pty Limited, and Aygeear Pty Limited. Mr Anthony J Clark AM, FCA, FAICD. Fellow of the Institute of Chartered Accountants in Australia and Fellow of the Australian Institute of Company Directors. Independent Non-Executive Director since 2000. Chairman of the Nominations and Remuneration Committee and Chairman of the Audit and Risk Committee (from December 2014). Broad experience as a director of listed companies and previously practised as a Chartered Accountant retiring as a partner of KPMG in 1998. Former directorships include Ramsay Health Care Limited, Telstra Corporation Limited, Amalgamated Holdings Limited (now known as Event Hospitality & Entertainment Limited) and Sphere Minerals Limited. Independent Non-Executive Director since 2014. Over 39 years’ experience in accounting and financial services, with extensive experience in infrastructure and start-up investment. He was previously in charge of Macquarie Group’s North American operations and was the CEO of Intoll Group, the Chairman of Suicide Prevention Australia and a Non-Executive Director and the Chairman of the Board Investment Committee at IFM Investors for 9 years. He is Chairman and co-founder of start-up investment group, AddVenture/Tidal Ventures. Other directorships include Energy Action Ltd, of which he is Chairman, and GreenCollar Group. Company Secretary and Chief Financial Officer Mr Peter W Horton was appointed Company Secretary and Chief Financial Officer in October 2011. He practised as a Chartered Accountant for over 20 years prior to his retirement as a partner of KPMG in 2001. Immediately prior to joining the Company, Mr Horton was the Director of Finance and Accounting for a public company engaged in the hospitality and leisure industries, a position which he held for almost 10 years. Officers who were previously partners of the audit firm AJ Clark and PW Horton were officers of the Company during the year and were previously partners of the current audit firm, KPMG, at a time when the audit firm undertook an audit of the Company. The most recent that any of these officers previously worked with KPMG was more than 18 years ago. Directors’ meetings The number of directors’ meetings and meetings of committees of directors held during the year together with the number of meetings attended by each director during the financial year were: Name of Director Directors’ Meetings Audit and Risk Committee Nominations and Remuneration Committee No. of meetings held: No. of meetings attended: Mr A G Rydge Mr A J Clark Mr M E Bleach 8 8 8 8 3 3 3 3 1 1 1 1 5 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 Corporate Governance For the year ended 30 June 2020, the Board applied where practicable, the guidelines set out in the 3rd Edition of ASX Corporate Governance Principles and Recommendations issued by the ASX Corporate Governance Council. The Board has adopted, where practicable, the 4th Edition of the ASX Corporate Governance Principles and Recommendations for the year ending 30 June 2021. The Company has disclosed its current 2020 Corporate Governance Statement in the Governance and Policies section on the Carlton Investments website (https://www.carltoninvestments.com.au/AboutUs/ GovernanceandPolicies.aspx). The Group has also lodged the 2020 Corporate Governance Statement and Appendix 4G with the ASX. Companies listed on the Australian Securities Exchange are required, under the ASX Listing Rules, to detail the principles and recommendations with which they have not complied and provide reasons as to why they have not done so. As disclosed in the 2020 Corporate Governance Statement, the Company complies, to the extent appropriate for an organisation of its size, with the ASX Corporate Governance Principles and Recommendations with the exception of Recommendation 2.5 as the Chairman is not considered to be an independent director due to his related interests in the Company. The remaining members of the Board do not consider that this in any way diminishes the effective conduct of the Board’s functions. Principal activities The principal activity of the Group is the acquisition and long term holding of shares and units in entities listed on the Australian Securities Exchange. There have been no significant changes in the activity of the consolidated entity during the year under review. Environmental regulation The Group’s operations are not subject to any significant environmental regulations under either Commonwealth or State legislation. Events subsequent to balance date Other than noted elsewhere in this report, there has not arisen in the interval between the end of the financial year and the date of this report any item, transaction or event of a material and unusual nature likely, in the opinion of the directors of the company, to affect significantly the operations of the Group, the results of those operations, or the state of affairs of the Group, in subsequent financial years. 6 Results and review of operations The consolidated profit for the year attributable to the members of Carlton Investments Limited was: 2020 $000 2019 $000 Operating revenue 40,159 47,301 Administration and finance costs (928) (882) Profit before income tax expense 39,231 46,419 Income tax expense Net profit for the year (1,116) (893) 38,115 45,526 Dividends and distributions received, before special dividends decreased by $4,590,000 from $43,251,000 to $38,661,000, representing a 10.6% decrease. With the outbreak of COVID-19, a number of companies in which the Group has invested chose to conserve funds and either significantly reduce or defer dividend payments. Among these companies were the major banks whose dividends are declared in the last quarter of the financial year. Special dividends received during the period decreased significantly from $3,567,000 in the prior year to $1,138,000, a decrease of $2,429,000. Interest income totalled $360,000, compared to $465,000 in the prior year. The weighted average interest rate on term deposits decreased from 2.53% in the prior year to 1.88%, with only a small increase in average funds on deposit during the period. During the last quarter of the financial year, with low interest rates and investment market uncertainties, funds were moved out of term deposit to bank accounts where the funds are immediately available. Administration expenses for the year were $916,000 compared to $870,000 in the prior year. The management expense ratio (MER) for the year was 0.10%, an increase of 0.01% from the prior year. Equity investments purchased during the year to 30 June 2020 totalled $10,554,000 (2019: $8,314,000). Major additions to the portfolio included BHP Group, Fortescue Metals Group, Iluka Resources, Link Administration, Pendal Group, Rio Tinto, Santos, Tabcorp and Woodside Petroleum. The Group continued to invest in Australian listed entities that are considered to be well managed and are anticipated to provide attractive levels of sustainable income through predominantly franked dividends and also long term capital growth. Details of investment acquisitions over $500,000 during the year to 30 June 2020 are given in the Chairman’s Report. CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 The only disposals of equity investments during the financial year resulted from takeovers, with total consideration of $5,106,000 being received. The largest takeover was the acquisition of Dulux by Nippon Paints in August 2019, when the Group received $5,076,000 in consideration for the disposal of its Dulux shares. Capital returns received during the period totalled $301,000 (2019 $113,000). The investment portfolio held by the Group is valued at market values. Increments and decrements in the market value of equity investments are recognised as other comprehensive income and taken to the revaluation reserve. Following the outbreak of the global COVID-19 pandemic the market value of the investment portfolio fell significantly resulting in a decrease in value for the year to 30 June 2020 of $219,076,000 or 23%. The S&P/ASX 200 Index decreased by 10.9% over the year to 30 June 2020. On a total portfolio return basis (measured by the movement in NTA per share assuming dividends are reinvested), the return for the twelve months was negative 19.4% compared with a decrease in the S&P ASX 200 Accumulation Index over the same period of 7.7%. With the current market uncertainties and an expectation of continuing high market volatility, the Group will continue to take a cautious approach in identifying long term investment opportunities. Dividends • Paid during the year in respect of the prior financial year: (i) As proposed in last year’s report, a final ordinary share dividend of 70 cents per share, fully franked, amounting to $18,532,000 was paid on 23 September 2019. As also proposed in last year’s report, a special dividend of 8 cents per share, fully franked, amounting to $2,118,000 was also paid on 23 September 2019. (ii) As proposed in last year’s report, a final preference share dividend of 7 cents per share, fully franked, amounting to $6,000 was paid on 23 September 2019. • In respect of the current financial year: (i) An interim ordinary share dividend of 55 $000 cents per share, fully franked, was declared and paid on 23 March 2020. 14,561 (ii) A final ordinary dividend of 56 cents per ordinary share in respect of the year ended 30 June 2020 has been declared. The dividend will be fully franked. Total ordinary share dividends paid or payable in respect of the year ended 30 June 2020 (iii) An interim preference share dividend of 7 cents per share, fully franked, was paid on 23 March 2020 (iv) A final preference share dividend of 7 cents per share, fully franked, has been declared 14,826 29,387 6 6 Total dividends paid or payable in respect of the year ended 30 June 2020 29,399 In the financial statements preference share dividends are recorded as a finance cost, refer note 3-4 to the financial statements. Outlook and Likely developments The COVID19 pandemic has impacted global and Australian economies and companies. The pandemic is likely to remain a major global issue until a treatment or vaccine is developed and the full financial impact on the Group will play out in the 2021 financial year. As stated in the Chairman’s Report it is anticipated that the Group’s dividend income will be impacted in the financial year to 30 June 2021 as companies in a number of industry sectors are taking a conservative approach to the payment of dividends. Also, Event Hospitality & Entertainment have announced that they do not currently intend to pay a final dividend for the year ended 30 June 2020 or an interim dividend for the half year to 31 December 2020. Dividends received by the Group from Event for the 2020 financial year were $16,009,000. The level of special dividends received in the 2019 and 2020 financial years is not expected to continue for the 2021 year. Lower interest rates are expected to continue for some time thus reducing the return on the Group’s deposits. The Group will continue to pursue its policy of holding equity investments on a long term basis and reinvesting dividends and other income in entities listed on the Australian Securities Exchange, together with accepting takeover offers which would prove to be of advantage to the Group. 7 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 Remuneration Report – Audited The Company has a Board of three directors and employs two staff, one of whom is the company secretary/ chief financial officer. The Board reviews the performance of the company secretary / chief financial officer and determines the appropriate remuneration after having reference to current market rates. Directors’ fees for the non-executive directors (there are no executive directors) are recommended to the Board each year by the Nominations and Remuneration Committee and, after reference to current market rates, are based on the nature of each director’s work and responsibilities. Directors do not receive additional fees for Committee participation. These fees are within the maximum amount of $350,000 that was approved by the shareholders at the 2014 annual general meeting. Performance evaluation and remuneration reviews are carried out in May each year, with any remuneration increases being effective from 1 July. No director or the company secretary/chief financial officer has a service agreement. Directors and the company secretary/chief financial officer do not receive any remuneration subject to performance conditions including bonuses or options over shares in the Company. There were no non-monetary benefits given to directors or the company secretary/chief financial officer. Their only remuneration is by way of fees and salary respectively, together with superannuation contributions which are paid to defined contribution funds. Directors’ and officer’s remuneration Short term base emolument Post employment superannuation contributions Leave entitlements movements Directors Mr A G Rydge Mr A J Clark Mr M E Bleach 2020 2019 2020 2019 2020 2019 2020 2019 Company Secretary/Chief Financial Officer Mr P W Horton 2020 2019 $ 90,411 86,758 79,452 77,626 79,452 77,626 249,315 242,010 170,000 165,000 $ 8,589 8,242 7,548 7,374 7,548 7,374 23,685 22,990 25,000 25,000 Total $ 99,000 95,000 87,000 85,000 87,000 85,000 273,000 265,000 $ - - - - - - 14,948 13,814 209,948 203,814 The table below sets out the Group’s performance indices in respect of the current year and the previous four years. 2020 2019 2018 2017 38,115 45,526 41,665 39,666 111 133* 121 116 $28.50 $22.97 0.10% $36.68 $31.60 0.09% $37.09 $33.08 0.09% $36.65 $31.50 0.08% 2016 41,812 121^ $35.52 $31.72 0.08% Net profit for year ($000) Dividends cents per ordinary share# Net tangible asset backing before capital gains tax at 30 June Share price at 30 June Management Expense Ratio # Interim, final and special dividends in respect of year * 2019 includes a special dividend of 8 cents per share ^ 2016 includes a special dividend of 7 cents per share 8 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 Directors’ equity holdings and transactions The movement during the reporting period in the number of ordinary shares of the Company held, directly, indirectly or beneficially, by each key management person, their spouses and their personally-related entities is as follows: Held at Purchases/(Sales) Held at 1 July 2019 1 July 2018 2020 2019 30 June 2020 30 June 2019 Mr A G Rydge 16,084,540 15,589,458 Mr A J Clark Mr M E Bleach 5,000 6,120 5,000 - - - - 495,082 16,084,540 16,084,540 - 6,120 5,000 6,120 5,000 6,120 The 16,084,540 ordinary shares disclosed above as being held directly, indirectly or beneficially by Mr A G Rydge includes 13,351,639 ordinary shares held by Enbeear Pty Limited representing 50.4% of the Company’s issued ordinary shares. End of Remuneration Report Directors’ interests The relevant interest of each director in the share capital of the Group, as notified by the directors to the Australian Securities Exchange in accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows: Shares held in Carlton Investments Limited Held Directly Other Relevant Interests Aggregate Relevant Interests Ordinary Shares Ordinary Shares Ordinary Shares 2020 2019 2020 2019 2020 2019 1,214,360 1,214,360 14,852,116 14,852,116 16,066,476 16,066,476 5,000 - 5,000 - - 6,120 - 6,120 5,000 6,120 5,000 6,120 Mr A G Rydge Mr A J Clark Mr M E Bleach None of the directors or entities in which the directors have a beneficial interest, hold preference shares. Mr Rydge also has a non-beneficial interest in 37,941 (2019: 37,941) preference shares by virtue of his directorship of Event Hospitality & Entertainment Limited. No options were granted over unissued ordinary shares in the Company to any officer of the Company during or since the end of the financial year and at the date of this report there are no unissued ordinary shares under option. Indemnification of officers The Company has agreed to indemnify the current directors and company secretary of the Company and its controlled entities for all liabilities to another person (other than the Company or a related body corporate) that may arise from their position, except where the liability arises out of conduct involving a lack of good faith. The agreements stipulate that the Company will meet the full amount of any such liabilities, including costs and expenses. No premium has been paid, or agreed to be paid, for insurance against a current or former officer’s or auditor’s liability for legal costs. Non-audit services During the year KPMG, the Company’s auditor, has performed certain other services in addition to its statutory duties. The Directors are satisfied that: (a) the non-audit services provided during the financial year by KPMG as the external auditor were compatible with the general standard of independence for auditors imposed by the Corporations Act 2001; and (b) any non-audit services provided during the financial year by KPMG as the external auditor did not compromise the auditor independence requirements of the Corporations Act 2001 for the following reasons: (i) the nature and scope of any non-audit service provided is reviewed and approved by the Audit and Risk Committee to ensure that they do not adversely affect the integrity and objectivity of the auditor; and (ii) the amount of non-audit fees paid to KPMG in comparison to the amount of audit fees are considered to be significantly within an appropriate threshold to maintain auditor independence. 9 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 directors’ report FOR THE YEAR ENDED 30 JUNE 2020 Non-audit services (continued) Details of amounts paid to KPMG for audit and non-audit services provided during the year are: Statutory Audit - Audit and review of financial reports Services other than statutory audit - Taxation compliance services 2020 $ 2019 $ 63,089 60,368 30,800 93,889 12,100 72,468 Lead auditor’s independence declaration A copy of the auditor’s independence declaration as required under Section 307C of the Corporations Act 2001 is included after the financial statements. Parent entity financial statements The Group has applied amendments to the Corporations Act (2001) that remove the requirement for the Group to lodge parent entity financial statements. Parent entity financial statements have been replaced by the specific parent entity disclosures detailed in note 6-6 to the consolidated entity’s financial statements. Rounding off The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 and in accordance with that legislative instrument amounts in the financial report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. Signed in accordance with a resolution of the Directors at Sydney on 21 August 2020. A G RYDGE Director A J CLARK AM Director 10 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 consolidated income statement FOR THE YEAR ENDED 30 JUNE 2020 Dividends and distributions received 2-3 39,799 46,818 Note 2020 $000 2019 $000 Interest income Other income Operating revenue Administration expenses Finance costs Profit before income tax expense Income tax expense Profit for the year 360 - 465 18 40,159 47,301 (916) (12) (870) (12) 39,231 46,419 (1,116) (893) 38,115 45,526 2-4 3-4 2-5 Basic and diluted earnings per ordinary share 2-1 $1.440 $1.720 The consolidated income statement is to be read in conjunction with the notes to the financial statements set out on pages 16 to 29. 11 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 consolidated statement of comprehensive income FOR THE YEAR ENDED 30 JUNE 2020 Net profit for the year Other comprehensive income: Items that will not be reclassified to the income statement in the future: 2020 $000 2019 $000 38,115 45,526 Increase/(decrease) in fair value of investments (219,076) (23,066) Decrease/(increase) in deferred tax liability relating to change in fair value of investments 56,970 6,886 Total other comprehensive income/(loss) Total comprehensive income/(loss) for the year (162,106) (16,180) (123,991) 29,346 The consolidated statement of comprehensive income is to be read in conjunction with the notes to the financial statements set out on pages 16 to 29. 12 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 consolidated statement of financial position AS AT 30 JUNE 2020 CURRENT ASSETS Cash Receivables Investments - term deposits TOTAL CURRENT ASSETS NON-CURRENT ASSETS Investments - equities Deferred tax assets TOTAL NON-CURRENT ASSETS TOTAL ASSETS CURRENT LIABILITIES Payables Current tax liabilities TOTAL CURRENT LIABILITIES NON-CURRENT LIABILITIES Deferred tax liabilities Other financial liabilities TOTAL NON-CURRENT LIABILITIES TOTAL LIABILITIES NET ASSETS EQUITY Share capital Revaluation reserve Retained profits TOTAL EQUITY Note 2020 $000 2019 $000 6-1 3-2 3-1 3-1 2-5 3-3 2-5 2-5 3-4 4-1 4-1 21,581 1,219 2,000 24,800 2,311 3,646 20,900 26,857 731,517 945,446 22 16 731,539 945,462 756,339 972,319 119 778 897 95 476 571 102,761 159,865 166 166 102,927 160,031 103,824 160,602 652,515 811,717 20,146 20,146 263,518 425,624 368,851 365,947 652,515 811,717 The consolidated statement of financial position is to be read in conjunction with the notes to the financial statements set out on pages 16 to 29. 13 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 consolidated statement of changes in equity FOR THE YEAR ENDED 30 JUNE 2020 Year to 30 June 2020 Equity as at 30 June 2019 On Market share buy-back Dividends paid Profit for the year Other comprehensive income:- Decrease in fair value of investments Decrease in deferred tax liability relating to change in fair value of investments Other comprehensive (loss) Total comprehensive income/(loss) Share capital $000 Revaluation reserve $000 Retained earnings $000 Total $000 20,146 425,624 365,947 811,717 - - - - 20,146 425,624 - - - - - - (219,076) 56,970 (162,106) (162,106) - (35,211) 330,736 38,115 - - - - (35,211) 776,506 38,115 (219,076) 56,970 (162,106) 38,115 (123,991) Total equity as at 30 June 2020 20,146 263,518 368,851 652,515 Year to 30 June 2019 Equity as at 30 June 2018 On Market share buy-back Dividends paid Profit for the year Other comprehensive income:- Decrease in fair value of investments Decrease in deferred tax liability relating to change in fair value of investments Other comprehensive (loss) Total comprehensive income/(loss) Share capital $000 20,146 - - Revaluation reserve $000 441,804 - - 20,146 441,804 - - - - - - (23,066) 6,886 (16,180) (16,180) 425,624 Retained earnings $000 353,514 - (33,093) 320,421 45,526 - - - 45,526 365,947 Total $000 815,464 - (33,093) 782,371 45,526 (23,066) 6,886 (16,180) 29,346 811,717 Total equity as at 30 June 2019 20,146 The consolidated statement of changes in equity is to be read in conjunction with the notes to the financial statements set out on pages 16 to 29. 14 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 consolidated statement of cash flows FOR THE YEAR ENDED 30 JUNE 2020 CASH FLOWS FROM OPERATING ACTIVITIES Dividends and distributions received 42,199 48,793 Note 2020 $000 2019 $000 Interest received Other income Cash paid for operating expenses Income tax paid Income tax refunds 387 - (892) (981) 27 517 18 (853) (741) 22 NET CASH PROVIDED BY OPERATING ACTIVITIES 6-1 40,740 47,756 CASH FLOWS FROM INVESTING ACTIVITIES Proceeds from capital returns and disposal of investments Payments for acquisition of investments Proceeds from reduction/(increase) in term deposits 5,407 (10,554) 18,900 118 (8,314) (6,500) NET CASH FROM/(USED IN) INVESTING ACTIVITIES 13,753 (14,696) CASH FLOWS FROM FINANCING ACTIVITIES Dividends paid Finance costs NET CASH USED IN FINANCING ACTIVITIES Net increase/(decrease) in cash held CASH AT BEGINNING OF FINANCIAL YEAR (35,211) (33,093) (12) (12) (35,223) (33,105) 19,270 (45) 2,311 2,356 CASH AT END OF FINANCIAL YEAR 6-1 21,581 2,311 The consolidated statement of cash flows is to be read in conjunction with the notes to the financial statements set out on pages 16 to 29. 15 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 SECTION 1 – BASIS OF PREPARATION (e) New and Revised Accounting Standards Reporting Entity 1-1 Carlton Investments Limited (The Company) is a company domiciled in Australia. The address of the Company’s registered office is Level 15, 478 George Street, Sydney, NSW. The consolidated financial report of the Company as at and for the year ended 30 June 2020 comprises the Company and its subsidiaries (collectively referred to as the “Group”). The Group is a for-profit entity and operates predominately in the acquisition and long term holding of shares and units in entities listed on the Australian Securities Exchange and solely within Australia. The consolidated financial statements were authorised for issue by the Board of Directors on 21 August 2020. A number of new accounting standards and interpretations became mandatory for the current financial year ended 30 June 2020. These new accounting standards and interpretations, including IFRS 16 Leases, have not had a material effect on the Group’s consolidated financial statements. There are also a number of new accounting standards, amendments to accounting standards and interpretations, which are not yet mandatory, which have not been adopted in preparing these consolidated financial statements. From an initial assessment, it is not expected that these new and amended accounting standards and interpretations will have a significant effect on the consolidated financial statements of the Group when they are adopted. Basis of preparation 1-2 (a) Statement of compliance The consolidated financial statements are general purpose financial statements which have been prepared in accordance with Australian Accounting Standards (AASBs) adopted by the Australian Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated financial statements also comply with International Financial Reporting Standards (IFRSs) and interpretations adopted by the International Accounting Standards Board (IASB). (b) Basis of measurement The consolidated financial statements have been prepared on the historical cost basis except that investments in equities have been stated at their market values at balance date. (c) Functional currency and presentation These consolidated financial statements are presented in Australian dollars which is the Group’s functional currency. The ASIC Corporations (rounding in Financial/Directors’ Reports) Instrument 2016/191 is applicable to the Group and therefore the amounts in the financial report and Directors’ Report have been rounded off to the nearest thousand dollars, unless otherwise stated. (d) Changes in accounting policies The accounting policies adopted by the Group are consistent with those adopted during the previous corresponding financial year. 16 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 SECTION 2 – EARNINGS AND COSTS 2-1 Earnings per share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is the same as basic EPS as there are no dilutive potential ordinary shares on issue by the Company. Basic and diluted earnings per ordinary share Reconciliation of earnings used in the calculation of earnings per share: Profit as per the consolidated statement of profit 2020 $1.440 $000 38,115 Number 2019 $1.720 $000 45,526 Number Weighted average number of ordinary shares used in the calculation of basic and diluted earnings per share 26,474,675 26,474,675 2-2 Timing of recognition of income Revenues from dividends and trust distributions are recognised in the profit or loss when the right to receive payment is established, which is the date that the investment trades “ex-dividend”. Interest income comprising interest on short term deposits is recognised as it accrues. 2-3 Dividends and distributions received Note 2020 $000 2019 $000 Dividends and distributions received Dividends and distributions received from listed entities: Dividends – ordinary Dividends – special Distributions from trusts Dividends from: Investments held at year end Investments disposed of during the year 2-4 Administration expenses Directors’ fees and employee remuneration Auditor’s remuneration Rent and office service charges Other administration costs 2-5 Income tax Accounting policy 37,501 1,138 1,160 39,799 39,799 - 39,799 558 94 22 242 916 42,069 3,567 1,182 46,818 46,818 - 46,818 540 72 23 235 870 6-5 Income tax expense comprises current and deferred tax. Current or deferred tax is recognised in profit or loss except to the extent that it relates to items recognised through other comprehensive income, when it is recognised into the revaluation reserve or directly in equity. Current tax is the expected tax payable or receivable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. 17 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 2-5 Income tax (continued) Deferred tax, being predominantly capital gains tax, is provided using the balance sheet liability method, providing for temporary differences between the carrying amounts of assets for financial reporting purposes and the amounts used for taxation purposes. The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of assets, using tax rates enacted or substantially enacted at the balance date. Deferred tax assets are reviewed at each reporting date. A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the asset can be utilised. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Income tax expense Prima facie income tax expense calculated at 30% (2019: 30%) on operating profit Increase/(decrease) in income tax expense due to: Imputation gross up on dividends received Franking credits on dividends received Difference in timing of recognition of franked dividends receivable Deferred tax adjustments Other adjustments Over provision in previous year Income tax expense Income tax expense in the statement of profit or loss comprises: Current income tax expense Over provision current income tax prior year Deferred income tax expense adjustments Current tax liability Balance at beginning of year Income tax paid Current year’s income tax Over provision in previous year Balance at end of year Deferred tax liability Balance at beginning of year Increase/(decrease) in deferred tax liability on change in market value of investments recognised directly in equity Origination and reversal of timing differences Balance at end of year Represented by: Capital gains tax on unrealised investment gains Temporary differences on timing of recognition of dividend and trust distribution income Deferred tax asset Balance at beginning of year Origination and reversal of temporary differences Balance at end of year Represented by: Temporary differences - employee entitlements accrued 18 2020 $000 2019 $000 11,769 13,926 4,872 (16,241) 595 189 5 (73) 1,116 1,014 (73) 175 1,116 476 (954) 1,313 (57) 778 5,813 (19,376) 569 - 8 (47) 893 1,014 (47) (74) 893 305 (719) 944 (54) 476 159,865 166,742 (57,369) 265 102,761 102,027 734 102,761 16 6 22 22 (7,169) 292 159,865 159.396 469 159,865 9 7 16 16 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 SECTION 3 – ASSETS AND LIABILITIES 3-1 Investments Current Term deposits Note 2020 $000 2019 $000 2,000 20,900 Term deposits are carried at cost. They have been placed with major financial institutions and at 30 June 2020 had a maturity periods of 50 days (2019: 17 to 82 days) with interest rate of 1.50% (2019: 1.60% and 2.70%). The weighted average effective interest rate on term deposits for the year ended 30 June 2020 was 1.88% (2019: 2.53%). Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Credit risk on term deposits is minimised as deposits are only made with major Australian financial institutions with acceptable credit ratings determined by a recognised rating agency. Non-Current Investments and equities Shares and units held in listed entities - at fair value 6-10 731,517 945,446 Shares and units in listed entities are valued continuously at fair value. Inputs used to determine fair value are the unadjusted last-sale price, last-bid price and last-sell price quoted on the Australian Securities Exchange at balance date. Fair value is determined at a value within the quoted bid/sell price spread with most investments being valued at the quoted last- sale price. As the inputs used to determine the fair value of shares and units in listed entities are prices quoted in an active market, being the Australian Securities Exchange, values are categorised within Level 1 of the fair value hierarchy of measurement under Accounting Standards AASB 13. Any change in fair value of shares and units in listed entities is recognised, through the Statement of Comprehensive Income, directly in equity. During the year to 30 June 2020 investments were acquired for consideration of $10,554,000 (2019: $8,314,000). Proceeds from disposal of investments in the year to 30 June 2020 totalled $5,106,000 (2019: $5,000). Proceeds from capital returns during the year to 30 June 2020 were $301,000 (2019: $113,000). The second six months of the 30 June 2020 financial year has seen market values for most of the Group’s investments fall with the outbreak of the COVID-19 pandemic impacting on the global and Australian investment markets. During the second six month period the market value of the group’s investments fell by 25.2%. The group is not directly exposed to interest or currency risk through its equity investments. The only individual, material investment in a listed equity, that is neither a subsidiary nor an interest in an associate or joint venture accounted for using the equity method, is: Name Principal Activities Ownership Carrying Amount Dividends Received 2020 % 2019 % 2020 $000 2019 $000 2020 $000 2019 $000 Event Hospitality & Entertainment Limited Entertainment, hospitality, tourism and leisure 19.1 19.1 258,916 384,834 16,009 16,009 19 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 3-2 Receivables Current Dividends and interest receivable 3-3 Payables Current Other creditors and accruals The consolidated entity’s exposure to liquidity risk related to creditors is disclosed in note 5-2. 3-4 Other financial liabilities Non-Current Cumulative preference shares 2020 $000 2019 $000 1,219 3,646 119 95 166 166 82,978 (2019: 82,978) 7% cumulative preference shares fully paid Holders of preference shares are entitled to receive a fixed cumulative preferential dividend at the rate of 7% per annum on capital paid up of $2 per existing preference share. In the event of a winding up of the Company, preference shareholders are entitled to the capital and all arrears of dividends up to the date of the commencement of the winding up paid off in priority to any payment of capital on the ordinary shares. Holders of preference shares may attend and speak at general meetings but do not have a right to vote except where at the date of the meeting any dividend or part of a dividend is in arrears or on matters which directly or indirectly affect the rights attaching to the preference shares. The preference shares when issued were not classified as redeemable. Dividends on these preference shares are recorded as a finance cost for accounting purposes. Final dividend (7 cents per preference share paid on 23 September 2019) Interim dividend (7 cents per preference share paid on 23 March 2020) Dividends paid were franked at a tax rate of 30%. 6 6 12 6 6 12 20 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 SECTION 4 – SHARE CAPITAL, RESERVES AND DIVIDENDS PAID 4-1 Share capital and reserves Issued and paid up capital 26,474,675 (2019: 26,474,675) ordinary shares fully paid 20,146 20,146 2020 $000 2019 $000 Movements in ordinary share capital Balance at the beginning of the financial year On market share buy-back – nil Balance at the end of the financial year 20,146 - 20,146 20,146 - 20,146 On 14 November 2001 the Company announced an On Market Buy Back of up to 2,500,000 of the Company’s ordinary shares. This Buy-Back has been extended until 28 November 2020. There were no shares bought back during the year ended 30 June 2020 (2019: Nil). At 30 June 2020 the cumulative number of shares bought back since 14 November 2001 is 806,612 at a cost of $10,700,000. The Company does not have authorised capital or par value in respect of its issued shares. All issued shares are fully paid. Holders of ordinary shares are entitled to receive dividends as declared from time to time and are entitled to one vote per ordinary share at shareholders’ meetings. In the event of a winding up of the Company, ordinary shareholders rank after preference shareholders and creditors and are fully entitled to any proceeds of liquidation. Revaluation reserve Revaluation reserve 263,518 425,624 The revaluation reserve comprises the cumulative change in the fair value of equity investments net of the estimated capital gains tax relating thereto. 4-2 Dividends The following dividends were declared and paid by the Company: Declared and paid during the year 2019 Final – ordinary share – ordinary share special 2020 Interim – ordinary share Total Cents per share Total amount $000 Franked/ unfranked Date of payment 70.0 8.0 78.0 55.0 18,532 2,118 20,650 14,561 35,211 Franked 23 September 2019 Franked 23 September 2019 Franked 23 March 2020 Franked dividends declared or paid during the year were franked at the tax rate of 30%. Declared after the end of the financial year: Final – ordinary share 56.0 14,826 Franked 21 September 2020 The financial effect of the final dividend has not been brought to account in the financial statements for the year ended 30 June 2020 and will be recognised in subsequent financial reports. 21 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 4-2 Dividends (continued) Dividend franking account 30% franking credits available to shareholders of Carlton Investments Limited for subsequent financial years 2020 $000 2019 $000 68,772 69,022 The above available amount is based on the balance of the dividend franking account at year-end adjusted for franking credits that will arise from the payment of the current tax liability. In addition to the above amount, there are franking credits available in subsidiary entities at 30 June 2020 totalling $7,673,000 (2019: $5,025,000). The ability to utilise the franking credits is dependent upon there being sufficient available profits to declare dividends. The impact on the dividend franking account of dividends proposed after the balance date but not recognised as a liability is to reduce it by $6,356,000 (2019: $8,853,000). 4-3 Capital management The Board manages the Group’s capital base so as to maintain investors’ value, market confidence and to sustain future growth of the business. In addition to endeavouring to achieve an increase in the value of capital invested by ordinary shareholders, the Board aims to be able to pay dividends which can be increased over future years. The actual level of dividends payable is dependent upon the level of income the Group receives from its investments. Capital management initiatives undertaken when appropriate from time to time include a share purchase plan, a dividend reinvestment plan and on market share buy-backs. The Group’s capital consists of total shareholders’ equity. Changes in the capital base are shown in the Consolidated Statement of Changes in Equity. SECTION 5 – RISK 5-1 Critical accounting estimates and judgements The preparation of the financial report requires management to make judgements, estimates and assumptions that affect the application of accounting policies and reported amounts of assets and liabilities, income and expenses. Actual results may differ from these estimates. A deferred tax liability has been recognised, in accordance with the requirements of Accounting Standards, in respect of Capital Gains Tax calculated on the unrealised gains applicable to listed equity investments. It is the intention of Group entities to hold these investments for the long term and not to dispose of them. Accordingly, the deferred tax liability may not be realised at the amount disclosed in the financial statements and may also be affected by subsequent changes in tax legislation in regard to capital gains. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised and in any future periods affected. 5-2 Financial risk management The Board of Directors has overall responsibility for the establishment and oversight of the risk management framework. Risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The risks associated with the Group’s assets fall into three categories, namely, credit risk, liquidity risk and market risk. Market risk includes interest rate risk, currency risk and other price risk. The Group is not currently materially exposed to interest rate risk as its cash and term deposits are short term and for a fixed interest rate. There is no material direct exposure to currency risk as almost all financial assets and liabilities are denominated in Australian dollars. Credit risk Credit risk is the risk of financial loss to the Group if a counter-party to a financial instrument fails to meet its contractual obligations and arises principally from the Group’s receivables from investment securities and term deposits. For the Company it arises from receivables due from subsidiaries. The credit risk with respect to term deposits is referred to in note 3-1. None of these assets are considered to be impaired. 22 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 5-2 Financial risk management (continued) Liquidity risk Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another asset. The only financial liabilities the Group has are for tax payable from time to time to the Australian Taxation Office, administration cost payables and payables for the purchases of investments. Cash flow forecasts are prepared on a monthly basis allowing for dividends and interest to be received, movements in term deposits, investments to be purchased, dividends to be paid and other outgoings. If the level of dividends or interest to be received were to reduce significantly the Group can reduce its planned acquisition of investments so that adequate liquid funds are available to meet any liabilities. Investments in listed entities could readily be sold on the Australian Securities Exchange to generate required funds. Market risk Market risk is the risk that changes in market prices, such as interest rates and equity prices will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. As the Group invests in equities listed on the Australian Securities Exchange there will always be a market risk as the price of the equities is subject to fluctuation. Equity investments represent 96.7% of total assets at 30 June 2020 (2019: 97.2%). If the market prices applicable to the listed equity portfolio were to fall by 5% or 10%, and if this fall was spread equally over all assets in the portfolio at 30 June 2020, total equity represented by share capital, reserves and retained profits would reduce by $27,602,000 and $55,203,000 respectively after tax. A major part of the Group’s income consists of dividends and distributions received from its investments. The level of these dividends and distributions fluctuates depending on the profits earned by the entities in which investments are held. There is a risk that in downturns in the economy the level of these profits will fall and consequently may affect dividends and distributions received. The portfolio of listed equity investments is spread over a number of market sectors so as to reduce the market risk of a major fall in a particular sector. Details of investments held and the relevant market sectors are included in note 6-10. SECTION 6 – OTHER INFORMATION 6-1 Cash flow information (i) Reconciliation of cash For the purposes of the Statements of Cash Flows, cash comprises of cash on hand and call bank deposits with original maturities of three months or less. Cash at the end of the financial year as shown on the Statements of Cash Flows is reconciled to the items in the consolidated statement of financial position as follows: Cash (ii) Reconciliation of profit after income tax to net cash provided by operating activities Profit for the year as per the consolidated statement of profit or loss Finance costs Net cash provided by operating activities before changes in assets and liabilities Increase/(decrease) in current tax payable (Decrease)/increase in deferred income tax Increase/(decrease) in other creditors and provisions Decrease/(increase) in receivables Net cash provided by operating activities 2020 $000 21,581 38,115 12 38,127 268 (106) 24 2,427 40,740 2019 $000 2,311 45,526 12 45,538 171 3 17 2,027 47,756 23 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-2 Related parties (a) Key management personnel compensation Directors and the company secretary / chief financial officer do not receive any bonuses, non-cash benefits or the granting of options over shares in the Company. Their only remuneration is by way of fees and salary respectively, together with the Superannuation Guarantee levy. The key management personnel compensation comprised: Short-term: - Base emolument - Leave entitlements movements Post-employment: - Superannuation relating to base emoluments 2020 $ 2019 $ 419,315 14,948 48,685 482,948 407,009 13,814 47,991 468,814 Apart from details disclosed in this note, no director has entered into a material contract with the Company or the Group since the end of the previous financial year, and there were no material contracts involving directors’ interests existing at 30 June 2020. (b) Other related party transactions in respect of the Company Investments in controlled entities Class of Share Interest Held Controlled Entities Carlton Hotel Limited Carlton Hotel Limited Eneber Investment Company Limited The Manly Hotels Pty Limited Amounts receivable from controlled entities Inter-Company loans receivable Non-Current Preference Ordinary Ordinary Ordinary 2020 % 100 100 100 100 The Company 2020 $000 2019 % 100 100 100 100 2019 $000 219,715 239,320 The amounts due to the Company are non-interest bearing and are at call. Receipt of payment is not expected within twelve months and therefore the balance due is disclosed as non-current in the parent entity disclosure in note 6-6. Carlton Investments Limited has undertaken not to require repayment of all or part of the amounts owing to it by the controlled entities before 31 July 2025 if repayment would result in the controlled entities not having sufficient funds to pay their other debts as and when they fall due. Rent of premises Rent and office service charges totalling $21,675 (2019: $22,954) were paid to an entity which is controlled by a listed public company of which a director of the Company is also a director. Rent and office service charges are paid monthly at commercial rates. 24 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-2 Related parties (continued) Management fees The Company provided accounting, administrative and other services during the year to its controlled entities for a management fee of $1,004,000 (2019: $956,000). The management fees are determined using costs incurred by the Company, plus a mark-up of 10%, and are apportioned between each controlled based upon investment portfolio market values. These management fees eliminate on group consolidation. Transactions eliminated on consolidation The balances and effects of transactions between controlled entities have been eliminated in the consolidated financial statements. 6-3 Financing facilities The Company has not negotiated any financing facilities. 6-4 Investment transactions The total number of transactions in securities that occurred during the financial year was 18 (2019: 11). The total brokerage paid on these transactions was $30,670 (2019: $24,543). 6-5 Auditor’s remuneration Amounts paid or due and payable for: Audit services: KPMG Audit and review of financial reports Other services: KPMG Taxation services - Compliance 2020 $ 2019 $ 63,089 60,368 30,800 93,889 12,100 72,468 6-6 Parent entity disclosures As at, and throughout, the financial year ended 30 June 2020 the immediate parent entity of the Group was Carlton Investments Limited. Result of Parent Entity Profit for the year Other comprehensive income Total comprehensive income for the year Financial position of parent entity at year end Current assets Total assets Current liabilities Total liabilities Net assets Total equity of parent entity comprising of: Share capital Retained profits Total equity 2020 $000 2019 $000 34,630 - 34,630 21,581 246,793 603 769 35,868 - 35,868 2,310 247,121 338 504 246,024 246,617 20,146 225,878 246,024 20,146 226,471 246,617 25 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-7 Operating segments The Group operates only in Australia, investing predominantly in Australian listed securities and has no reportable segments. 6-8 Deed of cross guarantee Pursuant to ASIC Class Order 98/1418 (as amended) dated 13 August 1998, the wholly-owned controlled entities named below are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports and directors’ reports. It is a condition of the Class Order that the Company and each of the controlled entities enter into a Deed of Cross Guarantee. The effect of the Deed is that the Company guarantees to each creditor payment in full of any debt in the event of winding up of any of the controlled entities under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The controlled entities have also given similar guarantees in the event that the Company is wound up. The controlled entities subject to the Deed are Carlton Hotel Limited, The Manly Hotels Pty Limited and Eneber Investment Company Limited. There are no controlled entities that are not party to the Deed. The consolidated income statement, the consolidated statement of comprehensive income and the consolidated statement of financial position, comprising the Company and controlled entities which are party to the Deed, after eliminating all transactions between those entities at 30 June 2020, are set out on pages 11, 12 and 13 of the financial statements. 6-9 Events subsequent to reporting date For final dividends declared after 30 June 2020 refer note 4-2. 26 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-10 Investments in listed equities valued at fair value through other comprehensive income SECTOR CONSUMER DISCRETIONARY Media Event Hospitality & Entertainment Ltd Seven West Media Ltd Nine Entertainment Co Holdings Ltd HT & E Limited NZME Limited Consumer Services Tabcorp Holdings Ltd The Star Entertainment Group Limited G8 Education Limited Ardent Leisure Group Limited Crown Resorts Limited FINANCIALS Banks National Australia Bank Limited Westpac Banking Corporation Limited Commonwealth Bank of Australia Ltd ANZ Banking Group Limited Bank of Queensland Limited Bendigo & Adelaide Bank Limited Virgin Money UK plc (formerly CYBG plc) Capital Markets Perpetual Limited Multi-Sector Holdings Gowing Bros Limited Insurance Suncorp Group Limited AMP Limited Medibank Private Limited Diversified Financial Services ASX Limited WAM Capital Limited Milton Corporation Limited Macquarie Group Limited Australian United Investments Limited Australian Foundation Co. Limited Pendal Group Limited Challenger Limited Argo Investments Limited Real Estate Management & Development Lend Lease Corporation Ltd Real Estate Investment Trusts (REITS) Cromwell Property Group Mirvac Ltd Stockland 2020 2019 No of shares or units $000 % No of shares or units $000 % 30,786,687 1,040,000 72,540 41,027 29,630 776,541 369,000 361,000 386,224 48,804 258,916 95 100 49 7 259,167 35.43 2,625 1,048 319 151 472 4,615 0.63 30,786,687 1,040,000 72,540 41,027 29,630 663,541 369,000 236,000 386,224 48,804 384,834 484 136 72 15 385,541 40.78 2,953 1,520 715 406 608 6,202 0.65 263,782 36.06 391,743 41.43 2,201,067 1,784,093 573,183 1,004,298 1,431,667 1,117,147 549,206 40,103 32,024 39,790 18,720 8,833 7,831 909 2,196,827 1,781,613 573,183 1,004,298 1,423,413 1,117,147 549,206 58,699 50,527 47,448 28,331 13,565 12,937 1,878 148,210 20.26 213,385 22.57 423,973 12,579 1.72 423,973 17,909 1.90 4,701,144 6,817 0.93 4,701,144 11,706 1.24 194,459 170,000 185,000 55,916 1,322,000 599,060 23,270 210,938 245,167 69,952 60,451 18,118 1,795 315 553 2,663 4,774 2,406 2,450 2,760 1,698 1,493 418 267 130 16,396 0.37 2.24 200,266 170,000 185,000 55,916 1,322,000 599,060 23,270 210,938 245,167 - 60,451 18,118 2,698 360 646 3,704 4,606 2,670 2,822 2,918 1,915 1,532 - 401 147 17,011 0.39 1.80 498,039 6,161 0.84 494,978 6,435 0.68 1,302,253 426,575 96,053 1,172 926 318 2,416 0.33 195,242 26.69 1,302,253 426,575 96,053 1,504 1,335 401 3,240 0.34 273,390 28.92 27 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-10 Investments in listed equities valued at fair value through other comprehensive income (continued) 2020 2019 No of shares or units $000 % No of shares or units $000 % 884,146 156,760 800,446 938,000 164,057 471,711 100,000 31,670 15,356 1,633 12,991 1,401 63,051 5,514 793 6,307 8.62 0.86 847,646 138,810 800,446 791,000 43,057 471,711 100,000 34,889 14,403 2,545 7,135 464 59,436 5,684 1,086 6,770 6.29 0.71 8,508 268 0.04 6,164 197 0.02 541,764 625,362 1,163,826 280,000 298,415 235,000 853,133 1,258,507 456,761 274,795 280,000 112,000 112,000 609,410 609,410 144,000 17,000 1,139,489 1,594,352 262,428 100,000 9,015 - 9,015 17,210 4,411 890 1,030 865 24,406 1.23 3.34 12,353 3,197 15,550 2.12 118,597 16.21 3,956 2,880 896 461 460 8,653 27,320 10,464 5,368 43,152 1.18 5.90 1,325 53,130 0.18 7.26 6,654 8,450 5,682 2,932 23,718 3.24 541,764 541,764 625,362 1,163,826 280,000 298,415 235,000 853,133 1,573,133 456,761 274,795 280,000 112,000 - 609,410 609,410 144,000 17,000 1,139,489 1,069,352 199,928 100,000 10,982 5,049 16,031 11,694 5,959 1,131 1,391 919 21,094 1.70 2.23 13,812 5,097 18,909 2.00 122,437 12.95 4,668 4,100 1,126 893 - 10,787 22,036 8,136 4,785 34,957 1.14 3.70 1,528 47,272 0.16 5.00 8,330 7,571 7,269 2,475 25,645 2.71 SECTOR MATERIALS Diversified Metals & Mining BHP Group Limited Rio Tinto Limited South32 Limited Fortescue Metals Group Limited Iluka Resources Limited Steel Bluescope Steel Limited Sims Metal Management Limited Gold Newcrest Mining Limited Chemicals Orica Limited Dulux Group Limited Construction Materials James Hardie Industries plc Boral Limited Adbri Limited (formerly Adelaide Brighton Ltd) Fletcher Building Limited CSR Limited Containers & Packaging Amcor plc Orora Limited CONSUMER STAPLES Food, Beverage & Tobacco Coca-Cola Amatil Limited Treasury Wine Estates Limited Inghams Group Limited Graincorp Limited United Malt Group Limited Food & Staples Retailing Wesfarmers Limited Coles Group Limited Woolworths Limited Household & Personal Products Blackmores Limited ENERGY Oil, Gas & Consumable Fuels Origin Energy Limited Santos Limited Woodside Petroleum Limited Ampol Limited (formerly Caltex Australia Limited) 28 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 notes to the consolidated financial statements FOR THE YEAR ENDED 30 JUNE 2020 6-10 Investments in listed equities valued at fair value through other comprehensive income (continued) SECTOR UTILITIES Gas Utilities APA Group Multi-Utilities AGL Energy Limited INFORMATION TECHNOLOGY Software & Services Computershare Limited Link Administration Holdings Limited Domain Holdings Australia Limited TELECOMMUNICATION SERVICES Telstra Corporation Limited INDUSTRIALS Capital Goods CIMIC Group Limited Seven Group Holdings Limited Spicers Limited Commercial & Professional Services IPH Limited Brambles Limited Ovato Limited Left Field Printing Group Limited Transportation Sydney Airport Limited Transurban Group Atlas Arteria HEALTH CARE Health Care Equipment & Services Ansell Limited Sonic Healthcare Limited Healius Limited Estia Health Limited Japara Healthcare Limited Regis Healthcare Ltd 2020 2019 No of shares or units $000 % No of shares or units $000 % 959,991 10,685 1.46 959,991 10,368 1.10 1,627,757 27,753 38,438 3.80 5.26 1,627,757 32,571 42,939 3.44 4.54 20,000 207,000 20,000 265 849 67 1,181 0.16 20,000 - 20,000 324 - 64 388 0.04 4,333,600 13,564 1.86 4,333,600 16,684 1.77 60,765 100,000 - 141,000 45,758 100,000 9,072 632,029 179,635 131,776 222,854 82,370 303,945 160,000 240,000 113,000 1,466 1,718 - 3,184 1,052 497 1 1 1,551 3,584 2,538 872 6,994 11,729 8,179 2,507 927 246 118 159 12,136 0.44 0.21 0.95 1.60 1.66 60,765 100,000 721,864 141,000 45,758 100,000 9,072 632,029 179,635 105,633 222,854 82,370 303,945 160,000 240,000 113,000 2,720 1,849 50 4,619 1,052 589 7 1 1,649 5,082 2,648 827 8,557 14,825 5,984 2,232 918 422 270 297 10,123 0.49 0.17 0.91 1.57 1.07 TOTAL 731,517 100.00 945,446 100.00 29 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 declarations DIRECTORS’ DECLARATION 1. In the opinion of the Directors of Carlton Investments Limited (“the Company”): (a) the consolidated financial statements and notes that are set out on pages 11 to 29, and the Remuneration Report on pages 8 and 9, are in accordance with the Corporations Act 2001, including: (i) giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its performance for the financial year ended on that date; and (ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; (b) there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due and payable; (c) there are reasonable grounds to believe that the Company and the Group entities identified in note 6-2 will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the Deed of Cross Guarantee between the Company and those Group entities pursuant to ASIC Class Order 98/1418. 2. The directors have been given the declarations required by Section 295A of the Corporations Act 2001 from the chief financial officer for the financial year ended 30 June 2020. 3. The directors draw attention to note 1-2 to the consolidated financial statements, which include a statement of compliance with International Financial Reporting Standards. Signed in accordance with a resolution of the Directors A G RYDGE Director A J CLARK AM Director Dated at Sydney 21 August 2020 30 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 declarations LEAD AUDITOR’S INDEPENDENCE DECLARATION UNDER SECTION 307C OF THE CORPORATIONS ACT 2001 To the directors of Carlton Investments Limited I declare that, to the best of my knowledge and belief, in relation to the audit of Carlton Investments Limited for the financial year ended 30 June 2020 there have been: i. no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in relation to the audit; and ii. no contraventions of any applicable code of professional conduct in relation to the audit. KPMG Sydney, Australia 21 August 2020 Duncan McLennan Partner 31 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 Independent Auditor’s Report To the shareholders of Carlton Investments Limited Report on the audit of the Financial Report Opinion We have audited the Financial Report of Carlton Investments Limited (the Company). In our opinion, the accompanying Financial Report of the Company is in accordance with the Corporations Act 2001, including: • giving a true and fair view of the Group’s financial position as at 30 June 2020 and of its financial performance for the year ended on that date; and The Financial Report comprises: • Consolidated statement of financial position as at 30 June 2020 • Consolidated income statement, Consolidated statement of comprehensive income, Consolidated statement of changes in equity, and Consolidated statement of cash flows for the year then ended • Notes including a summary of significant accounting • complying with Australian Accounting Standards and the policies Corporations Regulations 2001. • Directors’ Declaration. The Group consists of the Company and the entities it controlled at the year-end or from time to time during the financial year. Basis for opinion We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Our responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of the Financial Report section of our report. We are independent of the Group in accordance with the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in Australia. We have fulfilled our other ethical responsibilities in accordance with the Code. Key Audit Matters Key Audit Matters are those matters that, in our professional judgement, were of most significance in our audit of the Financial Report of the current period. These matters were addressed in the context of our audit of the Financial Report as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. 32 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 Valuation of listed equity investments ($731,517,000) Refer to Note 3-1 to the financial report The key audit matter How the matter was addressed in our audit Valuation of investments in listed equities is a key audit matter due to the: • Size of the Group’s portfolio of listed equities. These investments represent 97% of the Group’s total assets at year end; • Importance of the performance of these investments in driving the Group’s operating revenue and capital performance, as reported in the Financial Report; and As a result, this was the area with the greatest effect on our overall audit strategy and allocation of resources in planning and performing our audit. Our procedures included: • We assessed the appropriateness of the accounting policies applied by the Group, including those relevant to the fair value of investments, against the requirements of the accounting standards. • We checked the existence of a sample of investments being the ownership and quantity held to external independent share registry electronic records as at 30 June 2020; • We checked the valuation of a sample of investments, as recorded in the general ledger, to externally quoted market prices from relevant stock exchanges on the 30 June 2020; • We evaluated the Group’s disclosures of investments, using our understanding obtained from our testing, against the requirements of the accounting standards. Other Information Other Information is financial and non-financial information in Carlton Investments Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s Report. The Directors are responsible for the Other Information. Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not express an audit opinion or any form of assurance conclusion thereon, with the exception of the Remuneration Report and our related assurance opinion. In connection with our audit of the Financial Report, our responsibility is to read the Other Information. In doing so, we consider whether the Other Information is materially inconsistent with the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially misstated. We are required to report if we conclude that there is a material misstatement of this Other Information, and based on the work we have performed on the Other Information that we obtained prior to the date of this Auditor’s Report we have nothing to report. Responsibilities of Directors for the Financial Report The Directors are responsible for: • preparing the Financial Report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001; • implementing necessary internal control to enable the preparation of a Financial Report that gives a true and fair view and is free from material misstatement, whether due to fraud or error; and • assessing the Group’s ability to continue as a going concern and whether the use of the going concern basis of accounting is appropriate. This includes disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless they either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so. 33 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 Auditor’s responsibilities for the audit of the Financial Report Our objective is: • to obtain reasonable assurance about whether the Financial Report as a whole is free from material misstatement, whether due to fraud or error; and • to issue an Auditor’s Report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error. They are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of this Financial Report. A further description of our responsibilities for the audit of the Financial Report is located at the Auditing and Assurance Standards Board website at: http://www.auasb.gov.au/auditors_responsibilities/ar1pdf. This description forms part of our Auditor’s Report. Report on the Remuneration Report Opinion In our opinion, the Remuneration Report of Carlton Investments Limited for the year ended 30 June 2020, complies with Section 300A of the Corporations Act 2001. Director’s responsibilities The Directors of the Company are responsible for the preparation and presentation of the Remuneration Report in accordance with Section 300A of the Corporations Act 2001. Our responsibilities We have audited the Remuneration Report included in pages 8 to 9 of the Directors’ report for the year ended 30 June 2020. Our responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. KPMG Sydney, Australia 21 August 2020 Duncan McLennan Partner 34 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 securities exchange requirements FOR THE YEAR ENDED 30 JUNE 2020 DETAILS OF SHAREHOLDINGS AS AT 21 AUGUST 2020 SHAREHOLDERS (Ordinary Shares) VOTING RIGHTS: 1 Vote for each Ordinary Shareholder POLL: One vote for each fully paid ordinary share held SHAREHOLDERS (7% Cumulative Preference Shares) VOTING RIGHTS: Restricted - Subject to Article 9 SUBSTANTIAL SHAREHOLDERS - ORDINARY SHARES ENBEEAR PTY LIMITED * Includes associates’ holdings 16,066,476* SUBSTANTIAL SHAREHOLDERS - PREFERENCE SHARES EVENT HOSPITALITY & ENTERTAINMENT LIMITED 37,941 DISTRIBUTION OF SHAREHOLDERS Category Ordinary 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 – 100,000 100,001 & Over No. of Shareholders 1,363 1,005 212 177 13 No. of Shares 576,428 2,440,881 1,513,841 3,980,879 17,962,646 2,770 26,474,675 Category Preference 1 – 1,000 1,001 – 5,000 5,001 – 10,000 10,001 & Over No. of Shareholders 31 4 3 2 40 20 Number of Ordinary Shareholders holding less than a marketable parcel 121 Number of Preference Shareholders holding less than a marketable parcel TWENTY LARGEST ORDINARY SHAREHOLDERS TWENTY LARGEST PREFERENCE SHAREHOLDERS Enbeear Pty Limited Alphoeb Pty Limited Rydge A G 1. 2. 3. 4. Milton Corporation Limited 5. 6. 7. 8. 9. 10. Marlen Pty Limited 11. Ravenscourt Proprietary Limited 12. Charles and Cornelia Goode Foundation Pty T N Phillips Investments Pty Limited Somoke Pty Ltd (Pulman Super Fund A/C) Gowing Bros Limited A.J Dixon Pty Ltd (Super Fund A/C) HSBC Custody Nominees (Australia) Limited Ltd (CCG Foundation A/C) 13. A & M Dixon Investments Pty Ltd 14. Govett Investments Pty Ltd 15. Hamilton RS 16. Phillips JN 17. A.C.N. 009 757 948 Pty Ltd 18. Aygeear Pty Limited 19. Mythia Pty Ltd (Mythia Family A/C) 20. Phillips J N & Aust Executor Trustees (Estate T N Phillips A/C) No. of shares held 13,351,639 1,415,231 1,214,360 356,778 245,000 211,349 206,224 187,457 186,543 176,785 165,000 136,000 100,280 98,046 96,523 93,168 86,164 85,246 80,779 % of capital held 50.4 5.4 4.6 1.4 0.9 0.8 0.8 0.7 0.7 0.6 0.6 0.5 0.4 0.4 0.4 0.4 0.3 0.3 0.3 76,698 18,569,270 0.3 70.2 1. Event Hospitality & Entertainment Ltd 2. Morton IE & DL (Debian Super Fund A/C) 3. Wilcorp No 41 Pty Limited 4. 5. Winpar Holdings Limited 6. 7. Green A J Cameron W R Seven Bob Investments Pty Ltd (RF Cameron Super Fund A/C) Neild D R G 8. 9. Cameron A D 10. Elkington Dr G B 11. Turner A H 12. Fitzharris J M 13. Hallworth G T 14. Cameron K V M 15. Elkington M 16. Crawley D E 17. Lukins N L 18. Gowing J E 19. Morton I E 20. Lamproglou J Issued Preference Shares 26,474,675 Issued Preference Shares No. of shares held 37,941 12,516 6,010 5,819 5,746 2,127 1,700 1,500 1,300 1,000 834 833 800 750 585 534 466 300 300 250 81,311 82,978 No. of Shares 8,319 6,627 17,575 50,457 82,978 % of capital held 45.7 15.1 7.2 7.0 6.9 2.6 2.0 1.8 1.6 1.2 1.0 1.0 1.0 0.9 0.7 0.6 0.6 0.4 0.4 0.3 98.0 35 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 ordinary dividends and share issues SINCE 1 JULY 2010 Date Share issue/Dividend Issue price/ Dividend rate Franking % 19/09/2010 Cash dividend 24/03/2011 Cash dividend 21/09/2011 Cash dividend 22/03/2012 Cash dividend 19/09/2012 Cash dividend 21/03/2013 Cash dividend 18/09/2013 Cash dividend 20/03/2014 Cash dividend 17/09/2014 Cash dividend 19/03/2015 Cash dividend 21/09/2015 Cash dividend 21/03/2016 Cash dividend 26/09/2016 Cash dividend 26/09/2016 Cash dividend – special 20/03/2017 Cash Dividend 25/09/2017 Cash Dividend 20/03/2018 Cash Dividend 24/09/2018 Cash Dividend 25/03/2019 Cash Dividend 23/09/2019 Cash Dividend 23/09/2019 Cash Dividend – special 23/03/2020 Cash Dividend 21/09/2020 Cash Dividend 36 $0.40 $0.30 $0.48 $0.32 $0.52 $0.34 $0.58 $0.37 $0.63 $0.43 $0.65 $0.46 $0.68 $0.07 $0.48 $0.68 $0.51 $0.70 $0.55 $0.70 $0.08 $0.55 $0.56 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 100 CARLTON INVESTMENTS LIMITED AND ITS CONTROLLED ENTITIES • ANNUAL REPORT 2020 Carlton Investments Limited ABN 85 000 020 262 Level 15, 478 George Street, Sydney NSW 2000 Telephone: (02) 9373 6732. Email: info@carltoninvestments.com.au Website: www.carltoninvestments.com.au

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