wCrown Resorts Limited Annual Report 2017ANNUAL REPORT 2017crownresorts.com.auCRL091.1 - AR17 COVERS_AW.indd 114/9/17 11:22 am Corporate Information
Directors
• John H Alexander, BA Executive Chairman
• The Honourable Helen A Coonan, BA, LLB
• Rowena Danziger, AM, BA, TC, MACE
• Andrew Demetriou, BA, BEd
• Geoffrey J Dixon
• Professor John S Horvath, AO, MB, BS (Syd), FRACP
• Michael R Johnston, BEc, CA
• Harold C Mitchell, AC
• James D Packer
Company Secretary
Mary Manos, BCom, LLB (Hons), GAICD
Crown’s registered office and principal corporate office
Level 3
Crown Towers
8 Whiteman Street
Southbank VIC 3006
Australia
Phone: +61 3 9292 8824
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Phone: 1300 659 795 (within Australia)
+61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500
Website: www.computershare.com.au
Securities Exchange Listing
Crown’s ordinary shares are listed on the Australian Securities Exchange under the code “CWN”.
Crown’s Subordinated Notes I are listed on the Australian Securities Exchange under the code “CWNHA”.
Crown’s Subordinated Notes II are listed on the Australian Securities Exchange under the code “CWNHB”.
The home exchange is Melbourne.
Website
Visit our website www.crownresorts.com.au for media releases and financial information.
Auditor
Ernst & Young
Banker
Australia and New Zealand Banking Group Limited
CROWN RESORTS LIMITED
ABN 39 125 709 953
CRL091.1 - AR17 COVERS_AW.indd 2
14/9/17 11:22 am
2
4
6
8
10
11
17
18
19
23
36
48
75
76
82
133
134
136
Corporate Information
Contents
Executive Chairman’s Message
Financial Performance
About Crown Resorts
Directors
• John H Alexander, BA Executive Chairman
• The Honourable Helen A Coonan, BA, LLB
• Rowena Danziger, AM, BA, TC, MACE
• Andrew Demetriou, BA, BEd
• Geoffrey J Dixon
• Professor John S Horvath, AO, MB, BS (Syd), FRACP
• Michael R Johnston, BEc, CA
• Harold C Mitchell, AC
• James D Packer
Crown’s Resort Portfolio
Australian Projects
Australian Resorts
International Interests
Crown Digital
Corporate Social Responsibility
Corporate Governance Statement
Directors’ Statutory Report
Company Secretary
Mary Manos, BCom, LLB (Hons), GAICD
Remuneration Report
Crown’s registered office and principal corporate office
Level 3
Crown Towers
8 Whiteman Street
Southbank VIC 3006
Australia
Financial Report
Independent Auditor’s Report
Auditor’s Independence Declaration
Phone: +61 3 9292 8824
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Phone: 1300 659 795 (within Australia)
+61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500
Website: www.computershare.com.au
Directors’ Declaration
Shareholder Information
Additional Information
Corporate Information
Inside back cover
Financial Calendar
Record date for dividend
Securities Exchange Listing
Crown’s ordinary shares are listed on the Australian Securities Exchange under the code “CWN”.
Crown’s Subordinated Notes I are listed on the Australian Securities Exchange under the code “CWNHA”.
Crown’s Subordinated Notes II are listed on the Australian Securities Exchange under the code “CWNHB”.
The home exchange is Melbourne.
Payment of final dividend 6 October 2017
Annual General Meeting
2018 Interim results
26 October 2017
February 2018
22 September 2017
Website
Visit our website www.crownresorts.com.au for media releases and financial information.
Annual General Meeting
10.00am (Melbourne time)
CROWN RESORTS LIMITED
ABN 39 125 709 953
CRL091.1 - AR17 COVERS_AW.indd 2
Auditor
Ernst & Young
Banker
Australia and New Zealand Banking Group Limited
Thursday 26 October 2017
River Room
Level 1, Crown Towers Melbourne
8 Whiteman Street
Southbank, Victoria
Crown Resorts Limited Annual Report 2017
1
14/9/17 11:22 am
Executive Chairman’s Message
Crown Resorts has delivered significant cash returns to shareholders and is now primarily
focussed on its high quality core Australian operations and development projects.
The MRE sale will enable investors and analysts to more
easily assess the value of Crown’s high quality core
Australian operations. The return from our overall
investment in MRE has generated cash returns equivalent
to approximately six times the total amount invested by
Crown.
Capital Management
Following completion of the MRE sale, Crown returned
approximately $1.1 billion of capital to shareholders via
a special dividend of 83 cents per share and the
completion of an approximately $500 million on-market
share buy-back. In addition, Crown has announced its
intention to undertake a further on-market share buy-
back of up to approximately 29.3 million shares and the
recommencement of the buy-back of Subordinated Notes
listed on the ASX under the code “CWNHA”.
Consistent with the objective of increasing cash returns
to shareholders, Crown also adopted a new dividend
policy to pay 60 cents per share on a full year basis,
subject to Crown’s financial position. For the financial
year ended 30 June 2017, Crown declared a dividend of
30 cents per share, franked to 60%, at both the half and
full year results. This brings the dividends for the year to
60 cents per share or $1.43 per share including the
special dividend paid to shareholders during the period.
Crown has significantly reduced its net debt following
receipt of the proceeds from the MRE sale and has
strengthened its balance sheet and credit profile to fund
its Australian development project pipeline.
Major Focus
Following the sale of Crown’s interest in MRE and the
decision not to proceed with the Alon Las Vegas project,
Crown is now primarily focussed on its world-class core
Australian operations and development projects.
Crown’s major focus is to improve the underlying
performance of our key Australian resorts, execute on
our existing development project pipeline and continue to
grow our digital businesses.
Crown Melbourne and Crown Perth
Normalised EBITDA from Crown’s Australian resorts was
$833.7 million, down 10.7%. This result was impacted by
the challenging Perth economy and the reduction in VIP
program play revenue in Australia, where turnover was
down 48.9% compared to the prior year.
It is with great pleasure that I present my first Annual
Report as Executive Chairman.
Crown is one of Australia’s largest entertainment groups.
Crown’s continued investment in its Australian resorts
has ensured that Crown remains one of Australia’s most
valuable tourism assets with its leading integrated resorts
in Melbourne and Perth, and construction underway on
the highly anticipated Crown Sydney Hotel Resort.
It is with this reputation that Crown attracted
approximately 31 million local and international visits
during the period and has remained the largest single-
site private sector employer in both Victoria and Western
Australia, with more than 15,600 people working at
Crown Melbourne and Crown Perth in over 700
different roles.
It has been a challenging period given the detention of
a number of current and former Crown employees in
China last October. We are pleased that all of our
employees have now been reunited with their families
and loved ones. Crown is deeply appreciative of the
support provided by the Department of Foreign Affairs
and Trade and the Australian Government, and for their
professionalism and assistance throughout the course of
the matter.
Results and Sale of Interest in Melco Resorts &
Entertainment Limited (MRE)
For the financial year ended 30 June 2017, Crown
Resorts announced a net profit of $308.9 million before
significant items, which was down 21.5% from the
previous year. This result reflects difficult trading
conditions at Crown’s Australian resorts, due primarily to
the reduction in VIP program play revenue and the
challenging economic conditions in Perth.
Crown’s net profit after significant items was
$1,866.1 million, up 96.7%. This includes the profit from
the sale of Crown’s interest in MRE (the MRE sale), which
generated proceeds of approximately $3.1 billion,
resulting in a net gain of approximately $1.7 billion. Crown
no longer holds an interest in MRE.
2
CRL091.29 - AR17 FRT_SEC_AW.indd 2
15/9/17 10:39 am
3Executive Chairman’s MessageIn response to these challenging trading conditions and the increased focus on Crown’s Australian assets, Crown simplified its organisational structure and reduced costs across the business during the second half of the year. A number of productivity and efficiency improvements were also implemented at both Crown Melbourne and Crown Perth. Crown will remain focussed on continuing to identify opportunities to deliver improved operating performance at both Australian properties.Australian ProjectsCrown is excited to have commenced construction of the Crown Sydney Hotel Resort at Barangaroo South. We are working diligently to deliver Sydney’s first six-star hotel and a landmark building of global significance on one of the world’s most beautiful harbours. Crown Sydney is expected to be completed in 2021.In Victoria, Crown and its joint venture partner, the Schiavello Group, were pleased to receive conditional planning approval in February 2017 to construct the proposed One Queensbridge project. The project includes a new 388 room luxury six-star hotel, which will be connected to Crown Melbourne by a sculptural pedestrian bridge. The project remains subject to financing and long-form agreements between Crown and the Schiavello Group.On 15 December 2016, Crown officially opened Perth’s first luxury six-star hotel, Crown Towers Perth. We believe that Crown Towers Perth, which takes the total number of guest rooms and suites at the resort to approximately 1,200, is one of the most luxurious hotels in Australia and the region and has set a new benchmark in six-star accommodation.Crown DigitalCrown’s digital businesses saw strong revenue growth and improved profitability during the year. We were pleased with the performance of Crown’s wagering and online social gaming operations which generated EBITDA of $14.8 million, compared to a loss of $5.4 million in the previous year. The assets and investments in Crown Digital are expected to provide a continued source of future growth for Crown.Crown Digital also includes Crown’s investment in Chill Gaming, a 50/50 joint venture with the founders of Wymac Gaming Solutions. Chill Gaming, whose products are in the process of being developed, will focus on innovation and providing current gaming customers with new entertaining product options.Our Commitment to CommunityCrown is a large and diverse business, serving millions of customers each year and is responsible for the employment of over 15,600 people at our Melbourne and Perth resorts. We are grateful for the efforts of all our employees and are mindful of our responsibilities to them and to the communities in which we operate. Through the Crown Resorts Foundation, we continue to set the benchmark in corporate philanthropy.This year we have continued the momentum of our award-winning Indigenous Employment Program. We have now provided over 680 Indigenous employment opportunities as we work towards our ambitious target of 2,000 by 2021. Similarly, we are proud of the progress we have made with CROWNability, our disability employment program. Our efforts in diversity and inclusion resulted in Crown Perth receiving the 2017 Employer of the Year award for Innovation at the atWork Australia awards and Crown Melbourne receiving the National Employer of the Year 2016 award from OCTEC Employment Services. While we maintain our industry leading commitment to the training and development of our employees, a particular focus of our diversity and inclusion programs this year has been addressing gender equity within our business. We are working at all levels of our business to create positive and proactive change for gender equity.We are proud of the work the Crown Resorts Foundation continues to deliver with its community partners. Currently, the Foundation is working with 115 not-for-profit community organisations to provide thousands of school students across Australia with greater access to enhanced and creative educational programs, and pathways to employment and community re-engagement.On behalf of the Board, I wish to sincerely thank you, as a valued shareholder of Crown Resorts, for your support as we continue our strategy to maximise the performance of Crown Melbourne and Crown Perth and progress our strong portfolio of future projects. John Alexander Executive Chairman, Crown Resorts LimitedCrown Resorts Limited Annual Report 2017CRL091.29 - AR17 FRT_SEC_AW.indd 315/9/17 10:39 am 4Financial PerformanceThe 2017 full year result reflected difficult trading conditions in the Australian operations, primarily due to the reduction in VIP program play revenue in Australia and softness in the Perth economy. The result also includes a net gain from the sale of Crown’s interest in Melco Resorts & Entertainment Limited, which was reported as a significant item. •Crown reported a normalised net profit after tax (NPAT) of $343.1 million for the full year ended 30 June 2017, down 15.5%. •A net gain from the sale of shares in Melco Resorts & Entertainment Limited (MRE), formerly Melco Crown Entertainment Limited, was the major component of the $1,557.2 million in significant items. •Crown’s Australian resorts normalised EBITDA declined by 10.7%, with normalised revenue down 12.7%, primarily due to the decline in VIP program play revenue, which was down 48.9%, and softness in the Perth economy. •Crown’s share of MRE’s normalised NPAT of $42.4 million was down $15.7 million or 27.0%, with Crown no longer equity accounting the investment from 1 January 2017. •A final dividend of 30 cents per share, franked to 60%, was declared bringing the full year dividend to 60 cents per share or $1.43 per share including the special dividend of 83 cents per share.Performance for the year ended 30 June 2017FY17$mFY16$m% changeNormalised revenue13,231.33,584.9(9.9%)Normalised expenditure1(2,403.3)(2,729.1)11.9%Normalised EBITDA2828.0855.8(3.3%)Normalised EBIT3531.2573.1(7.3%)Normalised NPAT4 attributable to Crown343.1406.2(15.5%)Reported NPAT before significant items5 attributable to Crown308.9393.6(21.5%)Significant items attributable to Crown1,557.2555.2180.5%Reported NPAT after significant items attributable to Crown1,866.1948.896.7%1. Normalised results have been adjusted to exclude the impact of any variance from theoretical win rate on VIP program play and significant items.2. Normalised earnings before interest, tax, depreciation and amortisation.3. Normalised earnings before interest and tax.4. Net profit after tax.5. Significant items of $1,557.2 million in the 2017 financial year, the major component of which is the net gain from the sale of shares in MRE.CRL091.29 - AR17 FRT_SEC_AW.indd 414/9/17 12:29 pm 5Crown Resorts Limited Normalised NPATAustralian Resorts Normalised EBITDAAustralian Resorts Normalised Revenue$ millionMelbournePerth05001,0001,5002,0002,5003,0003,500F17F16F15F14F13$ millionMelbournePerth02004006008001,000F17F16F15F14F13$ millionMelco Resorts & EntertainmentAustralian Resorts and Other0100200300400500600700F17F16F15F14F13EmployeesTenancyContractors8,0009,00010,00011,00012,00013,00014,00015,00016,00017,000F17F16F15F14F13Head Count Australian ResortsCrown Resorts’ Major Focus AreasImprove the underlying performance of Crown Melbourne and Crown PerthDevelop a financing solution for the proposed One Queensbridge projectDeliver the Crown Sydney project on time and on budgetContinue growing Crown Digital, including wagering and online social gamingCrown Resorts Limited Annual Report 2017CRL091.29 - AR17 FRT_SEC_AW.indd 515/9/17 10:39 am 6About Crown Resorts Crown is one of Australia’s largest entertainment groups. The group’s core businesses and investments are in the integrated resorts sector.Crown is investing in complementary assets, with online wagering business CrownBet (62% owned), online betting exchange Betfair Australasia (100% owned), US-based online social gaming business DGN Games (70% interest) and Chill Gaming (50% owned), which will focus on innovation and providing current gaming customers with new entertaining product options.Crown has commenced construction of the Crown Sydney Hotel Resort at Barangaroo South. Crown Sydney, which is expected to be completed in 2021, will be Sydney’s first six-star hotel and a landmark building of global significance on one of the world’s most beautiful harbours.Crown Melbourne’s proposed fourth hotel, One Queensbridge, is a joint venture with the Schiavello Group. The project is a landmark luxury hotel and apartment development that received conditional planning approval from the Victorian State Government in February 2017 and was recognised as a project of state significance. The project remains subject to financing and long-form agreements between Crown and the Schiavello Group.Crown Melbourne is Australia’s leading integrated resort, featuring luxury accommodation, award-winning dining, world-class gaming, conferencing, shopping and entertainment facilities.Crown Perth is one of Western Australia’s largest tourist destinations, featuring three hotels, world-class convention and gaming facilities, restaurants and bars, a 2,300-seat theatre, and shopping and entertainment facilities.Crown owns and operates two of Australia’s leading integrated resorts, Crown Melbourne and Crown Perth, which together attracted approximately 31 million visits during the period.Overseas, Crown fully owns and operates Crown Aspinalls in London, one of the high-end licensed casinos in the West End entertainment district.Crown has a strong portfolio of future projects and complementary investments, anchored by Crown Sydney, and including our wagering and online social gaming businesses.Crown also holds equity interests in Aspers Group (50%) in the United Kingdom, Nobu (20%) and Caesars (approximately 2%).CROWN RESORTS GROUPAUSTRALIAN PROJECTSCROWN DIGITALAUSTRALIAN RESORTSProposed concept renderProposed concept renderCRL091.29 - AR17 FRT_SEC_AW.indd 615/9/17 12:54 pm SIGNATURE RESTAURANTS Crown Resorts Limited Annual Report 2016AWARD-WINNING HOTELSHIGH-END RETAILLUXURY SPASEXCLUSIVE CLUBSICONIC PROJECTSLUXURY BARSWORLD-CLASS GAMING7Proposed concept renderCRL091.29 - AR17 FRT_SEC_AW.indd 714/9/17 12:29 pm Crown’s Resort Portfolio
Crown Melbourne
• Crown Melbourne is Australia’s leading integrated resort
and one of the most visited tourist destinations in
Australia with its dynamic and diverse facilities.
• It is licensed to operate 2,628 gaming machines and 540
gaming tables.
• The resort currently features three hotels: Crown
Towers Melbourne (481 guest rooms), Crown Metropol
Melbourne (658 guest rooms) and Crown Promenade
Melbourne (465 guest rooms).
• The Crown Conference Centre has 7,350 square metres
of conference and meeting facilities across three floors.
• Banqueting facilities include the Palladium’s 1,500-seat
ballroom and The Palms’ 900-seat cabaret venue.
• A broad selection of restaurants and bars are located in
the resort, including many of Melbourne’s finest.
• Crown Melbourne’s retail precinct features prestigious
designer brands and luxury retail outlets.
8
CRL091.29 - AR17 FRT_SEC_AW.indd 8
15/9/17 10:39 am
Crown Perth
• Crown Perth is one of Western Australia’s largest
tourist destinations, with an exceptional range of
entertainment and tourism experiences.
• It has approval to operate 2,500 gaming machines
and 350 gaming tables.
• The resort features three hotels: the newly-opened
Crown Towers Perth (500 guest rooms), Crown
Metropol Perth (397 guest rooms) and Crown
Promenade Perth (291 guest rooms).
• Crown Towers Perth, which opened in December
2016, features luxury hotel rooms and suites, villas,
private gaming salons, restaurants, bars, luxury retail
outlets, a resort pool and spa facilities.
• Large-scale entertainment facilities include the new
1,500-seat Crown Ballroom and 2,300-seat Crown
Theatre Perth, along with world-class convention
facilities.
• A premium selection of restaurants and bars are
located across the resort in addition to casual dining
options.
Crown Resorts Limited Annual Report 2017
9
CRL091.29 - AR17 FRT_SEC_AW.indd 9
15/9/17 10:39 am
10Australian Projects 10 Crown Sydney •Crown Sydney, located at Barangaroo South on Sydney Harbour, will be the city’s first six-star luxury resort. •Construction of Crown Sydney is underway and the resort will include 349 hotel rooms and suites, luxury apartments, signature restaurants, bars, luxury retail outlets, pool and spa facilities, conference rooms and VIP gaming facilities. •Crown Sydney is expected to be completed in 2021.One Queensbridge •One Queensbridge, a joint venture with the Schiavello Group, is a proposed fourth hotel development to meet tourism demand at Crown Melbourne. •The project has received conditional planning approval to include a 388 room six-star hotel and approximately 700 luxury apartments. •Located on a site adjacent to Crown Melbourne, the new hotel will be connected to Crown Melbourne by a sculptural pedestrian bridge spanning Queensbridge Street. •The project remains subject to financing and long-form agreements between Crown and the Schiavello Group.50% equity interestProposed concept renderProposed concept render100% ownedCRL091.29 - AR17 FRT_SEC_AW.indd 1014/9/17 12:29 pm 11Crown’s Australian operations’ full year result reflected difficult trading conditions. Main floor gaming revenue decreased by 1.4% while non-gaming revenue increased by 6.5%. VIP program play turnover in Australia of $33.3 billion was down 48.9% on the prior year. Business conditions for Crown Melbourne were steady during the period, however Crown Perth was impacted by continued softness in the Western Australian economy. Normalised EBITDA decreased by 10.7% for Crown’s Australian resorts, primarily due to the reduction in VIP program play revenue in Australia.Despite declining revenues, margin improvement was achieved through cost reduction, a significant program of productivity and efficiency improvements, as well as a change in the mix of business, particularly in the second half, with the normalised operating margin at both Australian resorts improving on the prior year.Crown’s Australian resorts are some of the finest resorts in the world and continue to attract a growing share of visitors. With most of the major capital expenditure projects complete in Melbourne and Perth, the future capital expenditure profile predominantly relates to the construction of Crown Sydney. In November 2016, Crown launched the Crown Rewards loyalty program, integrated across Crown Melbourne, Crown Perth and CrownBet. The program rewards members with a range of offers, including invitations to special events and other unique experiences. The loyalty program membership base continues to grow, assisted by activities surrounding the new program launch.Crown recognises that it is our people who are the critical element in driving first-class service outcomes. Crown continues to invest in its people and is an employer of choice. Crown’s ongoing investment in training and developing our employees continues to be recognised as a best-practice model by government bodies and external parties. Crown College operates campuses at each of our Australian resorts and is one of Australia’s most awarded and respected Registered Training Organisations. Since its inception, approximately 7,900 apprentices and trainees have graduated from Crown College, with approximately 370,000 training hours being delivered in the 2017 financial year.Leveraging this success, Crown College International was established in March 2017, having been successful in gaining CRICOS (Commonwealth Register of Institutions and Courses for Overseas Students) registration, enabling it to provide training to international students.Additionally, Crown has continued to focus on inclusive employment practices which enhance the diversity of its workforce. Crown’s efforts in this area have been recognised with the Moulis Legal Award for Diversity at the 2017 Property Council of Australia’s Innovation & Excellence Awards and the Australian Business Awards citation for Community Contribution for the third consecutive year.Indigenous Employment ProgramOur award-winning Indigenous Employment Program has provided more than 680 Indigenous employment opportunities, well on our way to achieving our ambitious target of 2,000 job opportunities by 2021. Beyond employment outcomes, we continue to work across our business to achieve the targets we have set in our Elevate Reconciliation Action Plan which include procurement, community and cultural awareness outcomes.Crown’s Australian resorts, Crown Melbourne and Crown Perth, continue to attract approximately 31 million visits each year and are employers of choice in both Victoria and Western Australia.Australian ResortsBarry Felstead CEO, Australian ResortsCRL091.29 - AR17 FRT_SEC_AW.indd 1114/9/17 12:29 pm Australian Resorts continued
CROWNability
Crown continues to invest in creating a disability-
confident organisation, providing an accessible and
inclusive environment for people with disabilities,
through its CROWNability initiative. More than just an
employment program, CROWNability aims to build
careers and transform attitudes towards disability in our
workplaces and the broader community.
The 2017 financial year has seen the program, in
partnership with key industry organisations, continue to
provide employment pathways for people with
disabilities, with over 150 Australians with a disability
now employed as a result of the CROWN ability program.
In December 2016, Crown was a finalist in the 2016
Australian Human Rights Commission Business Awards,
which recognised Crown’s achievements in disability
employment. This was an acknowledgment of Crown’s
commitment to promoting and advancing human rights
in Australia through the CROWNability program.
The CROWNability Action Plan will include targets and
goals that will increase accessibility to employment, our
premises, communication and marketing materials,
products and services, and learning and development for
people with disabilities.
Health, Safety & Employee Well-being
Crown’s commitment to workplace health and safety is
contained in the Health, Safety & Wellbeing Policy. The
policy details the commitment, framework and expected
behaviours of all employees necessary to ensure the
continuous improvement of workplace safety.
This year there have been a number of key achievements
in Crown’s health, safety and workers compensation
performance.
By continuing to demonstrate effective injury prevention
and injury management practices, Crown has sustained
strong performance outcomes and achieved the
performance targets set for both the Crown Perth and
Crown Melbourne properties. Improved financial
outcomes have also been achieved following strong
performance in both self-insured and traditional workers
compensation insurance operations. Training, awareness
and acceptance of responsibility through CrownSAFE
have all contributed to Crown’s continued success in
health and safety performance.
In May 2017, Crown launched EMMaH (Evaluation and
Management of Manual Handling), its new Manual
Handling Program. EMMaH enables Crown to objectively
analyse employees whilst undertaking their roles and,
based on the findings, make recommendations to
improve body positioning, provide technique training or
modify the way tasks are being undertaken. This will
further enhance the health and safety of our employees.
Crown has also continued to expand the supportive
network of health and well-being resources, initiatives
and opportunities provided to all employees. This
continues to be fundamental to Crown’s commitment to
employee well-being in the workplace.
In September 2016, Crown launched its new Employee
Assistance Program (EAP). The EAP is a free and
confidential counselling service offered by Crown to
employees and their families who may need assistance.
Access to the Crown EAP was provided to all employees
via a mobile app, making support and information more
accessible at any time.
Industrial Relations
Crown is committed to managing industrial relations
through open and effective relationships with employee
associations and we act in good faith in all dealings with
these associations.
Crown has five collective bargaining enterprise
agreements, which cover the majority of frontline staff
and include some management level employees.
During the 2017 financial year, the new Crown
Melbourne Limited Enterprise Agreement 2016 was
approved and took effect on 24 January 2017 and the
Hospitality Sector WA United Voice Crown Perth
Enterprise Agreement 2016 was approved and took
effect from 24 October 2016.
12
CRL091.29 - AR17 FRT_SEC_AW.indd 12
14/9/17 12:29 pm
Crown Melbourne
Overview
Crown Melbourne is one of the region’s leading
integrated resorts and a key driver of international and
interstate visitation to Victoria. Its reputation for luxury
experiences and exceptional hotel, gaming and
entertainment facilities has attracted approximately
21 million visits to Crown Melbourne during the period.
Crown Melbourne continues to strengthen its offering
with property enhancements and initiatives to stimulate
visitation, in line with Crown’s strategic priorities. The
resort remains Victoria’s largest single-site private
sector employer, with almost 10,000 people working
across the resort.
Crown continues to develop its digital presence through
the Crown Resorts app, Crown websites and social
media. An evolved digital approach saw the continued
growth of fans on Facebook and followers on Instagram,
alongside broader digital reach, increased audience
engagement and digital transaction volume.
Property Update
Average occupancy at Crown Melbourne’s three hotels
was again greater than 90%, reaffirming the need for
increased hotel capacity to meet future tourist demand.
Crown and the Schiavello Group, through a joint venture
announced in December 2014, are planning to develop a
landmark new building comprising a 388 room six-star
hotel and approximately 700 luxury apartments. The
proposed One Queensbridge project, which is on a site
adjacent to Crown Melbourne, received conditional
planning approval in February 2017 and will be
connected to Crown Melbourne via a sculptural
pedestrian bridge over Queensbridge Street. The
project remains subject to financing and long-form
agreements between Crown and the Schiavello Group.
The Crown Melbourne resort saw a number of
new capital initiatives implemented during the 2017
financial year.
The main gaming floor received an expansion at each
end of the Maple Room to accommodate additional
baccarat tables for patrons. In retail, Kennedy launched
its new boutique and Jaeger-LeCoultre was introduced
at Monards. Kingpin re-launched its entertainment
venue following an extensive redevelopment.
Supporting these expansions, infrastructure projects
were undertaken including significant improvements to
car park control and automation.
Crown Melbourne also continued its affinity with
world-class cuisine, opening Long Chim by Michelin star
Thai chef David Thompson on the Riverwalk. This is the
third Long Chim restaurant in Australia following
successful openings in Perth and Sydney.
Local Gaming and Crown Rewards
Crown Melbourne continued to invest in new
technology, including the introduction of the latest
gaming products, system upgrades and innovations.
These investments, together with the Crown Rewards
program, allowed us to deliver differentiated market-
leading experiences for our guests.
Crown Melbourne hosted its twentieth Aussie Millions
Poker Championship in January 2017, which is a major
event on the international poker circuit. The enhanced
digital marketing campaign, through the use of live
streaming and social media, continued to expand the
tournament’s global reach.
VIP Program Play
Normalised VIP program play revenue at Crown
Melbourne was $340.3 million, down 49.7% with
turnover of $25.2 billion.
Hotels and Conferences
As one of the world’s leading integrated resorts, Crown
Melbourne features more than 1,600 guest rooms
across three luxury hotels, Crown Towers, Crown
Metropol and Crown Promenade. Together, they
provided for more than 875,000 guests during the year,
with combined occupancy levels exceeding 90%.
CRL091.29 - AR17 FRT_SEC_AW.indd 13
13
14/9/17 12:29 pm
Australian Resorts continued
Crown Towers was awarded the prestigious 2017
Forbes Travel Guide Global 5 Star Award, the only hotel
in Melbourne to achieve this status. All three hotels
received the Certificate of Excellence in the 2017
TripAdvisor Travellers’ Choice Awards.
Events and Conferencing achieved a strong revenue
result during the period, hosting major conferences for
Lion Nathan, Global Food Forum 2017, World Taiwanese
Chamber of Commerce and the Hadoop Summit
Australia.
Restaurants and Bars
Crown Melbourne’s award-winning restaurants and bars
showcase a global repertoire of culinary brands and
choice for our patrons that is unrivalled in Australia.
Crown’s signature restaurants continue to feature
strongly in The Age Good Food Guide 2017, with Dinner
by Heston Blumenthal, Rockpool Bar & Grill, Rosetta,
Spice Temple and Bistro Guillaume all included. In
January 2017, the much-anticipated Long Chim
restaurant was welcomed to Crown Melbourne, a
celebration of David’s Thompson’s unique take on
Bangkok street food.
Crown’s offering for sports enthusiasts was expanded
with the CrownBet Sports Bar launching its new identity
and Lagerfield partnering with Heineken and Carlton
Draught to deliver in-venue experiences aligned with key
sporting events including the Melbourne Grand Prix and
the AFL season.
Entertainment and Events
Crown Melbourne continued to provide the venues of
choice for some of Australia’s most memorable events.
More than 2,000 events were booked during the year.
At the Palladium ballroom, the largest events included
the TV Week Logie Awards and the AFL Brownlow
Medal. Key charitable events hosted at Crown
Melbourne included the Children’s Cancer Foundation’s
Million Dollar Lunch, Challenge – Supporting Kids with
Cancer, Diamonds are a Girl’s Best Friend Gala Dinner,
Starry Starry Night and the Epworth Medical Foundation
Dinner.
This year’s major live performances at The Palms
included sold-out shows with James Reyne, Arj Barker,
Kate Ceberano, Dami Im, Kasey Chambers and a five
week season of Velvet. Crown’s nightclubs continued to
feature top artists including Havana Brown, Will Sparks,
Marlo, Fatman Scoop, Blu Cantrell, Nelly, Tigerlily,
Chingy, Dash Berlin, Markus Shultz, Bryan Kearney, Sean
Kingston, Mya and many more.
In the 2017 financial year, Crown also hosted a number
of activations, including the Sony Foundation’s
River4Ward event, the AVPN Pizza Festival, which
headlined the Melbourne Food & Wine Festival,
the pop-up BBQ Festival headlined by San Antone’s
Kevin Bludso, the World of Nobu Festival, and the Jack
Daniels’ 150th Anniversary Barrel House.
Crown Perth
Overview
Crown Perth is Western Australia’s only fully integrated
entertainment resort. Following Crown’s extensive
development and renovation plan since its acquisition in
2004, it has been transformed into a premium tourist
destination, this year attracting approximately 10 million
visits. The highly anticipated Crown Towers Perth hotel
opened in December 2016, bringing to Perth a new level
of prestige.
Crown Perth remains the State’s largest single-site
private sector employer, with more than 5,900 people
working on site.
Property Update
The major development highlight for the year was the
opening of the Crown Towers Perth hotel, which opened
to the public in December 2016. The hotel provides the
Crown Perth resort with an additional 500 luxury
rooms, including a number of villas located on the upper
floors, each with amazing views over the Swan River and
Perth skyline. Also taking advantage of these views are
the private VIP gaming salons and Crystal Club lounge
located on level 15 of the tower. The hotel has
introduced a number of new venues including the
14
CRL091.29 - AR17 FRT_SEC_AW.indd 14
14/9/17 12:29 pm
luxurious Crown Spa, and the popular Epicurean
restaurant and TWR lobby bar.
The 1,500-seat Crown Ballroom was a key amenity
delivered as part of the opening of Crown Towers
Perth. The new ballroom, along with the refurbished
convention facilities, ensures that Crown Perth strongly
establishes itself as the premier convention facility in
Western Australia.
Other luxury offerings to complement the Crown
Towers hotel include the new retail link connecting
Crown Towers with the existing precinct. The dedicated
retail precinct has already seen the introduction of
Paspaley Pearls. Kennedy, a watch boutique featuring
luxury brands including Rolex, Omega and IWC, is
expected to open shortly.
Local Gaming
Crown Perth’s main gaming floor revenue declined by
4.7%, which reflected weak consumer sentiment in the
local economy. Investment in, and popularity of,
automated table games have helped drive increased
visitation to the gaming floor, despite challenging
market conditions overall.
A significant project was the expansion of the main
gaming floor through the addition of the Riverside
Room (formerly the Meridian Room), which provides
improved premium gaming machine facilities. The
expansion also provides upgraded amenities including a
new main gaming floor bar.
VIP Program Play
Normalised VIP program play revenue at Crown Perth
was $109.3 million, down 46.1% with turnover of
$8.1 billion.
Hotels and Conferences
The opening of Crown Towers Perth resulted in an
overall increase in the number of guests across the
three hotels by 28% to over 444,000 guests.
Combined occupancy reached 80% which aligned with
the overall Perth market, however average room rates
were approximately 40% ahead of the market, which
was a pleasing result considering the challenging
economic conditions. Looking ahead, the addition of
new hotel room inventory and a constrained market
outlook will continue to put pressure on the entire
Perth market.
Crown Towers Perth has been well received to date
with interest locally, interstate and overseas.
International visitation grew with a number of key
large-scale corporate groups staying from South East
Asia.
Although only recently opened, Crown Towers Perth
was nominated for, and won, Best Australian Luxury
Hotel for Luxury Travel Magazine. Further, Crown
Towers Perth also recently won the Western Australian
AHA Award for Best Deluxe Accommodation and Best
Overall Hotel Accommodation.
Events and Conferencing benefited from the
completion of the new Crown Ballroom with 182,000
patrons attending Crown Perth’s convention facilities,
up 16% on the previous year. Key assets such as the new
poolside area of Crown Towers and the Crystal Club
were utilised throughout the year creating
opportunities to host unique events. A number of
large-scale conferences and events are confirmed for
2018 and beyond, driven largely by the new convention
facilities at Crown Towers Perth.
Restaurants and Bars
Crown Perth increased its offering of restaurants and
bars with the December opening of Crown Towers
which includes the TWR lobby bar, Epicurean
restaurant, the Crystal Club and the luxurious poolside
bar area. In particular, public recognition has been
received by TWR for its sophistication and style, and by
Epicurean for exhibiting one of the largest chocolate
fountains in the Southern Hemisphere.
Crown’s premium restaurants were once again
recipients of a number of awards this year, receiving
four Gold Plate Awards at the Catering Institute of
Australia’s 2016 Gala Ball, with honours going to Atrium
for Buffet Dining, Modo Mio for Mediterranean Dining,
and Silks for Licensed Chinese Restaurant as well as the
CRL091.29 - AR17 FRT_SEC_AW.indd 15
15
14/9/17 12:29 pm
Australian Resorts continued
Premier’s Award. In addition, at the 2016 AHA
Accommodation Awards for Excellence, Bistro Guillaume
was awarded Best Accommodation Hotel Wine List.
This year, Crown Perth held its first food festival event,
the Merrywell/Yak Ales BBQ Festival, which attracted
over 8,000 patrons.
Entertainment and Events
The new 1,500-seat Crown Ballroom was unveiled in
December 2016 and has secured new and larger events
including the successful SUITED – New Year’s Eve Ball,
the Perth Wildcats Awards and the Chevron Australia
Ball. Key charitable events hosted at Crown Perth
included the Ear Science Institute Australia Dinner, the
HeartKids Ball, the Rafiki Ball and the Royal Flying
Doctors Ball.
Major long-running shows performing at Crown Perth
Theatre included the widely-acclaimed Matilda, Georgy
Girl and Singin’ in the Rain, in addition to single live
performances by Jimmy Barnes, Kevin Bloody Wilson,
Arj Barker, Suzi Quatro, Julia Morris and Icehouse.
This year also saw the new addition of the Crown
Pyramid, a temporary custom-made pyramid, which has
the capacity to hold various events for up to 5,000
people. Events included Santa’s Magical Kingdom,
Jurassic Creatures and Lights by DreamWorks, all of
which provided interactive walkthrough experiences for
people of all ages, and in total attracted an additional
96,000 visitors and 137 shows to the resort.
16
CRL091.29 - AR17 FRT_SEC_AW.indd 16
14/9/17 12:29 pm
International Interests
Crown Aspinalls
Crown Aspinalls is one of the licensed high-end casinos
in London’s prime West End entertainment district.
Nestled in the heart of Mayfair, Crown Aspinalls offers
members and guests an exciting and opulent world of
international VIP gaming, in an environment that only
London can provide.
Normalised EBITDA from Crown Aspinalls was $26.6
million, up 0.4% on the previous period. Reported
EBITDA for the period was a loss of $5.5 million, a
decrease of $21.5 million on the previous period.
The reported EBITDA result takes into account an
unfavourable variance from the theoretical VIP program
play result, which had a negative EBITDA impact of
$32.1 million. This compares to a negative EBITDA
impact of $10.5 million in the previous period.
Aspers Group
Crown holds a 50% equity interest in the Aspers Group,
which operates four regional casinos in the United
Kingdom, in Newcastle, Stratford (London), Milton
Keynes and Northampton (the latter in a joint venture
with Kerzner UK Limited).
Nobu
Crown holds a 20% interest in Nobu, one of the world’s
most recognised Japanese restaurant brands. Nobu
operates 13 owned restaurants in the US, London and
Tokyo, 23 international licenced restaurants, and
manages six hotels in Ibiza, Las Vegas, London, Malibu,
Manila and Miami Beach. The other investors in Nobu
are Nobu Matsuhisa, Robert De Niro and Meir Teper.
The restaurant business has a pipeline of three new
owned restaurants and six new licensed restaurants.
The managed hotels business has a pipeline of new
hotel openings, which include Chicago, Los Cabos,
Riyadh, Toronto, Palo Alto, Barcelona, Marbella and Sao
Paulo.
Alon Las Vegas
Crown, through a majority-owned subsidiary, has an
ownership interest in a 34.6 acre vacant site on the Las
Vegas Strip. As previously announced, Crown has
resolved not to proceed with the Alon project in Las
Vegas at this time and is assessing options to optimise
the value of Crown’s investment in the project,
including an outright sale. Crown recognised an
impairment loss relating to its investment in Alon in the
period, which has been classified as a significant item.
Caesars
Crown holds an ownership interest in Caesars
Entertainment Corporation (approximately 2%), which
owns and operates approximately 50 casinos and hotels
under several brands; and Caesars Acquisition Company
(approximately 2%), which is focussed on acquiring and
developing a portfolio of investments in the gaming and
interactive entertainment industries.
Cannery
Crown holds a 24.5% interest in Cannery, which is based
in the United States. During the period, Cannery
disposed of its casino assets at the Meadows Racetrack
& Casino in Pittsburgh, Pennsylvania, and Cannery
Casino and East Side Cannery in Las Vegas, Nevada.
Following the sale, Cannery no longer owns any
material assets.
During the year, Crown received $38.9 million from
Cannery, representing Crown’s share of the sale
proceeds from the disposal of its casino assets.
CRL091.29 - AR17 FRT_SEC_AW.indd 17
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
17
Crown Digital
Crown’s wagering and online social gaming operations
contributed revenues of $303.3 million and EBITDA of
$14.8 million in the year ended 30 June 2017, compared
to a loss of $5.4 million recorded in the prior year. In
addition, Crown equity accounts its investments in
Draftstars and Chill Gaming.
CrownBet
Crown owns a 62% controlling interest in CrownBet,
which is led by the founding shareholder and CEO, Matt
Tripp, and an experienced management team with a
proven track record of building highly successful
businesses in the wagering industry. CrownBet
continues to demonstrate strong revenue growth and is
one of the few Australian-owned businesses in the
online wagering industry.
CrownBet is building its business based on:
• leveraging its relationship with Crown’s Australian
integrated resorts, as well as a number of unique
‘partner’ relationships including the AFL, ClubsNSW,
Draftstars (a joint venture between CrownBet, Fox
Sports and Seven West Media) and racing.com (a
joint venture between Seven West Media and Racing
Victoria);
• developing proprietary software in order to offer a
best-in-class user experience, with features such as
live AFL vision (the only wagering provider in
Australia to offer this), a market-leading loyalty
program and market-leading mobile apps; and
• being recognised as the most responsible wagering
operator in Australia.
Betfair Australasia
Betfair Australasia is 100% owned by Crown and
provides access for Australian and New Zealand
customers to the world’s leading betting exchange. In
the 2017 financial year, Betfair Australasia continued to
grow revenue from the core exchange product whilst
delivering that product as efficiently as possible,
resulting in strong EBITDA growth.
DGN Games
DGN Games, which is based in Austin, Texas, is 70%
owned by Crown and is a developer of online social
games. DGN’s online social game titles include “Old
Vegas Slots”, a classic 3-reel game, and “Lucky Time
Slots”, a new 5-reel game, both of which continue to
improve in terms of performance and technology.
Draftstars
Draftstars is a daily fantasy sports wagering business
and is a joint venture between CrownBet, Fox Sports
and Seven West Media. Each joint venture partner has
dedicated their respective resources to grow the
business and it is now the largest daily fantasy sports
wagering business in Australia. Draftstars is the Official
Daily Fantasy Sports Partner of the AFL.
Chill Gaming
Chill Gaming is a 50/50 joint venture between Crown
and New Gaming Pty Ltd, which is owned by the
founders of Wymac Gaming Solutions, a manufacturer
and developer of electronic gaming machines. Chill
Gaming will focus on innovation and providing current
gaming customers with new entertaining product
options. Products are in the process of being developed
and will continue to be showcased at future gaming
technology expos.
18
CRL091.29 - AR17 FRT_SEC_AW.indd 18
15/9/17 10:39 am
Corporate Social Responsibility
Our approach to corporate social responsibility is integrated into everything we do with
all initiatives developed to consider efficiency, diversity, inclusion, community and our
impact on the environment.
Creating opportunities through employment
Crown is recognised as one of Australia’s leading
employers. We pride ourselves on our best-practice
Indigenous Employment Program, our disability
employment program (CROWNability) and our employee
training and development programs delivered through
Crown College, a Registered Training Organisation.
Crown’s two Australian resorts are significant employers
in both Melbourne and Perth, providing employment for
over 15,600 people. We are committed to the training
and development of our employees so that they have the
skills and attitude to deliver the world-class customer
experience expected at Crown’s Australian resorts.
The training that Crown employees undertake at Crown
College is relevant to their role and is nationally
recognised as it is aligned with the Australian
Qualification Framework. In the 2017 financial year, over
7,500 employees participated in technical, leadership,
health and safety and customer service training at Crown
College, receiving over 370,000 hours of training.
Our mantra is “not training for a job, but learning for a
career” and this year over 1,700 employees were
enrolled in Certificates III, IV and Diploma level
qualifications. Since its inception, over 7,900 apprentices
and trainees have graduated from Crown College.
Diversity and inclusion
At Crown we are committed to investing in our people
and ensuring that our employees can achieve their
personal career goals. Therefore, our workforce must
not only be well-trained but also feel supported and
included in the workplace. We want all our employees to
feel valued at work regardless of their gender, age,
ethnicity, cultural background, experience, physical
limitations or sexual orientation.
Our efforts in diversity and inclusion have received a
number of awards this year, including the Moulis Legal
Award for Diversity at the 2017 Property Council of
Australia’s Innovation & Excellence Awards. In addition,
Crown Melbourne received the National Employer of the
Year 2016 award from OCTEC Employment Services for
our commitment to inclusive employment, and Crown
Perth received the 2017 Employer of the Year award for
Innovation at the atWork Australia awards.
Our CROWNability program surpassed all of its 2017
targets. Crown now employs over 150 people with a
disability across its Melbourne and Perth properties. The
program is focussed on transforming attitudes towards
disability in our workplaces and the broader community.
We are working towards becoming a disability-confident
organisation and have developed our CROWNability
Action Plan with targets and goals to ensure our
workplace continues to evolve and provide as many
opportunities as possible for people with a disability.
Our award-winning Indigenous Employment Program
has provided more than 680 Indigenous Australians with
employment opportunities, well on our way to achieving
our ambitious target of 2,000 job opportunities by
2021. Beyond employment outcomes, we continue to
work across our business to achieve the targets we have
set in our Elevate Reconciliation Action Plan which
include procurement, community and cultural awareness
outcomes.
We acknowledge that, like many other Australian
workplaces, we need to work hard to address gender
imbalance. Gender equity is one of our key focus areas in
our quest to provide diverse and inclusive employment at
Crown. We are committed to improving gender balance
and have developed a number of programs overseen by
an executive committee to help address it, including the
Women of Crown Management program, developing
flexible work arrangements and developing a Gender
Action Plan which outlines targets and goals across the
business to help drive improvements in this area.
Industry-leading social safeguards
Crown is proud of the broad range of customer and
employee programs and services that promote
awareness of responsible gaming, recognising that
responsible gaming is the shared responsibility of the
gaming industry, governments, communities and
individuals, working in partnership to achieve socially
responsible outcomes.
Crown continues to adopt a proactive and business-wide
approach to responsible gaming led by the Crown
Responsible Gaming Committee, chaired by Independent
Director, Professor John Horvath, AO. This Committee is
dedicated to overseeing Crown’s responsible gaming
initiatives and recommending policies and procedures to
enhance the effectiveness of those programs.
In 2002, Crown Melbourne introduced a world first in
responsible gaming initiatives by establishing the
Responsible Gaming Support Centre at its resort. A
similar facility, the Responsible Gambling Information
Centre, was opened at the Crown Perth resort in 2010.
CRL091.29 - AR17 FRT_SEC_AW.indd 19
15/9/17 10:39 am
Crown Resorts Limited Annual Report 2017
19
19
Corporate Social Responsibility continued
Employee training and education in responsible gaming
begins on an employee’s first day during the induction
program. Responsible Service of Gaming training is
delivered using a combination of online and facilitator-
led learning. This training includes information about
observable behaviours that may indicate that a customer
may be experiencing difficulty with their gaming
experience and how to direct the customer to
appropriate services.
Each resort’s Responsible Gambling Code of Conduct/
Practice is widely promoted throughout the casino
gaming floor for customers and in back-of-house areas
for employees. Information about the Code is included in
all responsible gaming training.
Crown develops and maintains strong engagement with
many stakeholders and regularly attends national and
international conferences. This open dialogue
contributes to a culture of continuous improvement of
Crown’s responsible gaming services and programs.
Supporting our communities
At Crown we believe managing our business in a
sustainable manner is the right thing to do by our
stakeholders and makes good business sense. As such,
our approach to corporate sustainability is integrated
into everything we do with all initiatives developed to
consider efficiency, diversity, inclusion, community and
our impact on the environment.
Equally important is our role within the communities in
which we operate. Crown recognises our responsibility
to give back and, through the Crown Resorts
Foundation, we look for opportunities to partner with
outstanding local community organisations to provide
educational and mentoring pathways for young
Australians.
Across Crown we have a group-wide sustainability
framework in place which includes identified actions,
performance measures and targets which allow us to
focus on what matters most to our stakeholders.
Oversight by the Crown Corporate Social Responsibility
(CSR) Committee, and a number of employee
consultative committees, ensures that transparency and
reporting are also a major part of our CSR commitment.
Crown’s community support comes in many different
forms. Through our resorts, we are able to support
charities by subsidising, promoting and hosting their
fundraising events and providing raffle prizes. In
addition, many of our employees enthusiastically
volunteer their time to support a wide range of causes.
We look for opportunities to leverage our corporate
networks, funds and people to deliver the best
outcomes for our community partners. This year, the
Children’s Cancer Foundation’s Million Dollar Lunch was
once again hosted by Crown Melbourne. With the
support of its suppliers, Crown committed to delivering
the event cost-free, significantly assisting the Crown
Resorts Foundation to raise over $2.1 million, which will
be used to fund childhood cancer research programs,
clinical care and family support.
Within our business we also look for opportunities to
leverage our skill sets to support communities in need.
Crown Perth’s chefs once again provided more than
30,000 meals to Perth’s vulnerable and homeless
through Foodbank Western Australia, continuing this
longstanding commitment. Crown Melbourne’s
employees volunteered their time at The Salvation Army
Project 614’s Hamadova Café so that it could remain
open 24 hours a day throughout the winter months.
Many of Crown’s community partners, in addition to
receiving support from the business, benefit from
fundraising and volunteer support from Crown staff.
Within business departments, teams organise their own
fundraising events for charities such as SIDS and Kids,
the Cancer Council, Oxfam and Jeans for Genes. More
formal fundraising activities are organised in partnership
with the Crown Resorts Foundation by the Employee
Advisory Committee.
Crown’s Australian Resorts CEO, Barry Felstead, sets
the tone for a culture of giving and support throughout
the business. Barry has participated in the St Vincent de
Paul CEO Sleepout in Perth for eight consecutive years
and has raised over $730,000 for Perth’s St Vincent de
Paul’s homeless and emergency housing services.
The Crown Resorts Foundation
$200 million National Philanthropic Fund
We are very proud of the work that the Crown Resorts
Foundation is doing to provide more young Australians
access to better education, more opportunities to be
creative and to develop the self-esteem and confidence
that will support them to build more fulfilled lives.
The Crown Resorts Foundation is now into its third
year of the delivery of its $200 million National
Philanthropic Fund, a joint initiative of the Crown
Resorts Foundation and the Packer Family Foundation
(together, the Foundations). This year the first recipients
of the $25 million Melbourne and Perth Arts Education
Initiative were announced, the second grant round for
20
CRL091.29 - AR17 FRT_SEC_AW.indd 20
15/9/17 10:39 am
Corporate Social Responsibility continued
the $30 million Western Sydney Arts Initiative was
undertaken and sizable grants were delivered to
promote education opportunities for Indigenous girls.
The Foundations are currently delivering support for over
115 programs, which will provide thousands of school
students across Australia greater access to enhanced and
creative educational programs, and pathways to
employment and community re-engagement.
Supporting Indigenous education
Providing assistance to increase and improve the
education opportunities for Aboriginal and Torres Strait
Islander Australians is a priority for the Foundations.
The Foundations partner with organisations that provide
a highly supportive school environment and engage
students, family and the community in the design and,
where possible, the delivery of the program.
During the 2017 financial year, in addition to their
existing Indigenous education program partnerships, the
Foundations sought to identify programs which focus on
providing education opportunities for Aboriginal and
Torres Strait Islander girls. The two selected programs,
Role Models and Leaders Australia Girls Academy and
the Stars Foundation, both work within schools to help
overcome educational barriers faced by young
Indigenous girls aged 12 to 18. Their aim is to lift school
completion rates and help achieve successful post-
school transition.
Supporting our local communities –
Crown employees lead the way
Employee engagement with the Foundations’ partners
continues to grow. Crown Melbourne’s Employee
Advisory Committee continues to deliver exemplary
employee-driven fundraising opportunities which
provide channels for their peers to engage with some of
the Foundations’ programs. Equally important are the
opportunities the Committee has established in terms
of volunteering.
In November 2016, Crown Melbourne’s Employee
Advisory Committee organised its second successful
fundraiser for the Luke Batty Foundation during White
Ribbon Week. The event raised more than $75,000 and
increased awareness about domestic violence.
The Employee Advisory Committee also oversees the
allocation of the community grants which are provided
to the organisations nominated and supported by our
employees. So far, over $100,000 has been provided to
local charities and schools through this program.
The Foundations also support key community initiatives
whose work is undertaken locally around Crown’s
resorts. A longstanding partnership has been with the
Channel 7 Kids Telethon (WA) which raises money for
the Kids Telethon Institute. This year the Foundations
again donated $2.5 million towards the Telethon,
taking the total amount donated over the last five years
to $11 million.
Supporting Australian culture
The Foundations support engagement with the arts,
from first experience through to professional practice,
as they recognise the power of the arts for education
– nurturing creativity and development, improving
school attendance, building confidence and learning
skills that transfer into other disciplines.
Following the success of the Western Sydney Arts
Initiative programs, the Foundations extended this
funding opportunity to Melbourne and Perth-based arts
education organisations with the $25 million Melbourne
and Perth Arts Education Initiative.
In October 2016, 25 successful programs were selected,
with the recipients receiving multi-year funding. The
programs are focussed on promoting creativity and
supporting education – using art as the vehicle with
which to engage with learning and the community.
Concurrently, the second Western Sydney Arts Initiative
grant round was undertaken in which 40 successful
programs were selected.
These arts education grant rounds are in addition to the
ongoing support the Foundations provide to flagship
Australian arts organisations, adding the Australian
National Academy of Music to the program this year.
Progress towards environmental goals
This year saw a further increase in environmental action
across Crown’s two resorts, as we continue to work
towards being a leader in sustainable business practices
in the gaming and entertainment industry, focussing on
three major areas – energy efficiency, water
conservation and waste reduction.
During the 2017 financial year, the footprint of Crown’s
Australian resorts increased significantly with the
addition of Crown Towers Perth. Despite this, Crown’s
environmental performance improved in comparison to
the 2016 financial year, achieving a reduction in
greenhouse gas emissions intensity of 5.8% per area, a
decrease in water consumption of 5.2% per area and
recycling rates remained steady with 70% of Crown’s
waste diverted from landfill.
CRL091.29 - AR17 FRT_SEC_AW.indd 21
15/9/17 10:39 am
Crown Resorts Limited Annual Report 2017
21
21
Corporate Social Responsibility continued
To continue improving these results, Crown Melbourne
and Crown Perth are working together to develop and
align strategies and programs across both properties
that will further reduce the environmental impact and
contribute to developing more sustainable practices. To
engage our employees and business units, Crown has
well-established CROWNEARTH Committees with
representatives from each major business unit across
both properties with a focus on numerous energy, water
and waste management initiatives to improve the overall
sustainability performance of the business.
This year Crown Melbourne was excited to launch its
industry-first Eco-Chef Program, established by
Executive Sous Chef Bas Van Uyen and implemented
across Crown’s food and beverage outlets. Our aim for
the program is to deliver quantifiable savings that reduce
Crown’s environmental impact and encourage proactive,
sustainable behaviour by our employees. We are
particularly proud of this employee-led program as it
supports Crown’s environmental sustainability targets
around energy, water and life-cycle management.
Crown continues to invest in resource monitoring and
reporting systems that provide live building analytics
data to relevant business units highlighting their
electricity, gas and water consumption throughout both
resorts. The systems provide each business unit with
daily, weekly and monthly reports that show time-of-use
data, so that resource savings opportunities can be
identified and the effectiveness of programs can be
monitored.
In addition to our internal programs, Crown continues to
participate in a number of externally organised
programs, including Sustainability Victoria’s TAKE2
program, Clean-up Australia Day, Earth Hour, Soap Aid
and the Carbon Disclosure Project (for the eighth year
running).
22
CRL091.29 - AR17 FRT_SEC_AW.indd 22
15/9/17 10:39 am
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
Corporate Governance Statement
The Board of Crown Resorts Limited (Crown or the
Company) is committed to the implementation and
maintenance of good corporate governance practices.
This Statement sets out the extent to which Crown has
followed the ASX Corporate Governance Council’s third
Edition of the Corporate Governance Principles and
Recommendations (the Principles and Recommendations).
This Statement is current as at 12 September 2017 and
has been approved by the Board.
Principle 1: Lay solid foundations for
management and oversight
Functions reserved for the Board and Senior
Management
Functions reserved for the Board
The Board is responsible for guiding and monitoring
Crown on behalf of its shareholders. In addition, the Board
(in conjunction with management) is responsible for
identifying areas of significant business risk and ensuring
arrangements are in place to adequately manage those
risks.
The Board has adopted a formal Board Charter which
sets out a list of specific functions that are reserved for the
Board.
Board appointments are made pursuant to formal terms of
appointment.
More information
A full copy of the Crown Board Charter is available
at: www.crownresorts.com.au under the heading
Corporate Governance – Charters.
Functions delegated to Senior Executives
Crown’s senior executives have responsibility for matters
which are not specifically reserved for the Board (such as
the day-to-day management of the operations and
administration of Crown).
Crown Board Committees
To assist in carrying out its responsibilities, the Crown
Board has established the following Committees:
Committees
Current Members
Audit and Corporate
Governance Committee
Corporate Social
Responsibility Committee
Finance Committee
Investment Committee
Nomination and
Remuneration Committee
Helen Coonan (Chair)
Rowena Danziger
Michael Johnston
Helen Coonan (Chair)
John Horvath
Harold Mitchell
Geoff Dixon (Chair)
Helen Coonan
Michael Johnston
John Horvath (Chair)
John Alexander
Michael Johnston
Geoff Dixon (Chair)
John Horvath
Harold Mitchell
Occupational Health and
Safety Committee
Rowena Danziger (Chair)
John Horvath
Michael Johnston
Responsible Gaming
Committee
Risk Management
Committee
John Horvath (Chair)
John Alexander
Rowena Danziger
Geoff Dixon (Chair)
John Alexander
Rowena Danziger
Each Committee has adopted a formal Charter that
outlines its duties and responsibilities.
More information
A full copy of each of the Crown Committee
Charters is available at: www.crownresorts.com.au
under the heading Corporate Governance – Charters.
CRL091.32 - AR17 LGL_SEC_AW.indd 23
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
23
CorporatE GovErnanCE StatEMEnt CONTINUED
Director probity reviews and elections
Director and Senior Executive agreements
Every appointment of a Crown Director is subject to
receipt of necessary gaming regulatory approvals.
The gaming industry is highly regulated and each of the
casinos in which Crown has an interest is subject to
extensive regulation under the laws, rules and regulations
of the jurisdiction where it is located.
Officers, Directors and certain key employees of Crown
and its licensed subsidiaries must file applications with
relevant gaming authorities and may be required to be
licensed in certain jurisdictions. These investigations
generally concern the responsibility, financial stability and
character of the owners, managers and persons with
financial interests in gaming operations and generally
include requirements to obtain police checks and credit
checks and undergo fingerprinting.
A Director will only be formally appointed once all
necessary gaming regulatory approvals have been
obtained. As a separate exercise, Crown undertakes its
own internal investigations on the suitability of nominated
Directors as a pre-condition to a recommendation to the
Board to appoint a Director.
The Company’s Constitution requires that an election of
Directors must take place each year. In addition, Directors
appointed to fill casual vacancies during the year must
retire from office at the next annual general meeting
following his or her appointment but are eligible for
re-election by shareholders at that time. The Notice of
Meeting for an annual general meeting sets out the
background for the election and re-election of Directors,
informs shareholders where they can find background
information on the skills and experience of the relevant
Director and provides a recommendation of the Board in
relation to the proposed election or re-election.
Accordingly, shareholders are provided with all material
information in Crown’s possession relevant to a decision
on whether or not to elect or re-elect a Director.
More information
Copies of Crown’s past and present Notices of
Meeting are available at: www.crownresorts.com.au
under the heading Investors & Media – Annual
Reports.
Crown Directors are provided with an induction pack upon
appointment which, among other things, includes a letter
agreement setting out the terms of that Director’s
appointment. The letter agreement, which each Director
must countersign, describes when the appointment
commences and when it ends, sets out the Director’s
powers and duties and the agreed remuneration
arrangements and obliges the Director to comply with all
Crown Policies, Procedures and the Code of Conduct. In
addition, the letter agreement requires the Director to
enter into a separate undertaking to inform Crown of any
interests that Director may have in Crown securities (and
contracts relevant to Crown securities) so that Crown is
able to comply with its disclosure requirements under
Listing Rule 3.19A to provide ASX with completed
Appendices 3X, 3Y and 3Z within the time period allowed
by the ASX Listing Rules.
Each senior executive of Crown has an employment
contract setting out the terms of that senior executive’s
appointment.
Company Secretary accountability
The Company Secretary is accountable directly to the
Board, through the Chair, on all matters to do with the
proper functioning of the Board. The decision to appoint
or remove a Company Secretary must be made or
approved by the Board.
The role of the Company Secretary is set out in the Crown
Board Charter and includes:
• advising the Board and its committees on governance
matters;
• monitoring that Board and committee policy and
procedures are followed;
• coordinating the timely completion and despatch of
Board and committee papers;
• ensuring that the business at Board and committee
meetings is accurately captured in the minutes; and
• helping to organise and facilitate the induction and
professional development of Directors.
More information
A full copy of the Crown Board Charter is available
at: www.crownresorts.com.au under the heading
Corporate Governance – Charters.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
24
CRL091.32 - AR17 LGL_SEC_AW.indd 24
14/9/17 12:29 pm
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
Diversity policy
Crown has established a policy concerning diversity and disclosed its policy on its website. The policy includes
requirements for the Board to establish measurable objectives for achieving gender diversity and for the Board to assess
annually both the objectives and the progress in achieving them.
In accordance with the policy, Crown has established the measurable objectives for achieving gender diversity set out
below.
Objective
Crown’s Progress
1. To require that at least one
female candidate is presented
on candidate short lists for all
Senior Management and
Senior Executive positions
within the group for which a
recruitment process is
undertaken.
2. To maintain the level of female
participation in leadership and
development programs (which
incorporate targeted
mentoring/coaching elements)
across the group at no less
than 45% of all participants.
3. To conduct a review on an
annual basis of the
remuneration for key roles
within the group to ascertain
the existence of any gender
pay gaps and to implement
action plans to address any
such gaps.
Female candidates were presented on short lists for 95% of all Senior Management
and Senior Executive positions during the financial year.
During the financial year, Crown’s wholly-owned properties achieved 45.2% female
participation in leadership and development programs. There were a total of 366
participants.
Crown has continued to apply a variety of internal and external equity testing in relation
to remuneration decisions at various points throughout the year, of which gender equity
has been a key feature.
The testing and analysis applied has included:
• validation of salaries at the start of the recruitment process, whereby non-Enterprise
Agreement roles have their salaries validated prior to approval to hire;
• Workplace Gender Equity Agency (WGEA) reporting requirements, where gender
demographics as well as the gender pay gap is assessed; and
• annual performance and remuneration review processes, whereby a detailed
analysis of all salaried roles is undertaken to understand and identify areas where
individuals performing similar roles are validated to ensure there is internal parity.
Where these cases are identified, a case has been made to remedy them at the
mid-year point.
These processes have identified the existence of a gender pay gap which is currently
being reviewed by Crown management. A number of recommendations have been
made to address the issue, which are subject to review.
CRL091.32 - AR17 LGL_SEC_AW.indd 25
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
25
CorporatE GovErnanCE StatEMEnt CONTINUED
Objective
Crown’s Progress
4. To participate in the Male
Champions of Change
program and to implement
relevant actions arising out of
that program.
Crown has continued its participation in the Male Champions of Change (MCC)
program during the financial year. Through this program, the following were achieved in
FY17:
• a Gender Equity Group was formed in a bid to better understand the challenges our
employees face and to come up with ideas of how we can start to address them;
• a Flexible Work Arrangement Policy was implemented at Crown Melbourne, which
clarified the informal arrangements already in place, and introduced other options
such as job share and phased retirement; and
• participation in a variety of discussions and forums hosted by the MCC program,
increasing our knowledge and understanding of what other organisations are doing
in the diversity and inclusion space.
Following the departure of Rowen Craigie (Crown’s former Chief Executive Officer and
Managing Director), Ken Barton (Crown’s Chief Financial Officer and CEO Crown
Digital) was invited to join the Victorian Chapter of the MCC program as a Crown
representative.
Women of Crown Management Program, a tailored 12 month learning and
development program, was designed, developed and launched to support high
potential women in their career progression.
The program focusses on key aspects needed to enable career progression including
networking opportunities, talks with broader industry leaders such as the CEO of the
Victorian Property Council and invitations to relevant industry events.
The CEO of Australian Resorts is provided with an update of each participant’s
progress at the end of the 12 month period as well as a clearly articulated development
plan to aid their career progression. Ongoing evaluations of their progress continue to
be made after completion of the program.
Twelve high potential women were selected through the annual talent review process.
These women were allocated a Crown Executive mentor to meet with and guide them
throughout the program.
5. To identify and implement
development plans for high
potential women for career
progression as part of the
company’s succession
planning processes and to
ensure that these development
plans are reviewed annually by
the CEO.
The proportion of women employees in the group, women in senior executive positions and women on the Board as at 30
June 2017 is as follows:
Measure
Result
Proportion of women employees
in the group
There were 4,971 women in the group. This represents 42% of the total workforce of
11,835 employees.
Proportion of women in senior
executive positions in the group
There were 13 women in senior executive positions in the group. This represents 18%
of senior executive positions in the group.
Proportion of women on the
Board
There were two women Directors out of a total of eight Directors, or 25%.
For the purposes of these statistics, the term “senior executive position” refers to the Executive Team and Board members
of Crown Resorts Limited, Crown Melbourne and Crown Perth as well as the most senior leaders from each operational
unit therein. The Executive Team is comprised of persons with titles in the nature of, or similar to, Executive General
Manager, General Manager, Chief Information Officer, Chief Marketing Officer and General Counsel together with the Chief
Operating Officers, Chief Financial Officers, Chief Legal Officers and Chief Executive Officers within the group.
Crown’s Audit and Corporate Governance Committee has been delegated responsibility for developing and monitoring the
application of Crown’s Diversity Policy.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
26
CRL091.32 - AR17 LGL_SEC_AW.indd 26
14/9/17 12:29 pm
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
As noted above, Crown’s Diversity Policy requires that
Crown reviews its Gender Objectives annually to ensure
that they remain relevant and appropriate for Crown. The
Audit and Corporate Governance Committee formally
reviewed the Gender Objectives and resolved to amend
Objective 1 and replace Objective 5. In summary:
Objective 1
Objective 1 has been strengthened by requiring at least
one female Senior Manager or Senior Executive to be
involved in the recruitment process of Senior Managers or
Senior Executives. This has resulted in the existing
objective being improved to read:
To require that at least one female candidate is
presented on candidate short lists and at least one
female from Senior Management is involved in the
interview process for all Senior Management and
Senior Executive positions within the group for
which a recruitment process is undertaken.
Objective 5
Objective 5 has been replaced with the following objective:
To task the Gender Equity Group to develop a
Gender Action Plan for FY18 to FY21.
The Committee was of the view that an objective focussed
on a Gender Action Plan is more robust and cements
Crown’s commitment to diversity.
Accordingly, the Audit and Corporate Governance
Committee adopted the following revised Gender
Objectives with effect from 1 July 2017:
1. To require that at least one female candidate is
presented on candidate short lists and at least one
female from Senior Management is involved in the
interview process for all Senior Management and Senior
Executive positions within the group for which a
recruitment process is undertaken (Modified Objective).
2. To maintain the level of female participation in
leadership and development programs (which
incorporate targeted mentoring/coaching elements)
across the group at no less than 45% of all participants.
3. To conduct a review on an annual basis of the
remuneration for key roles within the group to ascertain
the existence of any gender pay gaps and to implement
action plans to address any such gaps.
4. To participate in the Male Champions of Change
program and to implement relevant actions arising out
of that program.
5. To task the Gender Equity Group to develop a Gender
Action Plan for FY18 to FY21 (New Objective).
A report on the progress against the revised objectives will
be provided in the 2018 Corporate Governance
Statement.
More information
A full copy of Crown’s Diversity Policy is available at:
www.crownresorts.com.au under the heading
Corporate Governance – Policies.
Crown is a “relevant employer” under the Workplace
Gender Equality Act 2012 (Cth) and, in accordance with
the requirements of the Act, Crown lodged its annual
Public Report with the Workplace Gender Equality Agency
for the 2016-2017 period which reports on the most recent
“Gender Equality Indicators”.
More information
A full copy of Crown’s Workplace Gender Equality
Report is available at: www.crownresorts.com.au
under the heading Corporate Governance –
Gender Equality.
process for evaluating performance of the
Board, its Committees and its Directors
A performance evaluation of the Board and of its
Committees is undertaken annually, following completion
of each financial year, by way of a questionnaire sent to
each Director.
The questionnaire covers the role, composition,
procedures and practices of the Board and its
Committees. The individual responses to the questionnaire
are confidential to each Director, with questionnaire
responses provided to the Chair of the Nomination and
Remuneration Committee for consideration and provision
of a report to the Board.
Crown’s Nomination and Remuneration Committee is also
responsible for reviewing Crown’s procedure for the
evaluation of the performance of the Board, its
Committees and its Directors.
An evaluation of the Board and its Committees took place
following the end of the financial year in accordance with
the processes described above.
process for evaluating performance of Senior
Executives
Crown has established processes for evaluating the
performance of its senior executives. In summary, each
senior executive is evaluated against the achievement of
pre-agreed performance objectives. The evaluation
process is conducted annually and is followed by the
determination of appropriate remuneration of the relevant
senior executive.
Detailed information regarding Crown’s remuneration
practices is provided in the Remuneration Report. An
evaluation of senior executives took place following the
end of the financial year and in accordance with the
processes described in the Remuneration Report.
CRL091.32 - AR17 LGL_SEC_AW.indd 27
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
27
CorporatE GovErnanCE StatEMEnt CONTINUED
Principle 2: Structure the Board to add
value
nomination and remuneration Committee
Crown has established a Nomination and Remuneration
Committee. The Nomination and Remuneration
Committee has adopted a formal Charter that outlines its
duties and responsibilities.
The current members of the Nomination and
Remuneration Committee are Geoff Dixon (Chair),
Professor John Horvath and Harold Mitchell who are each
independent, Non-Executive Directors. Information about
each Committee member’s qualifications and experience
is set out in the Directors’ Statutory Report. Information
regarding the number of times the Committee met
throughout the period and the individual attendances of
the members at those meetings has also been provided in
the Directors’ Statutory Report.
The role of the Committee is to assist the Board to
develop, maintain and implement policies in relation to:
1. the selection and appointment practices for Directors;
and
2. the remuneration of Directors and relevant executives.
Selection, appointment and development of Directors
The Nomination and Remuneration Committee is required
to:
• review Crown’s procedure for the selection and
appointment of new Directors (Selection Procedure)
and make appropriate recommendations to the Board
in relation to the Selection Procedure;
• implement the Selection Procedure and make
nomination recommendations to the Board;
• develop succession plans in order for the Board to
maintain appropriate experience, expertise and
diversity;
• review Crown’s procedure for the evaluation of the
performance of the Board, its Committees and its
Directors and be primarily responsible for the
implementation of the evaluation process; and
• consider implementing a plan for enhancing Director
competencies and ensure that an effective induction
process is in place for new Directors.
The Selection Procedure requires that in the event that a
new Director appointment is required, the Nomination and
Remuneration Committee (on behalf of the Board) must
adhere to procedures including the following:
• the experience and skills appropriate for an appointee,
the skills of the existing Board and any likely changes to
the Board will be considered;
• upon identifying a potential appointee, specific
consideration will be given to that candidate’s:
– competencies and qualifications;
– independence;
– other directorships and time availability; and
– the effect that the appointment would have on the
overall balance and composition of the Board
including by reference to the Crown Board Skills
Matrix adopted from time to time; and
• finally, all existing Board members must consent to the
proposed appointment.
The Nomination and Remuneration Committee also has
responsibility for reviewing the Board Skills Matrix on an
annual basis to ensure it remains consistent with the
objectives of Crown and existing regulatory requirements
and recommendations.
remuneration of Directors and relevant executives
The role of the Nomination and Remuneration Committee
also includes:
1. the review and recommendation of appropriate fees to
be paid to Non-executive Directors; and
2. consideration of remuneration policies to be applied to
executives, including any equity-based remuneration
plan that may be considered, subject to shareholder
approval (where required).
Following the end of the financial year, the Committee
reviewed and approved:
• the remuneration for Non-executive Directors and
senior executives which will apply during the financial
year ending 30 June 2018; and
• the short term incentive payments made to senior
executives referable to the financial year ended
30 June 2017.
A summary of current remuneration arrangements is set
out more fully in the Remuneration Report. The objective
of Crown’s remuneration policy is to ensure that:
• senior executives are motivated to pursue the long-term
growth and success of Crown; and
• there is a clear relationship between the performance
of senior executives and their remuneration.
Board Skills Matrix
As noted above, the Selection Procedure for Director
nomination requires that the Nomination and
Remuneration Committee (on behalf of the Board)
considers the effect that any proposed Director candidate
would have on the overall balance and composition of the
Board including by reference to the Crown Board Skills
Matrix adopted from time to time.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
28
CRL091.32 - AR17 LGL_SEC_AW.indd 28
14/9/17 12:29 pm
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
The Crown Board has adopted the following Board Skills Matrix which sets out the mix of skills and diversity that the Board
is looking to achieve in its membership. The Board Skills Matrix highlights the key skills and experience of the Board and the
extent to which those skills are currently represented on the Board and on each of its Committees as at 12 September 2017.
Skill / Competency
total number of Directors
Executive Experience
Experience in senior positions at executive levels.
Strategic planning and Execution
Ability to develop and implement successful strategy and deliver agreed
strategic planning goals.
Risk Management
Experience in the oversight and management of material business risk including
Board Risk Management Committee membership.
Financial Acumen
Senior executive or equivalent experience in financial accounting and reporting,
capital management, industry taxation, internal financial controls and corporate
financing arrangements.
Governance
Experience with listed and other organisations subject to robust governance
frameworks with an ability to assess the effectiveness of relevant governance
processes.
occupational Health and Safety
Experience in relation to workplace health and safety.
Environment and Sustainability
Experience in relation to environmental and social responsibility and
community.
Legal and regulatory
Experience in legal and regulatory matters including regulatory and contractual
frameworks governing gaming matters.
Information Technology
Senior executive experience in information technology including gaming
systems and data security.
Human Resources / Remuneration
Experience in relation to remuneration practices, development of incentive
plans, succession planning and director appointment processes including
Board Remuneration Committee membership.
Capital Projects
Senior executive experience in executing large scale projects with long-term
investment horizons and substantial capital outlays.
Sales and Marketing
Senior executive experience in marketing coupled with a detailed understanding
of Crown’s strategic direction and competitive environment.
Industry Experience - Gaming and Entertainment
Senior executive experience in the gaming and entertainment industry.
Industry Experience - Hospitality and Management
Senior executive experience in the hospitality, food and beverage industries.
Industry Experience – Tourism
Senior executive experience in the tourism industry.
Industry Experience – Public Policy
Experience in public and regulatory policy, including in relation to gaming
related policy.
l
a
i
c
o
S
e
t
a
r
o
p
r
o
C
y
t
i
l
i
b
i
s
n
o
p
s
e
R
e
c
n
a
n
r
e
v
o
G
d
n
a
t
i
d
u
A
e
t
a
r
o
p
r
o
C
d
r
a
o
B
t
n
e
m
t
s
e
v
n
I
e
c
n
a
n
i
F
d
n
a
n
o
i
i
t
a
n
m
o
N
n
o
i
t
a
r
e
n
u
m
e
R
l
a
n
o
i
t
a
p
u
c
c
O
d
n
a
h
t
l
a
e
H
y
t
e
f
a
S
e
l
b
i
s
n
o
p
s
e
R
i
g
n
m
a
G
t
n
e
m
e
g
a
n
a
M
k
s
i
R
9
9
9
9
8
9
7
8
8
3
8
6
6
4
5
5
6
3
3
3
3
3
3
3
3
3
0
3
1
1
0
1
1
2
3
3
3
3
2
3
2
3
3
1
3
1
1
0
0
0
2
3
3
3
3
3
3
3
3
3
1
3
2
1
1
2
2
3
3
3
3
3
2
3
3
3
3
1
3
3
2
1
2
2
1
3
3
3
3
2
3
2
3
3
2
3
2
2
1
1
1
2
3
3
3
3
2
3
3
3
3
0
3
1
1
0
1
1
2
3
3
3
3
2
3
3
3
3
1
3
1
2
1
1
1
2
3
3
3
3
3
3
3
3
3
2
3
2
3
2
2
2
2
The Board Skills Matrix, albeit important, is only part the Selection Procedure which the Board is required to follow. As
noted above, the Nomination and Remuneration Committee has responsibility for reviewing the appropriateness of the
Board Skills Matrix on an annual basis.
Crown Resorts Limited Annual Report 2017
29
CRL091.32 - AR17 LGL_SEC_AW.indd 29
14/9/17 12:29 pm
CorporatE GovErnanCE StatEMEnt CONTINUED
Succession planning is an important part of the responsibilities of the Nomination and Remuneration Committee as it
ensures that the Board maintains appropriate experience, expertise and diversity.
relationships affecting independence
The table below sets out the Crown Directors as at 12 September 2017, indicates which of those Directors are
considered to be independent Directors and notes the length of service of each Director from the date of their appointment
to 12 September 2017:
Name of Director
John H Alexander BA
Executive Chairman
The Hon. Helen A Coonan BA, LLB
Non-Executive Director
Rowena Danziger AM, BA, TC, MACE
Non-Executive Director
Andrew Demetriou BA, BEd
Non-Executive Director
Geoffrey J Dixon
Non-Executive Director
Independence
Status
Non-independent
Length of Tenure
(By years and complete months)
10 Years, 2 Months
Independent
5 Years, 9 Months
Independent
10 Years, 2 Months
Independent
2 Years, 8 Months
Independent
10 Years, 2 Months
Professor John S Horvath AO, MB, BS (Syd), FRACP
Non-Executive Director
Independent
7 Years
Michael R Johnston BEc, CA
Non-Executive Director
Harold C Mitchell AC
Non-Executive Director
James D Packer
Non-Executive Director
Independent Board Directors
Non-independent
10 Years, 2 Months
Independent
6 Years, 7 Months
Non-independent
1 month
The Crown Board is currently comprised of nine Directors, six of whom are independent Directors. A majority of Directors
are therefore independent. The independence of Directors is assessed against a list of criteria and materiality thresholds.
Those criteria have been formally enshrined in the Crown Board Charter. Each Director who is listed as an independent
Director complies with the relevant criteria for independence set out in the Crown Board Charter.
Board Chair independence
John Alexander is the Executive Chairman of Crown.
Departure from Recommendation 2.5: The Principles and Recommendations recommend that the chair of the Board
should be an independent Director and should not be the same person as the CEO. Crown’s Executive Chairman is not an
independent Director. Crown’s Executive Chairman is a senior executive of Crown who has assumed the responsibilities of
the former Chief Executive Officer. The Board believes that Crown’s Executive Chairman is well placed to act on behalf of
shareholders and in their best interests as a whole.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
30
CRL091.32 - AR17 LGL_SEC_AW.indd 30
14/9/17 12:29 pm
Director professional development
The induction process for new Directors involves both
formal and informal elements. As noted above, new
Directors are provided with a formal induction pack which
includes important information that a Director must know
about the Company and their appointment terms and
includes copies of relevant constitutions, Board Charters
and Policies. In addition, new Directors are provided with
tours of Crown’s main businesses and the opportunity to
spend time with various members of senior management.
The professional development program for Directors has
largely consisted of presentations from time to time to the
Board regarding issues including developments in
accounting standards, updates on legal issues and
governance processes.
In an attempt to provide more structure to Director
professional development, the Nomination and
Remuneration Committee has been formally delegated with
responsibility for implementing a plan for enhancing Director
competencies and ensuring that an effective induction
process is in place for new Directors. This process involves,
amongst other things, a review of the Crown Board Skills
Matrix and consideration of the extent to which those skills
are currently represented on the Board and on each of its
Committees. Where skills are not currently adequately
represented, appropriate professional development in this
area will be considered.
Principle 3: Act ethically and responsibly
Codes of Conduct
Crown has established separate Codes of Conduct that
outline the standard of ethical behaviour that is expected of
its Directors and of its employees at all times.
Code of Conduct for Directors
The purpose of the Code of Conduct for Directors is to
ensure that they have a clear understanding of Crown’s
expectations of their conduct and reinforces the statutory
duties of Directors to, among other things:
• act with proper purpose and honesty, in good faith and
in the best interests of Crown as a whole;
• use due care and diligence in fulfilling the functions of
office; and
• avoid improper use of information acquired as a Director,
improper advantage of the position of Director and
conflicts of interest.
Crown Directors have an obligation to be independent in
judgement and actions and to take all reasonable steps to
be satisfied as to the soundness of all decisions taken by
the Board. Directors are required to maintain the
confidentiality of confidential information received in the
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
course of the exercise of their duties and are prohibited
from engaging in conduct likely to bring discredit upon
Crown.
Finally, Directors are obliged to, at all times, comply with the
spirit as well as the letter of the law and with the principles
of the Code of Conduct and are encouraged to report
suspected unlawful and unethical behaviour.
Code of Conduct for Employees
The Code of Conduct for Employees is a detailed statement
of the:
• practices required by employees to maintain confidence
in Crown’s integrity;
• legal obligations of employees and the reasonable
expectations of their stakeholders; and
• responsibility and accountability of individuals for
reporting and investigating reports of unethical practices.
More information
Full copies of Crown’s Code of Conduct for Directors
and Code of Conduct for Employees are available at:
www.crownresorts.com.au under the heading
Corporate Governance – Codes.
Principle 4: Safeguard integrity in
corporate reporting
audit and Corporate Governance Committee
Crown has established a formal Audit and Corporate
Governance Committee to review the integrity of Crown’s
financial reporting and to oversee the independence of
Crown’s external auditors.
The current members of the Audit and Corporate
Governance Committee are Helen Coonan (Chair), Rowena
Danziger and Michael Johnston. All members of the
Committee are Non-Executive Directors and a majority of
those Committee members are independent Directors.
The Chair of the Audit and Corporate Governance
Committee, Ms Coonan is an independent Director who has
extensive financial experience. Ms Coonan has served as
the Minister for Revenue and Assistant Treasurer and had
portfolio oversight of the Australian Taxation Office and the
Australian Prudential Regulation Authority.
Further information about each Committee member’s
qualifications and experience is set out in the Directors’
Statutory Report. Information regarding the number of times
the Committee met throughout the period and the individual
attendances of the members at those meetings has also
been provided in the Directors’ Statutory Report.
CRL091.32 - AR17 LGL_SEC_AW.indd 31
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
31
CorporatE GovErnanCE StatEMEnt CONTINUED
The Audit and Corporate Governance Committee has
adopted a formal Charter that outlines its duties and
responsibilities. The Charter includes information on the
procedures for selection and appointment of the external
auditor of Crown and for the rotation of external audit
engagement partners.
More information
A full copy of the Audit and Corporate
Governance Committee Charter is available at:
www.crownresorts.com.au under the heading
Corporate Governance – Charters.
CEo & CFo declarations
Before approving the financial statements for each
financial period, the Board receives from the Executive
Chairman and the Chief Financial Officer a declaration
that, in their opinion:
• the financial records of Crown have been properly
maintained;
• the financial statements comply with the appropriate
accounting standards and give a true and fair view of
the financial position and performance of Crown; and
• that the opinion has been formed on the basis of a
sound system of risk management and internal control
which is operating effectively.
auditor’s attendance at aGMs
Crown shareholders are provided with an opportunity at
the AGM to ask questions and make comments on
Crown’s Annual Report and on the business and
operations of the Company. Crown’s Auditor is required to
attend the AGM and shareholders are therefore also
provided a reasonable opportunity to ask the Auditor
questions about the Auditor’s Report and the conduct of
the audit of the Financial Report. Shareholders are
informed of their opportunity to address the Auditor in the
Notice of Meeting for the AGM.
Principle 5: Make timely and balanced
disclosure
policy to ensure compliance with aSX Listing
rule disclosure requirements
Crown has a formal Continuous Disclosure Policy in place
which is designed to ensure compliance with ASX Listing
Rule requirements. The policy details processes for:
• ensuring material information is communicated to
Crown’s Chief Executive Officer (or equivalent), its
General Counsel and Company Secretary or a member
of the Audit and Corporate Governance Committee;
• the assessment of information and for the disclosure of
material information to the market; and
• the broader publication of material information to
Crown’s shareholders and the media.
More information
A full copy of Crown’s Continuous Disclosure Policy
is available at: www.crownresorts.com.au under the
heading Corporate Governance – Policies.
Principle 6: Respect the rights of
shareholders
providing online information to investors
Crown has a dedicated corporate website which provides
information about itself and its governance to investors.
The website has a dedicated Corporate Governance tab
which sets out Crown’s Charters, Policies and Codes,
describes Crown’s Board Committees and includes
copies of current and historical Corporate Governance
Statements and Remuneration Reports.
More information
For more information, visit: www.crownresorts.com.au
under the heading Corporate Governance.
promotion of effective communication with
shareholders
The Board aims to ensure that shareholders and
prospective investors are kept informed of all major
developments affecting Crown.
Crown’s investor relations program is designed to facilitate
effective communication between shareholders,
prospective investors and Crown.
Crown actively engages with shareholders and
prospective investors through a program of scheduled
interactions with institutional investors, sell-side and
buy-side analysts and the financial media. In addition,
meetings are held with shareholders and prospective
investors on request and responses are provided to
enquiries made from time to time.
Crown’s investor relations program works in tandem with
its obligations under its Continuous Disclosure Policy, a
copy of which is available on Crown’s website.
Crown’s Chief Financial Officer regularly reports to the
Board on investor relations matters.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
32
CRL091.32 - AR17 LGL_SEC_AW.indd 32
14/9/17 12:29 pm
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
In addition, Crown has a Communications Policy which
seeks to promote effective communication with its
shareholders. The policy explains how information
concerning Crown will be communicated to shareholders.
The communication channels include:
• Crown’s Annual Report;
• disclosures made to the ASX; and
• Notices of Meeting and other Explanatory Memoranda.
Advance notification of results announcements is made
via Crown’s website.
More information
A full copy of Crown’s Continuous Disclosure Policy
and Communications Policy is available at:
www.crownresorts.com.au under the heading
Corporate Governance – Policies.
Shareholder participation at meetings
Shareholders are encouraged to both attend and
participate in all meetings of shareholders. The date of
Crown’s AGM is advertised well in advance on its website
and separately communicated to investors via its investor
relations channels.
Shareholders are informed in the formal Notice of Meeting
for the AGM of their opportunity to participate in the
meeting by asking questions of either Crown Directors or
its Auditor.
At the AGM itself, as an introduction to the formal business
of the meeting, the Chairman encourages shareholders to
ask questions on each item of business and offers a
further opportunity to ask general questions at the
conclusion of the formal business of the meeting.
More information
Copies of Crown’s Notices of Meeting are available
at: www.crownresorts.com.au under the heading
Investors and Media – Annual Reports.
Shareholder communications
Crown shareholders have the option to receive
communications from Crown and to send communications
to Crown electronically. Crown’s share registry (on behalf
of Crown) actively encourages shareholders to receive
their shareholder communications electronically and
provides online access to shareholder information.
Separately, the Crown website includes a “Contact Us”
feature which can be used by both shareholders and
others to ask questions of the Company.
Principle 7: Recognise and manage risk
policy for oversight and management of material
business risks
Crown has established a formal Risk Management
Committee to provide strategic risk management
leadership, oversight and analysis to the Crown Board.
The current members of the Risk Management Committee
are Geoff Dixon (Chair), John Alexander and Rowena
Danziger. A majority of Committee members are
independent Directors.
The Chairman of the Risk Management Committee, Mr
Geoff Dixon is an independent Director who has extensive
experience in risk management having previously held a
number of senior executive positions in large corporations.
Further information about each Committee member’s
qualifications and experience is set out in the Directors’
Statutory Report. Information regarding the number of
times the Committee met throughout the period and the
individual attendances of the members at those meetings
has also been provided in the Directors’ Statutory Report.
The Risk Management Committee has adopted a formal
Charter that outlines its duties and responsibilities.
More information
A full copy of the Risk Management Committee
Charter is available at: www.crownresorts.com.au
under the heading Corporate Governance
– Charters.
Design and implementation of risk management
and internal control systems
Crown has established policies for the oversight and
management of material business risks and has adopted a
formal Risk Management Policy. Risk management is an
integral part of the industry in which Crown operates.
Management is charged with monitoring the effectiveness
of Crown’s risk management systems and is required to
report to the Board via the Risk Management Committee.
The Board convened Risk Management Committee
administers Crown’s Risk Management Policy.
The policy sets out procedures which are designed to
identify, assess, monitor and manage risk at each of
Crown’s controlled businesses and requires that the
results of those procedures are reported to the Crown
Board. A formal Risk Management Plan has been
developed using the model outlined in AS/NZS ISO
31000:2009 Risk Management – Principles and
Guidelines.
CRL091.32 - AR17 LGL_SEC_AW.indd 33
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
33
CorporatE GovErnanCE StatEMEnt CONTINUED
The Plan identifies specific Head Office risks in light of
major risks identified at an operational level and provides
the framework for the reporting and monitoring of material
risks across the Crown group.
Management is required to conduct an annual review of
the Risk Management Plan to ensure that risk ratings and
risk definitions remain appropriate for Crown, and that
adequate controls are in place to manage risk.
A review has been conducted during the reporting period
and presented to the Risk Management Committee (and
the Board). In the course of that review the current Risk
Profiles of Crown’s major operating businesses were taken
into account and the risk environment of its investments
also considered.
In addition, the Board has received, and will continue to
receive, periodic reports through the Risk Management
Committee, summarising the results of risk management
initiatives at Crown.
Disclosure of internal audit functions
Crown’s major operating businesses (namely Crown
Melbourne and Crown Perth) each had an internal audit
function in place for the full year that meets the definition
of “internal audit” under the Institute of Internal Auditor’s
International Professional Practices Framework.
The function is internally led and resourced at each
business, with supplemental resourcing provided by
specialist third parties if required.
Internal audit delivers a comprehensive audit program to
provide additional comfort around significant risks,
processes, systems and regulatory requirements where
assurance is determined to be a priority for that period.
Internal audit coverage is determined using a structured
approach. The Boards of each major operating business
and management receive regular reports from internal
audit on the control environment, areas for improvement
and progress in addressing those areas for improvement.
To ensure independence of the function, the Internal Audit
Manager reports to the Executive Chairman (together with
the Chief Legal Officer, Australian Resorts, as an
alternate). Further, each Internal Audit Manager periodically
meets with members of the relevant operating subsidiary’s
Board throughout the year.
As a holding company, Crown does not have a separate
internal audit function, however its accounts are subject to
third party independent audit.
Disclosure of sustainability risks
The Crown group is exposed to a number of economic,
environmental and social sustainability risks.
Crown’s goal is to be a leader in the entertainment and
tourism industry by creating long-term value for its
stakeholders across economic, social and environmental
dimensions. Crown aspires to be a model corporate
citizen and recognises that a company is assessed not
only on its financial performance, but also by its
commitment to corporate social responsibility (CSR),
which includes consideration of, among others, the
following factors:
• the quality of its workplace;
• its environmental footprint;
• its level of community engagement;
• the creation of a safe environment for its customers,
employees and contractors; and
• the provision of employment opportunities.
Crown has established a Corporate Social Responsibility
Committee to assist the Board in setting Crown’s
corporate social responsibility policies and programs and
assessing Crown’s corporate social responsibility
performance. The Corporate Social Responsibility
Committee has adopted a formal Charter that outlines its
duties and responsibilities.
The current members of the Corporate Social
Responsibility Committee are Helen Coonan (Chair),
Professor John Horvath and Harold Mitchell. Information
about each Committee member’s qualifications and
experience is set out in the Directors’ Statutory Report.
Information regarding the number of times the Committee
met throughout the period and the individual attendances
of the members at those meetings has also been provided
in the Directors’ Statutory Report.
The responsibilities of the Committee extend to:
• establishing appropriate corporate social responsibility
policies and programs for Crown;
• monitoring and reviewing the operation and
effectiveness of Crown’s corporate social responsibility
policies and programs;
• promoting and supporting continuous improvement in
Crown’s corporate social responsibility performance;
• encouraging and monitoring the establishment and
maintenance of relationships with key stakeholders
including non-government organisations, sporting and
cultural organisations and other community groups;
and
• encouraging and promoting awareness of corporate
social responsibility related issues at Crown among
Crown’s staff and other stakeholders.
C
o
r
p
o
r
a
t
e
G
o
v
e
r
n
a
n
c
e
S
t
a
t
e
m
e
n
t
34
CRL091.32 - AR17 LGL_SEC_AW.indd 34
14/9/17 12:29 pm
t
n
e
m
e
t
a
t
S
e
c
n
a
n
r
e
v
o
G
e
t
a
r
o
p
r
o
C
The Committee oversaw the development and publication
of Crown’s Corporate Social Responsibility Report. The
Corporate Social Responsibility Report brings together the
elements of Crown’s CSR activities and programs and
identifies and addresses all material economic,
environmental and social sustainability risks and Crown’s
processes for managing them.
accordance with the Plan rules. Security Interests are
defined to extend to any mortgage, charge, pledge or lien
or other encumbrance of any nature, and includes any
derivative relating to or involving a Participant Share. Any
Security Interest, disposal or dealing made by a
participant in contravention of the Plan rules will not be
recognised by Crown.
The rules of the 2017 Senior Executive Incentive Plan
specifically provide that a participant must not transfer,
encumber, dispose of or have a Security Interest issued
over Plan Shares, or any beneficial interest in Plan Shares,
unless all restrictions on the transfer, encumbrance or
disposal of the Plan Shares have been met or waived by
the Board or the Board has provided prior written consent.
A Security Interest is defined to include any mortgage,
charge, pledge, lien, encumbrance or other third party
interest of any nature. The rules of the 2017 Senior
Executive Incentive Plan also require participants to
comply with Crown’s Securities Trading Policy at all times.
A copy of the Corporate Social Responsibility Report can
be found on the Crown website.
More information
A full copy of the Corporate Social Responsibility
Report is available at: www.crownresorts.com.au
under the heading Our Contribution – Corporate
Social Responsibility Reports.
Principle 8: Remunerate fairly and
responsibly
nomination and remuneration Committee
As noted in response to Recommendation 2.1, Crown has
established a formal Nomination and Remuneration
Committee. The Nomination and Remuneration
Committee has adopted a formal Charter that outlines its
duties and responsibilities.
The current members of the Nomination and
Remuneration Committee are each independent, Non-
Executive Directors. Information about each Committee
member’s qualifications and experience is set out in the
Directors’ Statutory Report. Information regarding the
number of times the Committee met throughout the
period and the individual attendances of the members at
those meetings has also been provided in the Directors’
Statutory Report.
policy for Director remuneration
A summary of current remuneration arrangements is set
out more fully in the Remuneration Report. Crown
separately discloses the policies and practices regarding
the remuneration of Non-executive Directors and the
remuneration of Executive Directors and other senior
executives in the Remuneration Report.
restrictions on dealing in equity based
remuneration
The rules of the 2014 Crown Long Term Incentive Plan
specifically provide that a participant must not grant or
enter into any Security Interest in or over any Crown
shares that may be acquired under the Plan (Participant
Shares) or otherwise deal with any Participant Shares or
interest in them until the relevant Participant Shares are
transferred from the Trustee to the participant in
CRL091.32 - AR17 LGL_SEC_AW.indd 35
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
35
Directors’ Statutory Report
Company Information
Significant changes in state of affairs
Some of the significant changes in the state of affairs of
the consolidated group since 1 July 2016 include:
Capital Management Initiatives
• On 23 February 2017, Crown announced its intention to
buy back approximately $500 million of its ordinary
shares. On 30 June 2017, Crown announced the
completion of the share buy-back with 39,546,363
shares having been bought back at a total
consideration of approximately $500 million.
• On 23 February 2017, Crown announced its intention to
buy back any and all outstanding Subordinated Notes
listed on ASX under the code “CWNHA” (Notes). As at
30 June 2017, Crown had bought back a total of
1,266,277 Notes with 4,053,423 Notes remaining on
issue. On 30 June 2017, Crown announced its
suspension of the CWNHA Notes buy-back which
recommenced on 7 August 2017, following the release
of Crown’s 2017 full year results.
Board and Management Changes
• On 10 January 2017, Crown announced that Robert
Rankin would step down as Chairman of Crown
effective 1 February 2017 and that John Alexander had
been appointed as Executive Chairman of Crown
effective 1 February 2017. Robert Rankin subsequently
resigned as a Director of Crown on 21 June 2017.
• On 23 February 2017, Crown announced that Rowen
Craigie would step down from his role as Chief
Executive Officer and Managing Director of Crown with
effect from 28 February 2017, with Mr Craigie’s
responsibilities assumed by Executive Chairman, John
Alexander. A simplified organisation structure,
reflecting the changed focus of Crown’s business, was
also announced.
• On 26 April 2017, Crown announced the issue of 14
million options to acquire 14 million fully paid shares in
Crown that were issued to John Alexander and a small
number of senior executives under a new Crown Senior
Executive Incentive Plan.
• On 30 June 2017, Crown announced that Michael
Neilson had stepped down as General Counsel and
Company Secretary of Crown and that Mary Manos
would continue to act as Company Secretary and
would become General Counsel.
Significant Projects
• On 2 August 2016, Crown announced that it had been
served with legal proceedings from the Millers Point
Fund Incorporated, as applicant, challenging the validity
of the decision of the NSW Planning Assessment
Commission to approve the applications for the
modification of the approved concept plan for
Barangaroo (known as Mod 8) and for the construction
of the Crown Sydney Hotel Resort at Barangaroo
South. Crown defended the proceedings and, on 23
December 2016, announced that the legal challenge
had been dismissed by the Land and Environment
Court of NSW.
• On 15 December 2016, Crown announced that the
Board resolved not to proceed with the Alon project in
Las Vegas and that Crown would assess its options to
optimise the value of Crown’s investment in the project
and that Crown would not proceed with the proposed
demerger of its international investments.
• On 9 February 2017, Crown announced that it, together
with its joint venture partner, Schiavello Group, had
received conditional planning approval for the proposal
to develop One Queensbridge, a new 388 room luxury
six-star hotel and approximately 700 luxury apartments
on a site adjacent to Crown Melbourne. The project
remains subject to financing and long-form agreements
between Crown and Schiavello.
• On 23 February 2017, Crown announced that it would
not proceed with the proposed IPO of a 49% interest in
some of its Australian hotels and associated retail
property.
Investment in Melco Resorts & Entertainment Limited
During the 2017 financial year, Crown executed a series of
transactions in relation to its investment in Melco Resorts
& Entertainment Limited (MRE) (formerly Melco Crown
Entertainment Limited), including:
• an underwriting agreement for the sale of 40.9 million
MRE shares (equivalent to approximately 2.8% of MRE
shares outstanding) for US$5.33 per MRE share, which
completed on 20 December 2016;
• a bilateral agreement with Melco International
Development Limited for the sale of 198 million MRE
shares (equivalent to 13.4% of MRE shares outstanding)
for US$6.00 per MRE share, which completed on
16 February 2017; and
• a repurchase agreement with MRE for the sale of
165.3 million MRE shares (equivalent to 11.2% of MRE
shares outstanding) for US$7.04 per MRE share, which
completed on 16 May 2017,
(together, the MRE sell-down transactions).
In addition, Crown entered into agreements to unwind
each of the cash-settled equity swaps entered into in
December 2016 (referencing approximately 82 million MRE
shares outstanding with a price hedge of US$5.33 per
MRE share) and the cash-settled equity swap entered into
in March 2017 (referencing approximately 36 million MRE
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
R
e
p
o
r
t
36
CRL091.33 - AR17 LGL_SEC_AW.indd 36
15/9/17 12:11 pm
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
shares outstanding with a price hedge of US$6.02 per
MRE share).
As a result of the MRE sell-down transactions, Crown
generated net proceeds of approximately $3.1 billion and
no longer holds an interest in MRE.
Detention of Crown Employees in China
• On 17 October 2016, Crown released a response to
media reports of the detention of 18 Crown employees
by Chinese authorities.
• On 13 June 2017, Crown announced that all its
employees detained in China as well as those released
on bail had been charged with offences related to the
promotion of gambling and that their cases had been
referred to the Baoshan District Court.
• On 26 June 2017, Crown announced that 17 current
and two former employees of the Crown group were
convicted by the Shanghai Baoshan District Court of
contraventions of Article 303, Clause 1 and Article 25,
Clause 1 of the Criminal Law of the People’s Republic
of China. Fines totalling A$1.67 million were imposed
on 16 of the 19 defendants. All of the fines were paid
ex gratia by Crown. Of the 16 defendants who were
fined, 11 were sentenced to a period of incarceration of
nine months and five were sentenced to a period of ten
months, with time in detention since 14 October 2016
taken into account for all those incarcerated. The
remaining three defendants were not fined or
sentenced to a period of incarceration.
• On 14 August 2017, Crown announced that the last of
the 19 current and former employees of the Crown
group who were detained in China had now been
released.
Significant events after Balance Date
• On 3 August 2017, Crown announced that the
appointment of James Packer as a Director of Crown
had become effective following receipt of all necessary
consents and approvals and that Guy Jalland had been
appointed as a Director, subject to the receipt of all
necessary regulatory approvals.
• On 4 August 2017, Crown announced its intention to
undertake a further on-market share buy-back of up to
approximately 29.3 million shares, which, together with
the initial share buy-back that completed on 30 June
2017, represents no more than 10% of the smallest
number of Crown shares on issue during the prior 12
months.
• On 4 August 2017, Crown announced that on 7 August
2017 it would recommence the buy-back of
outstanding Subordinated Notes listed on ASX under
the code “CWNHA” that was suspended on 30 June
2017 pending the release of Crown’s full year results.
• On 4 August 2017, Crown announced that, subsequent
to 30 June 2017, it had repaid $300 million of Australian
Medium Term Notes (AMTNs) (maturing in July 2017)
and had provided early termination notices in relation to
$105.7 million of finance leases (maturing in June 2022).
Subsequent to year end, the Directors of Crown declared
a final dividend on ordinary shares of 30 cents per share in
respect of the year ended 30 June 2017. The final dividend
will be 60% franked. No part of the unfranked component
of the dividend will consist of conduit foreign income.
The dividend has not been provided for in the 30 June
2017 financial statements.
Environmental regulation
The National Greenhouse and Energy Reporting Act 2007
(NGER Act) established a mandatory reporting system for
corporate greenhouse gas emissions and energy
production and consumption. Crown is required to report
emissions under the NGER Act. Relevant reports have
been submitted during the year.
Key features of the NGER Act are:
• reporting of greenhouse gas emissions, energy
consumption and production by large corporations;
• corporate level public disclosure of greenhouse gas
emissions and energy information; and
• to provide consistent and comparable data for decision
making.
Under the Western Australian Water By-laws legislation,
Crown Perth is required to complete annual water
management assessments and submit water efficiency
management plans. Relevant reports have been submitted
during the year.
The Crown group is not otherwise subject to any particular
or significant environmental regulation under Australian
law. Environmental issues are, however, important to
Crown and it has taken a number of initiatives in this
regard. A description of those initiatives is set out in the
Corporate Social Responsibility section of this Annual
Report.
operating and Financial review
In addition to the information provided in the review of
operations section of this Report, set out below is some
additional information that shareholders of Crown might
reasonably require to make an informed assessment of
the operations, financial position and business strategies
of Crown. The commentary which follows omits some
information which might be considered relevant to
Crown’s business strategies and prospects for future
financial years, on the basis that the Directors have
CRL091.32 - AR17 LGL_SEC_AW.indd 37
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
37
DIrECtorS’ Statutory rEport CONTINUED
reasonable grounds to believe that disclosure would likely
result in unreasonable prejudice to Crown.
Normalised VIP program play revenue was $340.3 million,
down 49.7% on the pcp with turnover of $25.2 billion.
Crown reported a consolidated net profit after tax (NPAT)
attributable to the parent of $1,866.1 million and a
normalised NPAT1 of $343.1 million for the 12 months
ended 30 June 2017. Crown Melbourne and Crown Perth
normalised EBITDA declined by 10.7%, and normalised
revenue declined by 12.7%, predominantly due to the
decline in VIP program play revenue which was down
48.9%.
Performance for the year ended
30 June 2017
Normalised revenue1
Normalised expenditure1
Normalised EBITDA2
Normalised EBIT3
Normalised NPAT attributable to Crown
Reported NPAT before significant items
attributable to Crown
Significant items attributable to Crown4
Reported NPAT attributable to Crown
$m
3,231.3
(2,403.3)
828.0
531.2
343.1
308.9
1,557.2
1,866.1
1 Normalised results have been adjusted to exclude the impact of any
variance from theoretical win rate on VIP program play and significant
items.
2 Normalised earnings before interest, tax, depreciation and
amortisation.
3 Normalised earnings before interest and tax.
4 Relates to a net gain on the sale of MRE shares, a special dividend
from MRE and a net foreign currency gain on disposal of foreign
operations (previously recorded in reserves), partially offset by
restructuring costs, early debt retirement costs and net asset
impairments, predominately relating to the Alon Las Vegas project.
The activities and results of Crown’s operations are
discussed further below.
Crown Melbourne
Normalised EBITDA from Crown Melbourne was
$588.8 million, down 12.5% on the prior comparable
period (pcp). Reported EBITDA for the period was $570.6
million, down 14.0% on the pcp. The reported EBITDA
result takes into account an unfavourable variance from
the theoretical VIP program play result which had a
negative EBITDA impact of $18.2 million. This compares to
a negative EBITDA impact of $9.9 million in the pcp.
Normalised revenue of $1,994.8 million was down 13.7%
on the pcp. This decline was due primarily to the 49.7%
reduction in VIP program play revenue. Main floor gaming
revenue was $1,182.7 million, down 0.1% on the pcp, and
non-gaming revenue grew 4.2% to $471.8 million.
Crown Towers Melbourne hotel occupancy was 96.7%
with an average room rate of $375. Crown Metropol
Melbourne achieved hotel occupancy of 92.2% with an
average room rate of $268. Crown Promenade Melbourne
hotel occupancy was 93.4% with an average room rate of
$233. These high occupancy rates reflect the very strong
demand for luxury hotel accommodation in Melbourne.
The overall normalised operating margin increased from
29.1% to 29.5%. Margin improvement was achieved
through a significant program of productivity and
efficiency improvements, particularly in the second half, as
well as a change in the mix of business.
Crown perth
Normalised EBITDA from Crown Perth was $244.8 million,
down 5.8% on the pcp. Reported EBITDA for the period
was $257.3 million, down 10.0% on the pcp. The reported
EBITDA result takes into account a favourable variance
from the theoretical VIP program play result which had a
positive EBITDA impact of $12.5 million. This compares to
a positive EBITDA impact of $25.9 million in the pcp.
Normalised revenue of $830.1 million was down 10.0% on
the pcp. This decline was due primarily to the 46.1%
reduction in VIP program play revenue, with main floor
gaming revenue also down 4.7% on the pcp.
Normalised VIP program play revenue was $109.3 million,
down 46.1% on the pcp with turnover of $8.1 billion.
Non-gaming revenue was up 11.2% to $246.7 million.
Hotel occupancy at Crown Towers Perth, which officially
opened on 15 December 2016, was 58.0% with an
average room rate of $332. Crown Metropol Perth hotel
occupancy was 85.2% with an average room rate of $275.
Hotel occupancy at Crown Promenade Perth was 91.4%
with an average room rate of $193.
The overall normalised operating margin increased from
28.2% to 29.5%. This improvement includes the impact of
benefits from significant productivity and efficiency
improvements as well as a change in the mix of business.
Crown aspinalls
Normalised EBITDA from Crown Aspinalls was $26.6
million, up 0.4% on the pcp. Reported EBITDA for the
period was a loss of $5.5 million, a decrease of $21.5
million on the pcp. The reported EBITDA result takes into
account an unfavourable variance from the theoretical VIP
program play result which had a negative EBITDA impact
of $32.1 million. This compares to a negative EBITDA
impact of $10.5 million in the pcp.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
r
e
p
o
r
t
38
CRL091.32 - AR17 LGL_SEC_AW.indd 38
14/9/17 12:29 pm
Crown Digital
Cash Flow and Debt
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
Net operating cash flow for the period of $465.7 million
compared to net operating cash flow of $482.7 million in
the pcp. After net proceeds received from the sale of
investments of $3,165.1 million, net capital expenditure of
$348.1 million, share buy-back payments of $499.9 million
and dividend payments of $1,110.8 million, the Group’s
net debt position (excluding working capital cash of
$134.7 million) at 30 June 2017 was $308.5 million,
consisting of total debt of $1,945.0 million and cash
(excluding working capital cash) of $1,636.5 million.
At 30 June 2017, total liquidity, excluding working capital
cash of $134.7 million, was $2,051.3 million, represented
by $1,636.5 million in available cash and $414.8 million in
committed undrawn facilities.
Subsequent to 30 June 2017, Crown repaid $300 million
of Australian Medium Term Notes (AMTNs) (maturing in
July 2017) and provided early termination notices in
relation to $105.7 million of finance leases (maturing in
June 2022).
Likely developments
Other than the developments described in this Report and
the accompanying review of operations, the Directors are
of the opinion that no other matter or circumstance will
significantly affect the operations and expected results for
the Crown group.
EBITDA from Crown’s wagering and online social gaming
operations was $14.8 million, compared to a loss of
$5.4 million in the pcp. Crown’s wagering and online social
gaming operations include CrownBet (a 62% owned,
online wagering business), Betfair Australasia (a 100%
owned, online betting exchange) and DGN Games (a 70%
owned, online social gaming business based in Austin,
Texas).
Crown equity accounts its investments in Draftstars and
Chill Gaming. Chill Gaming is a 50/50 joint venture
between Crown and New Gaming Pty Ltd, which is owned
by the founders of Wymac Gaming Solutions, a
manufacturer and developer of electronic gaming
machines. Chill Gaming will focus on innovation and
providing current gaming customers with new entertaining
product options. Products are in the process of being
developed and will be showcased at future gaming
technology expos.
Melco resorts & Entertainment Limited (MrE)
Crown’s share of MRE’s normalised NPAT for the full year
to 30 June 2017 was an equity accounted profit of
$42.4 million, down $15.7 million or 27.0% on the pcp1.
After adjusting for the variance from theoretical, Crown’s
share of MRE’s reported NPAT result for the year was an
equity accounted profit of $37.9 million, down $4.8 million
or 11.3% on the pcp.
Dividends received from MRE totalled $62.1 million2 which
includes the special dividend paid in January 2017 of
$48.6 million.
As noted earlier in this Report under “Significant changes
in state of affairs”, Crown executed a series of transactions
in relation to its MRE investment which generated net
proceeds of approximately $3.1 billion. As a result of the
MRE sell-down transactions, Crown no longer holds an
interest in MRE.
1. Crown held a 34.3% interest in MRE for approximately 10 months and a 27.4% interest for approximately 2 months in the 2016 financial year. In the full
year ended 30 June 2017, Crown held a 27.4% interest in MRE from 1 July to 20 December 2016 and a 24.6% interest from 21 December to 31
December 2016, following which it no longer equity accounted the results of MRE. Crown completed the sale of its remaining interest in MRE on 16 May
2017 and, as a result, no longer holds an interest in MRE.
2. From 1 July to 31 December 2016, Crown equity accounted the results of MRE. During this period, dividends received from MRE totalled $10.2 million.
From 1 January to 16 May 2017, dividends received from MRE totalled $51.9 million, which includes the special dividend of $48.6 million. Given Crown
no longer equity accounted the results of MRE during this period, the special dividend of $48.6 million was included in significant items while the
ordinary dividend of $3.3 million was included in Crown’s revenue.
Crown Resorts Limited Annual Report 2017
39
CRL091.32 - AR17 LGL_SEC_AW.indd 39
14/9/17 12:29 pm
Directors’ statutory report CONTINUED
Dividends and distributions
Interim Dividend: Crown paid an interim dividend of 30 cents per ordinary share on 17 March 2017. The dividend was
60% franked.
Special Dividend: Crown paid a special dividend of 83 cents per ordinary share on 17 March 2017. The special dividend
was 60% franked.
Final Dividend: The Directors of Crown have declared a final dividend of 30 cents per ordinary share to shareholders
registered as at 22 September 2017.
The final dividend will be 60% franked. No part of the unfranked component of the dividend will consist of conduit foreign
income.
In summary:
Interim Dividend paid
Special Dividend paid
Final Dividend declared
Total
Dividend per share
$
30.0 cents per share
$218,518,256
83.0 cents per share
$604,567,174
30.0 cents per share
$206,654,3471
143.0 cents per share
$1,029,739,777
1 Dollar value based on the total number of shares on issue as at the date of declaration of the 2017 final dividend.
Crown paid shareholders a final dividend in respect of the 2016 financial year of $287.7 million.
Directors and officers
Director details
Set out below are the names of each person who has been a Director of Crown during or since year end and the period for
which they have been a Director. There are currently nine Directors.
Name
John Henry Alexander
Benjamin Alexander Brazil
The Hon. Helen Anne Coonan
Rowen Bruce Craigie
Rowena Danziger
Andrew Demetriou
Geoffrey James Dixon
Professor John Stephen Horvath AO
Michael Roy Johnston
Harold Charles Mitchell AC
James Douglas Packer
Robert John Rankin
Date Appointed
Date Ceased
6 July 2007
26 June 2009
2 December 2011
31 May 2007
6 July 2007
29 January 2015
6 July 2007
9 September 2010
6 July 2007
10 February 2011
3 August 2017
30 July 2015
12 April 2017
28 February 2017
21 June 2017
Since year end, the Board approved the appointment of My Guy Jalland as a Director, subject to the receipt of all
necessary regulatory approvals. Mr Jalland’s appointment will only become effective once the necessary approvals have
been received.
At Crown’s 2016 Annual General Meeting, John Alexander, The Hon. Helen Coonan, Geoff Dixon and
Professor John Horvath AO stood for re-election as Directors. Each Director was re-elected at that meeting.
D
i
r
e
c
t
o
r
s
’
s
t
a
t
u
t
o
r
y
r
e
p
o
r
t
40
CRL091.29 - AR17 LGL_SEC_AW.indd 40
15/9/17 10:17 am
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
The details of each Director’s qualifications and
experience as at the date of this Report are set out below.
Details of all directorships of other Australian listed
companies held in the three years before the end of the
financial year have been included.
John H alexander, BA
Executive Chairman
Mr Alexander is the Executive Chairman of Crown and is
also a Director of a number of companies, including Seven
West Media Limited. Mr Alexander is also Chairman of the
Crown Melbourne Limited, Burswood Limited and
CrownBet Pty Limited Boards.
Mr Alexander was the Executive Chairman of Consolidated
Media Holdings Limited (CMH) from 2007 to November
2012, when CMH was acquired by News Corporation.
Prior to 2007, Mr Alexander was the Chief Executive
Officer and Managing Director of Publishing and
Broadcasting Limited (PBL) from 2004, the Chief Executive
of ACP Magazines Limited from 1999 and PBL’s group
media division comprising ACP Magazines Limited and
the Nine Network from 2002.
Before joining the PBL Group, Mr Alexander was the
Editor-in-Chief, Publisher and Editor of The Sydney
Morning Herald and Editor-in-Chief of The Australian
Financial Review.
Mr Alexander is a member of the Crown Investment,
Responsible Gaming and Risk Management Committees.
Directorships of other Australian listed companies held
during the last three years:
• Seven West Media Limited from May 2013 to current
the Hon. Helen a Coonan, BA, LLB
Non-executive Director
Ms Coonan is a former Senator for New South Wales
serving in the Australian Parliament from 1996 to 2011.
Ms Coonan holds Bachelor of Arts and Bachelor of Laws
degrees from the University of Sydney. Prior to entering
Parliament, she worked as a lawyer including as principal
of her own legal firm, as a partner in law firm Gadens, as a
commercial Barrister in Australia and as an Attorney in
New York.
In Parliament, Ms Coonan served as the Deputy Leader of
the Government in the Senate. She was appointed to
Cabinet as the former Minister for Communications,
Information Technology and the Arts and was shareholder
Minister for Telstra Corporation and Australia Post. She
also served as the Minister for Revenue and Assistant
Treasurer and had portfolio oversight of the Australian
Taxation Office and the Australian Prudential Regulation
Authority. She is the recipient of a Centenary Medal for
service to the Australian Parliament.
Ms Coonan is a Non-executive Director of Snowy Hydro
Limited and is Chair of Snowy Hydro Retail Committee.
She is Chair of Place Management NSW (formerly the
Sydney Harbour Foreshore Authority), Chair of Supervised
Investments Australia Limited, a member of the J.P
Morgan Advisory Council, and is Co-Chair of GRACosway
(a subsidiary of the Clemenger Group). She is a Non-
executive Director of Obesity Australia Limited and a
trustee of the Sydney Opera House. She is a Non-
executive Director of Australian Children’s Television
Foundation and is a consultant to Samsung Electronics
Australia and Allegis Partners.
Ms Coonan serves on the Corporate Council of the
European Australian Business Council and the Australia-
Israel Chamber of Commerce Advisory Council. She is
also a member of Chief Executive Women.
Ms Coonan is an Ambassador for the Menzies School of
Health Research and of the GUT Foundation. She serves
on the Advisory Council of the National Breast Cancer
Foundation and is also a mentor at Stone and Chalk
(start-up hub).
Ms Coonan is the Chair of the Crown Audit and Corporate
Governance Committee and the Corporate Social
Responsibility Committee. She also sits on the Crown
Finance Committee, and is Chair of the Crown Resorts
Foundation.
rowena Danziger, AM, BA, TC, MACE
Non-executive Director
Mrs Danziger’s professional experience spans over 30
years in various Australian and American educational
institutions. Mrs Danziger was the Headmistress at
Ascham School in Sydney from 1973 to 2003.
Mrs Danziger is a Director of Crown Melbourne Limited
and is Chair of the Crown Occupational Health and Safety
Committee and is a member of the Crown Audit and
Corporate Governance, Risk Management and
Responsible Gaming Committees. Mrs Danziger also sits
on the Crown Resorts Foundation Board.
andrew Demetriou, BA, BEd
Non-executive Director
Mr Demetriou was Chief Executive Officer of the Australian
Football League from 2003 until June 2014.
CRL091.32 - AR17 LGL_SEC_AW.indd 41
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
41
DIrECtorS’ Statutory rEport CONTINUED
Prior to becoming Chief Executive Officer, Mr Demetriou
served as AFL General Manager – Football Operations for
three years, overseeing all aspects of the AFL competition.
This followed a stint as head of the AFL Players
Association when he was instrumental in establishing
programs to look after players both during and after their
playing careers.
Following an AFL playing career of 106 games, Mr
Demetriou was the Managing Director of the Ruthinium
Group, a business importing acrylic teeth, growing the
business significantly by expanding manufacturing and
exports to 70 countries worldwide and he currently
remains a Board member.
Mr Demetriou is a Director of the Melbourne Sports
Marketing firm, Bastion Group, is a Non-executive
Chairman of Capitol Health Limited, Transitional Chairman
of Cox Architects, Global Chairman of Beyond Boundaries
and a Non-executive Director of the non-partisan Climate
Institute.
Mr Demetriou was formerly Chair of the Acquire Learning
Advisory Group. He also served as Non-executive
Chairman of the Baxter Group, a waste management
group listed on ASX in 2003 with a market capitalisation of
$40 million – the company was later sold to Transpacific
for $260 million – and is a former Chairman of the
Australian Multicultural Advisory Council.
Mr Demetriou is a Director of CrownBet Pty Limited.
Directorship of other Australian listed companies held
during last three years:
• Capitol Health Limited from November 2014 to current
Geoffrey J Dixon
Non-executive Director
Geoff Dixon is an experienced and successful corporate
executive with a background in the media, mining, aviation
and tourism industries.
He was Managing Director and Chief Executive of Qantas
Airways Limited for eight years until 2008 - joining Qantas
in 1994 and also serving as Chief Commercial Officer and,
for two years, as Deputy Managing Director. He was
Chairman of the Australian Government’s major tourism
authority, Tourism Australia, for six years until 2015.
Mr Dixon is currently Chairman of the privately-held
Australian Pub Fund, Great Walks of Australia and the
Garvan Medical Research Foundation. He is on the Board
of the Museum of Contemporary Art Australia and is an
Ambassador for the Australian Indigenous Education
Foundation.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
r
e
p
o
r
t
42
He is Chairman of the Crown Nomination and
Remuneration Committee, the Risk Management
Committee and the Finance Committee.
Directorships of other Australian listed companies held
during the past three years:
• Adslot Limited from December 2013 to December 2016
professor John S Horvath, AO, MB, BS (Syd), FRACP
Non-executive Director
Professor John Horvath was the Australian Government
Chief Medical Officer from 2003 to 2009 and principal
Medical Consultant to the Commonwealth Department
until January 2016. He is currently continuing to advise the
Department of Health and the School of Medicine,
University of Sydney, and holds the position of Honorary
Professor of Medicine.
Professor Horvath is a Fellow of the Royal Australasian
College of Physicians and is a distinguished practitioner,
researcher and teacher. Professor Horvath previously sat
on the Board of the Garvan Research Foundation and was
a Governor of the Centenary Institute of Medical Research
until January 2016. He was a member of the Advisory
Council to the Australian Organ and Tissue Donation
Agency. He is a member of the Finance and Administration
Committee of the School of Medicine at the University of
Sydney. Professor Horvath was a member of the
Ministerial Advisory Council to the Minister of Health.
Professor Horvath was previously Clinical Professor of
Medicine at the University of Sydney. He is also known as
a leader in a range of medical training and workforce
organisations and is a former President of the Australian
Medical Council and the New South Wales Medical Board.
Professor Horvath is the Chairman of the Crown
Responsible Gaming Committee and the Investment
Committee and a member of Crown’s Occupational
Health and Safety, Corporate Social Responsibility and
Nomination and Remuneration Committees. He also sits
on the Crown Melbourne Limited Board and the Crown
Resorts Foundation Board.
Professor Horvath is currently the Global Strategic Medical
Advisor to the Chief Executive Officer of Ramsay Health
Care and a Director of the Ramsay Hospital Medical
Research Institute.
CRL091.32 - AR17 LGL_SEC_AW.indd 42
14/9/17 12:29 pm
Michael r Johnston, BEc, CA
Non-executive Director
Mr Johnston is the Finance Director of Consolidated Press
Holdings Pty Limited (CPH), having previously been an
adviser to the Consolidated Press Holdings Group (CPH
Group) for seventeen years. As Finance Director, Mr
Johnston oversees a number of operational businesses
within the CPH Group and its controlled associates. He
was also the Chief Financial Officer of Ellerston Capital (a
subsidiary of CPH) until 30 June 2008.
Prior to his appointment with the CPH Group, Mr Johnston
was a senior partner in the Australian member firm of
Ernst & Young. He was also on the Board of Partners of
Ernst & Young, Australia.
Mr Johnston holds a Bachelor of Economics degree from
Sydney University and is an Associate of the Institute of
Chartered Accountants of Australia.
Mr Johnston is a member of the Crown Audit and
Corporate Governance, Finance, Investment and
Occupational Health and Safety Committees.
Mr Mitchell was appointed Companion of the Order of
Australia in 2010 for eminent service to the community
through leadership and philanthropic endeavours in the
fields of art, health and education and as a supporter of
humanitarian aid in Timor-Leste and Indigenous
communities.
In December 2011, Mr Mitchell was awarded an Honorary
Doctorate – Doctor of Business Honoris Causa, by RMIT
University.
Mr Mitchell was awarded the Victorian Australian of the
Year for 2013.
In August 2013, Mr Mitchell was appointed Adjunct
Professor, School of Humanities and Communications
Arts, University of Western Sydney.
In December 2014, Melbourne University conferred on him
an honorary degree of Doctor of Laws.
Mr Mitchell is a member of the Crown Corporate Social
Responsibility and Nomination and Remuneration
Committees and he sits on the Crown Resorts Foundation
Board.
Harold C Mitchell, AC
Non-executive Director
James D packer
Non-executive Director
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
James Packer is Chairman of Consolidated Press
Holdings Pty Ltd (CPH). CPH owns and operates a
portfolio of investments and assets across the
entertainment, leisure, information technology, retail and
financial services sectors.
The CPH group is a substantial shareholder of Crown and
Mr Packer is the former Chairman of Crown.
Crown is also an investor in the Nobu hospitality group
and Mr Packer serves on Nobu’s Board of Directors.
In 2014, Mr Packer formed the Packer Family Foundation
which, together with the Crown Resorts Foundation, has
committed $200 million of funding through the National
Philanthropic Fund, a joint initiative of the Foundations.
The National Philanthropic Fund distributes funds to good
causes in the fields of education, arts and community
inclusion.
Mr Mitchell is the founder of Mitchell & Partners and until
August 2013 was Executive Chairman of Aegis Media,
Australia and New Zealand. Since he started Mitchell &
Partners in 1976, the company has evolved to become the
largest media and communications group in Australia
today.
In December 2000, Mr Mitchell launched the Harold
Mitchell Foundation which distributes funds between
health and the arts.
Mr Mitchell holds a large number of community roles
including Chairman of Art Exhibitions Australia, Board
member of Tennis Australia, Chairman of The Florey
Institute of Neuroscience and Mental Health, Board
member of New York Philharmonic, Chairman of Australia-
Indonesia Centre and Chairman of FreeTV Australia.
Previously Mr Mitchell was Chairman of the Melbourne
Symphony Orchestra, TVS and University of Western
Sydney’s television service for Greater Sydney and in June
2015, Mr Mitchell was appointed Chairman of the Victorian
Premier’s Job and Investment Panel.
In 2003, Mr Mitchell delivered the Andrew Olle Memorial
Lecture on Media. In January 2004, he was awarded the
Officer of the Order of Australia for his services as a
benefactor and fundraiser in support of artistic and cultural
endeavour.
CRL091.32 - AR17 LGL_SEC_AW.indd 43
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
43
DIrECtorS’ Statutory rEport CONTINUED
Company secretary details
Other officer details
In addition to the above, Crown’s principal officers include:
Kenneth M Barton
Chief Financial Officer and CEO Crown Digital
Barry J Felstead
Chief Executive Officer – Australian Resorts
W Todd Nisbet
Executive Vice President, Strategy and Development
Mary Manos, BCom, LLB (Hons), GAICD
Company Secretary
Mary Manos is Crown’s General Counsel and Company
Secretary. Prior to her appointment, she was Senior Legal
Counsel for Crown and joint Company Secretary. Ms
Manos was appointed joint Company Secretary in April
2008.
Prior to joining Crown, Ms Manos was a Senior Associate
in a Melbourne law firm, specialising in mergers and
acquisitions and corporate law.
Ms Manos holds Bachelor of Commerce and Bachelor of
Laws (Hons) degrees from the University of Melbourne.
She is also a Graduate of the Australian Institute of
Company Directors and a secretary of the Crown Resorts
Foundation.
Michael J neilson, BA, LLB
Former Company Secretary
Mr Neilson stepped down from his role as General
Counsel and joint Company Secretary on 30 June 2017.
Prior to his appointment with Crown, he was General
Counsel for Crown Melbourne Limited, a position he held
from 2004 to 2007.
Before joining the Crown group, Mr Neilson spent 10 years
in a commercial legal practice in Melbourne before joining
the Lend Lease Group in Sydney in 1997 as General
Counsel for Lend Lease Property Management.
In 1998, he was appointed General Counsel and Company
Secretary of General Property Trust, the position he held
until joining Crown Melbourne Limited in 2004.
Mr Neilson is also a member of the Board of Trustees of
the International Association of Gaming Advisers (IAGA)
and Chair of the School Council of Camberwell Grammar
School.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
r
e
p
o
r
t
44
CRL091.32 - AR17 LGL_SEC_AW.indd 44
14/9/17 12:29 pm
Relevant interests of Directors
Details of relevant interests of current Directors in Crown shares as at 30 June 20171 were as follows:
Director
John Alexander
The Hon. Helen Coonan
Rowena Danziger
Andrew Demetriou
Geoff Dixon
Professor John Horvath
Michael Johnston
Harold Mitchell
James Packer
Notes:
Total number of ordinary shares
Total number of options
399,557
-
30,896
-
-
-
-
114,887
342,527,795
5,000,000
-
-
-
-
-
-
-
-
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
1 For more information on relevant interests of current Directors, please see the Remuneration Report.
Other than in connection with Crown’s 2014 Long Term Incentive Plan and Crown’s 2017 Senior Executive Incentive Plan
which are described in the Remuneration Report, no Crown Director is party to any contract which would give that Director
the right to call for the delivery of shares in Crown.
Board and Committee meetings
Set out below are details of the number of Board meetings and Committee meetings held by Crown during the 2017
financial year together with each Director’s attendance details.
Audit and
Corporate
Governance
Committee
Meetings
Board
Meetings
Corporate Social
Responsibility
Committee
Meetings
Finance
Committee
Meetings
Nomination and
Remuneration
Committee
Meetings
Occupational
Health
and Safety
Committee
Meetings
Responsible
Gaming
Committee
Meetings
Risk Management
Committee
Meetings
Held Attended Held Attended
Held
Attended Held Attended Held Attended Held Attended Held Attended
Held
Attended
J H Alexander1
B A Brazil2
H A Coonan
R B Craigie3
R Danziger
A Demetriou
G J Dixon
J S Horvath
M R Johnston
H C Mitchell
R J Rankin4
15
12
15
12
15
15
15
15
15
15
15
15
10
15
11
13
15
13
14
14
15
15
3
3
3
3
3
2
2
1
2
2
2
1
2
2
2
2
2
2
2
2
4
4
4
4
4
4
1
4
6
6
1
4
5
6
1
3
4
4
1
3
4
4
4
4
4
4
4
4
4
4
1 John Alexander was appointed as a member of the Responsible Gaming and Risk Management Committees on 27 April 2017.
2 Ben Brazil resigned as a Director on 12 April 2017.
3 Rowen Craigie resigned as a Director on 28 February 2017.
4 Robert Rankin resigned as a Director on 21 June 2017.
CRL091.32 - AR17 LGL_SEC_AW.indd 45
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
45
DIrECtorS’ Statutory rEport CONTINUED
Under Crown’s Constitution and its Board and Committee
Charters, documents containing written resolutions
assented to by Directors are to be taken as a minute of a
meeting of Directors or of a Committee (as the case may
be). The Board assented to four written resolutions and
the Finance Committee assented to one written resolution
in the 2017 financial year. The Investment Committee did
not formally meet in the 2017 financial year.
Shares and Options
On 27 April 2017, Crown issued 14 million options under
the 2017 Senior Executive Incentive Plan (Options). The
Options, with an expiry date of 22 February 2021, have
been issued to the following Senior Executives:
Senior Executive
Number of Options
John Alexander
Barry Felstead
Todd Nisbet
Ken Barton
5,000,000
3,000,000
3,000,000
3,000,000
Each Option is granted over one fully paid ordinary share
in Crown with an initial exercise price of $11.43. The
exercise price of $11.43 per Option may be varied over the
life of the Plan to take into account the value of any capital
returns and special dividends.
If Crown undertakes a bonus issue of Crown shares
during the term of the Options, holders are entitled, upon
exercise of an Option, and without payment of any further
consideration, to the number of Crown shares the holder
would have received under that bonus issue. If Crown
undertakes a pro rata issue of Crown shares during the
term of the Options, then the exercise price of each Option
will be reduced in accordance with the 2017 Senior
Executive Incentive Plan Rules.
For all holders of the Options, other than a Director of
Crown, at Crown’s election, the Options can be settled by
the issue of new Crown fully paid ordinary shares, the
transfer of shares acquired by Crown from the market or
by paying a cash equivalent to the difference between the
exercise price of the Options and the market price of the
shares at the time of exercise. For John Alexander, a
Director of Crown, any shares to be acquired on the
vesting and exercise of the Options must be purchased
on-market and cannot be settled by the issue of new
Crown shares.
No shares or interests have been issued during the year or
since year end as a result of option exercise.
Indemnity and Insurance of Officers
and Auditors
Director and officer indemnities
Crown indemnifies certain persons as detailed in its
Constitution in accordance with the terms of the Crown
Constitution.
Directors’ and officers’ insurance
During the year Crown has paid insurance premiums to
insure officers of the Crown group against certain
liabilities.
The insurance contract prohibits disclosure of the nature
of the insurance cover and the amount of the insurance
premiums payable.
Indemnification of auditors
To the extent permitted by law, Crown has agreed to
indemnify its auditors, Ernst & Young, as part of the terms
of its audit engagement agreement against claims by third
parties arising from the audit (for an unspecified amount).
No payment has been made to indemnify Ernst & Young
during or since the end of the financial year.
Auditor Information
auditor details
Ernst & Young has been appointed Crown’s auditor. Mr
David McGregor was the Ernst & Young partner
responsible for the audit of Crown’s accounts for the year
ended 30 June 2017. As the 2017 financial year marked
Mr McGregor’s fifth anniversary as Crown’s lead audit
partner, the Crown Board has appointed Mr Michael
Collins of Ernst & Young as Crown’s lead audit partner
from the 2018 financial year.
non-audit services
Details of the amounts paid or payable to Ernst & Young
for non-audit services provided during the year by the
auditor are outlined in note 25 of the Financial Report.
Crown acquired non-audit services from Ernst & Young,
largely in respect of taxation matters relating to:
• the proposed demerger and REIT which did not
proceed;
• refinancing activities;
• the sale of Crown’s interest in Melco Resorts &
Entertainment Limited;
• proposed developments and major capital projects;
and
• ongoing taxation matters.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
r
e
p
o
r
t
46
CRL091.32 - AR17 LGL_SEC_AW.indd 46
14/9/17 12:29 pm
The ratio of non-audit to audit services provided by Ernst
& Young to Crown at the conclusion of the 2017 financial
year was approximately 8.6:1. This ratio reflects an
elevated level of activity in the areas noted above during
the year.
Based on advice received from the Audit and Corporate
Governance Committee, the Directors are satisfied that
the provision of non-audit services during the 2017
financial year by Ernst & Young is compatible with, and did
not compromise, the general standard of independence
for auditors imposed by the Corporations Act 2001 (Cth)
for the following reasons:
• all non-audit services have been reviewed by the Audit
and Corporate Governance Committee to ensure that
they did not impact the impartiality and objectivity of
the auditor; and
• none of the services involved reviewing or auditing the
auditor’s own work or acting in a management
decision-making capacity for the Company.
Rounding
The amounts contained in the financial statements have
been rounded off to the nearest thousand dollars (where
rounding is applicable) under the option available to Crown
under ASIC Class Order 2016/191. Crown is an entity to
which the Class Order applies.
t
r
o
p
e
r
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
CRL091.32 - AR17 LGL_SEC_AW.indd 47
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
47
Remuneration Report
This Remuneration Report for the year ended 30 June
2017 outlines the Director and executive remuneration
arrangements of Crown in accordance with the
requirements of the Corporations Act 2001 (Cth)
(Corporations Act) and the Corporations Regulations 2001
(Cth). For the purposes of this Report, key management
personnel (KMP) of the Crown group are defined as those
persons having authority and responsibility for planning,
directing and controlling the major activities of the Crown
group, directly or indirectly, including any Director (whether
executive or otherwise) of Crown Resorts Limited.
The disclosures in this Report have been audited. This
Report is presented under the following sections:
1. Introduction
2. Overview of Remuneration Policy
3. Summary of Senior Executive Remuneration Structure
• Fixed Remuneration
• Performance Based Remuneration
4. Details of Performance Based Remuneration Elements
• Short Term Incentives
• Long Term Incentives: 2014 Crown Long Term
Incentive Plan and 2017 Senior Executive Incentive
Plan
5. Relationship between Remuneration Policy and
Company Performance
• Remuneration linked to performance
• Policy on entering into transactions in associated
products which limit economic risk
6. Remuneration details for Non-executive Directors
7. Remuneration details for Senior Executives
8. Key Management Personnel Disclosures
Introduction
persons to whom report applies
The remuneration disclosures in this Report cover the
following persons:
Non-executive Directors
• Benjamin A Brazil (until 12 April 2017)
• The Hon. Helen A Coonan
• Rowena Danziger
• Andrew Demetriou
• Geoffrey J Dixon
• Professor John S Horvath
• Michael R Johnston
• Harold C Mitchell
• Robert J Rankin (until 21 June 2017 (Chairman from
12 August 2015 to 31 January 2017))
Executive Directors
• John H Alexander (Executive Chairman from 1 February
2017, previously Executive Deputy Chairman)
• Rowen B Craigie (Managing Director and Chief
Executive Officer until 28 February 2017)
Other company executives and key management
personnel
• Kenneth M Barton (Chief Financial Officer and CEO
Crown Digital)
• Barry J Felstead (Chief Executive Officer – Australian
Resorts)
• W Todd Nisbet (Executive Vice President – Strategy
and Development)
In this Report the group of persons comprised of the
Executive Directors and the other company executives
and key management personnel (listed above) are referred
to as “Senior Executives”.
This Report contains a similar level of disclosure to the
2016 Remuneration Report. Other than the introduction of
a new Senior Executive Incentive Plan (described below),
there has been no material change to the Company’s
remuneration policy during the period and much of the
description of the Company’s remuneration policy in this
Report is therefore unchanged from last year.
Crown Group restructure
In February 2017, Crown announced that after more than
20 years with the Crown group, Chief Executive Officer
and Managing Director, Rowen Craigie would be stepping
down from his role with effect from 28 February 2017.
Given the decision to reduce (and then ultimately exit)
Crown’s investment in Melco Resorts & Entertainment
Limited (MRE) (formerly Melco Crown Entertainment
Limited) and to discontinue the proposed Alon Las Vegas
project, the Board decided that following the cessation of
Mr Craigie’s employment, a simplified organisation
structure reflecting the changed focus of Crown’s
business should be adopted.
Accordingly, it was determined that Mr Craigie’s
responsibilities would be assumed by the then newly
appointed Executive Chairman, John Alexander.
The Senior Executives who report to Mr Alexander are Mr
Barry Felstead, Chief Executive Officer – Australian
Resorts, Mr Todd Nisbet, Executive Vice President
– Strategy and Development and Mr Ken Barton – Chief
Financial Officer who also assumed the role as CEO of
Crown’s Digital Businesses during the period.
As Executive Chairman, Mr Alexander now has primary
accountability for the management of Crown and, as
noted, has assumed the responsibilities of the previous
Chief Executive Officer. Mr Alexander’s role therefore
effectively replaced three existing positions, being
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
48
CRL091.32 - AR17 LGL_SEC_AW.indd 48
14/9/17 12:29 pm
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Chairman, Executive Deputy Chairman and the Chief
Executive Officer.
On account of these increased responsibilities, the
employment arrangements for Mr Alexander were varied
and a new Contract of Employment was entered into. A
summary of the material terms of Mr Alexander’s Contract
of Employment has been set out under the heading
“Remuneration details for Senior Executives” later in this
Report.
Overview of Remuneration Policy
philosophy
Crown is a company that provides outstanding customer
service and, to remain competitive, Crown must continue
to enhance the experience of all customers who visit
Crown’s land based and digital properties. As a result, the
performance of the Crown group is highly dependent
upon the quality of its Directors, senior executives and
employees. Crown seeks to attract, retain and motivate
skilled Directors and senior executives in leadership
positions of the highest calibre. Crown’s remuneration
philosophy is to ensure that remuneration packages
properly reflect a person’s duties and responsibilities, that
remuneration is appropriate and competitive both
internally and as against comparable companies and that
there is a direct link between remuneration and
performance. Crown has differing remuneration structures
in place for Non-executive Directors and Senior
Executives.
non-executive Directors
The process for determining remuneration of the Non-
executive Directors has the objective of ensuring
maximum benefit for Crown by the retention of a high
quality Board.
The Nomination and Remuneration Committee bears the
responsibility of determining the appropriate remuneration
for Non-executive Directors. Non-executive Directors’ fees
are reviewed periodically by the Nomination and
Remuneration Committee with reference to the fees paid
to the Non-executive Directors of comparable companies.
The Nomination and Remuneration Committee is subject
to the direction and control of the Board.
In forming a view of the appropriate level of Board fees to
be paid to Non-executive Directors, the Nomination and
Remuneration Committee may also elect to receive advice
from independent remuneration consultants, if necessary.
Details regarding the composition of the Nomination and
Remuneration Committee and its main objectives are
outlined in the Corporate Governance Statement. The
Nomination and Remuneration Committee is comprised
solely of independent Non-executive Directors.
A review of Non-executive Directors’ fees was conducted
at the beginning of the 2017 financial year and, at the 2016
Annual General Meeting, shareholders approved an
increase in the aggregate Non-executive Directors’ fee cap
in Crown’s Constitution to $2,500,000. Following the
receipt of shareholder approval, Non-executive Directors’
fees were increased with effect from 1 November 2016.
Further detail regarding this process is set out under the
heading “Remuneration details for Non-executive
Directors” later in this Report.
No performance based fees are paid to Non-executive
Directors. Non-executive Directors are not entitled to
participate in Crown’s incentive plans (described more fully
below). Non-executive Directors are not provided with
retirement benefits other than statutory superannuation at
the rate prescribed under the Superannuation Guarantee
(Administration) Act 1992 (Cth) (Superannuation
Legislation).
Senior Executives
The remuneration structure for Senior Executives
incorporates a mix of fixed and performance based
remuneration. The following section provides an overview
of the fixed and performance based elements of executive
remuneration. The summary tables provided later in this
Report indicate which elements apply to each Senior
Executive.
Crown’s key strategies and business focusses which are
taken into consideration as part of performance based
remuneration are set out on page 5 of the Annual Report.
Summary of Senior Executive
Remuneration Structure
Fixed remuneration
The objective of fixed remuneration is to provide a base
level of remuneration which is appropriate to the Senior
Executive’s responsibilities, the geographic location of the
Senior Executive and competitive conditions in the
appropriate market.
Fixed remuneration is therefore determined with reference
to available market data, the scope and any unique
aspects of an individual’s role and having regard to the
qualifications and experience of the individual. From time
to time, Crown seeks a range of specialist advice to help
establish the competitive remuneration for its Senior
Executives.
Fixed remuneration typically includes base salary and
superannuation at the rate prescribed under the
Superannuation Legislation, mobile telephone costs,
complimentary privileges at Crown Melbourne and Crown
Perth and may include, at the election of the Senior
CRL091.32 - AR17 LGL_SEC_AW.indd 49
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
49
rEMunEratIon rEport CONTINUED
Executive, other benefits such as a motor vehicle,
additional contribution to superannuation, car parking and
staff gym membership, aggregated with associated fringe
benefits tax to represent the total employment cost (TEC)
of the relevant Senior Executive to Crown.
Fixed remuneration for the Senior Executives (except the
Executive Chairman) is reviewed annually by the Executive
Chairman and is approved by the Nomination and
Remuneration Committee.
The review process measures the achievement by the
Senior Executives of their Key Performance Objectives
(KPOs) established at the beginning of the financial year
(see further below), the performance of Crown and the
business in which the Senior Executive is employed,
relevant comparative remuneration in the market and
relevant external advice.
Fixed remuneration for the Executive Chairman is reviewed
by the Nomination and Remuneration Committee following
their consideration of his performance against his annual
KPOs.
The KPOs for Senior Executives, including the Executive
Chairman are closely aligned with the objectives set out in
Crown’s Four Year Financial Plan (see below).
Prior to becoming Executive Chairman, Mr Alexander’s
fixed annual remuneration was $1.5 million and he also
participated in the long term incentive program. The
former Chief Executive Officer and Managing Director
received fixed annual remuneration of approximately $3.1
million and he also participated in short term and long
term incentive programs. As a result of the Crown group
restructure (described above), the position of Executive
Chairman replaced these roles which, at a cost of $3.5
million per annum in fixed remuneration, is less than the
combined TEC of the Executive Deputy Chairman and the
Chief Executive Officer and Managing Director roles
previously in place.
Any payments relating to redundancy or retirement are as
specified in each relevant Senior Executive’s contract of
employment.
For summaries of Senior Executive contracts of
employment, see pages 63 to 69 of this Report.
performance based remuneration
The performance based components of remuneration for
Senior Executives seek to align the rewards attainable by
Senior Executives with the achievement of particular
annual and long term objectives of Crown and the creation
of shareholder value over the short and long term. The
performance based components which applied to the
Senior Executives during the year were as follows:
• Short Term Incentives (STI); and
• Long Term Incentives (the 2014 Crown Long Term
Incentive Plan (2014 Crown LTI) and the 2017 Senior
Executive Incentive Plan (2017 Incentive Plan)).
A key focus of the Crown Board is the achievement of the
Crown group’s annual business plan and budget and the
long term financial plan. In order to provide incentives to
executives, each of the STI and the 2014 Crown LTI link
back to key elements of the business plan and budget and
long term financial plan. It is therefore important to
understand how that business plan and budget and long
term financial plan are developed. A summary of the
process involved is set out below. The 2017 Incentive Plan
is based on an alignment of the relevant Senior Executive’s
reward to the appreciation of Crown’s share price and is
contingent on continued employment with the Crown
group.
Development of Long Term Financial Plan (Four Year
Financial Plan)
Each year, the Crown Board approves a financial plan
which contains the key assumptions and forecasts for
each Crown group business and for the Crown group as a
whole for the four year period commencing in the following
financial year (Four Year Financial Plan).
The process for developing, reviewing and approving the
Four Year Financial Plan is rigorous. Each department in
each Crown business must prepare a four year financial
plan. Key inputs into this process include current operating
performance and the previously approved Four Year
Financial Plan, having regard to:
• performance relative to targets set in the previous Four
Year Financial Plan;
• any changes in the business;
• any changes in factors affecting performance over the
four year period; and
• any new strategic initiatives and changes in the market
in which those businesses are operating.
The targets in each department’s four year financial plan
incorporate an underlying target growth in operating profit
with additional operating profit increases arising from
capital expenditure programs, performance improvement
initiatives and other strategic impacts.
Each department’s four year forecast is consolidated into
the relevant business’s four year forecast which is then
reviewed by the Chief Executive Officer and Chief Financial
Officer of the relevant business.
In turn, the four year forecast for each business is then
incorporated into the Four Year Financial Plan and
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
50
CRL091.32 - AR17 LGL_SEC_AW.indd 50
14/9/17 12:29 pm
reviewed by the Crown Resorts Limited Chief Financial Officer and the Executive Chairman before it is submitted to the
Crown Board for review and approval.
Development of Annual Business Plan and Budget
Crown’s Annual Business Plan and Budget is prepared having regard to the Four Year Financial Plan.
The Annual Business Plan and Budget is based on the first year of the Four Year Financial Plan and details key operational
strategic initiatives and the risks to be addressed. It is developed on a departmental basis, which is then incorporated into
each business’s annual budget and business plan and, finally, into the Crown group Annual Business Plan and Budget,
which then must be approved by the Crown Board.
Details of Performance Based Remuneration Elements
Short term Incentives (StI)
The remuneration of Senior Executives is linked to Crown’s short term annual performance through a cash-based STI.
Individuals may be paid an STI following an assessment of the performance of the Crown group in the previous year and
the performance of the individual against agreed annual KPOs. Senior Executives have a potential or target STI, which is
subject to the Crown group’s performance and the achievement of the Senior Executive’s KPOs established at the
beginning of each financial year. In summary, the typical KPO structure might comprise the following elements:
Financial Performance Objectives
• Performance against budgeted normalised EBITDA1 and/or net profit after tax.
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Typical Non-Financial Objectives
• Management of major capital expenditure and investment programs to ensure
projects are delivered on time and on budget, while minimising disruption at
relevant Australian properties as well as the subsequent delivery of anticipated
benefits from those capital programs.
• Reinforcement and delivery of outstanding customer experiences through
continuous improvement in Crown’s service culture.
• Successful management of Crown stakeholders, including government, media,
trade unions, community organisations, to achieve targeted outcomes.
• Achievement of successful expansion of customer base for Crown properties
and digital businesses through marketing or other relevant activities.
• Growth in engagement levels of employees across Crown.
• Achievement of margin improvement targets through the implementation of
approved programs aimed at reducing costs and increasing asset yield.
• Achievement (or maintenance) of improvements in key occupational health and
safety statistics.
Financial performance objectives are derived from Crown’s Annual Business Plan and Budget as the Crown Board
considers this is the best way to ensure that Crown meets the Annual Business Plan and Budget, aligning performance
outcomes with shareholder value.
A failure to achieve relevant financial performance objectives will result in Senior Executives receiving either no STI bonus
or, where relevant financial performance objectives are only partially met, a reduced STI bonus. The Crown Board retains
discretion, however, to pay an STI bonus where financial performance objectives have not been met, but other objectives
have been achieved.
Appropriate non-financial performance objectives (such as those set out above) are also included in a Senior Executive’s
KPOs where they are within that Senior Executive’s sphere of influence and are relevant to the Senior Executive’s area of
work. These metrics are aligned with the achievement of Crown’s Annual Business Plan and Budget.
1
In this Report, the term “normalised EBITDA” represents EBITDA which has been adjusted to exclude the impact of any variance from theoretical win
rate on VIP program play and the impact of significant items (where applicable).
Crown Resorts Limited Annual Report 2017
51
CRL091.32 - AR17 LGL_SEC_AW.indd 51
14/9/17 12:29 pm
rEMunEratIon rEport CONTINUED
The performance of each Senior Executive against
financial and non-financial KPOs is reviewed on an annual
basis. Whether KPOs have been achieved is determined
by the Executive Chairman, having regard to the
operational performance of the business or function in
which the Senior Executive is involved and the Executive
Chairman’s assessment of the attainment of the
individual’s KPOs.
The Executive Chairman reviews performance based
remuneration entitlements and recommends the STI
payments, subject to final approval by the Nomination and
Remuneration Committee and the Board.
The Executive Chairman’s eligibility for an STI is
determined by the Nomination and Remuneration
Committee on behalf of the Board.
For a more detailed commentary on financial year 2017
STI bonuses see page 70.
Long term Incentives
This year, as part of the Crown group restructure
described earlier in this Report, the Board determined that
an additional long term incentive plan be put in place in
order to incentivise selected Senior Executives to remain
with the Crown group to assist it to achieve the group’s
strategic plans over the life of the 2017 Four Year Financial
Plan. Accordingly, Crown has the following two long term
incentive plans in place:
• the 2014 Crown Long Term Incentive Plan (2014 Crown
LTI); and
• the 2017 Senior Executive Incentive Plan (2017
Incentive Plan).
This section of the Report describes these two Plans.
2014 Crown Long term Incentive plan (2014 Crown
LtI)
The 2014 Crown LTI was made available to selected senior
executives with effect from 1 July 2014. A summary of the
terms of the 2014 Crown LTI follows.
Operation of the 2014 Crown LTI
The award of a long term incentive bonus under the 2014
Crown LTI is dependent on Crown achieving certain
earnings per share hurdles (EPS Hurdles) in respect of, or
in relation to, the four financial years ending 30 June 2015,
30 June 2016, 30 June 2017 and 30 June 2018 (each a
Plan Year).
The 2014 Crown LTI rules provide that the earnings per
share (EPS) target would exclude the contribution from
MRE and are to be calculated in accordance with the
following formula:
Crown Profit
Total Crown Shares
where:
Crown profit means, in respect of a Plan Year, the
normalised net profit after tax of the group for that Plan
Year (excluding the contribution made by MRE and
significant items). Normalised net profit excludes the
impact of any variance from the theoretical win rate on VIP
program play. For the purposes of both the EPS Hurdles
and actual EPS, a theoretical win rate of 1.4% is applied;
and
total Crown Shares means the average of the largest
number of Crown shares on issue during each day during
the relevant Plan Year.
How EPS Hurdles were derived
The EPS Hurdles adopted in the 2014 Crown LTI were
derived directly from EPS forecasts put in place in respect
of the 2014 Four Year Financial Plan (each an EPS Target).
Accordingly, the 2014 Crown LTI was specifically designed
to provide an incentive to senior executives participating in
the 2014 Crown LTI (Participants) to ensure the Four Year
Financial Plan from financial year 2015 to financial year
2018 was met. The way in which Crown’s Four Year
Financial Plans are developed has been described in detail
above.
The EPS Hurdles in financial year 2015, financial year 2016
and financial year 2017 are 98% of the EPS Target for the
relevant year in the Four Year Financial Plan. The EPS
Hurdle in financial year 2018 is 100% of the EPS Target for
the relevant year in the Four Year Financial Plan.
Why earnings per share is used as the single measure
for the 2014 Crown LTI
Crown has elected to use earnings per share as the single
measure for its 2014 Crown LTI.
Earnings per share targets represent the product of
individual business unit future performance projections (as
determined by relevant executives based on their business
unit’s four year financial plan targets). These individual
future performance projections are aggregated with group
costs, interest and taxes to arrive at a Crown group
earnings per share target.
As a result, each executive knows with certainty what
performance hurdles need to be met from their respective
business operations over an extended period in order to
meet the EPS Targets. In addition, as the executive group
collectively needs to achieve the consolidated EPS Target,
it fosters a cooperative approach across businesses to
optimise the Crown group as well as individual business
unit outcomes.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
52
CRL091.32 - AR17 LGL_SEC_AW.indd 52
14/9/17 12:29 pm
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
In developing the 2014 Crown LTI, consideration was
given by the Crown Board to a range of different measures
as well as the potential use of multiple measures, however,
ultimately, it was determined that a single clear,
unambiguous target in the form of an earnings per share
hurdle was best suited to Crown. For example,
consideration was given to the use of a relative measure,
such as relative total shareholder return (TSR), however, it
was decided such measures were not appropriate for
Crown. This is because there are a limited number of
comparable companies within any sizeable ASX
comparator group and many of the larger companies
listed on ASX bear little resemblance to Crown (e.g.
financial institutions and resource companies). As the
results and share prices of such companies can be
expected to move in line with different economic factors
(such as credit conditions and global resource market
conditions) the Crown Board considered it to be
inappropriate to base Crown executives’ long term
rewards on factors over which Crown executives have little
influence.
In addition, the complexity of TSR and other relative
measures (to accommodate changes in the comparator
group, restructurings and capital management initiatives)
can, in some cases, cause them to be of limited value in
motivating executives to individually and collectively deliver
outstanding performance. It is difficult for executives to
equate their individual performance and efforts to the
performance of Crown’s share price relative to unrelated
and incomparable companies.
Crown acknowledges that its EPS Targets are, to a large
degree, an internal measure. However, Crown has
disclosed in this Report (and will continue to disclose) its
historical EPS Targets and EPS Hurdles as well as actual
EPS performance against those historical targets, so that
shareholders are able to see the “stretch” nature of these
targets.
How bonuses accrue
If an EPS Hurdle is achieved in respect of a Plan Year, a
Participant will become entitled to a portion of the
potential maximum bonus (Maximum Bonus) which may
be achieved under the 2014 Crown LTI in accordance with
the following table:
Plan Year
Plan Year 1
Plan Year 2
Plan Year 3
Plan Year 4
Percentage
15%
20%
25%
40%
The Plan rules provide that bonuses will only ultimately be
paid at the end of financial year 2018 either by way of the
transfer of shares acquired under the 2014 Crown LTI or
the payment of cash. See further below.
Effect of achieving an EPS Hurdle
If an EPS Hurdle is met in respect of a Plan Year, the 2014
Crown LTI provides that Crown will calculate the dollar
value of the bonus in respect of the relevant Plan Year
(Plan Year Bonus) by multiplying the Maximum Bonus for
the Participant by the relevant percentage applicable to
that Plan Year (as set out in the table above).
If the Plan Year is Plan Year 1, Plan Year 2 or Plan Year 3,
the 2014 Crown LTI provides that Crown will pay the Plan
Year Bonus earned by the Participant to the nominated
Trustee and with an instruction that the Trustee apply that
Plan Year Bonus to acquire Crown shares on market
(Participant Shares), to be held on trust for the benefit of
the Participant until the end of Plan Year 4 (at which time
the shares could be transferred to the Participant).
In respect of Plan Year 4, the 2014 Crown LTI provides
that Crown will pay the Plan Year 4 Plan Year Bonus to the
Participant in cash and also advise the Trustee, who will
arrange for any shares held in trust to be transferred to the
relevant Participant. The Plan Year 4 Plan Year Bonus is
designed to be paid in cash because the Participant will
be required to pay tax on the Bonus at this time.
Effect of not achieving one or more EPS Hurdles
If an EPS Hurdle is not met, the 2014 Crown LTI provides
as follows:
• if an EPS Hurdle in respect of Plan Year 1, Plan Year 2
or Plan Year 3 is not met, Crown will calculate the Plan
Year Bonus which would have been applied to the
purchase of Participant Shares had the relevant EPS
Hurdle been met (Carried Over Plan Year Bonus);
• if the EPS Hurdle in respect of Plan Year 4 is met:
– the Plan Year 4 Bonus will be paid by Crown to the
relevant Participant in cash;
– the Trustee will arrange for any Crown shares held in
trust to be transferred to the relevant Participant;
and
– if the sum of the EPS Targets for financial year 2015,
financial year 2016, financial year 2017 and financial
year 2018 (Cumulative EPS Hurdle) has also been
met, any Carried Over Plan Year Bonuses will also
be paid to the relevant Participant in cash. The
Carried Over Plan Year Bonuses (if any) are paid in
cash because the Participant will be required to pay
tax on these Bonuses at this time.
CRL091.32 - AR17 LGL_SEC_AW.indd 53
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
53
rEMunEratIon rEport CONTINUED
• if the EPS Hurdle in respect of Plan Year 4 is not met but both the Fallback Plan Year 4 EPS Hurdle (i.e. 98% of the Plan
Year 4 EPS Target) and the Cumulative EPS Hurdle are met:
– the Plan Year Bonus in respect of Plan Year 4 will be paid by Crown to the relevant Participant in cash;
– any Carried Over Plan Year Bonuses will be paid to the relevant Participant in cash; and
– the Trustee will arrange for any Crown shares held in trust to be transferred to the relevant Participant.
• if neither the EPS Hurdle in respect of Plan Year 4 nor the Fallback Plan Year 4 EPS Hurdle are met but the Cumulative
EPS Hurdle is met:
– the Plan Year Bonus in respect of Plan Year 4 will not be paid by Crown to the relevant Participant;
– any Carried Over Plan Year Bonuses will be paid to the relevant Participant in cash; and
– the Trustee will arrange for any Crown shares held in trust to be transferred to the relevant Participant.
• if neither the EPS Hurdle in respect of Plan Year 4 nor the Cumulative EPS Hurdle are met (whether or not the Fallback
Plan Year 4 EPS Hurdle is met):
– the Plan Year Bonus in respect of Plan Year 4 will not be paid by Crown to the relevant Participant;
– any Carried Over Plan Year Bonuses will lapse and will not be paid by Crown to the relevant Participant; and
– the Trustee will arrange for any Crown shares held in trust to be transferred to the relevant Participant.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
Illustration
The following is an illustration of a range of outcomes which might have been achieved by a Participant under the 2014
Crown LTI. It does not include every permutation or combination of outcomes which the 2014 Crown LTI was designed to
achieve.
Key: 4 = Achieved 7 = Not achieved.
year 1 EpS
Hurdle Met?
15%
year 2 EpS
Hurdle Met?
20%
year 3 EpS
Hurdle Met?
25%
year 4 EpS
Hurdle Met?
40%
Fallback year
4 EpS Hurdle
Met?
40%
Cumulative EpS Hurdle
Met?
4
4
4
4
7
4
4
4
7
7
4
4
7
7
7
4
7
7
7
7
4
60% shares
40% cash
4
60% shares
40% cash
4
60% shares
No cash
4
35% shares
65% cash
4
35% shares
25% cash
4
15% shares
85% cash
4
15% shares
45% cash
7
60% shares
No cash
7
60% shares
No cash
7
35% shares
No cash
7
35% shares
No cash
7
15% shares
No cash
7
15% shares
No cash
7
No shares
No cash
4
7
4
7
4
7
7
Note: the percentage allocations between cash and shares are based on the Maximum Bonus, with the share component being valued based on the value
of Crown shares at the time of acquisition. Subsequent movements in the price of Crown shares may result in changes to the cash and share proportions.
54
CRL091.32 - AR17 LGL_SEC_AW.indd 54
14/9/17 12:29 pm
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
What happens to dividends earned on Crown shares
acquired under the 2014 Crown LTI
All dividends received on shares held in trust are to be
passed through to the Participant. As bonuses earned in
the final year of the 2014 Crown LTI (including any Carried
Over Plan Year Bonuses) are to be paid in cash, no
dividends apply in respect of these bonuses.
What happens if an executive’s employment with
Crown ceases
If a Participant’s employment with Crown ceases, then the
Participant is not entitled to any part of his or her 2014
Crown LTI bonus, except where the Participant’s
employment is terminated by Crown without cause, in
which case the Participant will be entitled to any tranche
(in the form of shares held on trust) which has vested prior
to the date of termination.
How EPS Hurdles can be amended
The 2014 Crown LTI provides that in the event that
corporate control events or capital reconstruction events
impact the achievement of EPS Hurdles, then the Crown
Board has discretion to amend the EPS Hurdles in such a
way that does not materially disadvantage Participants.
The Crown Board retains general power to amend the
rules of the 2014 Crown LTI from time to time.
After the Plan Year ended 30 June 2015, the Crown
Nomination and Remuneration Committee conducted a
review of the 2014 Crown LTI and the EPS Hurdles, to
consider whether the Board should exercise its discretion
to adjust any EPS Hurdle or any feature of the Plan.
Whilst there was no change to the EPS Hurdles which will
apply over the life of the Plan, the Nomination and
Remuneration Committee recognised that since the
adoption of the 2014 Crown LTI, there had been a number
of events which affected the definition of Crown Profit,
which were not contemplated when the 2014 Four Year
Financial Plan was adopted.
Those events had both a positive impact on the
determination of Crown Profit, in some cases, and a
negative impact in other cases. They included the
beneficial effect of the removal of super tax for Crown
Melbourne as part of the modifications to the Crown
Melbourne Casino Licence, changes in interest expense
on account of various debt raising activities (including the
issue of Crown Subordinated Notes II) and various
additional corporate costs.
Accordingly, for the purposes of calculating “Crown Profit”
and EPS, the Board determined that the effect of these
uncontemplated events should not have been taken into
account during the financial year ended 30 June 2015 and
thereafter.
The Crown Nomination and Remuneration Committee
conducted a similar review of the 2014 Crown LTI and the
EPS Hurdles, following 30 June 2016. Again, there was no
change to the EPS Hurdles which will apply over the life of
the Plan. However, in addition to the above matters, the
Nomination and Remuneration Committee recognised that
there had been a number of events which affected the
determination of Crown Profit, which were not
contemplated in the 2014 Four Year Financial Plan. Again
some of those events had a positive impact on the
determination of Crown Profit and others had a negative
impact. Those events included new business acquisitions
not contemplated in the 2014 Four Year Financial Plan
such as CrownBet and DGN, potential development
projects including One Queensbridge and the Alon Las
Vegas project and foreign exchange movements and
asset revaluations.
In light of these events and unforeseen costs, and in
accordance with the conclusion of the Nomination and
Remuneration Committee, appropriate adjustments were
made to neutralise the effect of these events. As a result of
those adjustments to the determination of Crown Profit,
the EPS Hurdles were considered to be achieved in
relation to the 2016 financial year.
Having conducted its review of the 2014 Crown LTI and
the EPS Hurdles, following 30 June 2017, the Nomination
and Remuneration Committee has concluded that the
EPS Hurdles for the 2017 financial year have not been
met. Accordingly, no part of the 2014 Crown LTI vested
for financial year 2017. Crown has calculated the Carried
Over Plan Year Bonus, being the Plan Year Bonus which
would have been applied to the purchase of Participant
Shares had the relevant EPS Hurdle been met, and that
Carried Over Plan Year Bonus will be dealt with in the
manner described earlier in this Report.
How the 2014 Crown LTI ameliorates issues with
“cliff’s edge” vesting
The key features of the 2014 Crown LTI are that:
• the EPS Hurdles for Plan Years 1, 2 and 3 are set at
98% of the EPS Targets in the 2014 Four Year Financial
Plan; and
• if at the end of financial year 2018, on a cumulative
basis, the EPS Hurdles over all four years are met, then
any Carried Over Plan Year Bonuses will vest and be
paid to the relevant senior executive in cash.
Accordingly, when viewed as a whole, the Maximum
Bonus under the 2014 Crown LTI consists of four separate
and individually achievable targets, as well as a cumulative
target. As a result, there are a range of potential outcomes
depending on performance against target in each year of
the 2014 Crown LTI as well as the cumulative result.
CRL091.32 - AR17 LGL_SEC_AW.indd 55
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
55
rEMunEratIon rEport CONTINUED
This feature is designed to ameliorate issues with “cliff’s edge” vesting, by giving participants a “second chance” to have a
tranche paid when an individual EPS Hurdle is not met.
Disclosure of historical EPS Targets
The disclosure of prospective EPS Targets would have the consequence of providing the market and Crown’s competitors
with Crown’s financial forecasts. It has been Crown’s longstanding practice not to disclose prospective financial information
and financial forecasts. Accordingly, Crown will not publicly disclose prospective EPS Targets.
Such concerns, however, are not as significant in relation to historical EPS Targets and EPS Hurdles and performance
against those historical EPS Hurdles.
Set out below are the EPS Targets and EPS Hurdles which applied for financial year 2015, financial year 2016 and financial
year 2017 together with Crown’s actual EPS for financial year 2015, financial year 2016 and financial year 2017.
EpS target
(2014 Four year
Financial plan)
EpS target
Growth
(2014 Four year
Financial plan)
FY15
FY16
FY17
51.5 cents
57.6 cents
60.9 cents
N/A
11.8%
5.7%
EpS Hurdle
(Crown LtI)*
50.5 cents
56.4 cents
59.7 cents
actual EpS
53.0 cents
57.1 cents
42.5 cents
actual EpS
Growth (from
previous year)
N/A
7.7%
(25.6%)
tranche
vested?
Yes
Yes
No
* In financial year 2015, financial year 2016 and financial year 2017, the EPS Hurdle was 98% of the 2014 Four Year Financial Plan EPS Target.
All references in the above table to “EPS” exclude the contribution made by MRE and significant items and Crown’s actual
EPS also excludes the impact of certain uncontemplated events as described above.
Details of Participation of Senior Executives in 2014 Crown LTI
Of the Senior Executives named in this Report, five participate in the 2014 Crown LTI. Details of potential 2014 Crown LTI
bonuses are as follows:
Senior Executive
John Alexander
Ken Barton
Rowen Craigie
Barry Felstead
Todd Nisbet
Maximum value
over four year
period
$
4,500,000
4,050,000
9,000,000
6,300,000
6,300,000
30 June 2015
(15%)
30 June 2016
(20%)
30 June 2017
(25%)
30 June 2018
(40%)
$
675,000
607,500
1,350,000
945,000
945,000
$
900,000
810,000
1,800,000
1,260,000
1,260,000
$
1,125,000
1,012,500
$
1,800,000
1,620,000
2,250,000*
3,600,000*
1,575,000
1,575,000
2,520,000
2,520,000
* Mr Craigie ceased as Chief Executive Officer and Managing Director on 28 February 2017. As such, Mr Craigie has no entitlement to receive a bonus for
Plan Years 3 and 4.
As noted in the tables above, in financial year 2017, Crown did not meet the relevant EPS Hurdle and accordingly, no
entitlement to the EPS Bonus for financial year 2017 has vested, being 25% of the Maximum Value over the four year
period.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
56
CRL091.32 - AR17 LGL_SEC_AW.indd 56
14/9/17 12:29 pm
Set out below are the vested bonus amounts for the above participants in respect of financial year 2015, financial year 2016
and financial year 2017:
Senior Executive
John Alexander
Ken Barton
Rowen Craigie*
Barry Felstead
Todd Nisbet
vested in relation
to the financial year
ended 30 June 2015
vested in relation
to the financial year
ended 30 June 2016
vested in relation
to the financial year
ended 30 June 2017
$
675,000
607,500
1,350,000
945,000
945,000
$
900,000
810,000
1,800,000
1,260,000
1,260,000
$
Nil
Nil
Nil
Nil
Nil
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
* Mr Craigie ceased as Chief Executive Officer and Managing Director on 28 February 2017.
As noted above, in accordance with the rules of the 2014 Crown LTI, Crown has calculated the Carried Over Plan Year
Bonus in respect of the period ended 30 June 2017 and that Carried Over Plan Year Bonus will be dealt with in the manner
described earlier in this Report.
2017 Senior Executive Incentive plan
Rationale for the Introduction of the Plan
As part of the Crown group restructure described earlier in this Report, the Board determined that a new incentive plan
should be adopted to incentivise selected Senior Executives to remain with the Crown group to assist it to achieve the
group’s strategic plans over the life of the 2017 Four Year Financial Plan.
The Board considered that the Senior Executives remaining following the restructure should be given the opportunity to
benefit from the increase in the value of Crown shares over the following four years. The Plan is designed to motivate
participants to deliver improved performance of Crown which is expected to lead to an increase in the value of Crown’s
shares over and above the price at the time the Options were issued.
The 2017 Incentive Plan seeks to assist in the reward, retention and motivation of relevant Senior Executives, to link the
reward to shareholder value creation and to align the interests of relevant Senior Executives with shareholders.
In February 2017, the Board therefore agreed to offer Options to Mr Alexander and his direct reports Mr Barton,
Mr Felstead and Mr Nisbet under the 2017 Incentive Plan.
Outline of the Plan and the Offer
The 2017 Incentive Plan accommodates the offer and issue of ‘Awards’ which may be in the form of Options, Performance
Rights or Share Appreciation Rights. All Awards may, under the Plan, be settled with Crown shares or cash settled.
The Awards that have been granted to the relevant Senior Executives are Options which have a four year term from their
agreed date of issue. The Options were agreed to be issued on 22 February 2017. The Options are not quoted on ASX or
on any other financial market.
For all participants, other than a Director of Crown, at Crown’s election, the Options can be settled by the issue of new
Crown shares, the transfer of shares acquired by Crown from the market or by paying a cash equivalent to the difference
between the exercise price of the Options and the market price of the shares at the time of exercise. For John Alexander, a
director of Crown, any Crown shares to be acquired on the vesting and exercise of the Options must be purchased
on-market and cannot be settled by the issue of new Crown shares.
In addition to the cash or physical settlement of Awards, Awards may be bought back by the agreement of Crown and the
participant or, at the instigation of Crown, at market value.
The Options that have been issued are styled as ‘European’ Options, meaning that they are only exercisable on a single
day being Monday, 22 February 2021 starting at midnight and ending at 11.59pm Melbourne time on that day (the Expiry
Date).
CRL091.32 - AR17 LGL_SEC_AW.indd 57
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
57
rEMunEratIon rEport CONTINUED
Option Exercise Price
Single Vesting Condition of Continued Employment
An initial exercise price of $11.43 per Option has been
determined by reference to the volume weighted average
price (VWAP) of Crown shares at the time the Crown
Board approved the offer of Options at its February 2017
meeting.
The Options are subject to a single Vesting Condition
being the continued employment of the relevant Senior
Executive for four years after the grant date, or the
classification of the Senior Executive as a good leaver at
the Expiry Date.
The exercise price of each Option of $11.43 may be varied
over the life of the Plan to take into account the value of
any capital returns and special dividends.
Options are Issued for Value – Senior Executives Pay
for Options
The 2017 Incentive Plan differs from many similar option-
based incentive plans in that it requires participants to pay
value for their Options. The Options are not free.
Participants in the 2017 Incentive Plan were invited to
acquire Options for a fee equal to the market value of
those Options.
The market value has been based on the option valuation
methodology determined under the Income Tax
Assessment Regulations 1997 (Cth) (Regulations).
Under the Regulations, having regard to the market price
of a Crown share at grant and the exercise price of the
Option, a four year Option is valued at 6.2% of the market
value of the underlying share.
Options were therefore issued to participants for a fee
equal to the market value at the date they were agreed to
be issued, being 22 February 2017, of $0.71 per Option
(Fee) (i.e. 6.2% of the initial exercise price of $11.43).
On the day the Options were issued, the value to the
participants was therefore nil. The value of the incentives
to the participants will arise only where Crown’s share
price exceeds the exercise price of the Options plus the
Fee, the vesting condition is met and the Options are
exercisable.
Consideration for the Payment of Options –
Acquisition Loan
Each participant paid the Fee for the issue of the Options
through an Acquisition Loan advanced by Crown.
The Acquisition Loan is repayable on the exercise, lapse,
cancellation or forfeiture of the Options financed by the
Acquisition Loan. No interest is payable on the Loan.
The repayment amount of the Acquisition Loan is the
lesser of the outstanding amount of the Acquisition Loan
and:
• the market value of the Crown shares to be delivered
on exercise; or
• in the case of a buy-back, the market value of the
Option; or
• in the case of lapse, cancellation or forfeiture, nil.
As noted, the Board considered that the Senior Executives
remaining following the restructure should be given the
opportunity to benefit from the increase in the value of
Crown shares over the following four years and seeks to
reward and retain those Senior Executives who have
primary responsibility for delivering Crown’s key strategic
priorities over the coming years.
Continued employment together with an improvement in
the value of Crown shares will therefore result in a benefit
to participants. Continued employment without
improvement in value of Crown shares above the Fee paid
for the Options will not deliver any benefit to participants.
Voting Rights and Rights to Dividends
No ordinary dividend or voting rights will attach to the
Options unless and until Crown shares are delivered on
exercise.
Any special dividends (but not ordinary dividends), capital
restructure or other corporate events will be reflected as
adjustments to the exercise price of the Options.
Option Participants
Options have been granted to the following Senior
Executives:
Senior Executive
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
number of options
5,000,000
3,000,000
3,000,000
3,000,000
Accounting Valuation of Options and Reporting
The Options constitute remuneration for the purposes of
this Report.
For the purposes of reporting, a determination of the “fair
value” (for accounting purposes) of each Option was
undertaken.
As there is a limited recourse Acquisition Loan associated
with the Options with an obligation to repay Crown (in the
event the Options are exercised) of $0.71 per Option, from
an accounting perspective, the Acquisition Loan has been
treated as an addition to the exercise price of the Option
and the Option has been re-valued accordingly, without
having further regard to the amount outstanding under the
Acquisition Loan.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
58
CRL091.32 - AR17 LGL_SEC_AW.indd 58
14/9/17 12:29 pm
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Based on this approach, from an accounting perspective, the Options have been valued using an exercise price of $12.14
and assumes that there is no Acquisition Loan.
The fair value of the Options has therefore been determined to be $0.53 per Option (being approximately 4.6% of the
exercise price of the Options).
The outcome of this valuation approach (using the Black Scholes valuation model) and the accounting implications are
shown below:
Number of Options
Exercise Price*
Total Face value
Valuation %*
Valuation $
Value per Option
annual impact on Crown reported results (over four years)
14,000,000
11.43
160,020,000
4.6%
7,360,920
0.53
1,840,230
$
$
$
$
$
* While the contracted exercise price of each Option is $11.43, from an accounting perspective, the valuation of each Option is determined assuming an
exercise price of $12.14. For the purposes of the Black Scholes Valuation model, a volatility measure of 18% has been used representing the historical
volatility of Crown shares excluding the material impact of the Melco Resorts & Entertainment Limited investment.
Based on the above, the annual value of the 2017 Incentive Plan which has been attributed to each Senior Executive
participant is as follows:
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
total
number
of options
accounting
value per option
5,000,000
3,000,000
3,000,000
3,000,000
14,000,000
53 cents
53 cents
53 cents
53 cents
annual
Impact
$
657,225
394,335
394,335
394,335
1,840,230
Fy17 Impact (5
months)
$
275,000
165,000
165,000
165,000
770,000
Disclosures in line with the above have been included in the Senior Executive Remuneration Table set out later in this
Report.
Relationship between remuneration policy and company performance
remuneration linked to performance
As detailed above in the sections on Fixed Remuneration and Performance Based Remuneration, various elements of
Crown’s remuneration policy are linked to company performance, in particular, the achievement of Crown’s Board
approved Annual Budget and Business Plan (in the case of STI), Crown’s Board approved Four Year Financial Plan (in the
case of the 2014 Crown LTI) and an increase in the value of Crown shares (in the case of the 2017 Incentive Plan).
The Crown Board has sought to achieve this link by requiring the achievement of an annual level of normalised EBITDA and
net profit after tax (in the case of STI), predetermined EPS Targets (in the case of the 2014 Crown LTI) or an increase in the
value of Crown shares over the following four years (in the case of the 2017 Incentive Plan).
Full details of how these links have been achieved are set out in the above sections of this Report, but, in summary:
• an STI may be payable if Crown achieves its budgeted financial objectives and where an individual achieves his or her
annual KPOs, assessed using a combination of financial and non-financial measures;
• the 2014 Crown LTI is linked to predetermined EPS Hurdles in financial year 2015, financial year 2016, financial year
2017 and financial year 2018; and
• an increase in the value of Crown shares over the following four years may result in a benefit to Senior Executives who
have participated in the 2017 Incentive Plan.
CRL091.32 - AR17 LGL_SEC_AW.indd 59
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
59
RemuneRation RepoRt CONTINUED
This year, normalised EBITDA generated by Crown Melbourne and Crown Perth, Crown’s wholly owned Australian casinos,
fell by 10.7%. The compound average normalised EBITDA growth for Crown Melbourne and Crown Perth for the five year
period from 1 July 2012 to 30 June 2017 was 2.5%. Normalised Crown group NPAT fell by 15.5% in financial year 2017
predominantly due to the reduction in VIP program play revenue in Australia. The compound average normalised NPAT
growth for the Crown group for the five year period from 1 July 2012 to 30 June 2017 was negative 3.7%.
The table and graph below set out information about movements in shareholder wealth for the years ended 30 June 2013
to 30 June 2017.
Year ended
30 June 2013
Year ended
30 June 2014
Year ended
30 June 2015
Year ended
30 June 2016
Year ended
30 June 2017
Share price at start of period
Share price at end of period
$8.49
$12.11
$12.11
$15.12
$15.12
$12.20
$12.20
$12.61
$12.61
$12.28
Full year dividend
37.0 cents1
37.0 cents1
37.0 cents2
72.5 cents3
143.0 cents4
Basic/diluted earnings per share5
67.40 cps
96.44 cps
61.28 cps
54.04 cps
42.55 cps
1 Franked to 50% with none of the unfranked component comprising conduit foreign income.
2 Franked to 50% with all of the unfranked component of the final dividend comprising conduit foreign income.
3 Interim dividend franked to 50% and final dividend franked to 70% with all of the unfranked components comprising conduit foreign income.
4 Franked to 60% with none of the unfranked component comprising conduit foreign income. This amount includes a special dividend paid to
shareholders in March 2017 of 83 cents per share.
5 Excluding the effect of significant items.
d
o
i
r
e
P
f
o
d
n
e
t
a
e
c
i
r
p
e
r
a
h
S
$16.00
$14.00
$12.00
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
e
r
a
h
s
r
e
p
i
s
g
n
n
r
a
e
d
e
t
u
l
i
i
d
/
c
s
a
B
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$0.00
Year ended
30 June 2013
Year ended
30 June 2014
Year ended
30 June 2015
Year ended
30 June 2016
Year ended
30 June 2017
EPS - MRE Component
EPS - Australian Resorts and Other
Share price at the end of period
policy on entering into transactions in associated products which limit economic risk
The rules of the 2014 Crown LTI specifically provide that a Participant must not grant or enter into any Security Interest in or
over any Crown shares that may be acquired under the Plan (Participant Shares) or otherwise deal with any Participant
Shares or interest in them until the relevant Participant Shares are transferred from the Trustee to the participant in
accordance with the Plan rules. A Security Interest is defined to extend to any mortgage, charge, pledge or lien or other
encumbrance of any nature, and includes any derivative relating to or involving a Participant Share. Any Security Interest,
disposal or dealing made by a participant in contravention of the Plan rules will not be recognised by Crown.
The rules of the 2017 Incentive Plan specifically provide that a participant must not transfer, encumber, dispose of or have a
Security Interest issued over Plan Shares, or any beneficial interest in Plan Shares, unless all restrictions on the transfer,
encumbrance or disposal of the Plan Shares have been met or waived by the Board or the Board has provided prior
written consent. A Security Interest is defined to include a mortgage, charge, pledge, lien, encumbrance or other third
party interest of any nature.
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
60
CRL091.33 - AR17 LGL_SEC_AW.indd 60
15/9/17 12:55 pm
In addition, Crown’s Securities Trading Policy provides that
restricted persons who hold Crown shares (defined as
Crown shares or other securities which may be issued
from time to time by Crown) under an incentive plan
offered by Crown from time to time, must not, without the
prior consent in writing of Crown, sell, create a security
interest in, or otherwise dispose or deal with their Crown
shares or any of their interests in any of those Crown
shares.
The rules of the 2017 Incentive Plan also require
participants to comply with Crown’s Securities Trading
Policy at all times.
Remuneration Details for Non-executive
Directors
non-executive Directors
Non-executive Directors are entitled to a base fee per
annum for acting as a Director of Crown.
Non-executive Directors acting on the Board of Crown
Melbourne Limited are entitled to receive a further fee in
respect of that service. Crown’s nominee on the CrownBet
Board is also entitled to an annual fee in respect of that
service.
Non-executive Directors of Crown are entitled to
additional fees if they act as either chair or a member
of an active Committee (the Audit and Corporate
Governance Committee, the Occupational Health and
Safety Committee, the Nomination and Remuneration
Committee, the Corporate Social Responsibility
Committee or the Risk Management Committee).
All Directors are entitled to complimentary privileges at
Crown Melbourne and Crown Perth facilities.
Non-executive Directors fees which applied at the
commencement of the 2017 financial year were as follows:
Base Board Fees:
Active Board Committees:
- Chair
- Member
Crown Melbourne Board:
CrownBet Board:
$100,000
$20,000
$10,000
$60,000
$75,000
A review of Non-executive Directors’ fees was conducted
following the 2016 financial year end by the Nomination
and Remuneration Committee.
The focus of the review was twofold:
• firstly to consider whether the existing Non-executive
Director fees remain appropriate, in light of the fact that
there had been no increase in Non-executive Directors’
fees since the Publishing and Broadcasting Limited
demerger in 2007; and
• to determine whether the existing aggregate Non-
executive Directors’ fee cap of $1,300,000 could
accommodate a potential increase in Non-executive
Director fees or the appointment of additional Non-
executive Directors.
Egan Associates, an expert remuneration consultant, was
engaged by the Committee to assist by providing factual
information and analysis. Egan Associates provided a
report to the Nomination and Remuneration Committee
regarding the level of fees paid to Non-executive Directors
in other Top 100 Listed Companies so that the Nomination
and Remuneration Committee could assess whether to
increase Non-executive Director fees and assess whether
there might be a need to increase the fee cap in the
Crown Constitution. No recommendation was made by or
sought from Egan Associates. The advice contained only
facts and an analysis of those facts.
With the benefit of the advice from the remuneration
consultant, the Nomination and Remuneration Committee
recommended to the Board that Non-executive Directors’
fees which should apply commencing 1 November 2016
be as follows, subject to shareholders approving the
increase in the remuneration pool cap (further discussed
below):
Base Board Fees:
Active Board Committees:
- Chair
- Member
$150,000
$25,000
$15,000
Crown Melbourne Board:
$60,000 (no change)
CrownBet Board:
$75,000 (no change)
In light of the above recommendation and to allow for
scope for possible future fee increases as well as the
possible appointment of another Non-executive Director,
the Nomination and Remuneration Committee also
recommended to the Board that the Non-executive
Directors’ fee cap be increased from $1,300,000 per
annum to $2,500,000 per annum (that is, an increase of
$1,200,000 per annum).
Under Crown’s Constitution, an increase in the fee cap
requires the approval of shareholders by an ordinary
resolution. The Crown Board adopted the
recommendation of the Nomination and Remuneration
Committee to increase the Non-executive Directors’ fee
cap to $2,500,000 per annum by seeking shareholder
approval at the 2016 Annual General Meeting. At the 2016
Annual General Meeting, shareholders approved the
increase in fee cap and accordingly, the increase in
Non-executive Directors’ fees set out above applied from
1 November 2016.
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
are reviewed periodically by the Nomination and
Remuneration Committee with reference to the fees paid
to the Non-executive Directors of comparable companies.
The Nomination and Remuneration Committee is subject
to the direction and control of the Board.
In forming a view of the appropriate level of Board fees to
be paid to Non-executive Directors, the Nomination and
Remuneration Committee may also elect to receive advice
from independent remuneration consultants, if necessary.
Details regarding the composition of the Nomination and
Remuneration Committee and its main objectives are
outlined in the Corporate Governance Statement. The
Nomination and Remuneration Committee is comprised
solely of Non-Executive independent Directors.
A review of Non-executive Directors’ fees was conducted
following year end and it is proposed that, subject to
shareholder approval to increase the Non-executive
Directors fee cap in the Crown Constitution, those fees be
increased with effect from 1 November 2016. Further
detail regarding this process is set out under the heading
“Remuneration details for Non-executive Directors” later in
this Report.
No performance based fees are paid to Non-executive
Directors. Non-executive Directors are not entitled to
participate in Crown’s long term incentive plan (described
more fully below).
Non-executive Directors are not provided with retirement
benefits other than statutory superannuation at the rate
prescribed under the Superannuation Guarantee
legislation.
Senior Executives
The remuneration structure incorporates a mix of fixed and
performance based remuneration. The following section
provides an overview of the fixed and performance based
elements of executive remuneration. The summary tables
provided later in this Report indicate which elements apply
to each Senior Executive.
Crown’s key strategies and business focuses which are
taken into consideration as part of performance based
remuneration, are set out on page 3.
Summary of Senior Executive
Remuneration Structure
Fixed remuneration
The objective of fixed remuneration is to provide a base
level of remuneration which is appropriate to the Senior
Executive’s responsibilities, the geographic location of the
Senior Executive and competitive conditions in the
appropriate market.
CRL091.32 - AR17 LGL_SEC_AW.indd 61
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
61
rEMunEratIon rEport CONTINUED
Remuneration Report
Set out below is a table showing Non-executive Director remuneration for financial years 2017 and 2016.
remuneration table – non-executive Directors
Short term Benefits
Financial
year
Salary &
Fees
non
Monetary
other
post-employment
Benefit –
Superannuation
Long term Incentives
Cash
Based
Equity
Based
termina-
tion
Benefits
Ben Brazil1
Non-executive Director
Helen Coonan2
Non-executive Director
Rowena Danziger3
Non-executive Director
Andrew Demetriou4
Non-executive Director
Geoffrey Dixon
Non-executive Director
John Horvath3
Non-executive Director
Michael Johnston5
Non-executive Director
Harold Mitchell
Non-executive Director
Robert Rankin5,6
Non-executive Director
2017 TOTALS
2016 TOTALS
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
2017
2016
118,750
120,000
161,041
120,000
256,666
210,000
208,333
175,000
180,000
140,000
256,666
210,000
-
-
160,000
120,000
-
-
1,341,456
1,095,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
11,281
11,400
15,299
11,400
19,616
19,308
19,616
16,625
17,100
13,300
19,616
19,308
-
-
15,200
11,400
-
-
117,728
102,741
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
total
130,031
131,400
176,340
131,400
276,282
229,308
227,949
191,625
197,100
153,300
276,282
229,308
-
-
175,200
131,400
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 1,459,184
- 1,197,741
1. Mr Brazil ceased as a director on 12 April 2017.
2. Ms Coonan was appointed Chair of the Audit and Corporate Governance Committee on 27 April 2017.
3. Mrs Danziger and Professor Horvath each received Directors’ fees at a rate of $60,000 per annum for their participation on the Crown Melbourne Limited Board.
4. Mr Demetriou received Directors’ fees at a rate of $75,000 per annum for his participation on the CrownBet Pty Ltd and CrownBet Holdings Pty Ltd Boards.
5. Mr Johnston and Mr Rankin did not receive remuneration from Crown for their services to Crown.
6. Mr Rankin ceased as a director on 21 June 2017.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
62
CRL091.32 - AR17 LGL_SEC_AW.indd 62
14/9/17 12:29 pm
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Remuneration details for Senior Executives
Senior Executives are employed under service agreements with Crown or a subsidiary of Crown. Common features to
these service agreements include (unless noted otherwise):
• an annual review of the Senior Executive’s fixed remuneration, with any increases requiring approval of the Executive
Chairman (except in relation to the Executive Chairman) and the Nomination and Remuneration Committee and
dependent on Crown’s financial performance, the individual’s KPO performance and market changes;
• competitive performance based incentive payments annually and in the long term, dependent upon Crown achieving its
objectives and the Senior Executive achieving his or her KPOs;
• a provision that Crown may ask the Senior Executive to act as a Director of a member or associate of the Crown group
for no additional remuneration;
• a prohibition from gambling at any property within the Crown group during the term of employment and for six months
following termination and a requirement that the Senior Executive maintains licences required and issued by relevant
regulatory authorities (such as the Victorian Commission for Gambling and Liquor Regulation and the Western Australian
Gaming and Wagering Commission);
• where post-employment restraints apply, a restraint covering, amongst other things, competitive activities to those of the
Crown group. Restraint periods vary and have been noted in each instance;
• where an employment agreement is terminated by Crown, a provision that notice may be given in writing or payment
may be made (wholly or partly) in lieu of notice;
• a provision that all contracts may be terminated without notice by Crown for serious misconduct; and
• all Senior Executives are entitled to complimentary privileges at Crown Melbourne and Crown Perth facilities.
Specific details of each Senior Executive’s contract of employment which applied at the end of the 2017 financial year are
summarised in the tables on the following pages.
Employment arrangements for Mr rowen Craigie
On 23 February 2017, Crown announced that after more than 20 years with the Crown group, its Chief Executive Officer
and Managing Director, Rowen Craigie would be stepping down from his role with effect from 28 February 2017.
Mr Craigie has received, and will receive subject to shareholder approval at the 2017 Annual General Meeting, entitlements
payable in accordance with the terms of his employment contract and the 2014 Crown LTI Rules. A summary of the key
elements of Mr Craigie’s employment contract have been disclosed to shareholders since 2007 and have been included in
each of Crown’s Annual Reports since 2008. The key elements of Mr Craigie’s employment contract which applied until 28
February 2017 are as follows:
Fixed Remuneration
Base salary:
Superannuation:
$3,116,734 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum
contribution base, equating to $19,616 per annum.
post-employment benefits
Nil
post-employment restraint
Crown may impose a restraint for various periods up to 12 months.
Termination
By Senior Executive:
12 months’ notice.
By Crown:
termination benefits*
12 months’ notice without cause (Notice Pay).
Subject to the receipt of shareholder approval, Mr Craigie will be entitled to receive
a severance payment equal to 12 months’ fixed remuneration in the event of early
termination of his employment by Crown (Severance Pay).
The imposition of Mr Craigie’s post-employment restraint is tied to, and is
conditional upon, receipt of his Severance Pay.
* Note: As announced to the ASX on 19 February 2015, and as subsequently disclosed in Crown’s 2016 Annual Report, Mr Craigie’s employment
contract was last varied in February 2015 to reduce the severance payment payable to Mr Craigie should Crown terminate Mr Craigie’s employment from
24 months’ base salary to 12 months’ base salary. Mr Craigie’s post-employment restraint was also reduced at that time from 24 months to 12 months.
CRL091.32 - AR17 LGL_SEC_AW.indd 63
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
63
rEMunEratIon rEport CONTINUED
Remuneration Report
Mr Craigie also participated in the 2014 Crown LTI. The Rules of the 2014 Crown LTI provide that where a Participant
leaves the employment of the Group and their employment is terminated “without cause” prior to the end of Plan Year 4
(i.e. 30 June 2018), any Participant Shares held on trust for the Participant will remain in trust until the end of Plan Year 4.
In accordance with the 2014 Crown LTI Rules, the Board has determined that, subject to the receipt of shareholder
approval, the 254,821 Participant Shares held on trust for Mr Craigie be released to Mr Craigie prior to the end of Plan Year
4. The 2014 Crown LTI Rules also provide that where a Participant leaves the employment of the Group, that Participant’s
rights to any Carried Over Plan Year Bonus will cease. As Mr Craigie’s employment with Crown ceased part way through
Plan Year 3, Mr Craigie has no entitlement to receive a bonus for Plan Years 3 and 4 but is entitled to receive the first two
vested tranches of his bonus for Plan Years 1 and 2 comprising 254,821 Participant Shares. This represents 35% (less
than half) of the maximum bonus granted to Mr Craigie under the 2014 Crown LTI despite the earnings per share hurdles
for the 2014 Crown LTI having been met for two of the four years (i.e. half of the life of the plan). Shareholder approval will
be sought at Crown’s 2017 Annual General Meeting in relation to the benefit constituted by the early release of the 254,821
Participant Shares to Mr Craigie. As Mr Craigie is entitled, under the 2014 Crown LTI, to any dividends payable in relation to
the 254,821 Participant Shares, the value of the early release of the 254,821 Participant Shares is the ability to trade these
shares prior to the end of Plan Year 4, which is not able to be quantified.
In addition, there will be no STI paid to Mr Craigie in relation to his employment for the financial year ended 30 June 2017.
Crown has agreed with Mr Craigie that, subject to and conditional upon the approval of the shareholders of Crown by
resolution passed under sections 200B and 200E of the Corporations Act 2001 (Cth) at the 2017 Annual General Meeting:
• Crown will procure the early release of the Participant Shares presently held on trust for Mr Craigie under the 2014
Crown LTI; and
• pay the Notice Pay and the Severance Pay to Mr Craigie,
within 10 Business Days after the date of shareholder approval.
Importantly, under Mr Craigie’s employment contract, Mr Craigie’s post-employment restraint is tied to, and is conditional
upon, the receipt of his Severance Pay. Accordingly, should the approval of shareholders not be obtained at the 2017
Annual General Meeting, Mr Craigie’s restraint will also cease at that time. Mr Craigie has agreed to consult to Crown, as
required, on specific projects of the Company.
The Explanatory Statement to the 2017 Notice of Annual General Meeting provides further information regarding the
proposed approvals in respect of the termination benefits payable to Mr Craigie in accordance with the terms of his
employment contract and the 2014 Crown LTI Rules.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
64
CRL091.32 - AR17 LGL_SEC_AW.indd 64
14/9/17 12:29 pm
Changes to Employment arrangements made during the 2017 Financial year
As Executive Chairman, Mr Alexander now has primary accountability for the management of Crown and as noted,
assumed the responsibilities of the previous Chief Executive Officer. Mr Alexander’s role therefore effectively replaced
three existing positions, being Chairman, Executive Deputy Chairman and the Chief Executive Officer.
On account of these increased responsibilities, the employment arrangements for Mr Alexander were varied and a new
Contract of Employment was entered into.
A summary of the material changes to Mr Alexander’s Contract of Employment which took effect from 1 February 2017 is
as follows:
previous Contract of Employment
Current Contract of Employment
term
Commenced 1 December 2007 with no
fixed term.
Commenced 1 February 2017 with no fixed
term.
Fixed remuneration
$1,500,000 per annum (inclusive of
Compulsory Superannuation Guarantee
Contributions).
$3,500,000 per annum (inclusive of
Compulsory Superannuation Guarantee
Contributions).
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
performance based
remuneration
STI:
LTI:
Nil
Participation in the 2014 Crown LTI.
Potential to earn a short term incentive of up
to $500,000 based on performance and at
the sole discretion of the Board.
Continued participation in the 2014 Crown LTI
and participation in the 2017 Incentive Plan.
In determining the fixed remuneration component, the Board took into consideration the global gaming and resort hotel
environment and remuneration arrangements of leaders in the industry. While there is variability in the market, in the
context of the Board’s expectations, and the near term criticality of the role, the Board considered the arrangements with
Mr Alexander to be commercially appropriate.
All other material terms of Mr Alexander’s employment contract remained unchanged.
CRL091.32 - AR17 LGL_SEC_AW.indd 65
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
65
rEMunEratIon rEport CONTINUED
Remuneration Report
Summary of Contracts of Employment applicable at 30 June 2017
John H Alexander
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
Current Position
Fixed Remuneration
Base salary:
Superannuation:
Non-monetary benefits
and other:
Performance based
remuneration
STI:
LTI:
Executive Chairman (commenced 1 February 2017) (previously Executive Deputy
Chairman): Mr Alexander’s current employment agreement with Crown Resorts Limited
has no fixed term.
$3,480,384 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $19,616 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile telephone
and salary sacrifice arrangements for motor vehicle and superannuation.
Discretionary STI based on the performance of Crown and the achievement of personal
KPOs. Mr Alexander may receive an STI payment of up to $500,000.
Mr Alexander participates in the 2014 Crown LTI and the 2017 Incentive Plan.
Refer to pages 52 to 59.
2017 Percentage
breakdown of
remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive Plan
113%
6%
(31)%
12%
Given that the Year 3 EPS Hurdle adopted under the 2014 Crown LTI was not achieved,
Crown has amended its provisioning in relation to the 2014 Crown LTI accordingly.
This has resulted in a reversal of amounts previously expensed and, as a result of this,
each Senior Executive who participated in the 2014 Crown LTI must be shown to have a
negative amount for the 2014 Crown LTI component of their F17 remuneration.
Crown recognises that while it is required to include the reversal in the remuneration
disclosures, the percentage breakdown in the form provided above is not a meaningful
reflection of the 2017 percentage breakdown of remuneration.
To assist shareholders, set out below is a percentage breakdown of remuneration which
excludes the effect of the reversal of amounts previously expensed under the 2014 Crown LTI:
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
86%
STI
4%
2017 Incentive Plan
10%
Post-employment benefits Nil
Post-employment restraint Crown may impose a restraint for various periods up to 12 months.
Termination
By Senior Executive:
12 months’ notice.
By Crown:
12 months’ notice without cause; without notice for breach or misconduct.
Termination benefits
Payments made prior to
commencement
Directors’ Fees
Nil
Nil
Nil
66
CRL091.32 - AR17 LGL_SEC_AW.indd 66
14/9/17 12:29 pm
Current Position
Fixed Remuneration
Base salary:
Superannuation:
Non-monetary benefits
and other:
Performance based
remuneration
STI:
LTI:
Kenneth M Barton
Chief Financial Officer (commenced 9 March 2010) and CEO Crown Digital (from
1 February 2017): Mr Barton’s employment agreement with Crown Resorts Limited
will expire on 30 September 2018.
$1,787,084 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $19,616 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile telephone
and salary sacrifice arrangements for motor vehicle and superannuation. Until Mr Barton
relocates to Melbourne, Crown will meet the weekly travel costs of his Melbourne/Sydney
commuting and will provide hotel accommodation while in Melbourne.
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Mr Barton’s annual target STI is $500,000 and payment depends on meeting agreed
personal KPOs. The STI may, at the discretion of the Nomination and Remuneration
Committee, be increased to a maximum of $750,000 if Mr Barton exceeds his KPOs and
Crown also achieves its performance objectives.
Mr Barton participates in the 2014 Crown LTI and the 2017 Incentive Plan.
Refer to pages 52 to 59.
2017 Percentage
breakdown of
remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive Plan
107%
19%
(35)%
9%
Given that the Year 3 EPS Hurdle adopted under the 2014 Crown LTI was not achieved,
Crown has amended its provisioning in relation to the 2014 Crown LTI accordingly.
This has resulted in a reversal of amounts previously expensed and, as a result of this,
each Senior Executive who participated in the 2014 Crown LTI must be shown to have a
negative amount for the 2014 Crown LTI component of their F17 remuneration.
Crown recognises that while it is required to include the reversal in the remuneration
disclosures, the percentage breakdown in the form provided above is not a meaningful
reflection of the 2017 percentage breakdown of remuneration.
To assist shareholders, set out below is a percentage breakdown of remuneration which
excludes the effect of the reversal of amounts previously expensed under the 2014 Crown LTI:
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
79%
STI
14%
2017 Incentive Plan
7%
Post-employment benefits Nil
Post-employment restraint Nil
Termination
By Senior Executive:
6 months’ notice.
By Crown:
6 months’ notice without cause; one month’s notice for performance issues (following at
least 3 months’ notice to improve); 3 months’ notice for incapacity.
Termination benefits
Nil
Payments made prior to
commencement
As previously disclosed, a sign on payment was made in 2010 to compensate Mr Barton
for unvested incentives forfeited on cessation of employment with his previous employer.
Directors’ Fees
Nil
CRL091.32 - AR17 LGL_SEC_AW.indd 67
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
67
rEMunEratIon rEport CONTINUED
Remuneration Report
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
Current Position
Fixed Remuneration
Base salary:
Superannuation:
Non-monetary benefits
and other:
Performance based
remuneration
STI:
LTI:
Barry J Felstead
Chief Executive Officer – Australian Resorts (from 1 August 2013): Mr Felstead’s current
employment agreement with Crown Resorts Limited has no fixed term.
$2,238,759 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $19,616 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile
telephone and salary sacrifice arrangements for motor vehicle and superannuation.
Mr Felstead is entitled to a travel allowance of $50,000 per annum.
Discretionary STI based on the performance of Crown and the achievement of personal
KPOs. Mr Felstead’s annual target STI is 40% of his TEC.
Mr Felstead participates in the 2014 Crown LTI and the 2017 Incentive Plan.
Refer to pages 52 to 59.
2017 Percentage
breakdown of
remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive Plan
127%
14%
(50)%
9%
Given that the Year 3 EPS Hurdle adopted under the 2014 Crown LTI was not achieved,
Crown has amended its provisioning in relation to the 2014 Crown LTI accordingly.
This has resulted in a reversal of amounts previously expensed and, as a result of this,
each Senior Executive who participated in the 2014 Crown LTI must be shown to have a
negative amount for the 2014 Crown LTI component of their F17 remuneration.
Crown recognises that while it is required to include the reversal in the remuneration
disclosures, the percentage breakdown in the form provided above is not a meaningful
reflection of the 2017 percentage breakdown of remuneration.
To assist shareholders, set out below is a percentage breakdown of remuneration which
excludes the effect of the reversal of amounts previously expensed under the 2014 Crown LTI:
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
84%
STI
10%
2017 Incentive Plan
6%
Post-employment benefits Nil
Post-employment restraint Crown may impose various restraint periods up to a period of 12 months
post-employment.
Termination
By Senior Executive:
12 months’ notice.
By Crown:
12 months’ notice without cause; one month’s notice for performance issues; three
months’ notice due to incapacity.
Termination benefits
Payments made prior to
commencement
Directors’ Fees
Nil
Nil
Nil
68
CRL091.32 - AR17 LGL_SEC_AW.indd 68
14/9/17 12:29 pm
Current Position
Fixed Remuneration
Base salary:
Superannuation:
Non-monetary benefits
and other:
Performance based
remuneration
STI:
LTI:
W Todd Nisbet
Executive Vice President – Strategy and Development (from 9 August 2010): Mr Nisbet’s
fixed term employment agreement with Crown Resorts Limited expired on 31 December
2015 and is continuing on the same terms and conditions except as to term, which is now
no longer fixed.
$2,238,759 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $19,616 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile telephone
and salary sacrifice arrangements for motor vehicle and superannuation. During Mr Nisbet’s
employment with Crown, he is also entitled to additional customary expatriate benefits
for himself and his family. Upon cessation of employment, Mr Nisbet will be entitled to
relocation benefits for him and his family to Las Vegas.
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Discretionary STI based on the performance of Crown and the achievement of personal
KPOs. Mr Nisbet’s annual target STI is 50% of his base salary.
Mr Nisbet participates in the 2014 Crown LTI and the 2017 Incentive Plan.
Refer to pages 52 to 59.
2017 Percentage
breakdown of
remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive Plan
118%
14%
(39)%
7%
Given that the Year 3 EPS Hurdle adopted under the 2014 Crown LTI was not achieved,
Crown has amended its provisioning in relation to the 2014 Crown LTI accordingly.
This has resulted in a reversal of amounts previously expensed and, as a result of this,
each Senior Executive who participated in the 2014 Crown LTI must be shown to have a
negative amount for the 2014 Crown LTI component of their F17 remuneration.
Crown recognises that while it is required to include the reversal in the remuneration
disclosures, the percentage breakdown in the form provided above is not a meaningful
reflection of the 2017 percentage breakdown of remuneration.
To assist shareholders, set out below is a percentage breakdown of remuneration which
excludes the effect of the reversal of amounts previously expensed under the 2014 Crown LTI:
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
85%
STI
10%
2017 Incentive Plan
5%
Post-employment benefits Nil
Post-employment restraint Crown may impose various restraint periods up to a period of 12 months post-
employment.
Termination
By Senior Executive:
12 months’ notice.
By Crown:
12 months’ notice without cause; one month’s notice for performance issues; three
months’ notice due to incapacity.
Termination benefits
Payments made prior to
commencement
Directors’ Fees
Nil
Nil
Nil
CRL091.32 - AR17 LGL_SEC_AW.indd 69
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
69
rEMunEratIon rEport CONTINUED
Remuneration Report
remuneration table for Senior Executives
Commentary
The structure of Senior Executive remuneration has been described in detail in this Report, both generically and specifically
in relation to each named Senior Executive. In addition, a table summarising all remuneration to be attributed to each
Senior Executive for the financial years ended 30 June 2017 and 30 June 2016 is set out below.
Accounting Standards are prescriptive in relation to the required presentation of remuneration tables. Accordingly, as an
aid to understanding, the following additional information should be read in conjunction with the table set out below.
In addition, a separate table has been provided which details the remuneration that was received, or vested by each Senior
Executive during the year.
Fixed Remuneration
During the year, Mr Alexander’s fixed remuneration increased from $1.5 million to $3.5 million per annum as disclosed on
page 65 of this Report.
During the 2017 Financial Year, Messrs Barton, Craigie, Felstead and Nisbet received an increase to their fixed
remuneration of 1.5%.
Short Term Incentives (STI)
In the 2017 financial year, the Group’s financial performance objectives were not met. Although the 2017 targets were not
met, some important financial and non-financial outcomes were achieved. These included the successful exit of the
Group’s shareholding in Melco Resorts & Entertainment Limited, capital management initiatives, debt restructuring,
substantial operational improvement and cost saving initiatives in light of the downturn in revenues and progress on major
projects including the completion of Crown Towers Perth and obtaining all necessary approvals for the Crown Sydney and
Queensbridge projects.
STI bonuses at Crown Melbourne, Crown Perth and Crown Resorts were generally paid at 30% of target STI bonuses.
However, individual STI bonuses were adjusted to reflect the extent to which non-financial objectives were achieved.
Accordingly, Mr Alexander received $125,000 representing 25% of his total target STI bonus, although Mr Alexander was
only entitled to receive an STI bonus from the time he commenced as Executive Chairman. Mr Nisbet received $335,000
representing 30% of his target STI bonus, Mr Barton received $335,000 representing 67% of his target STI bonus and Mr
Felstead received $270,000 representing 30% of his target STI bonus.
Long Term Incentives (LTI)
As summarised earlier, each Senior Executive participated in the 2014 Crown LTI.
In accordance with relevant accounting standards, the 2014 Crown LTI is included in the remuneration for each Senior
Executive to the extent that it is considered more likely than not at the date of this Report that the performance condition
and service condition will eventuate over the life of the 2014 Crown LTI, notwithstanding that the benefits will vest for the
Senior Executives at a different rate.
As explained earlier, the first, second and third tranches of the 2014 Crown LTI represent 15%, 20% and 25% (respectively)
of the total 2014 Crown LTI bonus for which each Senior Executive is eligible. The EPS Hurdles of the 2014 Crown LTI for
financial years 2015 and 2016 were met. Details of the actual sums vested to relevant Senior Executives have been
provided earlier, however, these have also been shown in the separate Remuneration Received / Vested table below.
As noted earlier, the Year 3 EPS Hurdle adopted under the 2014 Crown LTI was not achieved. Crown has therefore
amended its provisioning in relation to the 2014 Crown LTI accordingly, resulting in a reversal of amounts previously
expensed.
As summarised earlier, four Senior Executives participated in the 2017 Incentive Plan.
In accordance with relevant accounting standards, the 2017 Incentive Plan is included in the remuneration for each Senior
Executive to the extent that it is considered more likely than not at the date of this Report that the performance condition
and service condition will eventuate over the life of the 2017 Incentive Plan.
An amount has been attributed to each participant in the 2017 Incentive Plan based on the methodology noted earlier in
this Report.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
70
CRL091.32 - AR17 LGL_SEC_AW.indd 70
14/9/17 12:29 pm
l
a
t
o
t
8
s
t
fi
e
n
e
B
7
7
1
0
2
6
i
t
L
4
1
0
2
d
e
s
a
B
5
n
o
i
t
a
u
n
n
a
n
o
i
t
a
n
m
r
e
t
i
l
n
a
p
e
v
i
t
n
e
c
n
i
–
d
e
s
a
B
h
s
a
C
-
r
e
p
u
S
i
r
o
n
e
S
e
v
i
t
u
c
e
x
e
y
t
i
u
q
e
-
t
s
o
p
–
s
t
fi
e
n
e
B
t
n
e
m
y
o
p
m
e
l
i
t
S
f
o
%
t
e
g
r
a
t
i
t
S
4
r
e
h
t
o
4
y
r
a
t
e
n
o
m
n
o
n
y
r
a
a
S
l
s
e
e
F
&
l
s
e
v
i
t
n
e
c
n
i
m
r
e
t
g
n
o
L
s
t
fi
e
n
e
B
m
r
e
t
t
r
o
h
S
i
a
c
n
a
n
F
i
r
a
e
Y
y
r
o
t
u
t
a
t
S
–
l
e
b
a
T
n
o
i
t
a
r
e
n
u
m
e
R
3
2
1
3
0
2
,
,
2
0
0
0
,
5
2
6
2
,
5
6
6
8
5
7
,
,
1
6
2
2
,
6
4
5
3
,
-
-
-
-
0
0
0
0
4
2
,
,
6
4
7
0
5
7
8
,
,
1
0
0
8
,
2
2
8
4
,
8
9
7
,
5
4
4
,
2
0
4
9
2
3
1
,
,
5
-
-
-
-
-
5
3
2
,
5
1
0
,
7
0
0
7
2
7
2
,
,
6
0
0
0
,
5
7
2
)
0
0
0
,
5
7
6
(
-
0
0
0
,
5
2
1
,
1
0
0
0
,
5
6
1
)
6
0
7
,
7
0
6
(
-
-
-
0
0
5
,
2
1
0
,
1
)
0
0
0
,
0
5
3
1
,
(
0
0
0
,
0
5
2
,
2
0
0
0
,
5
6
1
)
0
0
0
,
5
4
9
(
-
0
0
0
,
5
7
5
,
1
0
0
0
,
5
6
1
)
0
0
0
,
5
4
9
(
-
0
0
0
,
5
7
5
,
1
5
9
8
,
7
9
2
,
5
1
0
0
7
2
7
2
,
,
6
0
0
0
,
0
7
7
)
6
0
7
2
2
5
,
,
4
(
6
6
9
6
6
3
,
,
2
2
-
-
0
0
5
,
7
3
5
,
7
-
-
-
-
-
-
-
-
-
-
-
-
r
o
f
s
t
i
f
e
n
e
b
m
r
e
t
t
r
o
h
s
y
r
a
t
e
n
o
M
n
o
N
e
h
T
i
.
e
v
e
c
e
r
o
t
d
e
l
t
i
t
n
e
s
i
l
6
1
6
,
9
1
%
5
2
0
0
0
,
5
2
1
1
6
5
,
8
6
9
2
2
,
6
7
7
1
7
,
3
1
3
,
2
7
1
0
2
8
0
3
,
9
1
-
-
6
1
6
,
9
1
%
7
6
0
0
0
,
5
3
3
8
9
9
,
4
3
%
2
4
1
0
0
0
,
0
1
7
2
1
7
,
4
1
-
-
8
0
3
,
9
1
%
0
9
0
0
0
,
0
0
9
6
1
6
,
9
1
%
0
3
0
0
0
,
0
7
2
8
0
3
,
9
1
%
2
1
1
0
0
0
,
0
0
0
,
1
-
-
-
-
-
-
-
-
2
9
6
,
0
8
4
,
1
6
1
0
2
1
7
6
,
9
5
4
8
0
,
7
8
7
,
1
7
1
0
2
-
-
3
2
8
,
7
7
0
,
2
7
1
0
2
2
9
6
,
0
7
0
,
3
6
1
0
2
9
9
6
,
6
2
1
9
5
7
,
8
3
2
,
2
7
1
0
2
0
0
8
,
2
2
2
9
6
,
5
0
2
,
2
6
1
0
2
6
1
6
,
9
1
%
0
3
0
0
0
,
5
3
3
7
2
9
,
6
6
3
6
9
4
,
5
6
2
9
5
7
,
8
3
2
,
2
7
1
0
2
8
0
3
,
9
1
%
0
9
0
0
0
,
0
0
0
,
1
0
4
9
,
2
3
3
-
2
9
6
,
5
0
2
,
2
6
1
0
2
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
1
r
e
d
n
a
x
e
A
n
h
o
J
l
2
n
o
t
r
a
B
n
e
K
&
r
e
c
fi
f
O
l
i
a
c
n
a
n
F
i
f
i
e
h
C
r
e
c
fi
f
O
e
v
i
t
u
c
e
x
E
f
i
e
h
C
s
t
r
o
s
e
R
n
a
i
l
a
r
t
s
u
A
-
l
d
a
e
t
s
e
F
y
r
r
a
B
i
t
e
b
s
N
d
d
o
T
i
i
3
e
g
a
r
C
n
e
w
o
R
i
t
n
e
d
s
e
r
P
e
c
V
e
v
i
t
u
c
e
x
E
i
l
t
n
e
m
p
o
e
v
e
D
&
y
g
e
t
a
r
t
S
-
6
2
7
,
3
4
2
0
0
,
5
4
7
,
1
6
1
0
2
l
i
a
t
i
g
D
O
E
C
.
7
1
0
2
y
r
a
u
r
b
e
F
1
m
o
r
f
t
c
e
f
f
e
h
t
i
w
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
d
e
t
n
o
p
p
a
i
s
a
w
d
n
a
7
1
0
2
y
r
a
u
n
a
J
1
3
l
i
t
n
u
n
a
m
r
i
a
h
C
y
t
u
p
e
D
e
v
i
t
u
c
e
x
E
s
a
w
r
e
d
n
a
x
e
A
l
r
M
.
7
1
0
2
y
r
a
u
r
b
e
F
1
m
o
r
f
t
c
e
f
f
e
h
t
i
w
s
e
s
s
e
n
s
u
B
i
l
i
a
t
i
g
D
s
’
n
w
o
r
C
f
o
O
E
C
s
a
l
e
o
r
e
h
t
d
e
m
u
s
s
a
n
o
t
r
a
B
r
M
.
7
1
0
2
y
r
a
u
r
b
e
F
8
2
m
o
r
f
t
c
e
f
f
e
h
t
i
w
r
e
c
i
f
f
O
e
v
i
t
u
c
e
x
E
f
i
e
h
C
d
n
a
r
o
t
c
e
r
i
i
D
g
n
g
a
n
a
M
s
a
l
e
o
r
i
s
h
m
o
r
f
n
w
o
d
d
e
p
p
e
t
s
i
i
e
g
a
r
C
r
M
i
a
u
d
v
d
n
i
i
h
c
a
e
i
h
c
h
w
o
t
s
t
i
f
e
n
e
b
m
r
e
t
t
r
o
h
s
e
h
t
f
o
n
o
i
t
p
i
r
c
s
e
d
a
r
o
f
e
v
i
t
u
c
e
x
E
r
o
n
e
S
h
c
a
e
i
r
o
f
t
n
e
m
y
o
p
m
e
l
f
o
s
t
c
a
r
t
n
o
c
f
o
s
e
i
r
a
m
m
u
s
e
h
t
o
t
r
e
f
e
R
.
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
e
h
t
i
y
b
d
e
v
e
c
e
r
i
s
t
i
f
e
n
e
b
o
t
n
o
i
t
a
e
r
l
n
i
i
d
a
p
x
a
t
s
t
i
f
e
n
e
b
e
g
n
i
r
f
e
d
u
c
n
l
i
o
s
a
l
r
a
e
y
l
i
a
c
n
a
n
i
f
7
1
0
2
e
h
t
1
2
3
4
6
7
1
,
3
9
0
3
2
,
2
1
1
0
0
0
,
5
6
0
,
1
8
8
4
,
5
3
4
5
9
0
,
8
2
5
2
4
1
,
6
5
6
,
0
1
0
0
0
,
0
1
6
,
3
0
4
9
,
2
3
3
6
2
5
,
6
6
0
7
7
,
7
0
7
,
0
1
S
L
A
T
O
T
7
1
0
2
S
L
A
T
O
T
6
1
0
2
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
e
h
t
n
i
d
e
d
u
c
n
l
i
t
n
u
o
m
a
e
h
t
o
t
l
a
u
q
e
n
o
i
t
a
r
e
n
u
m
e
r
d
e
x
i
f
’
s
h
t
n
o
m
2
1
o
t
l
a
u
q
e
t
n
e
m
y
a
p
e
c
n
a
r
e
v
e
s
a
d
n
a
e
c
i
t
o
n
f
o
u
e
i
l
n
i
y
a
p
’
s
h
t
n
o
m
2
1
o
t
d
e
l
t
i
t
n
e
e
b
l
l
i
i
w
e
g
a
r
C
i
r
M
,
l
a
v
o
r
p
p
a
l
r
e
d
o
h
e
r
a
h
s
f
o
i
t
p
e
c
e
r
e
h
t
o
t
j
t
c
e
b
u
S
.
n
m
u
o
c
l
s
t
i
f
e
n
e
B
n
o
i
t
a
n
m
r
e
T
i
.
)
I
T
L
n
w
o
r
C
4
1
0
2
(
l
n
a
P
e
v
i
t
n
e
c
n
I
m
r
e
T
g
n
o
L
n
w
o
r
C
4
1
0
2
d
e
l
t
i
t
n
e
t
r
o
p
e
R
s
h
t
i
f
o
n
o
i
t
c
e
s
e
h
t
n
i
d
e
t
o
n
n
e
e
b
s
a
h
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
i
t
n
a
v
e
e
r
l
o
t
d
e
t
s
e
v
s
m
u
s
l
a
u
t
c
a
e
h
t
f
o
s
l
i
a
t
e
D
.
d
e
s
n
e
p
x
e
.
r
u
c
c
o
l
l
i
w
n
o
i
t
i
d
n
o
c
g
n
i
t
s
e
v
e
h
t
,
t
r
o
p
e
R
s
h
t
i
f
o
e
t
a
d
e
h
t
t
a
,
t
a
h
t
t
o
n
n
a
h
t
l
y
e
k
i
l
e
r
o
m
d
e
r
e
d
s
n
o
c
i
s
i
t
i
t
a
h
t
i
s
s
a
b
e
h
t
n
o
n
o
i
t
a
r
e
n
u
m
e
r
l
a
t
o
t
n
i
d
e
d
u
c
n
l
i
n
e
e
b
s
a
h
l
n
a
P
e
v
i
t
n
e
c
n
I
7
1
0
2
e
h
T
7
8
r
M
,
4
6
7
,
4
3
$
i
i
e
g
a
r
C
l
i
y
s
u
o
v
e
r
p
s
t
n
u
o
m
a
r
M
,
5
1
0
,
0
3
$
n
o
t
r
a
B
r
M
,
5
6
7
,
8
3
$
r
e
d
n
a
x
e
A
l
r
M
:
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
g
n
w
o
i
i
l
l
o
f
e
h
t
r
o
f
7
1
0
2
e
n
u
J
0
3
d
e
d
n
e
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
g
n
i
r
u
d
d
e
s
a
e
r
c
n
i
e
v
a
h
l
s
e
c
n
a
a
b
d
e
u
r
c
c
a
e
v
a
e
l
i
e
c
v
r
e
s
g
n
o
L
5
.
9
1
5
,
7
3
$
t
e
b
s
N
i
r
M
d
n
a
9
1
5
,
7
3
$
d
a
e
t
s
e
F
l
f
o
l
a
s
r
e
v
e
r
a
n
i
d
e
t
l
u
s
e
r
s
a
h
i
s
h
T
l
i
.
y
g
n
d
r
o
c
c
a
d
e
d
n
e
m
a
n
e
e
b
s
a
h
i
i
g
n
n
o
s
v
o
r
p
i
I
T
L
e
h
t
d
n
a
l
e
d
r
u
H
S
P
E
t
n
a
v
e
e
r
l
e
h
t
t
e
e
m
i
t
o
n
d
d
n
w
o
r
C
,
7
1
0
2
e
n
u
J
0
3
d
e
d
n
e
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
g
n
i
r
u
D
6
CRL091.33 - AR17 LGL_SEC_AW.indd 71
15/9/17 12:11 pm
Crown Resorts Limited Annual Report 2017
71
RemuneRation RepoRt CONTINUED
Remuneration Report
f
o
s
m
r
e
t
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
e
v
i
t
u
c
e
x
E
r
o
n
e
S
e
h
t
i
f
o
t
i
f
e
n
e
b
e
h
t
r
o
f
l
d
e
h
g
n
e
b
e
r
a
i
e
h
t
o
t
t
s
e
r
e
t
n
i
f
o
e
b
o
t
d
e
r
e
d
s
n
o
c
i
s
i
t
i
s
a
d
e
d
v
o
r
p
s
i
i
n
o
i
t
a
m
r
o
n
f
i
i
s
h
T
l
.
e
b
a
t
g
n
w
o
i
i
h
c
h
w
s
e
r
a
h
s
n
w
o
r
C
e
r
i
u
q
c
a
o
t
l
n
a
P
e
h
t
f
o
e
e
t
s
u
r
t
e
h
t
y
b
d
e
i
l
p
p
a
e
r
e
w
s
d
n
u
f
e
s
o
h
t
l
l
o
f
e
h
t
n
i
d
e
d
u
c
n
l
i
n
e
e
b
t
o
n
s
a
h
l
n
a
P
e
v
i
t
n
e
c
n
I
7
1
0
2
e
h
t
f
o
e
u
a
v
l
e
h
T
.
s
e
u
r
l
l
n
a
P
e
h
t
.
t
r
o
p
e
R
s
h
t
i
f
o
s
r
e
s
u
l
a
u
t
c
a
e
h
t
d
n
a
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
f
o
d
n
e
e
h
t
r
e
t
f
a
d
e
v
e
c
e
r
i
s
a
w
h
c
h
w
i
t
u
b
,
r
a
e
y
l
i
a
c
n
a
n
i
f
i
s
u
o
v
e
r
p
e
h
t
o
t
l
e
b
a
r
e
f
e
r
I
T
S
e
h
t
,
s
e
e
f
d
n
a
y
r
a
a
s
l
f
o
d
e
s
i
r
p
m
o
c
s
i
i
s
h
T
.
e
v
i
t
u
c
e
x
E
i
r
o
n
e
S
h
c
a
e
r
o
f
r
a
e
y
l
i
a
c
n
a
n
i
f
t
n
a
v
e
e
r
l
e
h
t
,
g
n
i
r
u
d
d
e
t
s
e
v
r
o
,
y
b
d
e
v
e
c
e
r
i
i
s
a
w
h
c
h
w
n
o
i
t
a
r
e
n
u
m
e
r
e
h
t
t
u
o
s
t
e
s
l
e
b
a
t
i
g
n
w
o
l
l
o
f
e
h
T
.
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
g
n
i
r
u
d
s
e
v
i
t
u
c
e
x
E
i
r
o
n
e
S
e
h
t
y
b
d
e
v
e
c
e
r
i
y
l
l
a
u
t
c
a
s
t
n
u
o
m
a
t
c
e
l
f
e
r
t
o
n
s
e
o
d
d
n
a
,
t
c
A
s
n
o
i
t
a
r
o
p
r
o
C
e
h
t
f
o
s
t
n
e
m
e
r
i
u
q
e
r
e
h
t
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
d
e
r
a
p
e
r
p
s
i
e
v
o
b
a
l
e
b
a
t
y
r
o
t
u
t
a
t
s
e
h
T
i
d
e
t
s
e
V
/
d
e
v
e
c
e
R
n
o
i
t
a
r
e
n
u
m
e
R
–
l
e
b
a
T
n
o
i
t
a
r
e
n
u
m
e
R
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
72
,
I
T
L
n
w
o
r
C
4
1
0
2
e
h
t
f
o
t
n
e
n
o
p
m
o
c
d
e
t
s
e
v
e
h
t
i
e
v
e
c
e
r
y
l
l
a
u
t
c
a
i
t
o
n
d
d
s
e
v
i
t
u
c
e
x
E
r
o
n
e
S
e
i
l
i
h
W
.
r
a
e
y
l
i
a
c
n
a
n
i
f
e
h
t
g
n
i
r
u
d
d
e
t
s
e
v
i
h
c
h
w
I
T
L
n
w
o
r
C
4
1
0
2
e
h
t
f
o
n
o
i
t
r
o
p
1
4
1
,
2
3
0
,
3
0
0
0
,
0
0
4
,
2
1
7
3
,
6
7
5
,
2
6
2
7
,
3
8
0
,
3
0
5
1
,
5
8
3
,
5
0
0
0
,
0
9
6
,
5
4
7
0
,
5
8
3
,
3
0
0
8
,
1
7
3
,
4
8
9
7
,
0
9
8
,
3
0
4
9
,
1
8
6
,
4
4
3
5
,
9
6
2
,
8
1
6
6
4
7
2
2
,
,
0
2
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
0
0
8
,
,
1
8
0
3
,
9
1
0
0
0
,
0
0
8
-
6
1
6
,
9
1
0
0
0
,
0
0
0
,
1
0
0
0
0
6
2
,
,
1
8
0
3
,
9
1
0
0
0
,
4
6
8
-
-
-
-
-
-
0
0
0
,
0
0
9
0
0
0
,
0
1
8
6
1
6
,
9
1
8
0
3
,
9
1
6
1
6
,
9
1
8
9
9
,
4
3
2
1
7
,
4
1
-
-
0
0
0
,
0
1
7
0
0
0
,
0
5
4
-
-
-
0
0
0
,
0
0
9
5
1
6
,
2
9
3
,
2
-
2
9
6
,
0
8
4
,
1
1
7
6
,
9
5
4
8
0
,
7
8
7
,
1
6
2
7
,
3
4
2
0
0
,
5
4
7
,
1
-
-
3
2
8
,
7
7
0
,
2
2
9
6
,
0
7
0
,
3
9
9
6
,
6
2
1
9
5
7
,
8
3
2
,
2
0
0
8
,
2
2
2
9
6
,
5
0
2
,
2
9
7
5
,
2
2
6
9
2
2
,
6
7
7
1
7
,
3
1
3
,
2
-
6
1
6
,
9
1
0
0
0
,
0
0
0
,
1
7
2
9
,
6
6
3
6
9
4
,
5
6
2
9
5
7
,
8
3
2
,
2
0
0
0
0
6
2
,
,
1
8
0
3
,
9
1
0
0
0
,
4
6
8
0
4
9
,
2
3
3
-
2
9
6
,
5
0
2
,
2
-
6
7
1
,
3
9
0
0
0
,
0
1
6
,
3
1
2
1
,
2
8
3
,
3
5
9
0
,
8
2
5
2
4
1
,
6
5
6
,
0
1
0
0
0
,
0
3
0
,
6
0
3
2
,
2
1
1
0
0
0
,
8
7
9
,
2
0
4
9
,
2
3
3
6
2
5
,
6
6
0
7
7
,
7
0
7
,
0
1
d
e
t
s
e
V
f
o
t
n
e
n
o
p
m
o
C
l
a
t
o
T
s
t
fi
e
n
e
B
i
t
L
n
w
o
r
C
4
1
0
2
n
o
i
t
a
u
n
n
a
i
t
S
1
r
e
h
t
o
y
r
a
t
e
n
o
m
s
e
e
F
&
y
r
a
a
S
l
n
o
i
t
a
n
m
r
e
T
i
-
d
e
s
a
B
y
t
i
u
q
e
-
r
e
p
u
S
n
o
n
l
r
a
e
Y
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
7
1
0
2
6
1
0
2
i
a
c
n
a
n
F
i
-
r
e
c
fi
f
O
e
v
i
t
u
c
e
x
E
f
i
e
h
C
s
t
r
o
s
e
R
n
a
i
l
a
r
t
s
u
A
l
d
a
e
t
s
e
F
y
r
r
a
B
i
t
e
b
s
N
d
d
o
T
i
i
e
g
a
r
C
n
e
w
o
R
l
i
a
t
i
g
D
O
E
C
l
t
n
e
m
p
o
e
v
e
D
&
y
g
e
t
a
r
t
S
–
S
L
A
T
O
T
7
1
0
2
S
L
A
T
O
T
6
1
0
2
i
t
n
e
d
s
e
r
P
e
c
V
e
v
i
t
u
c
e
x
E
i
&
r
e
c
fi
f
O
l
i
a
c
n
a
n
F
i
f
i
e
h
C
n
a
m
r
i
a
h
C
e
v
i
t
u
c
e
x
E
r
e
d
n
a
x
e
A
n
h
o
J
l
n
o
t
r
a
B
n
e
K
y
r
a
u
r
b
e
F
8
2
g
n
d
u
c
n
l
i
i
d
n
a
i
o
t
p
u
d
a
p
d
n
a
d
e
u
r
c
c
a
e
v
a
e
l
f
o
t
n
u
o
m
a
n
a
s
e
d
u
c
n
l
i
i
i
e
g
a
r
C
r
M
r
o
f
’
r
e
h
t
O
‘
n
i
d
e
d
u
c
n
l
i
e
r
u
g
i
f
e
h
t
d
n
a
6
1
0
2
r
e
b
m
e
v
o
N
n
i
t
u
o
d
e
h
s
a
c
e
v
a
e
l
l
a
u
n
n
a
f
o
t
n
u
o
m
a
n
a
s
e
d
u
c
n
l
i
r
e
d
n
a
x
e
A
r
l
M
.
7
1
0
2
r
o
f
’
r
e
h
t
O
‘
n
i
d
e
d
u
c
n
l
i
e
r
u
g
i
f
e
h
T
i
.
e
v
e
c
e
r
o
t
d
e
l
t
i
t
n
e
s
i
l
i
a
u
d
v
d
n
i
i
h
c
a
e
i
h
c
h
w
o
t
s
t
i
f
e
n
e
b
m
r
e
t
t
r
o
h
s
e
h
t
f
o
n
o
i
t
p
i
r
c
s
e
d
a
r
o
f
e
v
i
t
u
c
e
x
E
r
o
n
e
S
h
c
a
e
i
r
o
f
t
n
e
m
y
o
p
m
e
l
f
o
s
t
c
a
r
t
n
o
c
f
o
s
e
i
r
a
m
m
u
s
e
h
t
o
t
r
e
f
e
R
1
CRL091.33 - AR17 LGL_SEC_AW.indd 72
15/9/17 12:11 pm
Key Management Personnel Disclosures
Shareholdings of Key Management personnel
Set out below is a summary of equity instruments held directly, indirectly or beneficially by KMPs, close family or controlled
entities.
30 June 2017
Crown Directors
Directors (Including
Directors who left the
Board during the year)
John Alexander
Rowen Craigie
Rowena Danziger
Harold Mitchell
Balance
1 July 2016
Issued under
2014 Crown LtI
other net change
30 June 2017
Balance
333,768
225,556
30,896
114,887
65,789
131,579
-
-
-
-
-
-
399,557
357,135*
30,896
114,887
* Mr Craigie ceased as a director on 28 February 2017. As required by the ASX Listing Rules, Mr Craigie provided Crown with an Appendix 3Z detailing
his interests in Crown shares on the date of his resignation. The interests in respect of Mr Craigie are therefore as at 28 February 2017.
t
r
o
p
e
r
n
o
i
t
a
r
e
n
u
m
e
r
Crown Executives
Executives
Ken Barton
Barry Felstead
Todd Nisbet
30 June 2016
Crown Directors
Directors (Including
Directors who left the
Board during the year)
James Packer
John Alexander
Rowen Craigie
Rowena Danziger
Harold Mitchell
Balance
1 July 2016
Issued under
2014 Crown LtI
other net change
30 June 2017
Balance
83,898
86,269
137,426
59,230
92,105
92,105
-
-
-
143,128
178,374
229,531
Balance
1 July 2015
Issued under
2014 Crown LtI
other net change
30 June 2016
Balance
364,270,253
272,147
102,314
30,896
114,887
-
61,621
123,242
-
-
-
-
-
-
-
364,270,253*
333,768
225,556
30,896
114,887
* Mr Packer ceased as a director on 21 December 2015. As required by the ASX Listing Rules, Mr Packer provided Crown with an Appendix 3Z detailing
his interests in Crown shares on the date of his resignation. The interests in respect of Mr Packer are therefore as at 21 December 2015.
Crown Executives
Executives
Ken Barton
Barry Felstead
Todd Nisbet
Balance
1 July 2015
Issued under
2014 Crown LtI
other net change
30 June 2016
Balance
28,420
-
51,157
55,478
86,269
86,269
-
-
-
83,898
86,269
137,426
CRL091.32 - AR17 LGL_SEC_AW.indd 73
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017
73
rEMunEratIon rEport CONTINUED
Remuneration Report
Senior Executive option Holdings
Set out below is a summary of Options held directly, indirectly or beneficially by KMPs, close family or controlled entities.
r
e
m
u
n
e
r
a
t
i
o
n
r
e
p
o
r
t
Senior
Executives
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
Balance
1 July 2016
-
-
-
-
options
granted
under 2017
Incentive
plan
5,000,000
3,000,000
3,000,000
3,000,000
Loans to Key Management personnel
options
exercised
other net
change
Balance
30 June 2017
options
vested
during year
-
-
-
-
-
-
-
-
5,000,000
3,000,000
3,000,000
3,000,000
-
-
-
-
As noted above, Options under the 2017 Incentive Plan have been issued to those Senior Executives remaining following
the restructure announced by Crown earlier in the year. The Options were issued to those Senior Executives for a Fee
equal to the market value at the date they were originally agreed to be issued, being 22 February 2017, of $0.71 per Option
(Fee). Each relevant Senior Executive paid the Fee for the issue of the Options through an Acquisition Loan advanced by
Crown.
The Acquisition Loan is repayable on the exercise, lapse, cancellation or forfeiture of the Options financed by the
Acquisition Loan. No interest is payable on the Loan.
The repayment amount of the Acquisition Loan is the lesser of the outstanding amount of the loan and:
• the market value of the Crown shares to be delivered on exercise; or
• in the case of a buy-back, the market value of the Option; or
• in the case of lapse, cancellation or forfeiture, nil.
The Senior Executives who have been granted an Acquisition Loan and the value of that Acquisition Loan are as follows:
Senior Executives
John Alexander
Barry Felstead
Todd Nisbet
Ken Barton
acquisition Loan value
$3,543,300
$2,125,980
$2,125,980
$2,125,980
There have been no other loans made, guaranteed or secured, directly or indirectly by the Company or any of its
subsidiaries in the reporting period in relation to KMPs, close family or controlled entities.
transactions entered into with Key Management personnel
Other than as has been disclosed in Note 28 of the Financial Report, there have been no transactions entered into during
the reporting period between the Company or any of its subsidiaries and KMPs, close family and controlled entities.
Signed in accordance with a resolution of the Directors.
J H alexander
Director
Melbourne, 12 September 2017
74
CRL091.32 - AR17 LGL_SEC_AW.indd 74
14/9/17 12:29 pm
Crown Resorts Limited Annual Report 2017 75auditor’s Independence DeclarationAuditor’s Independence DeclarationA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards LegislationErnst & Young8 Exhibition Street Melbourne VIC 3000 AustraliaGPO Box 67 Melbourne VIC 3001Tel: +61 3 9288 8000Fax: +61 3 8650 7777ey.com/auAuditor’s Independence Declaration to the Directors of Crown Resorts Limited As lead auditor for the audit of Crown Resorts Limited for the financial year ended 30 June 2017, I declare to the best of my knowledge and belief, there have been: a)no contraventions of the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and b)no contraventions of any applicable code of professional conduct in relation to the audit. This declaration is in respect of Crown Resorts Limited and the entities it controlled during the financial year. Ernst & Young David McGregor Partner Melbourne 12 September 2017 CRL091.32 - AR17 LGL_SEC_AW.indd 7514/9/17 12:29 pm 76Independent auditor’s reportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation Ernst & Young 8 Exhibition Street Melbourne VIC 3000 Australia GPO Box 67 Melbourne VIC 3001 Tel: +61 3 9288 8000 Fax: +61 3 8650 7777 ey.com/au Independent Auditor’s Report to the Members of Crown Resorts Limited Report on the Audit of the Financial Report Opinion We have audited the financial report of Crown Resorts Limited (the Company) and its subsidiaries (collectively the Group), which comprises the statement of financial position as at 30 June 2017, the statement of profit or loss, statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended, notes comprising a summary of significant accounting policies and other explanatory information and the Directors’ Declaration. In our opinion, the accompanying financial report of the Group is in accordance with the Corporations Act 2001, including: (i)giving a true and fair view of the consolidated financial position of the Group as at 30 June 2017 and of its consolidated financial performance for the year ended on that date; and (ii)complying with Australian Accounting Standards and the Corporations Regulations 2001. Basis for Opinion We conducted our audit in accordance with Australian Auditing Standards. 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 auditor independence requirements of 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 also fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 year. These matters were addressed in the context of our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the Financial Report section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying financial report. Independent Auditor’s ReportCRL091.32 - AR17 LGL_SEC_AW.indd 7614/9/17 12:29 pm Crown Resorts Limited Annual Report 2017 77Independent auditor’s reportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation 1.Carrying value of trade receivables Why significant How our audit addressed the key audit matter The Group is required to regularly assess the recoverability of its trade receivables. The recoverability of trade receivables was significant to our audit due to the value of amounts aged greater than the credit terms extended to customers. The Group early adopted Australian Accounting Standard - AASB 9 Financial Instruments, effective from 1 July 2016. As a result, a forward-looking expected loss impairment model was applied by the Group. This involves judgement as the expected credit losses must reflect information about past events, current conditions and forecasts of future conditions, as well as the time value of money. The Group’s disclosures are included in Note 1.2 and Note 6 to the financial report, which outlines the accounting policy for determining the allowance for doubtful debts and details of the period on period movement in gross and net trade receivables. In obtaining sufficient audit evidence over the carrying value of trade receivables, we: ►tested the aging of trade receivables for a sample of customer transactions; ►evaluated receipts after year-end to determine any remaining exposure at the date of the financial report; ►examined the Group’s assessment of the customers’ financial circumstances and ability to repay the debt; ►assessed the design and tested the operating effectiveness of relevant controls in relation to the granting of credit facilities, including credit checks; and ►considered the customers’ historical payment habits along with other macroeconomic information. We assessed the Group’s provisioning policy applied from 1 July 2016, which included assessing whether the calculation was in accordance with AASB 9 and comparing the Group’s provisioning rates against historical collection data. We assessed whether the time value of money was considered in the expected credit loss impairment model and checked the mathematical accuracy of the calculations. We assessed the adequacy of the Group’s disclosures in relation to trade receivables included in the financial report.2.Impairment testing of intangibles assets and property, plant & equipment Why significant How our audit addressed the key audit matter The Group has licence intangible assets of $1,097.3 million, goodwill of $346.5 million and other intangible assets of $216.3 million. Property, plant & equipment of $3,959.2 million is also held on the statement of financial position at 30 June 2017. The Group performs an impairment assessment on an annual basis, for goodwill and indefinite life intangible assets, or when there is an impairment indicator present. We evaluated the cash flow forecasts, which supported the value-in-use impairment models for goodwill, licence intangible assets, other intangible assets and other non-current assets such as property, plant and equipment. We compared the forecasts with the Board approved budgets and long term financial plan. We also compared the actual results for FY 2017 against the forecasts to assess their reliability. CRL091.32 - AR17 LGL_SEC_AW.indd 7714/9/17 12:29 pm 78InDEpEnDEnt auDItor’S rEport CONTINUEDIndependent auditor’s reportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter The impairment assessment is complex and judgemental, as it includes modelling a range of assumptions and estimates that are affected by expected future performance and market conditions such as cash flow forecasts, growth rates, terminal value multiples and discount rates. This is why the Group’s impairment assessment was considered to be a key audit matter. The DGN cash generating unit (CGU) was impaired during the period. Key assumptions, judgements and estimates used in the Group’s assessment of impairment of intangibles assets are set out in Note 13 to the financial report. In addition property, plant and equipment is disclosed in note 10, licenses are disclosed in note 11 and other intangible assets are disclosed in note 12 to the financial report. In addition, during the period the Group indefinitely suspended the Alon project in Las Vegas. The Group performed a fair value less costs of disposal valuation of the Alon project and as a result, recorded an impairment expense at 30 June 2017, as disclosed in note 10. We evaluated the appropriateness of the key assumptions in the cash flow forecasts. We performed sensitivity analysis around the key assumptions to ascertain the extent of change in those assumptions that would either individually or collectively result in an impairment charge. We involved our valuation specialists to assess whether the methodology applied was in accordance with Australian Accounting Standards and evaluated the key assumptions applied in the impairment models. These included the discount rates and terminal value multiples. We assessed the discount rates and terminal value multiples applied by reference to external market data for comparable companies. We assessed the adequacy of the disclosures included in notes 10 - 13 to the financial report. In respect of the Alon project, we involved our Real Estate valuation specialists in Las Vegas to assess the valuation performed by the Group. We checked the mathematical accuracy of the calculation, as well as evaluated the impairment expense and related disclosure included in the financial report. 3.Accounting for the Group’s interest in Melco Resorts & Entertainment Ltd Why significant How our audit addressed the key audit matter During the year, the Group sold their entire 27.4% interest in the Nasdaq-listed entity Melco Resorts & Entertainment Ltd (“MRE”). The net gain on the sale was $1,745.5 million. The foreign exchange gain previously recorded in the foreign currency translation reserve (FCTR) has been transferred to the statement of profit or loss. Given the quantum of the gain on sale of MRE, this was considered to be a key audit matter. This has been disclosed as a significant item in the financial report, refer to note 3(e). For the first six months of the financial year, the Group’s investment in MRE was equity accounted as detailed in Note 9. Subsequently the investment was classified as held for sale in accordance with Australian Accounting Standard - AASB 5 Non-current Assets Held for Sale and Discontinued Operations. In obtaining sufficient audit evidence regarding the sale of the Group’s interest in MRE, we: ►agreed the gain recorded from the sale of MRE shares to supporting evidence and cash received; ►assessed the treatment of foreign exchange gains that were recycled from the FCTR to the statement of profit or loss; ►agreed a sample of transaction costs to underlying support; and ►assessed the adequacy of the disclosure included in the financial report. In order to gain comfort over the equity accounted result of MRE, we: ►reviewed the audited financial statements of MRE for the year ended 31 December 2016; CRL091.32 - AR17 LGL_SEC_AW.indd 7814/9/17 12:29 pm Crown Resorts Limited Annual Report 2017 79Independent auditor’s reportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation Why significant How our audit addressed the key audit matter An equity accounted gain of $37.9 million contributed to the overall result of the Group. The assessment of the adequacy of the procedures performed by MREs auditors was considered significant to the audit. MRE has a 31 December financial year end. ►obtained a completed questionnaire from MREs auditors detailing their risk assessment procedures, and execution of audit procedures for the year ended 31 December 2016; ►enquired with MREs auditors regarding the completed questionnaire and evaluated scoping of key audit areas, planning and execution of audit procedures, significant areas of estimation and judgement, and audit findings for the year ended 31 December 2016; ►recalculated Crown’s share of the equity-accounted result and dividends; ►agreed Crown’s shareholding to supporting documentation, and monitored market announcements for any changes in ownership interest; and ►assessed the appropriateness and timing of the MRE investment being classified as held for sale, resulting in the share of MRE’s net profit no longer being recorded on the Group’s statement of profit or loss. Information Other than the Financial Report and Auditor’s Report Thereon The Directors are responsible for the other information. The other information comprises the information in the Company’s Annual Report for the year ended 30 June 2017, but does not include the financial report and the auditor’s report thereon. Our opinion on the financial report does not cover the other information and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report, our responsibility is to read the other information and, in doing so, 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. If, based upon the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Responsibilities of the Directors for the Financial Report The Directors of the Company are responsible for the preparation of the financial report that gives a true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal control as the Directors determine is necessary to enable the preparation of the financial report that gives a true and fair view and is free from material misstatement, whether due to fraud or error. CRL091.32 - AR17 LGL_SEC_AW.indd 7914/9/17 12:29 pm 80InDEpEnDEnt auDItor’S rEport CONTINUEDIndependent auditor’s reportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation In preparing the financial report, the Directors are responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Directors either intend to liquidate the Group or cease operations, or have no realistic alternative but to do so. Auditor’s Responsibilities for the Audit of the Financial Report Our objectives are 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 and 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. As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: ►Identify and assess the risks of material misstatement of the financial report, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. ►Obtain an understanding of internal controls relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal controls. ►Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors. ►Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern. ►Evaluate the overall presentation, structure and content of the financial report, including the disclosures, and whether the financial report represents the underlying transactions and events in a manner that achieves fair presentation. ►Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the financial report. We are responsible for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit opinion. CRL091.32 - AR17 LGL_SEC_AW.indd 8014/9/17 12:29 pm Crown Resorts Limited Annual Report 201781Independent Auditor’s ReportIndependent Auditor’s ReportA member firm of Ernst & Young Global LimitedLiability limited by a scheme approved under Professional Standards Legislation We communicate with the directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the directors with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated to the directors, we determine those matters that were of most significance in the audit of the financial report of the current year and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on the Audit of the Remuneration Report Opinion on the Remuneration Report We have audited the Remuneration Report included in pages 48 to 74 of the Directors' Report for the year ended 30 June 2017. In our opinion, the Remuneration Report of Crown Resorts Limited for the year ended 30 June 2017, complies with section 300A of the Corporations Act 2001. 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 responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian Auditing Standards. Ernst & Young David McGregor Partner Melbourne 12 September 2017 CRL091.21 - AR17 FIN_SEC_AW.indd 8114/9/17 12:30 pm FINANCIAL REPORT 2017
Financial Report
83
Statement of
Profit or Loss
85
Statement of
Financial Position
87
Statement of
Changes in Equity
84
Statement of
Comprehensive Income
86
Cash Flow Statement
88
Notes to the
Financial Statements
i
F
n
a
n
c
a
i
l
R
e
p
o
r
t
82
CRL091.21 - AR17 FIN_SEC_AW.indd 82
14/9/17 12:30 pm
Statement of Profit or Loss
For the year ended 30 June 2017
Revenues
Other income
Expenses
Share of profits of associates and joint venture entities
Profit before income tax and finance costs
Finance costs
Profit before income tax
Income tax expense
Net profit after tax
Attributable to:
Equity holders of the Parent
Non-controlling interests
s
s
o
L
r
o
t
i
f
o
r
P
f
o
t
n
e
m
e
t
a
t
S
Note
2017
$’000
2016
$’000
3
3
3
2,9
3
3,344,135
3,616,152
1,835,408
603,593
(3,143,274)
(2,996,405)
39,132
41,261
2,075,401
1,264,601
(143,617)
(215,671)
1,931,784
1,048,930
2,5
(106,815)
(105,354)
1,824,969
943,576
1,866,055
948,823
(41,086)
(5,247)
1,824,969
943,576
The above Statement of Profit or Loss should be read in conjunction with the accompanying notes.
Earnings per share (EPS)
Basic EPS
Diluted EPS
EPS calculation is based on the weighted average number of shares on issue
throughout the period
Dividends per share
Current year final dividend declared
Current year interim dividend paid
2017
Cents
per share
2016
Cents
per share
257.03
257.03
130.26
130.26
Note
26
26
4
4
30.00
113.00
39.50
33.00
CRL091.21 - AR17 FIN_SEC_AW.indd 83
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
83
FINANCIAL REPORT 2017 CONTINUED
Statement of Comprehensive Income
For the year ended 30 June 2017
Net profit after tax
Other Comprehensive Income
Items that may be reclassified subsequently to profit or loss:
Foreign currency translation
Movement in cash flow hedge reserve
Unrealised gain / (loss) on investments
Items reclassified to profit or loss:
Foreign currency translation
Items that will not be reclassified subsequently to profit or loss:
Employee benefits reserve
Note
2017
$’000
2016
$’000
1,824,969
943,576
19
19
19
19
19
(33,460)
18,033
-
65,751
(14,230)
(5,079)
(88,820)
(70,576)
(3,188)
3,188
Other comprehensive income / (loss) for the period, net of income tax
(107,435)
(20,946)
Total comprehensive income / (loss) for the period
1,717,534
922,630
Attributable to:
Equity holders of the Parent
Non-controlling interests
1,759,508
925,236
(41,974)
(2,606)
1,717,534
922,630
The above Statement of Comprehensive Income should be read in conjunction with the accompanying notes.
S
t
a
t
e
m
e
n
t
o
f
C
o
m
p
r
e
h
e
n
s
i
v
e
I
n
c
o
m
e
84
CRL091.21 - AR17 FIN_SEC_AW.indd 84
14/9/17 12:30 pm
n
o
i
t
i
s
o
P
l
i
i
a
c
n
a
n
F
f
o
t
n
e
m
e
t
a
t
S
Statement of Financial Position
As at 30 June 2017
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Other financial assets
Total current assets
Non-current assets
Receivables
Other financial assets
Investments
Investments in associates
Property, plant and equipment
Licences
Other intangible assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Other payables
Interest-bearing loans and borrowings
Deferred tax liabilities
Provisions
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Treasury shares
Reserves
Retained earnings
Equity attributable to equity holders of the Parent
Non-controlling interest
Total equity
Note
22
6
7
6
7
8
9
10
11
12
5
14
15
16
17
15
16
5
17
18
18
19
19
2017
$’000
1,771,227
225,290
17,457
35,465
9,375
2,058,814
145,735
21,892
64,764
235,511
3,959,191
1,097,296
562,720
354,701
51,996
6,493,806
8,552,620
446,503
350,109
118,168
210,788
1,125,568
224,802
1,594,889
377,423
51,783
2,790
2,251,687
3,377,255
5,175,365
(53,233)
(19,377)
60,792
5,153,080
5,141,262
34,103
5,175,365
2016
$’000
449,663
248,558
16,296
33,405
9,639
757,561
141,488
15,136
51,760
1,614,886
4,069,036
1,113,959
740,646
355,553
60,694
8,163,158
8,920,719
475,240
85,715
138,720
182,017
881,692
339,489
2,175,611
351,163
58,580
22,060
2,946,903
3,828,595
5,092,124
446,763
(8,886)
796,630
3,767,765
5,002,272
89,852
5,092,124
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
CRL091.21 - AR17 FIN_SEC_AW.indd 85
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
85
FINANCIAL REPORT 2017 CONTINUED
Cash Flow Statement
For the year ended 30 June 2017
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Borrowing costs paid
Income tax paid
Note
2017
$’000
2016
$’000
3,352,499
3,566,724
(2,685,118)
(2,695,800)
70,598
195,913
6,294
14,184
(170,665)
(252,771)
(107,945)
(345,568)
Net cash flows from/(used in) operating activities
22b
465,663
482,682
Cash flows from investing activities
Purchase of property, plant and equipment
Proceeds from sale of property, plant and equipment
Investment in equity accounted associates
Proceeds from disposal of investments
Net proceeds from sale of equity investments
Net payment for acquisition of controlled entities
Loans to associated entities
Repayments of loans from associated entities
Other (net)
(404,514)
(556,549)
56,407
66,291
(5,880)
(203,105)
38,966
-
3,134,105
1,067,109
-
(49,523)
(2,000)
(386)
-
-
131,867
(2,599)
Net cash flows from/(used in) investing activities
2,817,084
453,105
Cash flows from financing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Payments for share buy-back
Net cash flows from/(used in) financing activities
Net increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the financial year
Effect of exchange rate changes on cash
270,124
883,394
(614,510)
(1,331,718)
(1,110,801)
(378,765)
(499,884)
-
(1,955,071)
(827,089)
1,327,676
108,698
449,663
340,984
(6,112)
(19)
Cash and cash equivalents at the end of the financial year
22a
1,771,227
449,663
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
l
C
a
s
h
F
o
w
S
t
a
t
e
m
e
n
t
86
CRL091.21 - AR17 FIN_SEC_AW.indd 86
14/9/17 12:30 pm
Statement of Changes in Equity
For the year ended 30 June 2017
Ordinary
Shares
Shares
Held in
Trust
Retained
Earnings Reserves
$’000
$’000
$’000
$’000
Non-
Controlling
Interest
$’000
Total
$’000
Total
Equity
$’000
Year ended 30 June 2017
Balance at 1 July 2016
446,763
(8,886)
3,767,765
796,630
5,002,272
89,852
5,092,124
Profit for the period
Other comprehensive
income
Total comprehensive income
for the period
Dividends paid
Share buy-back
Transfers
Share based payments
Change in ownership
-
-
-
-
-
1,866,055
-
1,866,055
(41,086)
1,824,969
-
-
(106,547)
(106,547)
(888)
(107,435)
-
1,866,055
(106,547)
1,759,508
(41,974)
1,717,534
- (1,110,801)
- (1,110,801)
-
(1,110,801)
(499,996)
-
-
-
-
-
(10,491)
-
-
-
(499,996)
630,061
(630,061)
-
770
(9,721)
-
-
-
(499,996)
-
(9,721)
-
-
(13,775)
(13,775)
-
-
y
t
i
u
q
E
n
i
s
e
g
n
a
h
C
f
o
t
n
e
m
e
t
a
t
S
Balance at 30 June 2017
(53,233)
(19,377)
5,153,080
60,792
5,141,262
34,103
5,175,365
Year ended 30 June 2016
Balance at 1 July 2015
446,763
-
3,257,760
820,217
4,524,740
84,260
4,609,000
Profit for the period
Other comprehensive
income
Total comprehensive income
for the period
Dividends paid
Share based payments
Acquisition of subsidiaries
Adjustment on adoption of
AASB 9
-
-
-
-
-
-
-
-
948,823
-
948,823
(5,247)
943,576
-
-
(23,587)
(23,587)
2,641
(20,946)
-
948,823
(23,587)
925,236
(2,606)
922,630
-
(378,765)
(8,886)
-
-
-
-
(60,053)
-
-
-
-
(378,765)
(8,886)
-
-
-
8,198
(378,765)
(8,886)
8,198
(60,053)
-
(60,053)
Balance at 30 June 2016
446,763
(8,886)
3,767,765
796,630 5,002,272
89,852
5,092,124
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
CRL091.21 - AR17 FIN_SEC_AW.indd 87
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
87
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements
For the year ended 30 June 2017
1. Significant Accounting Policies
Hedge Accounting
1.1 Basis of preparation
This financial report is a general-purpose financial report,
which has been prepared in accordance with the requirements
of the Corporations Act 2001, Australian Accounting
Standards and other authoritative pronouncements of the
Australian Accounting Standards Board. The financial report
has also been prepared on a historical cost basis, except for
derivative financial instruments, contingent consideration and
investments that have been measured at fair value and
investments in associates accounted for using the equity
method.
The financial report is presented in Australian dollars and all
values are rounded to the nearest thousand dollars ($’000)
unless otherwise stated under the option available to the
Company under ASIC Class Order 2016/191. The Company is
an entity to which the class order applies.
The financial report of Crown Resorts Limited and its
controlled entities (the Group) for the year ended 30 June 2017
was authorised for issue in accordance with a resolution of the
directors on 12 September 2017 subject to final approval by a
subcommittee.
Statement of Compliance
The financial report complies with Australian Accounting
Standards as issued by the Australian Accounting Standards
Board and International Financial Reporting Standards (IFRS)
as issued by the International Accounting Standards Board.
1.2 Changes in accounting policies
The Group has adopted the following accounting standard,
which became applicable from 1 July 2016:
AASB 9 Financial Instruments
AASB 9 Financial Instruments (December 2014) is a new
standard which replaces AASB 139 Financial Instruments:
Recognition and Measurement. This new version supersedes
AASB 9 issued in December 2009 (as amended) and AASB 9
(issued in December 2010) and includes a model for
classification and measurement, a single, forward-looking
‘expected loss’ impairment model and a substantially-
reformed approach to hedge accounting.
From 31 December 2010, Crown elected to early adopt the
classification and measurement component of AASB 9, which
has been applied to Crown’s financial statements.
Crown has elected to early adopt AASB 9 in its entirety from 1
July 2016.
Classification and measurement
Crown has applied the classification and measurement
requirements since 31 December 2010. In the transition to
the most current version of AASB 9, there have been no
changes to the classification and measurement of financial
assets and financial liabilities from those adopted upon
initial application on 31 December 2010.
The requirements for general hedge accounting have been
simplified for hedge effectiveness testing. There was no
significant impact on the Group from the application of this
section of the standard.
Impairment
AASB 9 introduces a new expected-loss impairment model
that will require more timely recognition of expected credit
losses which will replace the incurred loss model under
AASB 139. Specifically, the new Standard requires entities to
account for expected credit losses from the time financial
instruments are first recognised and to recognise full lifetime
expected losses on a more timely basis.
The early adoption of AASB 9 has been applied retrospectively
as permitted by the transitional provision of AASB 9. The
impact of transitioning to AASB 9 on the Group’s financial
statements was a decrease in net assets of $60.1 million,
comprising:
- An increase in provisioning for doubtful debts on trade
receivables of $84.6 million; and
- An increase in deferred tax assets of $24.5 million.
As per the transition requirements of AASB 9, adjustments
have been recognised against retained earnings. The
comparative period information has been updated to reflect
this change.
AASB 112 Income Taxes
In November 2016, the IFRS Interpretations Committee (IFRIC)
published a summary of its discussions following a request to
clarify how an entity determines the expected manner of
recovery of an intangible asset with an indefinite useful life for
the purpose of measuring deferred taxes in accordance with
AASB 112 Income Taxes. The IFRIC noted that the fact that an
entity does not amortise an intangible asset with an indefinite
useful life does not mean that it has infinite life and that the
entity will recover the carrying amount of that asset only
through sale and not through use.
Consequently, the Group has adopted an accounting policy to
measure deferred taxes arising from indefinite life intangible
assets based upon the tax consequences that follow from the
expected manner of recovery of the assets. As a result of the
retrospective adoption of this accounting policy, goodwill has
increased by $132.1 million, and deferred tax liabilities have
increased by $132.1 million. This change has been applied
retrospectively to the comparative information presented in the
Financial Statements.
1.3 Standards issued but not yet effective
Australian Accounting Standards and Interpretations that have
recently been issued or amended but are not yet effective and
have not been adopted by the Group for the reporting period
ending 30 June 2017 which may impact the entity in the
period of initial application are outlined below:
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
88
CRL091.21 - AR17 FIN_SEC_AW.indd 88
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
1. Significant Accounting Policies continued
1.3 Standards issued but not yet effective continued
AASB 15 Revenue from Contracts with Customers
(applicable to the Group from 1 July 2018)
This standard specifies the accounting treatment for revenue
arising from contracts with customers providing a framework
for determining whether, when and how much revenue should
be recognised. The core principle is that revenue must be
recognised when the goods or services are transferred to the
customer at the transaction price, which is an amount that
reflects the consideration to which the entity expects to be
entitled in exchange for those goods or services.
An assessment is being undertaken to identify the impact of
AASB 15 on the Group’s financial statements. This
assessment includes an analysis of the specific requirements
of the standard and the impact on Crown’s revenue streams.
Based on the assessment to date, the Group expects that the
standard will not have a material impact on its financial
performance. However, there is expected to be changes to the
classification between revenue and expenses.
The standard also imposes additional disclosure requirements.
The Group is continuing to determine the impact of the new
standard.
AASB 16 Leases (applicable to the Group from 1 July
2019)
This standard has a number of key features included requiring
the recognition of assets and liabilities for all leases with a term
of more than 12 months, unless the underlying asset is of low
value. Assets and liabilities arising from a lease are initially
measured on a present value basis. For Lessor accounting,
AASB 16 substantially carries forward the accounting
requirements in AASB 117.
Depending on the Group’s lease arrangements in place when
the standard becomes effective, the standard may have a
material impact on the financial position of the company, as
the Group will recognise a right-of-use-asset and a
corresponding liability in respect of its operating leases.
Currently, the Group is not expecting a material impact to
financial performance, however there will be a change of
classification between expenses. On adoption of the new
standard, the Group is expecting an increase in EBITDA, offset
by higher depreciation and interest expense.
The full impact on the financial statements from the new
standard will be dependent on the Group’s lease
arrangements in place when the standard becomes effective
from 1 July 2019.
Crown will continue to monitor the impact the application of
this standard will have on the Group.
Standards and Interpretations not expected to be
material
Certain other new Accounting Standards and Interpretations
have been published that are not mandatory for the 30 June
2017 reporting period. The Group has assessed the impact of
these new Accounting Standards and Interpretations that are
relevant to the Group, and does not expect any material
impact on net assets, net profit, presentation or disclosures
when these standards become effective and are adopted.
1.4 Basis of consolidation
The consolidated financial statements are those of the
consolidated entity, comprising Crown Resorts Limited (the
parent entity) and all entities that Crown Resorts Limited
controlled from time to time during the year and at reporting
date. Control is achieved when the Group is exposed, or has
rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power
over the investee.
The Group re-assesses whether or not it controls an investee
if facts and circumstances indicate that there are changes to
one or more of the three elements of control.
Information from the financial statements of subsidiaries is
included from the date the parent entity obtains control until
such time as control ceases. Where there is loss of control of
a subsidiary, the consolidated financial statements include the
results for the part of the reporting period during which the
parent entity has control. Change of ownership interest of a
subsidiary without the loss of control is accounted for as an
equity transaction.
Subsidiary acquisitions are accounted for using the acquisition
method of accounting. The financial statements of subsidiaries
are prepared for the same reporting period as the parent
entity, using consistent accounting policies. Adjustments are
made to bring into line any dissimilar accounting policies that
may exist.
All inter-company balances and transactions, including
unrealised profits arising from intra-group transactions, have
been eliminated in full.
The accounting policies adopted have been applied
consistently throughout the two reporting periods.
1.5 Significant accounting judgements, estimates
and assumptions
The carrying amounts of certain assets and liabilities are often
determined based on judgements, estimates and assumptions
of future events. The key judgements, estimates and
assumptions that have a significant risk of causing a material
adjustment to the carrying amounts of certain assets and
liabilities within the next annual reporting period are:
Impairment of non-financial assets
The Group determines whether goodwill and casino licences
with indefinite useful lives are impaired at least on an annual
basis. This requires an estimation of the recoverable amount
of the cash-generating units to which the goodwill and casino
licences with indefinite useful lives are allocated. The
assumptions used in this estimation of recoverable amount
and the carrying amount of goodwill and casino licences with
indefinite useful lives are discussed in note 13.
CRL091.21 - AR17 FIN_SEC_AW.indd 89
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
89
1. Significant Accounting Policies continued
1.5 Significant accounting judgements, estimates
and assumptions continued
Impairment of non-financial assets continued
N
o
t
e
s
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
During the period, Crown announced that it was not
proceeding with the Alon project in Las Vegas and began
exploring alternatives to optimise the value, including an
outright sale. Based on the review of the anticipated
recoverable amount of a land sale, the carrying value of
assets relating to the Alon project has been written down to
its recoverable amount.
Fair value of financial instruments
In accordance with accounting standards the Group uses the
Level Three method in estimating the fair value of financial
assets. Accordingly, the fair value is estimated using inputs
for the asset that are not based on observable market data.
Contingent consideration, resulting from business
combinations is valued at fair value at the acquisition date as
part of the business combination. When contingent
consideration meets the definition of a financial liability, it is
subsequently remeasured to fair value at each reporting date.
Refer note 15 for further details.
Taxes
Deferred tax assets are recognised for all unused tax losses
to the extent that it is probable that taxable profit will be
available against which the losses can be utilised.
Management judgement is required to determine the amount
of deferred tax assets that can be recognised, based upon
the likely timing and the level of future taxable profits.
Doubtful debts
An allowance for doubtful debts is recognised based on the
expected credit loss from the time the financial instrument is
initially recognised.
Significant items
Significant items are transactions or events that fall outside
the ordinary course of business. Significant items are
disclosed separately to allow users of the financial report to
see the performance of the Group in a comparable form to
that of the comparative period.
• where the deferred tax liability arises from the initial
recognition of an asset or liability in a transaction that is
not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss; or
•
in respect of taxable temporary differences associated
with investments in subsidiaries, associates and interests
in joint ventures, when the timing of the reversal of the
temporary differences can be controlled and it is probable
that the temporary differences will not reverse in the
foreseeable future.
Deferred tax assets are recognised for all deductible
temporary differences, carry-forward of unused tax assets
and unused tax losses, to the extent that it is probable
that taxable profit will be available against which the
deductible temporary differences, and the carry-forward
of unused tax assets and unused tax losses can be
utilised except:
• when the deferred tax asset relating to the deductible
temporary difference arises from the initial recognition of
an asset or liability in a transaction that is not a business
combination and, at the time of the transaction, affects
neither the accounting profit nor taxable profit or loss; or
•
in respect of deductible temporary differences associated
with investments in subsidiaries, associates and interests
in joint ventures, deferred tax assets are recognised only
to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and
taxable profit will be available against which the temporary
differences can be utilised.
The carrying amount of deferred tax assets is reviewed at
each reporting date and reduced to the extent that it is no
longer probable that sufficient taxable profit will be available
to allow all or part of the deferred tax asset to be utilised.
Deferred tax assets and liabilities are measured at the tax
rates that are expected to apply to the year when the asset is
realised or the liability is settled, based on tax rates (and tax
laws) that have been enacted or substantively enacted at the
reporting date.
Income taxes relating to items recognised directly in equity
are recognised in equity and not the Statement of Profit or
Loss.
1.6 Summary of significant accounting policies
(b) Other taxes
(a) Income tax
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered from or paid to the taxation authorities based on
the current period’s taxable income. The tax rates and tax
laws used to compute the amount are those that are enacted
or substantively enacted by the reporting date.
Deferred tax is provided on most temporary differences at the
reporting date between the tax bases of assets and liabilities
and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognised for all taxable temporary
differences except:
Revenues, expenses and assets are recognised net of the
amount of GST except:
• where the GST incurred on a purchase of goods and
services is not recoverable from the taxation authority, in
which case the GST is recognised as part of the cost of
acquisition of the asset or as part of the expense item as
applicable;
• gaming revenues, due to the GST being offset against
casino taxes; and
• receivables and payables are stated with the amount of
GST included.
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
90
CRL091.21 - AR17 FIN_SEC_AW.indd 90
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
1. Significant Accounting Policies continued
(e) Trade and other receivables
1.6 Summary of significant accounting policies continued
(b) Other taxes continued
The net amount of GST recoverable from, or payable to, the
taxation authority is included as part of receivables or
payables in the Statement of Financial Position.
Cash flows are included in the Cash Flow Statement on a
gross basis and the GST component of cash flows arising
from investing and financing activities, which is recoverable
from, or payable to, the taxation authority, are classified as
operating cash flows.
Commitments and contingencies are disclosed net of the
amount of GST recoverable from, or payable to, the taxation
authority.
(c) Foreign currency translation
Both the functional and presentation currency of Crown Resorts
Limited and its Australian subsidiaries is Australian dollars.
Each foreign entity in the Group determines its own functional
currency and items included in the financial statements of
each foreign entity are measured using that functional
currency, which is translated to the presentation currency.
Transactions in foreign currencies are initially recorded in the
functional currency at the exchange rates ruling at the date of
the transaction. Monetary assets and liabilities denominated in
foreign currencies are retranslated at the rate of exchange
ruling at the reporting date.
Non-monetary items that are measured in terms of historical
cost in a foreign currency are translated using the exchange
rate as at the date of the initial transaction. Non-monetary
items measured at fair value in a foreign currency are
translated using the exchange rates at the date when the fair
value was determined.
As at the reporting date the assets and liabilities of overseas
subsidiaries are translated into the presentation currency of
Crown Resorts Limited at the rate of exchange ruling at the
reporting date and the profit or loss is translated at the
weighted average exchange rates for the period. The exchange
differences arising on the retranslation are taken directly to a
separate component of equity.
On disposal of a foreign entity, the deferred cumulative amount
recognised in equity relating to that particular foreign operation
is recognised in the Statement of Profit or Loss.
(d) Cash and cash equivalents
Cash and cash equivalents in the Statement of Financial Position
comprises of cash at bank and on hand, and short term
deposits with an original maturity of three months or less that
are readily convertible to known amounts of cash and which are
subject to an insignificant risk of changes in future value.
For the purposes of the Cash Flow Statement, cash and cash
equivalents consist of cash and cash equivalents as defined
above, net of outstanding bank overdrafts.
Trade receivables are recognised and carried at original invoice
amount less an allowance for any uncollectible amounts.
An allowance for doubtful debts is recognised based on the
expected credit loss from the time the financial instrument is
initially recognised. Bad debts are written off when identified.
Receivables from associates and other related parties are
carried at amortised cost less an allowance for impairment.
Interest, when charged is taken up as income on an accrual
basis.
(f)
Inventories
Inventories are valued at the lower of cost and net realisable
value.
Costs incurred in bringing each product to its present location
and condition are accounted for as follows:
•
Inventories which include food, beverages and other
consumables are costed on a weighted average basis; and
• net realisable value is the estimated selling price in the
ordinary course of business, less estimated costs of
completion and the estimated costs necessary to make the
sale.
(g) Investments in associates
The financial statements of the associates are used by the
Group to apply the equity method. Where associates apply
different accounting policies to the Group, adjustments are
made upon application of the equity method.
Investments in associates are carried in the Statement of
Financial Position at cost plus post-acquisition changes in the
Group’s share of net assets of the associates, less any
impairment in value. The Statement of Profit or Loss reflects
the Group’s share of the results of operations of the
associates.
Where there has been a change recognised directly in the
associates’ equity, the Group recognises its share of any
changes and discloses this, when applicable in the Statement
of Comprehensive Income.
When the Group’s share of losses in an associate equals or
exceeds its interest in the associate, including any unsecured
long term receivables and loans, the Group does not
recognise further losses unless it has incurred obligations or
made payments on behalf of the associate.
(h) Investments and other financial assets
Financial assets are classified based on:
(i) The objective of the entity’s business model for managing
the financial assets; and
(ii) the characteristics of the contractual cash flow.
The classification depends on the purpose for which the
financial assets were acquired. Management determines the
classification of its financial assets at initial recognition. An
irrevocable election is made by instrument to determine if the
instrument is measured at fair value either through Other
CRL091.21 - AR17 FIN_SEC_AW.indd 91
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
91
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
1. Significant Accounting Policies continued
N
o
t
e
s
1.6 Summary of significant accounting policies continued
(h) Investments and other financial assets continued
Comprehensive Income (OCI) or the Statement of Profit or
Loss.
The recoverable amount of property, plant and equipment is
the greater of fair value less costs to sell and value in use. In
assessing value in use, the estimated future cash flows are
discounted to their present value using a post-tax discount
rate that reflects current market assessments of the time value
of money and the risks specific to the asset.
Derecognition
When financial assets are recognised initially, they are
measured at fair value, plus, in the case of assets at fair value
through OCI, directly attributable transaction costs.
An item of property, plant and equipment is derecognised
upon disposal or when no future economic benefits are
expected to arise from the continued use of the asset.
The best evidence of fair value is quoted prices in an active
market. The fair value of the investments and other financial
assets that do not have a price quoted in an active market
have been estimated using valuation techniques based on
assumptions that are not supported by observable market
prices or rates. The fair value is reassessed each reporting
period.
If the fair value through Statement of Profit or Loss approach is
adopted, increments and decrements on the fair value of the
financial asset at each reporting date are recognised through
the Statement of Profit or Loss.
If the fair value through OCI approach is adopted, increments
and decrements on the fair value are recognised in OCI,
without recycling of gains and losses between the Statement
of Profit or Loss and OCI, even on disposal of the investment.
Dividends in respect of these investments that are a return on
investment are recognised in the Statement of Profit or Loss.
Purchases or sales of financial assets that require delivery of
assets within a time frame established by regulation or
convention in the market place (regular way trades) are
recognised on the trade date, i.e., the date that the Group
commits to purchase or sell the asset.
(i) Property, plant and equipment
Property, plant and equipment is stated at cost less
accumulated depreciation and any impairment in value.
Depreciation and amortisation is calculated on a straight-line
basis over the estimated useful life of the asset as follows:
• Freehold buildings - 40 to 75 years;
• Leasehold improvements - lease term; and
• Plant and equipment - 2 to 15 years.
The asset’s residual values, useful lives and amortisation
methods are reviewed, and adjusted if appropriate, at each
financial year end.
Impairment
The carrying values of property, plant and equipment are
reviewed for impairment when events or changes in
circumstances indicate the carrying value may not be
recoverable. For an asset that does not generate largely
independent cash inflows, the recoverable amount is
determined for the cash-generating unit to which the asset
belongs. If any such indication exists and where the carrying
values exceed the estimated recoverable amount, the assets
or cash-generating units are written down to their recoverable
amount.
Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal
proceeds and the carrying amount of the item) is included in
the Statement of Profit or Loss in the period the item is
derecognised.
(j)
Intangible assets
Licences
Licences are carried at cost less any accumulated
amortisation and any accumulated impairment losses.
The directors regularly assess the carrying value of casino
licences so as to ensure they are not carried at a value greater
than their recoverable amount.
The casino licences are carried at cost of acquisition. The
Crown Melbourne licence is being amortised on a straight-line
basis over the remaining life of the licence to 2050. The
Crown Perth licence is assessed as having an indefinite useful
life and, as such, no amortisation is charged. The Crown Perth
licence is subject to an annual impairment assessment.
Amortisation will commence on the Crown Sydney licence
once the property is operational.
Goodwill
Goodwill on acquisition is initially measured at cost being the
excess of the cost of the business combination over the
acquirer’s interest in the net fair value of the identifiable assets,
liabilities and contingent liabilities. Following initial recognition,
goodwill is measured at cost less any accumulated
impairment losses. Goodwill is not amortised.
As at the acquisition date, any goodwill acquired is allocated
to each of the cash-generating units expected to benefit from
the combination’s synergies.
Goodwill is reviewed for impairment, annually or more
frequently if events or changes in circumstances indicate that
the carrying value may be impaired. Impairment is determined
by assessing the recoverable amount of the cash generating
unit to which the goodwill relates. Where the recoverable
amount of the cash-generating unit is less than the carrying
amount, an impairment loss is recognised.
Where goodwill forms part of a cash-generating unit and part
of the operation within that unit is disposed of, the goodwill
associated with the operation disposed of is included in the
carrying amount of the operation when determining the gain or
loss on disposal of the operation. Goodwill disposed of in this
circumstance is measured on the basis of the relative values of
the operation disposed of and the portion of the cash-
generating unit retained.
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
92
CRL091.21 - AR17 FIN_SEC_AW.indd 92
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
1. Significant Accounting Policies continued
1.6 Summary of significant accounting policies continued
(j)
Intangible assets continued
Other intangible assets
Acquired both separately and from a business
combination.
Intangible assets acquired separately are capitalised at cost
and from a business combination are capitalised at fair value
as at the date of acquisition. Following initial recognition, the
cost model is applied to the class of intangible assets.
The useful lives of these intangible assets are assessed to be
either finite or indefinite. Where amortisation is charged on
assets with finite lives, this expense is taken to the Statement
of Profit or Loss.
Intangible assets created within the business are not
capitalised and expenditure is charged against profits in the
period in which the expenditure is incurred.
Intangible assets are tested for impairment where an indicator
of impairment exists, and annually in the case of intangible
assets with indefinite lives, either individually or at the cash
generating unit level. Useful lives are also examined on an
annual basis and adjustments, where applicable, are made on
a prospective basis.
Gains or losses arising from derecognition of an intangible
asset are measured as the difference between the net
disposal proceeds and the carrying amount of the asset and
are recognised in the Statement of Profit or Loss when the
asset is derecognised.
(k) Recoverable amount of assets
At each reporting date, the Group assesses whether there is
any indication that an asset may be impaired. Where an
indicator of impairment exists, the Group makes a formal
estimate of recoverable amount. Where the carrying amount of
an asset exceeds its recoverable amount the asset is
considered impaired and is written down to its recoverable
amount.
Recoverable amount is the greater of fair value less costs to
sell and value in use. For the purposes of assessing
impairment, assets are grouped at the lowest levels for which
there are separately identifiable cash flows that are largely
independent of the cash flows from other assets or groups of
assets (cash-generating units). In assessing value in use, the
estimated future cash flows are discounted to their present
value using a post-tax discount rate that reflects current
market assessments of the time value of money and the risks
specific to the asset.
(l) Trade and other payables
Trade and other payables are brought to account for amounts
payable in relation to goods received and services rendered,
whether or not billed to the Group at reporting date. The
Group operates in a number of diverse markets, and
accordingly the terms of trade vary by business.
(m) Interest-bearing loans and borrowings
All loans and borrowings are initially recognised at the fair
value of the consideration received less directly attributable
transaction costs.
After initial recognition, interest-bearing loans and borrowings
are subsequently measured at amortised cost using the
effective interest method.
Borrowings are classified as current liabilities unless the
Group has an unconditional right to defer settlement of the
liability for at least 12 months after the reporting date.
Borrowing costs
Borrowing costs directly associated with qualifying assets are
capitalised, including any other associated costs directly
attributable to the borrowing. The capitalisation rate to
determine the amount of borrowing costs to be capitalised is
the weighted average interest rate applicable to the Group’s
outstanding borrowings during the year, in this case 6.2%
(2016: 6.4%).
All other borrowing costs are expensed in the period they are
incurred.
(n) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) to make a future sacrifice of
economic benefits to other entities as a result of past
transactions or other events, it is probable that a future
sacrifice of economic benefit will be required and a reliable
estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be
reimbursed, the reimbursement is recognised as a separate
asset. The expense relating to any provision is presented in
the Statement of Profit or Loss net of any reimbursement.
If the effect of the time value of money is material, provisions
are discounted using a current pre-tax rate that reflects the
risks specific to the liability. When discounting is used, the
increase in the provision due to the passage of time is
recognised as a finance cost.
A provision for dividends is not recognised as a liability unless
the dividends are declared, or publicly recommended on or
before the reporting date.
(o) Employee benefits
Provision is made for employee benefits accumulated as a
result of employees rendering services up to reporting date
including related on-costs. The benefits include wages and
salaries, incentives, compensated absences and other
benefits, which are charged against profits in their respective
expense categories when services are provided or benefits
vest with the employee.
The provision for employee benefits is measured at the
remuneration rates expected to be paid when the liability is
settled. Benefits expected to be settled after twelve months
from the reporting date are measured at the present value of
the estimated future cash outflows to be made in respect of
services provided by employees up to the reporting date.
CRL091.21 - AR17 FIN_SEC_AW.indd 93
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
93
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
1. Significant Accounting Policies continued
N
o
t
e
s
1.6 Summary of significant accounting policies continued
(o) Employee benefits continued
The liability for long service leave is recognised in the provision
for employee benefits and measured as the present value of
expected future payments to be made in respect of services
provided by employees up to the reporting date using the
projected unit credit method. Consideration is given to
expected future wage and salary levels, experience of
employee departures, and periods of service. Expected future
payments are discounted using market yields at the reporting
date on bonds with terms to maturity and currencies that
match, as closely as possible, the estimated future cash
outflows.
(p) Leases
Finance leases, which transfer to the Group substantially all
the risks and benefits incidental to ownership of the leased
item, are capitalised at the inception of the lease at the fair
value of the leased property or, if lower, at the present value of
the minimum lease payments.
Lease payments are apportioned between the finance
charges and reduction of the lease liability so as to achieve a
constant rate of interest on the remaining balance of the
liability.
Operating lease payments are recognised as an expense in
the Statement of Profit or Loss on a straight-line basis over the
lease term.
(q) Derecognition of financial instruments
The derecognition of a financial instrument takes place when
the Group no longer controls the contractual rights that
comprise the financial instrument, which is normally the case
when the instrument is sold, or all the cash flows attributable
to the instrument are passed through to an independent third
party.
(r) Derivative financial instruments and hedging
Derivatives are carried as assets when their fair value is
positive and as liabilities when their fair value is negative. Any
gains or losses arising from changes in the fair value of
derivatives, except for those that qualify as cash flow hedges,
are taken directly to profit or loss for the year.
The fair value of forward exchange contracts are calculated by
reference to current forward exchange rates for contracts with
similar maturity profiles. The fair values of interest rate swaps
are determined by reference to market values for similar
instruments.
Hedges that meet the strict criteria for hedge accounting are
accounted for as follows:
(i) Fair value hedges
Fair value hedges are hedges of the Group’s exposure to
changes in the fair value of a recognised asset or liability or an
unrecognised firm commitment, or an identified portion of
such an asset, liability or firm commitment that is attributable
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
94
to a particular risk and could affect profit or loss. For fair value
hedges, the carrying amount of the hedged item is adjusted
for gains and losses attributable to the risk being hedged and
the derivative is remeasured to fair value. Gains and losses
from both are taken to profit or loss.
The Group discontinues fair value hedge accounting if the
hedging instrument expires or is sold, terminated or exercised,
the hedge no longer meets the criteria for hedge accounting
or the Group revokes the designation. Any adjustment to the
carrying amount of a hedged financial instrument for which the
effective interest method is used is amortised to profit or loss.
Amortisation may begin as soon as an adjustment exists and
shall begin no later than when the hedged item ceases to be
adjusted for changes in its fair value attributable to the risk
being hedged.
(ii) Cash flow hedges
Cash flow hedges are hedges of the Group’s exposure to
variability in cash flows that is attributable to a particular risk
associated with a recognised asset or liability that is a firm
commitment and that could affect profit or loss. The effective
portion of the gain or loss on the hedging instrument is
recognised directly in equity, while the ineffective portion is
recognised in the Statement of Profit or Loss.
Amounts taken to equity are transferred out of equity and
included in the measurement of the hedged transaction
(finance costs or inventory purchases) when the forecast
transaction occurs. If the hedging instrument expires or is
sold, terminated or exercised without replacement or rollover,
or if its designation as a hedge is revoked (due to it being
ineffective), amounts previously recognised in equity remain in
equity until the forecast transaction occurs.
(s) Impairment of financial assets
The Group assesses at each reporting date whether a
financial asset or group of financial assets is impaired.
If there is objective evidence that an impairment loss on loans
and receivables carried at amortised cost has been incurred,
the amount of the loss is measured as the difference between
the asset’s carrying amount and the present value of
estimated future cash flows (excluding future credit losses that
have not been incurred) discounted at the financial asset’s
original effective interest rate (i.e. the effective interest rate
computed at initial recognition). The carrying amount of the
asset is reduced either directly or through use of an allowance
account. The amount of the loss is recognised in the
Statement of Profit or Loss.
The Group first assesses whether objective evidence of
impairment exists individually for financial assets that are
individually significant, and individually or collectively for
financial assets that are not individually significant. If it is
determined that no objective evidence of impairment exists for
an individually assessed financial asset, whether significant or
not, the asset is included in a group of financial assets with
similar credit risk characteristics and that group of financial
assets is collectively assessed for impairment. Assets that are
individually assessed for impairment and for which an
impairment loss is or continues to be recognised are not
included in a collective assessment of impairment.
CRL091.21 - AR17 FIN_SEC_AW.indd 94
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
1. Significant Accounting Policies continued
1.6 Summary of significant accounting policies continued
(s) Impairment of financial assets continued
If, in a subsequent period, the amount of the impairment loss
decreases and the decrease can be related objectively to an
event occurring after the impairment was recognised, the
previously recognised impairment loss is reversed. Any
subsequent reversal of an impairment loss is recognised in the
Statement of Profit or Loss, to the extent that the carrying
value of the asset does not exceed its amortised cost at the
reversal date.
(t) Contributed equity
Ordinary shares are classified as equity. Issued capital is
recognised at the fair value of the consideration received, less
transaction costs and share buy-backs.
(u) Revenue
Revenue is recognised and measured at the fair value of the
consideration received or receivable to the extent that it is
probable that the economic benefits will flow to the Group and
the revenue can be reliably measured. The following specific
recognition criteria must also be met before revenue is
recognised:
Sale of goods
Revenue is recognised when the significant risks and rewards
of ownership of the goods have passed to the buyer and can
be measured reliably. Risks and rewards are considered to
have passed to the buyer at the time of delivery of the goods
to the customer.
Rendering of services
Revenue is recognised when control of the right to be
compensated for the services and the stage of completion
can be reliably measured.
Gaming revenues are the net of gaming wins and losses.
Interest
Revenue is recognised as the interest accrues (using the
effective interest method, which is the rate that exactly
discounts estimated future cash receipts through the
expected life of the financial instrument) to the net carrying
amount of the financial asset.
Dividends
Revenue is recognised when the shareholders’ right to receive
the payment is established.
(v) Earnings per share (EPS)
Basic EPS is calculated as net profit after tax, adjusted to
exclude any costs of servicing equity (other than dividends),
divided by the weighted average number of ordinary shares,
adjusted for any bonus element.
Diluted EPS is calculated as net profit after tax, adjusted for:
• costs of servicing equity (other than dividends);
• the after tax effect of dividends and interest associated
with dilutive potential ordinary shares that have been
recognised as expenses; and
• other non-discretionary changes in revenues or expenses
during the period that would result from the dilution of
potential ordinary shares;
divided by the weighted average number of ordinary shares
and dilutive potential ordinary shares, adjusted for any bonus
element.
(w) Segment information
The Group’s operating segments have been determined
based on internal management reporting structure and the
nature of the products provided by the Group. They reflect the
business level at which financial information is provided to
management for decision making regarding resource
allocation and performance assessment. The segment
information presented is consistent with internal management
reporting.
The Group has four operating segments being Crown
Melbourne, Crown Perth, Crown Aspinalls and Wagering &
Online.
(x) Business combinations
Business combinations are accounted for using the acquisition
method. The consideration transferred in a business
combination shall be measured at fair value, which shall be
calculated as the sum of the acquisition date fair values of the
assets transferred by the acquirer, the liabilities incurred by the
acquirer to former owners of the acquiree and the equity
issued by the acquirer, and the amount of any non-controlling
interest in the acquiree. Acquisition-related costs are
expensed as incurred.
For each business combination the group elects whether to
measure the non-controlling interest in the acquiree at the fair
value or at the proportionate share of the acquiree’s
identifiable net assets.
When the Group acquires a business, it assesses the financial
assets and liabilities assumed for appropriate classification
and designation in accordance with the contractual terms,
economic conditions, the Group’s operating or accounting
policies and other pertinent conditions as at the acquisition
date. This includes the separation of embedded derivatives in
host contracts by the acquiree.
If the business combination is achieved in stages, the
acquisition date fair value of the acquirer’s previously held
equity interest in the acquiree is remeasured to fair value at the
acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer
will be recognised at fair value at the acquisition date.
Subsequent changes to the fair value of the contingent
consideration which is deemed to be an asset or liability will
be recognised in accordance with AASB 9 in the Statement of
Profit or Loss. If the contingent consideration is classified as
equity, it should not be remeasured until it is finally settled
within equity.
CRL091.21 - AR17 FIN_SEC_AW.indd 95
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
95
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
n
w
o
r
C
p
u
o
r
G
0
0
0
’
$
l
a
u
t
c
A
N
o
t
e
s
2
9
2
,
5
0
6
,
2
1
7
6
5
6
1
,
-
-
0
0
0
’
$
)
3
(
s
m
e
t
I
t
n
a
c
i
f
i
n
g
S
i
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
)
4
2
1
1
,
(
,
2
2
7
4
7
0
1
,
-
0
2
6
,
8
4
-
-
)
4
2
1
1
,
(
,
2
0
1
6
2
0
1
,
1
4
8
,
6
5
,
1
5
4
8
4
5
-
,
2
1
7
6
5
6
1
,
7
0
3
,
3
4
3
3
,
3
0
3
2
8
9
-
-
-
-
-
6
7
7
,
8
9
7
4
0
,
4
7
4
0
4
3
,
9
0
1
7
7
6
,
6
4
2
5
3
3
,
0
4
3
2
0
8
,
1
7
4
5
6
6
,
2
8
1
,
1
,
2
0
6
5
3
3
,
3
0
2
6
,
8
4
1
4
8
,
6
5
,
1
4
1
0
3
2
,
3
7
0
3
,
3
4
3
3
,
3
0
3
8
5
7
,
9
9
4
6
0
,
0
3
8
2
0
8
,
4
9
9
,
1
8
4
6
9
,
-
-
8
4
6
9
,
)
2
(
0
5
2
,
5
4
3
,
3
0
2
6
,
8
4
1
4
8
,
6
5
,
9
8
7
9
3
2
,
3
7
0
3
,
3
4
3
3
,
3
0
3
8
5
7
,
9
9
4
6
0
,
0
3
8
2
0
8
,
4
9
9
,
1
-
t
s
u
d
A
j
)
1
(
t
n
e
m
0
0
0
’
$
)
1
(
t
l
u
s
e
R
d
e
s
i
l
a
m
r
o
N
n
w
o
r
C
p
u
o
r
G
0
0
0
’
$
-
l
l
a
n
U
d
e
t
a
c
o
0
0
0
’
$
&
g
n
i
e
n
i
l
n
O
0
0
0
’
$
-
r
e
g
a
W
0
0
0
’
$
n
w
o
r
C
s
l
l
i
a
n
p
s
A
n
w
o
r
C
h
t
r
e
P
0
0
0
’
$
0
0
0
’
$
n
w
o
r
C
e
n
r
u
o
b
e
M
l
n
o
i
t
a
m
r
o
n
f
I
t
n
e
m
g
e
S
.
2
7
1
0
2
e
n
u
J
0
3
96
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
i
g
n
m
a
g
r
o
o
l
f
i
n
a
M
i
g
n
m
a
g
n
o
N
&
g
n
i
r
e
g
a
W
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
t
n
e
m
g
e
s
r
e
t
n
I
e
u
n
e
v
e
r
t
s
e
r
e
t
n
I
t
l
u
s
e
r
t
n
e
m
g
e
S
e
u
n
e
v
e
r
l
a
t
o
T
l
y
a
p
m
a
r
g
o
r
p
P
V
I
)
6
4
5
4
9
,
(
)
6
5
0
1
0
7
,
(
-
-
)
7
0
5
,
3
4
(
)
6
3
6
,
4
3
1
(
)
3
1
9
,
2
2
5
(
r
e
h
t
o
&
s
n
o
s
s
m
m
o
c
i
i
,
s
e
x
a
t
i
g
n
m
a
G
-
-
4
2
1
1
,
)
6
4
2
,
2
0
7
1
,
(
)
3
7
3
,
0
5
(
)
3
4
5
,
8
8
2
(
)
4
7
6
,
9
2
(
)
0
9
5
,
0
5
4
(
)
6
6
0
,
3
8
8
(
s
e
s
n
e
p
x
e
g
n
i
t
a
r
e
p
O
t
n
e
m
g
e
s
r
e
t
n
I
)
2
0
6
5
9
7
,
(
)
6
4
2
,
2
0
7
1
,
4
2
1
1
,
8
5
2
,
0
9
7
)
,
4
6
7
6
9
2
(
4
9
4
,
3
9
4
,
3
7
4
5
4
7
1
,
0
2
8
,
8
8
0
2
6
,
8
4
2
3
1
9
3
,
)
3
5
5
,
9
8
(
)
3
3
2
,
0
6
2
(
)
9
6
9
,
3
3
1
(
)
5
1
8
,
6
0
1
(
9
6
9
,
4
2
8
1
,
6
8
0
1
4
,
5
5
0
,
6
6
8
1
,
(
-
-
-
-
-
-
,
3
7
4
5
4
7
1
,
0
2
8
,
8
8
0
2
6
,
8
4
)
3
5
5
,
9
8
(
)
3
3
2
,
0
6
2
(
-
)
7
1
4
2
3
,
(
3
9
2
,
0
2
,
3
0
0
1
2
5
1
,
9
5
1
6
3
,
-
-
-
-
-
-
)
1
6
5
4
,
(
-
8
2
0
8
,
)
8
3
2
,
4
3
(
-
-
-
-
-
3
9
6
,
3
4
)
2
5
5
1
0
1
,
(
)
,
6
3
1
5
3
1
(
4
0
2
,
8
3
3
7
2
9
4
,
)
5
0
7
7
3
(
,
3
6
9
7
2
8
,
)
6
6
0
,
7
4
(
1
9
7
,
4
1
7
7
5
,
6
2
8
3
8
,
4
4
2
-
)
,
4
6
7
6
9
2
(
)
5
7
2
,
5
(
)
8
8
2
,
2
2
(
)
7
4
9
(
)
5
0
7
7
3
(
,
,
9
9
1
1
3
5
)
1
4
3
,
2
5
(
)
7
9
4
,
7
(
0
3
6
,
5
2
)
1
4
6
,
9
7
(
7
9
1
,
5
6
1
3
2
8
,
8
8
5
)
3
1
6
,
8
8
1
(
0
1
2
,
0
0
4
”
A
D
T
I
B
E
"
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
t
a
i
c
e
r
p
e
d
,
x
a
t
,
t
s
e
r
e
t
n
i
e
r
o
f
e
b
s
g
n
n
r
a
E
i
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
i
n
o
i
t
a
c
e
r
p
e
D
s
n
o
i
t
a
r
e
p
o
i
n
g
e
r
o
f
f
o
l
a
s
o
p
s
d
i
n
o
i
n
a
g
y
c
n
e
r
r
u
c
i
n
g
e
r
o
f
t
e
N
E
R
M
f
o
l
e
a
s
n
o
i
n
a
g
t
e
N
"
T
I
B
E
"
x
a
t
d
n
a
t
s
e
r
e
t
n
i
e
r
o
f
e
b
s
g
n
n
r
a
E
i
d
n
e
d
v
d
i
i
l
i
a
c
e
p
s
E
R
M
)
1
4
3
,
2
5
(
)
7
9
4
,
7
(
0
3
6
,
5
2
7
9
1
,
5
6
1
0
1
2
,
0
0
4
)
s
s
o
l
(
/
t
i
f
o
r
p
t
e
n
i
'
s
e
t
a
c
o
s
s
a
f
o
e
r
a
h
s
d
e
t
n
u
o
c
c
a
y
t
i
u
q
E
l
a
s
r
e
v
e
r
/
)
t
n
e
m
r
i
a
p
m
i
(
t
e
s
s
a
t
e
N
s
e
s
n
e
p
x
e
r
e
h
t
o
&
g
n
i
r
u
t
c
u
r
t
s
e
R
)
e
s
n
e
p
x
e
(
/
e
m
o
c
n
i
t
s
e
r
e
t
n
i
t
e
N
)
e
s
n
e
p
x
e
(
/
t
i
f
e
n
e
b
x
a
t
e
m
o
c
n
I
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
x
a
t
r
e
t
f
a
)
s
s
o
l
(
/
t
i
f
o
r
P
.
s
m
e
t
i
t
n
a
c
i
f
i
i
n
g
s
d
n
a
)
E
R
M
d
n
a
s
l
l
i
a
n
p
s
A
n
w
o
r
C
,
h
t
r
e
P
n
w
o
r
C
l
,
e
n
r
u
o
b
e
M
n
w
o
r
C
t
a
(
l
y
a
p
m
a
r
g
o
r
p
P
V
n
o
e
t
a
r
I
i
n
w
l
a
c
i
t
e
r
o
e
h
t
m
o
r
f
e
c
n
a
i
r
a
v
y
n
a
f
o
t
c
a
p
m
i
e
h
t
l
e
d
u
c
x
e
o
t
d
e
t
s
u
d
a
j
i
&
s
n
o
s
s
m
m
o
c
i
i
,
s
e
x
a
t
g
n
m
a
g
,
e
u
n
e
v
e
r
l
y
a
p
m
a
r
g
o
r
p
P
V
o
t
I
s
t
n
e
m
t
s
u
d
a
o
t
j
e
s
i
r
i
s
e
v
g
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
n
e
h
t
i
l
,
y
g
n
d
r
o
c
c
A
.
e
m
i
t
l
I
r
e
v
o
y
a
p
m
a
r
g
o
r
p
P
V
n
o
e
g
a
t
n
e
c
r
e
p
d
o
h
d
e
t
c
e
p
x
e
l
n
e
e
b
e
v
a
h
s
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
N
e
h
t
s
i
e
t
a
r
i
n
w
l
a
c
i
t
e
r
o
e
h
t
e
h
T
.
s
s
o
L
r
o
t
i
f
o
r
P
f
o
t
n
e
m
e
t
a
t
S
e
h
t
n
i
e
u
n
e
v
e
r
n
i
d
e
d
u
c
n
l
i
t
o
n
s
i
i
h
c
h
w
,
s
t
e
s
s
a
t
n
e
r
r
u
c
-
n
o
n
f
o
l
i
a
s
o
p
s
d
n
o
t
i
f
o
r
p
f
o
n
o
i
l
l
i
m
1
.
1
$
s
e
d
u
c
n
l
i
n
o
i
l
l
i
m
3
.
5
4
3
,
3
$
f
o
e
u
n
e
v
e
r
l
a
t
o
T
.
s
t
l
u
s
e
r
i
’
s
e
t
a
c
o
s
s
a
f
o
e
r
a
h
s
d
e
t
n
u
o
c
c
a
y
t
i
u
q
e
d
n
a
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
i
,
s
e
s
n
e
p
x
e
r
e
h
t
o
)
1
(
)
2
(
y
l
l
a
i
t
r
a
p
,
)
s
e
v
r
e
s
e
r
n
i
d
e
d
r
o
c
e
r
l
y
s
u
o
v
e
r
p
i
(
s
n
o
i
t
a
r
e
p
o
n
g
e
r
o
i
f
f
o
l
i
i
a
s
o
p
s
d
n
o
n
a
g
y
c
n
e
r
r
u
c
n
g
e
r
o
i
f
t
e
n
a
d
n
a
E
R
M
m
o
r
f
d
n
e
d
v
d
i
i
l
i
a
c
e
p
s
a
,
s
e
r
a
h
s
E
R
M
f
l
o
e
a
s
n
o
n
a
g
t
e
n
a
i
f
i
o
t
s
s
n
o
c
n
o
i
l
l
i
m
2
.
7
5
5
,
1
$
f
o
s
m
e
t
i
t
n
a
c
i
f
i
n
g
S
i
)
3
(
l
.
n
o
A
o
t
g
n
i
t
a
e
r
l
l
i
y
e
t
a
n
m
o
d
e
r
p
,
s
t
n
e
m
r
i
a
p
m
i
t
e
s
s
a
t
e
n
d
n
a
s
t
s
o
c
t
n
e
m
e
r
i
t
e
r
t
b
e
d
y
l
r
a
e
,
s
t
s
o
c
g
n
i
r
u
t
c
u
r
t
s
e
r
y
b
t
e
s
f
f
o
,
2
6
1
7
5
5
1
,
)
8
3
2
,
4
3
(
,
1
3
1
3
4
3
)
1
4
3
,
2
5
(
)
7
9
4
,
7
(
0
3
6
,
5
2
7
9
1
,
5
6
1
0
1
2
,
0
0
4
t
n
e
r
a
P
e
h
t
f
o
s
r
e
d
l
o
h
y
t
i
u
q
e
o
t
e
l
b
a
t
u
b
i
r
t
t
a
)
s
s
o
l
(
/
t
i
f
o
r
P
CRL091.21 - AR17 FIN_SEC_AW.indd 96
14/9/17 12:30 pm
n
w
o
r
C
p
u
o
r
G
0
0
0
’
$
l
a
u
t
c
A
9
8
5
,
0
8
6
1
,
2
5
7
7
1
9
,
)
9
9
4
1
,
(
,
3
8
5
4
0
0
1
,
5
2
4
1
0
6
,
,
3
2
3
3
,
6
1
)
2
(
7
5
7
7
1
6
,
,
3
)
)
,
8
8
4
1
5
0
1
,
(
,
3
7
0
0
9
6
1
,
(
9
9
4
1
,
3
6
3
1
6
8
,
)
,
5
7
7
2
8
2
(
8
8
5
,
8
7
5
8
8
9
1
0
6
,
5
6
4
5
3
,
)
3
3
0
9
,
(
1
6
2
1
4
,
)
9
3
3
,
9
9
1
(
)
4
5
3
,
5
0
1
(
6
7
5
,
3
4
9
7
4
2
,
5
3
2
8
,
8
4
9
-
-
-
-
-
-
-
-
-
-
-
-
-
0
0
0
’
$
-
8
8
9
1
0
6
,
5
6
4
5
3
,
)
3
3
0
9
,
(
)
3
(
s
m
e
t
I
t
n
a
c
i
f
i
n
g
S
i
-
t
s
u
d
A
j
)
1
(
t
n
e
m
0
0
0
’
$
)
1
(
t
l
u
s
e
R
d
e
s
i
l
a
m
r
o
N
n
w
o
r
C
p
u
o
r
G
0
0
0
’
$
-
l
l
a
n
U
d
e
t
a
c
o
0
0
0
’
$
&
g
n
i
e
n
i
l
n
O
0
0
0
’
$
-
r
e
g
a
W
0
0
0
’
$
n
w
o
r
C
s
l
l
i
a
n
p
s
A
n
w
o
r
C
h
t
r
e
P
0
0
0
’
$
0
0
0
’
$
n
w
o
r
C
e
n
r
u
o
b
e
M
l
)
3
5
4
5
1
,
(
4
1
7
6
5
,
-
-
-
7
6
0
8
1
,
6
1
5
,
6
8
9
2
5
7
7
1
9
,
)
9
9
4
1
,
(
9
8
5
,
0
8
6
1
,
5
4
3
,
2
1
5
0
9
,
9
2
2
3
9
8
-
-
-
-
-
6
6
2
,
7
0
1
2
2
3
,
7
9
4
9
6
7
,
2
0
2
1
0
9
,
1
2
2
1
8
4
,
6
7
6
8
0
7
,
2
5
4
7
6
2
,
3
8
1
,
1
-
2
3
3
,
6
1
7
6
0
8
1
,
8
5
3
,
3
8
5
,
3
5
4
3
,
2
1
5
0
9
,
9
2
2
9
5
1
,
8
0
1
2
9
9
,
1
2
9
6
5
4
,
2
1
3
,
2
7
6
0
,
8
1
0
9
6
,
9
9
5
,
3
5
4
3
,
2
1
5
0
9
,
9
2
2
9
5
1
,
8
0
1
2
9
9
,
1
2
9
6
5
4
,
2
1
3
,
2
)
5
3
5
,
2
1
(
)
3
5
9
,
8
3
0
1
,
(
-
-
)
2
2
3
,
9
4
(
)
2
6
1
,
5
3
2
(
)
9
6
4
,
4
5
7
(
-
-
2
3
5
,
5
-
2
3
5
,
5
-
-
-
)
,
3
7
0
0
9
6
1
,
(
)
4
9
7
,
0
1
1
(
)
3
5
3
,
5
3
2
(
)
7
5
3
,
2
3
(
)
4
9
8
,
6
2
4
(
)
5
7
6
,
4
8
8
(
-
-
-
9
9
4
1
,
1
3
8
,
5
5
8
)
9
4
4
,
8
9
(
)
8
4
4
,
5
(
)
,
5
7
7
2
8
2
(
)
6
1
8
,
4
(
)
0
1
8
,
5
1
(
6
5
0
,
3
7
5
)
5
6
2
,
3
0
1
(
)
8
5
2
,
1
2
(
0
8
4
,
6
2
)
1
0
2
,
1
(
9
7
2
,
5
2
6
3
9
,
9
5
2
)
3
4
8
,
6
6
(
3
9
0
,
3
9
1
2
1
3
,
3
7
6
)
5
0
1
,
4
9
1
(
7
0
2
,
9
7
4
)
5
3
7
7
5
,
(
-
)
1
5
4
5
1
,
(
-
4
3
2
,
5
5
5
-
)
7
0
7
2
,
(
)
8
2
6
,
2
1
(
)
4
0
6
1
4
1
,
(
)
6
9
1
7
8
,
(
0
7
9
,
0
0
4
7
4
2
,
5
)
5
6
2
,
3
0
1
(
)
8
5
2
,
1
2
(
9
7
2
,
5
2
3
9
0
,
3
9
1
7
0
2
,
9
7
4
d
e
u
n
i
t
n
o
c
n
o
i
t
a
m
r
o
n
f
I
t
n
e
m
g
e
S
.
2
6
1
0
2
e
n
u
J
0
3
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
i
g
n
m
a
g
r
o
o
l
f
i
n
a
M
i
g
n
m
a
g
n
o
N
&
g
n
i
r
e
g
a
W
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
t
n
e
m
g
e
s
r
e
t
n
I
e
u
n
e
v
e
r
t
s
e
r
e
t
n
I
t
l
u
s
e
r
t
n
e
m
g
e
S
e
u
n
e
v
e
r
l
a
t
o
T
l
y
a
p
m
a
r
g
o
r
p
P
V
I
r
e
h
t
o
&
s
n
o
s
s
m
m
o
c
i
i
,
s
e
x
a
t
i
g
n
m
a
G
”
A
D
T
I
B
E
“
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
n
o
i
t
a
i
c
e
r
p
e
d
,
x
a
t
,
t
s
e
r
e
t
n
i
e
r
o
f
e
b
s
g
n
n
r
a
E
i
s
e
s
n
e
p
x
e
g
n
i
t
a
r
e
p
O
t
n
e
m
g
e
s
r
e
t
n
I
)
s
s
o
l
(
/
t
i
f
o
r
p
t
e
n
i
’
s
e
t
a
c
o
s
s
a
f
o
e
r
a
h
s
d
e
t
n
u
o
c
c
a
y
t
i
u
q
E
”
T
I
B
E
“
x
a
t
d
n
a
t
s
e
r
e
t
n
i
e
r
o
f
e
b
s
g
n
i
n
r
a
E
n
o
i
t
a
s
i
t
r
o
m
a
d
n
a
i
n
o
i
t
a
c
e
r
p
e
D
s
t
s
o
c
d
e
t
a
e
r
l
r
e
g
r
e
m
e
d
d
e
s
o
p
o
r
P
E
R
M
f
o
l
e
a
s
n
o
i
n
a
g
t
e
N
l
a
s
r
e
v
e
r
t
n
e
m
r
i
a
p
m
I
)
e
s
n
e
p
x
e
(
/
e
m
o
c
n
i
t
s
e
r
e
t
n
i
t
e
N
)
e
s
n
e
p
x
e
(
/
t
i
f
e
n
e
b
x
a
t
e
m
o
c
n
I
t
s
e
r
e
t
n
i
g
n
i
l
l
o
r
t
n
o
c
-
n
o
N
x
a
t
r
e
t
f
a
)
s
s
o
l
(
/
t
i
f
o
r
P
4
3
2
,
5
5
5
)
8
2
6
,
2
1
(
7
1
2
,
6
0
4
)
5
6
2
,
3
0
1
(
)
8
5
2
,
1
2
(
9
7
2
,
5
2
3
9
0
,
3
9
1
7
0
2
,
9
7
4
t
n
e
r
a
P
e
h
t
f
o
s
r
e
d
l
o
h
y
t
i
u
q
e
o
t
e
l
b
a
t
u
b
i
r
t
t
a
)
s
s
o
l
(
/
t
i
f
o
r
P
m
o
r
f
i
s
t
s
o
c
g
n
n
e
p
o
-
e
r
p
,
)
E
R
M
d
n
a
s
l
l
i
a
n
p
s
A
n
w
o
r
C
,
h
t
r
e
P
n
w
o
r
C
l
,
e
n
r
u
o
b
e
M
n
w
o
r
C
t
a
(
l
y
a
p
m
a
r
g
o
r
p
P
V
n
o
e
t
a
r
I
i
n
w
l
a
c
i
t
e
r
o
e
h
t
m
o
r
f
e
c
n
a
i
r
a
v
y
n
a
f
o
t
c
a
p
m
i
e
h
t
l
e
d
u
c
x
e
o
t
d
e
t
s
u
d
a
j
n
e
e
b
e
v
a
h
s
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
N
,
e
u
n
e
v
e
r
l
y
a
p
m
a
r
g
o
r
p
P
V
o
t
I
s
t
n
e
m
t
s
u
d
a
o
t
j
e
s
i
r
i
s
e
v
g
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
n
e
h
t
i
l
,
y
g
n
d
r
o
c
c
A
.
e
m
i
t
l
I
r
e
v
o
y
a
p
m
a
r
g
o
r
p
P
V
n
o
e
g
a
t
n
e
c
r
e
p
d
o
h
d
e
t
c
e
p
x
e
l
e
h
t
s
i
e
t
a
r
i
n
w
l
a
c
i
t
e
r
o
e
h
t
e
h
T
.
s
m
e
t
i
t
n
a
c
i
f
i
i
n
g
s
d
n
a
E
R
M
.
s
s
o
L
r
o
t
i
f
o
r
P
f
o
t
n
e
m
e
t
a
t
S
e
h
t
n
i
e
u
n
e
v
e
r
n
i
d
e
d
u
c
n
l
i
t
o
n
s
i
i
h
c
h
w
,
s
t
e
s
s
a
t
n
e
r
r
u
c
-
n
o
n
f
o
l
i
a
s
o
p
s
d
n
o
t
i
f
o
r
p
f
o
n
o
i
l
l
i
m
6
.
1
$
s
e
d
u
c
n
l
i
n
o
i
l
l
i
m
8
.
7
1
6
,
3
$
f
o
e
u
n
e
v
e
r
l
a
t
o
T
.
s
t
l
u
s
e
r
i
’
s
e
t
a
c
o
s
s
a
f
o
e
r
a
h
s
d
e
t
n
u
o
c
c
a
y
t
i
u
q
e
d
n
a
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
i
,
s
e
s
n
e
p
x
e
r
e
h
t
o
&
s
n
o
s
s
m
m
o
c
i
i
,
s
e
x
a
t
g
n
m
a
g
i
)
1
(
)
2
(
x
a
t
a
d
n
a
s
t
s
o
c
t
n
e
m
e
r
i
t
e
r
t
b
e
d
y
l
r
a
e
,
s
t
s
o
c
d
e
t
a
e
r
l
r
e
g
r
e
m
e
d
d
e
s
o
p
o
r
p
y
b
t
e
s
f
f
o
y
l
l
a
i
t
r
a
p
,
l
a
s
r
e
v
e
r
t
n
e
m
r
i
a
p
m
i
s
r
e
p
s
A
n
a
d
n
a
s
e
r
a
h
s
E
R
M
f
o
e
a
s
l
i
n
o
n
a
g
t
e
n
a
f
i
o
t
s
s
n
o
c
n
o
i
l
l
i
m
2
.
5
5
5
$
f
o
s
m
e
t
i
t
n
a
c
i
f
i
n
g
S
i
)
3
(
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
.
s
t
n
e
m
s
s
e
s
s
a
d
e
d
n
e
m
a
o
t
g
n
i
t
a
e
r
l
t
n
e
m
t
s
u
d
a
j
i
i
n
o
s
v
o
r
p
CRL091.21 - AR17 FIN_SEC_AW.indd 97
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
97
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
3. Revenue and Expenses
Profit before income tax expense includes the following revenues and expenses:
(a) Revenue
Revenue from services
Revenue from sale of goods
Interest
Dividends
Other operating revenue
(b) Other income
Profit on disposal of non-current assets
Net gain on sale of MRE
Net foreign currency gain on disposal of foreign operations
(c) Expenses
Cost of sales
Operating activities
Net asset impairment/(reversal)
Restructuring & other expenses
Proposed demerger related costs
Other expenses
Depreciation of non-current assets
(included in expenses above)
Buildings
Plant and equipment
Amortisation of non-current assets
(included in expenses above)
Casino licence fee and management agreement
Other assets
Total depreciation and amortisation expense
(d) Other income and expense disclosures
Finance costs expensed:
Debt facilities
Capitalised interest
Early debt retirement costs
Operating leases
Superannuation expense
Other employee benefits expense
Net foreign currency (gains)/losses
(e) Significant items - income / (expense)
Net gain on sale of MRE
Net foreign currency gain on disposal of foreign operations
MRE special dividend
Net asset (impairment)/reversal
Restructuring & other expenses
Early debt retirement costs
Proposed demerger related costs
Net tax on significant items
2017
$’000
2016
$’000
2,837,943
415,020
9,648
51,927
29,597
3,344,135
1,115
1,745,473
88,820
1,835,408
153,605
2,584,235
260,233
89,553
-
55,648
3,143,274
3,161,944
394,642
16,332
12,345
30,889
3,616,152
1,605
601,988
-
603,593
142,042
2,765,185
(35,465)
-
9,033
115,610
2,996,405
96,269
170,473
266,742
91,739
161,070
252,809
20,335
9,687
30,022
296,764
20,335
9,631
29,966
282,775
151,232
(40,032)
111,200
32,417
143,617
7,970
64,784
940,027
(2,784)
201,321
(43,385)
157,936
57,735
215,671
8,361
61,575
920,022
(7,762)
1,745,473
601,988
88,820
48,620
-
-
(260,233)
35,465
(89,553)
(32,417)
-
20,293
1,521,003
-
(57,735)
(9,033)
(15,451)
555,234
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
98
CRL091.21 - AR17 FIN_SEC_AW.indd 98
14/9/17 12:30 pm
4. Dividends Paid and Declared
(a) Dividends declared and paid during the financial year
Prior year final dividend (paid 7 October 2016)
2017
$’000
2016
$’000
s
t
n
e
m
e
t
a
t
S
l
Paid at 39.5 cents (2015: 19.0 cents) per share franked at 70% (2015: 50% franked) at the
Australian tax rate of 30% (2015: 30%)
287,716
138,395
i
i
a
c
n
a
n
F
e
h
t
o
t
823,085
240,370
1,110,801
378,765
s
e
t
o
N
Current year interim dividend (paid 17 March 2017)
Paid at 113.0 cents (2016: 33.0 cents) per share franked at 60% (2016: 50% franked) at the
Australian tax rate of 30% (2016: 30%)
Total dividends appropriated
(b) Dividends declared and not recognised as a liability
Current year final dividend (expected to be paid 6 October 2017)
Declared at 30.0 cents (2016: 39.5 cents) per share and franked at 60% (2016: 70% franked)
at the Australian tax rate of 30% (2016: 30%)
206,654 (1)
287,716
(c) Franking credits
The tax rate at which the final dividend will be franked is 30% (2016: 30%). The franking
account disclosures have been calculated using the franking rate applicable at 30 June 2017.
The amount of franking credits available for the subsequent financial year:
Franking account balance as at the end of the financial year at 30% (2016: 30%)
91,233
287,958
Franking credits/(debits) that will arise from the payment/(receipt) of income taxes payable/
(refundable) as at the end of the financial year
Total franking credits
The amount of franking credits available for future reporting periods:
Impact on the franking account of dividends announced before the financial report was
authorised for issue but not recognised as a distribution to equity holders during the financial
year
Total franking credits available for future reporting periods
(18,227)
7,047
73,006
295,005
(53,140)
(86,315)
19,866
208,690
(1) Dollar value based on the total number of shares on issue as at the date of declaration of the 2017 final dividend.
CRL091.21 - AR17 FIN_SEC_AW.indd 99
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
99
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
5.
Income Tax
(a) Income tax expense
The prima facie tax expense, using the Australian tax rate multiplied by profit differs from
income tax provided in the financial statements as follows:
Profit before income tax
Prima facie income tax expense on profit at the Australian rate of 30% (2016: 30%)
Tax effect of:
Non deductible depreciation and amortisation
Share of associates' net losses/(profits)
Differences in foreign tax rates
Deferred tax balances not previously brought to account
Income tax (over)/under provided in prior years
Non-deductible/(non-assessable) significant items
Revenue losses not brought to account
Other items - net
Income tax expense
Income tax expense comprises:
Current expense
Deferred expense/(benefit)
Adjustments for current income tax of prior periods
Tax on significant items
(b) Deferred income taxes
Deferred income tax assets
Deferred income tax liabilities
Net deferred income tax assets/(liabilities)
(c) Deferred income tax assets and liabilities at the end of the financial year
The balance comprises temporary differences attributable to:
Doubtful debt provision
Employee benefits provision
Losses available for offsetting against future taxable income
Other receivables
Other provisions
Prepaid casino tax
Licences and intangibles
Land and buildings
Property, plant & equipment
Revaluation of investment to fair value
Other
Net deferred income tax assets/(liabilities)
2017
$’000
2016
$’000
1,931,784
1,048,930
579,535
314,679
1,655
(11,740)
46
1,655
(12,378)
3,056
8,572
(102,905)
(11,513)
52,799
(470,506)
(155,754)
4,222
6,544
803
3,399
106,815
105,354
103,098
137,891
35,523
(100,787)
(11,513)
(20,293)
52,799
15,451
106,815
105,354
354,701
355,553
(377,423)
(351,163)
(22,722)
4,390
99,070
37,248
52,316
2,986
64,839
(14,943)
87,579
35,828
46,220
4,376
53,939
(15,390)
(229,577)
(230,970)
(120,475)
5,517
(87,338)
10,146
88,566
108,372
(8,269)
(22,722)
(8,372)
4,390
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
100
CRL091.21 - AR17 FIN_SEC_AW.indd 100
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
5.
Income Tax continued
(d) Movements in deferred income tax assets and liabilities during the
financial year
Carrying amount at the beginning of the year (1)
Tax income / (expense) during the period recognised in profit or loss
Tax income / (expense) during the period recognised in profit or loss - significant items
Exchange differences
Tax income / (expense) - derivatives
Carrying amount at the end of the year
(e) Tax losses not brought to account, as the realisation of the benefits
represented by these balances is not considered to be probable
Tax losses arising in Australia for offset against future capital gains
Foreign income tax losses for offset against future foreign profits
Foreign capital tax losses for offset against future foreign profits
Total tax losses not brought to account
Potential tax benefit at respective tax rates
2017
$’000
2016
$’000
4,390
(95,346)
(35,523)
100,787
16,140
-
(7,729)
-
(237)
(814)
(22,722)
4,390
515,478
622,301
608,199
625,674
-
257,712
1,123,677
1,505,687
361,431
487,041
(1) Opening balances have been adjusted to reflect the new interpretive guidance in relation to AASB 112 Income Taxes. Refer to note 1.2 for
further details.
(f) Unrecognised temporary differences
At 30 June 2017, there is no recognised or unrecognised deferred income tax liability (2016: $nil) for taxes that would be
payable on the unremitted earnings of certain of the Group’s subsidiaries, associates or joint ventures, as the Group has no
liability for additional taxation should such amounts be remitted.
(g) Tax consolidation
Crown Resorts Limited and its 100% owned Australian resident subsidiaries have formed a tax consolidated group with
effect from 1 July 2007. Crown Resorts Limited is the head entity of the tax consolidated group. Members of the group
have entered into a tax sharing arrangement with Crown Resorts Limited in order to allocate income tax expense between
Crown Resorts Limited and the wholly owned subsidiaries. In addition, the agreement provides for the allocation of income
tax liabilities between the entities should the head entity default on its tax payment obligations. At the balance date the
possibility of default is remote.
(h) Tax effect accounting by members of the tax consolidated group
Members of the tax consolidated group have entered into a tax funding agreement. The tax funding agreement provides
for the allocation of current and deferred taxes to members of the tax consolidated group in accordance with their taxable
income for the period. The allocation of taxes under the tax funding agreement is recognised as an increase / decrease in
the subsidiaries inter-company accounts with the tax consolidated group head company, Crown Resorts Limited.
CRL091.21 - AR17 FIN_SEC_AW.indd 101
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
101
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
6. Trade and Other Receivables
Current
Trade receivables
Provision for doubtful debts (a)
Other receivables
Non-current
Other receivables
2017
$’000
2016
$’000
581,906
550,239
(367,561)
(319,616)
214,345
230,623
10,945
17,935
225,290
248,558
145,735
141,488
145,735
141,488
(a) Allowance for Doubtful Debts
Trade receivables are non-interest bearing and are generally 30 day terms.
An allowance for doubtful debts is recognised based on the expected credit loss from the time the financial instrument is
initially recognised.
Movements in the allowance for doubtful debts
Allowance for doubtful debts at the beginning of the year
Net doubtful debt expense (1)
Net amounts written off
Exchange differences
(1) Amounts are included in other expenses.
The comparative period reflects the retrospective application of AASB 9. Refer note 1.2.
Ageing analysis of trade receivables
2017- consolidated
Current
Past due not impaired
Considered impaired
2016- consolidated
Current
Past due not impaired
Considered impaired
2017
$’000
2016
$’000
(319,616)
(246,123)
(57,308)
(78,730)
5,047
4,316
2,829
2,408
(367,561)
(319,616)
0-30 days
>30 days
$’000
$’000
Total
$’000
92,730
-
92,730
-
121,615
121,615
3,144
364,417
367,561
95,874
486,032
581,906
87,370
-
87,370
-
143,253
143,253
3,897
315,719
319,616
91,267
458,972
550,239
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
102
CRL091.21 - AR17 FIN_SEC_AW.indd 102
14/9/17 12:30 pm
7. Other Financial Assets
Current
Receivable on forward exchange contracts
Non-current
Receivable on forward exchange contracts
Receivable on cross currency swaps
2017
$’000
9,375
9,375
-
21,892
21,892
2016
$’000
9,639
9,639
1,592
13,544
15,136
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
Details of the Group’s exposure to interest rate risk and foreign currency changes are provided in note 32.
s
e
t
o
N
8.
Investments
At fair value
Shares - listed (USA)
Shares - unlisted (North America)
2017
$’000
2016
$’000
64,764
49,743
-
2,017
64,764
51,760
Investments consist of shares, and therefore have no fixed maturity date or coupon rate.
The fair value of listed investments have been determined by reference to published price quotations in an active market.
9.
Investments in Associates
Investment details:
Associated entities - unlisted shares
Associated entities - listed shares
Total investments in associates
Share of profits of associates
Melco Resorts & Entertainment Ltd (1)
Aggregate share of profit from non material associates
2017
$’000
2016
$’000
235,511
241,184
-
1,373,702
235,511
1,614,886
37,857
42,676
1,275
(1,415)
39,132
41,261
(1) Crown’s share of MRE’s profits relates to the period from 1 July 2016 to 31 December 2016. From 1 January 2017, Crown ceased equity
accounting MRE, which was fully divested during the period.
CRL091.21 - AR17 FIN_SEC_AW.indd 103
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
103
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
9.
Investments in Associates continued
Investments in Associates
Reporting
Date
Melco Resorts & Entertainment Ltd 31 Dec(1)
Principal Activity
Resort/Casino and gaming
machine operator
Nobu Group
31 Dec(1)
Restaurants/Hospitality
Aspers Holdings (Jersey) Ltd
30 June
Casino and gaming
machine operator
Principal
Place of
Business
Macau(2)
USA
UK
Chill Gaming Pty Ltd
30 June
Gaming software developer
Australia
Draftstars Pty Ltd
30 June
Daily fantasy sports
Australia
Ellerston Leisure Pty Ltd
30 June
Accommodation/Recreation
Australia
Zengaming Inc
31 Dec(1)
eSports social network
USA
(1) The Group uses 30 June results to equity account for the investments.
(2) Melco Resorts & Entertainment Ltd was incorporated in the Cayman Islands.
% Interest
30 June
2017
30 June
2016
-
20.0
50.0
50.0
33.3
50.0
30.0
27.4
20.0
50.0
50.0
50.0
50.0
30.0
The associates outlined above are accounted for using the equity method in these consolidated financial statements.
Summarised financial information in respect of each of the Group’s material associates is set out below.
Carrying amount of investment in Melco Resorts & Entertainment Ltd
Balance at the beginning of the financial year
Share of associates’ net profit/(loss) for the year
Disposal of MRE shares
Foreign exchange movements
Dividends received
Carrying amount of investment in Melco Resorts & Entertainment Ltd
at the end of the financial year
2017
$’000
2016
$’000
1,373,702
1,965,717
37,857
42,676
(1,394,116)
(523,948)
(7,282)
69,926
(10,161)
(180,669)
-
1,373,702
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
104
CRL091.21 - AR17 FIN_SEC_AW.indd 104
14/9/17 12:30 pm
10. Property, Plant and Equipment
Freehold
land and
buildings
Buildings
on
leasehold
land
Plant &
equipment
Construction
work in
progress
Leased
plant &
equipment
Total
property,
plant and
equipment
$’000
$’000
$’000
$’000
$’000
$’000
s
t
n
e
m
e
t
a
t
S
l
1,578,394
914,725
613,100
839,242
123,575
4,069,036
36,491
17,643
89,120
304,548
25,291
473,093
i
i
a
c
n
a
n
F
e
h
t
o
t
(141)
-
(57,805)
(241,455)
(9,411)
638,898
-
(854)
(967)
(1,059)
(471)
160,150
(798,081)
-
-
-
-
-
(57,946)
(13,833)
(266,742)
(5,000)
(247,514)
-
-
(10,736)
-
s
e
t
o
N
1,964,838
872,216
646,395
345,709
130,033
3,959,191
Year ended 30 June 2017
At 1 July 2016, net of
accumulated depreciation and
impairment
Additions
Disposals
Impairment
Exchange differences
Reclassification/ transfer
At 30 June 2017, net of
accumulated depreciation
and impairment
At 30 June 2017
Depreciation expense
(37,938)
(58,331)
(156,640)
Cost (gross carrying amount)
2,604,531
1,607,630
2,303,289
345,709
158,377
7,019,536
Accumulated depreciation and
impairment
(639,693)
(735,414)
(1,656,894)
-
(28,344)
(3,060,345)
Net carrying amount
1,964,838
872,216
646,395
345,709
130,033
3,959,191
Impairment Testing
During the current period, a net impairment loss of $247.5 million has been recorded in the Group’s Statement of Profit or
Loss (2016: nil). During the period, Crown announced that it was not proceeding with the Alon project in Las Vegas and
began exploring alternatives to optimise the value, including an outright sale. Based on the review of the anticipated
recoverable amount of a land sale, calculated using the fair value less cost to sale method, the carrying value of Property,
Plant and Equipment relating to the Alon project (including directly attributable costs incurred from acquisition) has been
written down to its recoverable amount. The recoverable amount was categorised as a Level 2 fair value (as defined in
note 32), utilising a listing of all recent comparable land sale transactions and currently marketed properties in Las Vegas.
CRL091.21 - AR17 FIN_SEC_AW.indd 105
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
105
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
10. Property, Plant and Equipment continued
Freehold
land and
buildings
Buildings
on
leasehold
land
Plant &
equipment
Construction
work in
progress
Leased
plant &
equipment
Total
property,
plant and
equipment
$’000
$’000
$’000
$’000
$’000
$’000
1,542,579
939,091
632,624
491,947
84,256
3,690,497
1,544
39,416
158,688
415,713
52,273
667,634
-
-
(57,115)
Year ended 30 June 2016
At 1 July 2015, net of
accumulated depreciation and
impairment
Additions
Disposals
Depreciation expense
(29,745)
(61,994)
(148,116)
Acquisition of subsidiary
Exchange differences
Reclassification/ transfer
-
18,434
45,582
-
(1,116)
(672)
5,147
(643)
22,515
(67,425)
-
-
-
(993)
-
(57,115)
(12,954)
(252,809)
-
-
-
5,147
15,682
-
At 30 June 2016, net of
accumulated depreciation
and impairment
At 30 June 2016
1,578,394
914,725
613,100
839,242
123,575
4,069,036
Cost (gross carrying amount)
1,938,829
1,593,200
2,124,667
839,242
138,085
6,634,023
Accumulated depreciation and
impairment
(360,435)
(678,475)
(1,511,567)
-
(14,510)
(2,564,987)
Net carrying amount
1,578,394
914,725
613,100
839,242
123,575
4,069,036
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
106
CRL091.21 - AR17 FIN_SEC_AW.indd 106
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
11. Licences
Year ended 30 June 2017
At 1 July 2016, net of accumulated amortisation and impairment
Amortisation expense
At 30 June 2017, net of accumulated amortisation and impairment
At 30 June 2017
Cost (gross carrying amount)
Accumulated amortisation and impairment
Net carrying amount
Year ended 30 June 2016
At 1 July 2015, net of accumulated amortisation and impairment
Amortisation expense
At 30 June 2016, net of accumulated amortisation and impairment
At 30 June 2016
Cost (gross carrying amount)
Accumulated amortisation and impairment
Net carrying amount
Casino
Licences
$’000
1,113,959
(16,663)
1,097,296
1,297,020
(199,724)
1,097,296
1,130,623
(16,664)
1,113,959
1,297,020
(183,061)
1,113,959
The casino licences are carried at cost and amortised on a straight line basis over their useful lives.
The Crown Melbourne licence is being amortised until 2050. The Crown Perth licence is assessed as having an indefinite
useful life and no amortisation is charged. Amortisation will commence on the Crown Sydney licence once the property is
operational.
CRL091.21 - AR17 FIN_SEC_AW.indd 107
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
107
For the year ended 30 June 2017
12. Other Intangible Assets
N
o
t
e
s
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
Year ended 30 June 2017
At 1 July 2016, net of accumulated amortisation and
impairment
Additions
Impairment (2)
Exchange differences
Amortisation expense
At 30 June 2017, net of accumulated amortisation
and impairment
Casino
Management
Agreement (1)
Goodwill (1)
$’000
$’000
Other
$’000
Total
$’000
459,464
126,345
154,837
740,646
-
(110,257)
(2,739)
-
-
-
-
(3,672)
1,574
1,574
(49,371)
(159,628)
(5,264)
(8,197)
(8,003)
(11,869)
346,468
122,673
93,579
562,720
At 30 June 2017
Cost (gross carrying amount)
Accumulated amortisation and impairment
456,725
(110,257)
245,279
(122,606)
166,201
868,205
(72,622)
(305,485)
Net carrying amount
346,468
122,673
93,579
562,720
Year ended 30 June 2016
At 1 July 2015, net of accumulated amortisation and
impairment (3)
Business acquisitions
Additions
Exchange differences
Amortisation expense
264,976
204,911
-
(10,423)
130,016
157,980
-
-
-
-
4,997
-
(8,140)
552,972
204,911
4,997
(10,423)
(11,811)
-
(3,671)
At 30 June 2016, net of accumulated amortisation
and impairment
459,464
126,345
154,837
740,646
At 30 June 2016
Cost (gross carrying amount)
459,464
245,279
169,891
874,634
Accumulated amortisation and impairment
-
(118,934)
(15,054)
(133,988)
Net carrying amount
459,464
126,345
154,837
740,646
(1) Purchased as part of business combinations.
(2) Refer note 13 for details regarding the impairment of intangible assets.
(3) Opening balances have been adjusted to reflect the new interpretive guidance in relation to AASB 112 Income Taxes. Refer to note 1.2 for
further details.
Goodwill is considered to have an indefinite life and is tested annually for impairment (see note 13). The goodwill balance at
30 June 2017 is allocated to Crown Melbourne $26.9 million (2016: $26.9 million), Crown Perth $144.0m (2016: $144.0
million), Crown Aspinalls $49.7 million (2016: $52.5 million) and Wagering & Online $125.9 million (2016: $236.0 million).
The useful life of the Crown Melbourne casino management agreement is amortised on a straight line basis to 2050.
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
108
CRL091.21 - AR17 FIN_SEC_AW.indd 108
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
13. Impairment Testing of Intangible Assets
Intangible assets deemed to have indefinite lives are allocated to the Group’s cash generating units (CGU’s) identified
according to business segment.
The recoverable amount of a CGU is determined based on a value in use calculation using a discounted cash flow
methodology covering a specified period, with an appropriate residual value at the end of that period, for each segment.
The methodology utilises cash flow forecasts that are based primarily on business plans presented to and approved by the
Board.
The following describes each key assumption on which management has based its cash flow projections to undertake
impairment testing of intangible assets.
(a) Cash flow forecasts
Cash flow forecasts are based on past performance and expectations for the future using a five year cash flow period.
(b) Residual value
Residual value is calculated using a perpetuity growth formula based on the cash flow forecast using a weighted average
cost of capital (after tax) and forecast growth rate.
(c) Forecast growth rates
Forecast growth rates are based on past performance and management’s expectations for future performance in each
segment.
(d) Discount rates
A weighted average cost of capital (after tax) of between 8% and 11% was used by the Group in impairment testing, risk
adjusted where applicable.
(e) Outcome of impairment tests for intangible assets
Based on the valuation techniques performed, an impairment loss of $159.6 million has been recorded against the Group’s
intangible assets during the year (2016: nil). In the prior period, Crown acquired 70% of DGN Games LLC (DGN), and
DGN subsequently acquired 100% of Winners Club Limited (and subsidiaries). This acquisition resulted in goodwill of
$204.9 million being recorded in the Group’s Statement of Financial Position, $157.8 million of which related to contingent
consideration. Refer to note 15 for details of the contingent consideration on the acquisition of Winners Club Limited.
During the current period, following a re-forecast of earnings of the DGN Group, Crown has reduced goodwill relating to
the acquisition of DGN by $110.3 million. DGN forms part of the Wagering & Online segment. In addition, as part of the
review of the anticipated recoverable amount of Alon as outlined in note 10, Crown has impaired intangible assets relating
to Alon by $49.4 million being the excess of the carrying amount over its recoverable amount. These amounts have been
included in net asset impairment/(reversal) in the Statement of Profit or Loss.
(f) Sensitivity analysis
It is not considered that any reasonable possible change in any of the above assumptions would cause the carrying value
of any CGU to materially exceed its recoverable amount. The exception to this is in respect of the DGN CGU, where the
estimated recoverable amount is equal to the carrying value, and any adverse movement in a key assumption would lead
to further impairment of the DGN goodwill.
CRL091.21 - AR17 FIN_SEC_AW.indd 109
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
109
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
14. Other Assets
Non-current
Prepaid casino tax at cost
Accumulated amortisation
Other prepayments
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
15. Trade and Other Payables
Current - unsecured
Trade and other payables
Deferred income
Non-current - unsecured
Casino licence payable
Deferred income
Contingent consideration
Other
Contingent consideration
2017
$’000
2016
$’000
100,800
100,800
(50,990)
(49,500)
49,810
51,300
2,186
9,394
51,996
60,694
2017
$’000
2016
$’000
444,549
473,505
1,954
1,735
446,503
475,240
158,498
154,136
7,486
45,277
13,541
9,004
154,094
22,255
224,802
339,489
As part of the purchase agreement with the previous owners of Winners Club, there may be additional contingent
consideration payments based on future earnings of the DGN Group. These potential cash payments are due in
December 2017 and December 2020, based on the 2017 and 2020 earnings. As at the acquisition date, the fair value of
the contingent consideration was estimated to be $157.8 million. Following a re-forecast of earnings of the DGN Group,
Crown has reduced the contingent consideration by $110.3 million in net asset impairment/(reversal) through the
Statement of Profit or Loss in the current period. The fair value was determined using the probability-weighted approach,
discounted to present value. A significant increase (decrease) in the future earnings of the DGN Group would result in a
higher (lower) fair value of the contingent consideration liability. As part of the reassessment of future earnings Crown
also impaired the goodwill relating to DGN, as outlined in note 13.
16. Interest-Bearing Loans and Borrowings
Current
Bank Loans - unsecured
Capital Markets Debt - unsecured
Finance Lease - secured
Non-current
Bank Loans - unsecured
Capital Markets Debt - unsecured
Finance Lease - secured
110
2017
$’000
2016
$’000
38,391
75,552
300,000
11,718
350,109
-
10,163
85,715
20,000
-
1,444,011
2,057,968
130,878
117,643
1,594,889
2,175,611
CRL091.21 - AR17 FIN_SEC_AW.indd 110
14/9/17 12:30 pm
16. Interest-Bearing Loans and Borrowings continued
Assets pledged as security
The lease liabilities are effectively secured, as the rights to the leased assets revert to the lessor in the event of default.
Fair Value Disclosures
Details of the fair value disclosures of the Group’s interest bearing liabilities are set out in note 32.
Financial Risk Management
Information about the Group’s exposure to interest rate and foreign currency changes is provided in note 32.
Financing and Credit Facilities
Unsecured credit facilities are provided as part of the overall debt funding structure of the Crown Group as follows:
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
Facility Type
Bank Facilities
Bilateral Multi Option Facilities
Syndicated Revolving Facilities
GBP Syndicated Facility
Letter of Credit Facilities
Debt Capital Markets
Euro Medium Term Notes
Australian Medium Term Notes
Facility
Amount
$’000
170,000
250,000
84,760
398,734
903,494
174,634
559,070
Drawn
Letters of
Amount Credit Issued
Available
$’000
$’000
$’000
Expiry
Dates
58,391
31,602
80,007 Feb 18 / Nov 19
-
-
-
58,391
174,634
559,070
-
-
250,000
Jun 2021
84,760
Aug 2020
398,734
430,336
- Jan 20 - Jan 22
414,767
-
-
-
-
-
-
Jul 2036
Jul 17 / Nov 19
- Sep 72 / Apr 75
-
AUD Subordinated Notes
1,010,307
1,010,307
1,744,011
1,744,011
Total at 30 June 2017
2,647,505
1,802,402
430,336
414,767
Total at 30 June 2016
3,641,731
2,133,520
218,914
1,289,297
The bank facilities are provided on an unsecured basis by domestic and international banks.
The debt capital markets drawn amounts represent unsecured notes issued to domestic and international debt investors.
Crown is able to make advances and issue letters of credit under the letter of credit facility, syndicated facilities and the
bilateral facilities which are multi option in nature.
Each of the above mentioned facilities is issued by or supported by a Group guarantee from Crown and certain
subsidiaries and impose various affirmative covenants on Crown, which may include compliance with certain financial
ratios and negative covenants, including restrictions on encumbrances, and customary events of default, including a
payment default, breach of covenants, cross-default and insolvency events.
During the current and prior year, there were no defaults or breaches on any of the loans or borrowings.
Refer to note 22(c) for a summary of Crown’s overdraft facilities.
CRL091.21 - AR17 FIN_SEC_AW.indd 111
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
111
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
17. Provisions
At 1 July 2016
Arising during the year
Utilised during the year
At 30 June 2017
Current 2017
Non-current 2017
At 30 June 2017
Current 2016
Non-current 2016
At 30 June 2016
18. Contributed Equity
Issued share capital
Ordinary shares fully paid
Movements in issued share capital
Carrying amount at the beginning of the financial year
Share buy-back, inclusive of costs
Carrying amount at the end of the financial year
Shares held in Trust
Balance at beginning of the financial year
Net shares acquired by the Crown Long Term Incentive Plan
Balance at the end of the financial year
Issued share capital
Ordinary shares fully paid
Movements in issued share capital
Balance at the beginning of the financial year
Share buy-back
Balance at the end of the financial year
Employee
Entitlements
$’000
207,292
117,900
(127,178)
198,014
161,278
36,736
198,014
162,103
45,189
207,292
Other
$’000
33,305
68,677
(37,425)
64,557
49,510
15,047
64,557
19,914
13,391
33,305
Total
$’000
240,597
186,577
(164,603)
262,571
210,788
51,783
262,571
182,017
58,580
240,597
2017
$’000
2016
$’000
(53,233)
446,763
446,763
(499,996)
(53,233)
446,763
-
446,763
(8,886)
(10,491)
(19,377)
2017
No.
-
(8,886)
(8,886)
2016
No.
688,847,822
728,394,185
728,394,185
728,394,185
(39,546,363)
-
688,847,822
728,394,185
During the year, the Group carried out an on-market share buy-back as an element of its capital management program.
For the year ended 30 June 2017, shares to a value of approximately $500 million have been purchased.
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
112
CRL091.21 - AR17 FIN_SEC_AW.indd 112
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
18. Contributed Equity continued
Due to share buy-backs being undertaken at higher prices than the original subscription prices, the balance of contributed
equity is reflected as a negative balance, which shows the excess value of shares bought over the original amount of
subscribed capital. Refer note 31 for details of the Parent Entity’s share capital, which has significant paid up capital.
Terms and Conditions of Contributed Equity
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding-up of the Company in proportion
to the number of shares held.
The voting rights attaching to ordinary shares provide that each ordinary shareholder present in person or by proxy or
attorney or being a corporation present by representative at a meeting shall have:
(a) on a show of hands, one vote only;
(b) on a poll, one vote for every fully paid ordinary share held.
Capital Management
When managing capital, the Group’s objective is to maintain optimal returns to shareholders and benefits for other
stakeholders. The Group also aims to maintain a capital structure that ensures the lowest cost of capital available to the
entity.
During 2017, the Group paid dividends of $1,110.8 million (2016: $378.8 million). The Group’s dividend policy is to pay
60 cents per share on a full year basis, subject to Crown’s financial position.
19. Reserves and Retained Earnings
Foreign currency translation reserve
Employee equity benefits reserve
Net unrealised gains reserve
Cash flow hedge reserve
Foreign Currency Translation Reserve
The foreign currency translation reserve is used to record exchange differences
arising from the translation of the financial statements of foreign operations. It is also
used to recognise gains and losses on hedges of the net investment in foreign
operations.
Balance at the beginning of the financial year
Net foreign exchange translation
Net foreign exchange reclassified to profit or loss
Non-controlling interest
Balance at the end of the financial year
Employee Equity Benefits Reserve
The employee equity benefits reserve is used to record share based remuneration
obligations to executives in relation to ordinary shares.
Balance at the beginning of the financial year
Movement for the period
Balance at the end of the financial year
2017
$’000
26,061
13,780
1,018
19,933
60,792
2016
$’000
147,453
16,198
631,079
1,900
796,630
147,453
(33,460)
(88,820)
888
154,919
65,751
(70,576)
(2,641)
26,061
147,453
16,198
(2,418)
13,780
13,010
3,188
16,198
CRL091.21 - AR17 FIN_SEC_AW.indd 113
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
113
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
19. Reserves and Retained Earnings continued
Net Unrealised Gains Reserve
The net unrealised gains reserve records the movement from changes in ownerships
interest in a subsidiary, investments and associates equity.
Balance at the beginning of the financial year
Transfer to retained earnings
Change ownership interest in subsidiary without loss of control
Balance at the end of the financial year
Cash Flow Hedge Reserve
The cash flow hedge reserve records the portion of the gain or loss on a hedging
instrument in a cash flow hedge that is determined to be an effective hedge.
Balance at the beginning of the financial year
Movement in interest rate swaps
Movement in cross currency swaps
Movement in forward exchange contracts
Balance at the end of the financial year
Retained Earnings
Balance at the beginning of the financial year
Transfer from unrealised gains reserve
Net profit after tax attributable to equity holders of the parent
Total available for appropriation
Dividends provided for or paid
Adjustment on adoption of AASB 9
Balance at the end of the financial year
2017
$’000
2016
$’000
631,079
(630,061)
-
636,158
-
(5,079)
1,018
631,079
1,900
13,488
5,844
(1,299)
19,933
16,130
(11,621)
4,148
(6,757)
1,900
3,767,765
3,257,760
630,061
-
1,866,055
948,823
6,263,881
4,206,583
(1,110,801)
-
(378,765)
(60,053)
5,153,080
3,767,765
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
114
CRL091.21 - AR17 FIN_SEC_AW.indd 114
14/9/17 12:30 pm
20. Business Combinations
Acquisition of subsidiaries in prior period
On 2 July 2015, Crown acquired 60% of DGN Games LLC (DGN) for US$32.5 million (A$42.5 million). Subsequently on 23
December 2015, Crown increased its shareholding in DGN to 70% by investing a further US$15m (A$20.8 million) in return
for new units in the company.
On 23 December 2015, Crown through its majority owned subsidiary DGN, acquired 100% of Winners Club Limited (and
subsidiaries) for US$10 million (A$13.8 million).
The fair value of the identifiable assets and liabilities as at the dates of acquisition were:
Consolidated fair value at
acquisition date
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
Cash and cash equivalents
Other current assets
Property, plant and equipment
Trade and other payables
Other current liabilities
Fair value of identifiable net assets
Goodwill arising on acquisition
Consideration transferred on acquisition
Contingent consideration
Fair value of identifiable net assets
Minority interest in identifiable net assets
Goodwill
s
e
t
o
N
$’000
6,814
2,586
5,147
14,547
1,823
168
1,991
12,556
$’000
56,337
157,801
(12,556)
3,329
204,911
Based on the fair values, DGN and Winners Club’s identifiable net assets at the date of acquisition were $12.6 million,
resulting in goodwill of $204.9 million. The goodwill is attributable to the skills and experience of the management team, as
well as the synergies that will be obtained through the integration of the two businesses. Goodwill will be deductible for US
Federal tax purposes when there has been a payment for the goodwill. Goodwill on payment of the contingent
consideration (refer below) may be deductible in the future.
Crown has elected to measure the non-controlling interest on acquisition in DGN at fair value.
Contingent consideration
As part of the purchase agreement with the previous owners of Winners Club, there may be additional contingent
consideration payments based on future earnings of the DGN Group. These potential cash payments are due in
December 2017 and December 2020, based on the 2017 and 2020 earnings. As at the acquisition date, the fair value of
the contingent consideration was estimated to be $157.8 million. The fair value was determined using the probability-
weighted approach, discounted to present value.
A significant increase (decrease) in the future earnings of the DGN Group would result in a higher (lower) fair value of the
contingent consideration liability. Refer note 15 for further details.
Net Cash Flow - Acquisition of subsidiaries
Cash paid
Cash acquired
Net Cash Flow - Acquisition of subsidiaries
$’000
56,337
(6,814)
49,523
Crown Resorts Limited Annual Report 2017
115
CRL091.21 - AR17 FIN_SEC_AW.indd 115
14/9/17 12:30 pm
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
21. Expenditure Commitments
(a) Capital expenditure commitments
N
o
t
e
s
Estimated capital expenditure contracted for at balance date, but not
provided for:
Payable within one year
Payable after one year but not more than five years
(b) Non-cancellable operating lease commitments
Payable within one year
Payable after one year but not more than five years
Payable more than five years
2017
$’000
2016
$’000
219,998
813,894
217,758
974,427
1,033,892
1,192,185
2017
$’000
14,964
48,528
503,137
566,629
2016
$’000
15,766
55,184
519,028
589,978
The Group has entered into non-cancellable operating leases. The leases vary in contract period depending on the asset
involved but generally have an average lease term of approximately 6 years (2016: 8 years) excluding the land leases
detailed below. Operating leases include telecommunications rental agreements and leases on assets including motor
vehicles, land and buildings and items of plant and equipment. Renewal terms are included in certain contracts, whereby
renewal is at the option of the specific entity that holds the lease. On renewal, the terms of the leases are usually
renegotiated. There are no restrictions placed upon the lessee by entering into these leases.
In addition, in 1993 Crown Melbourne entered into a ninety-nine year lease agreement for the site upon which Crown
Melbourne Entertainment Complex is located. For years one to forty inclusive the annual rent payable by the parent entity
is one dollar per annum. For years forty-one to ninety-nine inclusive the annual rent payable will be the then current market
rent for the site. The aggregate lease expenditure contracted for at balance date but not provided for which is disclosed in
this report does not include an estimate for the rent payable for years forty-one to ninety-nine inclusive due to the
uncertainty of these amounts.
Crown through its majority owned subsidiary, Alon, holds the operating lease on the leasehold portion of the land in Las
Vegas which expires in 2097. The above operating lease commitment table includes the scheduled payments until 2097.
(c) Non-cancellable finance lease commitments
Payable within one year
Payable after one year but not more than five years
Payable more than five years
2017
$’000
11,718
75,104
55,774
2016
$’000
10,163
51,099
66,544
142,596
127,806
Under the terms of the lease, Crown has the option to acquire the leased asset for a predetermined residual value on
expiry of the lease.
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
116
CRL091.21 - AR17 FIN_SEC_AW.indd 116
14/9/17 12:30 pm
22. Cash Flow Statement Reconciliation
(a) Cash balance represents:
Cash on hand and at bank
Deposits at call
2017
$’000
2016
$’000
330,973
1,440,254
1,771,227
412,123
37,540
449,663
The above closing cash balances includes $134.7 million (2016: $151.0 million) of cash on the company’s premises and
cash held in bank accounts needed to run the day to day operations of the businesses and cash (including deposits on
call) of $1,636.5 million (2016: $298.7 million) for other purposes.
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
(b) Reconciliation of the profit/(loss) after tax to the net cash flows
from operating activities
Profit after tax
Non cash items and items dealt with separately:
- Depreciation and amortisation
- Asset impairment/(reversal)
- Share of associates' net (profit)/loss
- Net foreign exchange (gain)/loss
- Net foreign exchange gain on disposal of foreign operations
- Net mark-to-market (gain)/loss on investments
Cash items not included in profit after tax:
- Dividends received from associates
Items classified as investing/financing activities:
- (Profit)/loss on sale of property, plant and equipment
- Net profit on sale of MRE
Working Capital changes:
2017
$’000
2016
$’000
s
e
t
o
N
1,824,969
943,576
296,764
260,233
(39,132)
(2,784)
(88,820)
(16,245)
282,775
(35,465)
(41,261)
(7,762)
-
(8,432)
18,671
183,568
(1,115)
(1,605)
(1,745,473)
(601,988)
- (Increase) / decrease in trade receivables and other assets
(36,292)
(139,535)
- (Increase) / decrease in inventories
- (Decrease) / increase in tax provisions
- (Decrease) / increase in trade and other payables, accruals and provisions
Net cash flows from operating activities
(1,161)
6,560
(10,512)
465,663
(1,435)
(114,834)
25,080
482,682
(c) Bank Overdraft Facilities
The Group has bank overdraft facilities available as follows:
Bank
ANZ Banking Group Limited
Citibank NA
Royal Bank of Scotland PLC
2017
2016
A$20 million
A$20 million
US$10 million
US$10 million
£20 million
£20 million
As at 30 June 2017 there were no drawn down amounts on the overdraft facilities (2016: nil).
CRL091.21 - AR17 FIN_SEC_AW.indd 117
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
117
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
23. Events After the Reporting Period
Subsequent to 30 June 2017, the directors of Crown declared a final dividend on ordinary shares in respect of the year
ending 30 June 2017. The total amount of the dividend is expected to be $206.7 million, which represents a dividend of
30.0 cents per share franked at 60%. No part of the unfranked portion of the dividend will consist of conduit foreign
income.
On 4 August 2017, Crown announced its intention to undertake a further on-market share buy-back of up to approximately
29.3 million shares (the “Further Share Buy-Back”), which together with the initial share buy-back that completed on 30
June 2017, represents no more than 10% of the smallest number of shares on issue during the prior 12 months. Crown
may, at its discretion, vary, suspend or terminate the Further Share Buy-Back at any time.
24. Contingent Liabilities and Related Matters
On 15 February 2016 Crown was issued with amended assessments and notice of penalty by the Australian Taxation
Office for a total of approximately $362 million which comprises primary tax, interest and penalties. The amended
assessments are in respect of income tax paid for the financial years ending 30 June 2009 to 30 June 2014 (inclusive) and
relate to the tax treatment of some of the financing for Crown’s investment in Cannery Casino Resorts and other
investments in North America. Crown considers that it has paid the correct amount of tax and intends to pursue all
available avenues of objection (including, if necessary, court proceedings) to the amended assessments.
The group has no other contingent liabilities at 30 June 2017.
Legal Actions
Entities within the group are defendants from time to time in legal proceedings arising from the conduct of their business.
The group does not consider that the outcome of any proceedings ongoing at balance date, either individually or in
aggregate, is likely to have a material effect on its financial position. Where appropriate, provisions have been made.
25. Auditors’ Remuneration
Amounts received, or due and receivable, by Ernst & Young (Australia) for:
Auditing the accounts
Taxation services
Consulting and assurance related services
Amounts received, or due and receivable, by other member firms of Ernst &
Young International for:
Auditing the accounts
Taxation services
2017
$’000
1,045
8,180
1,441
287
1,886
12,839
2016
$’000
1,113
7,701
200
298
2,791
12,103
Amounts received, or due and receivable, by non Ernst & Young audit firms for:
Auditing services
64
22
26. Earnings Per Share (EPS)
2017
2016
The following reflects the income and share data used in the calculations of
basic and diluted EPS:
Net profit / (loss) after tax used in calculating basic and diluted EPS ($’000)
1,866,055
948,823
Weighted average number of ordinary shares used in calculating basic and diluted
EPS ('000)
726,008
728,394
During the year, Crown completed a $500 million on-market share buy-back (the “Initial Share Buy-Back”). Following the
completion of the Initial Share Buy-Back, Crown’s shares on issue reduced by approximately 39.5 million to approximately
688.8 million.
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
118
CRL091.21 - AR17 FIN_SEC_AW.indd 118
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
26. Earnings Per Share (EPS) continued
In addition to the Initial Share Buy-Back, on 4 August 2017 Crown announced its intention to undertake a further on-market
share buy-back of up to approximately 29.3 million shares, which together with the Initial Share Buy-Back represents no
more than 10% of the smallest number of shares on issue during the prior 12 months of approximately 688.8 million
shares.
Crown may, at its discretion, vary, suspend or terminate the Further Share Buy-Back at any time.
27. Key Management Personnel Disclosures
(a) Details of key management personnel
(i) Directors
John H Alexander
Benjamin A Brazil
Executive Chairman (appointed Executive Chairman 1 February 2017)
Non-Executive Director (resigned 12 April 2017)
The Hon. Helen A Coonan
Non-Executive Director
Rowen B Craigie
Rowena Danziger
Chief Executive Officer and Managing Director (resigned 28 February 2017)
Non-Executive Director
Andrew Demetriou
Non-Executive Director
Geoffrey J Dixon
Non-Executive Director
Professor John S Horvath
Non-Executive Director
Michael R Johnston
Non-Executive Director
Harold C Mitchell
Robert J Rankin
Non-Executive Director
Chairman (until 31 January 2017), Non-Executive Director (resigned 21 June 2017)
Prior to 30 June 2017, the Board approved the appointment of Mr James Packer as a director, subject to the receipt of all
necessary consents and regulatory approvals. On 3 August 2017, following the receipt of the necessary consents and
approvals, Mr Packer’s appointment became effective.
On 3 August 2017, the Board approved the appointment of Mr Guy Jalland as a director, subject to receipt of all necessary
regulatory approvals. Mr Jalland’s appointment will only become effective once the necessary approvals have been
received.
(ii) Executives
Kenneth M Barton
Barry J Felstead
W Todd Nisbet
Chief Financial Officer & Chief Executive Officer – Crown Digital
Chief Executive Officer – Australian Resorts
Executive Vice President – Strategy and Development
(b) Remuneration of key management personnel
Total remuneration for key management personnel for the Group and Parent Entity during the financial year are set out
below:
Remuneration by category
Short term benefits
Post employment benefits
Long term incentives
Termination benefits
Further details are contained in the Remuneration Report.
2017
$
2016
$
12,684,725
14,717,236
93,176
(3,752,706)
6,272,700
112,230
7,537,500
-
15,297,895
22,366,966
Crown Resorts Limited Annual Report 2017
119
CRL091.21 - AR17 FIN_SEC_AW.indd 119
14/9/17 12:30 pm
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
28. Related Party Disclosures
(a) Parent entity
Crown Resorts Limited is the ultimate parent entity of the Group.
(b) Controlled entities, associates and joint ventures
Interests in significant controlled entities are set out in note 29.
Investments in associates and joint ventures are set out in note 9.
(c) Entity with significant influence over the Group
At balance date Consolidated Press Holdings Group (“CPH”), comprising Consolidated Press Holdings Pty Limited and its
related corporations, a group related to Mr James Packer, have a relative interest in 49.72% (2016: 53.01%) of the
Company’s fully paid ordinary shares.
(d) Key management personnel
Disclosures relating to key management personnel are set out in note 27, and in the Remuneration Report.
(e) Terms and conditions of transactions with related parties
Sales to and purchases from related parties are made in arm’s length transactions both at normal market prices and on
normal commercial terms, unless otherwise stated.
(f) Transactions with related parties
The Group had the following transactions with related parties:
(i) Director related entities and entities with significant influence over the Group
CPH provided management services in accordance with a Services Agreement, in addition to corporate
secretarial and administrative services of $4.0 million during the year (2016: $0.2 million). CPH paid costs on
behalf of Crown to third parties totalling $2.2 million during the year (2016: $1.0 million). At 30 June 2017 there
was $4.2 million owing to CPH (2016: $nil).
Crown and its controlled entities provided CPH with hotel and banqueting services of $0.1 million during the year
(2016: $0.1m). At 30 June 2017 there were no amounts owing from CPH (2016: $nil).
(ii) Associates
During the year, Crown provided loans of $2.0 million (2016: nil) to Draftstars Pty Ltd which remained outstanding
at 30 June 2017.
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
120
CRL091.21 - AR17 FIN_SEC_AW.indd 120
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
29. Investment in Controlled Entities
The consolidated financial statements include the financial statements of Crown Resorts Limited and its controlled entities.
Significant controlled entities and those that are party to a Deed of Cross Guarantee with the parent entity are set out
below:
Crown Resorts Limited
ALON Las Vegas Financeco, LLC
ALON Las Vegas Holdings, LLC
ALON Las Vegas Landco, LLC
Artra Pty Ltd
Aspinall’s Club Limited
Betfair Pty Ltd
Betfair Australasia Pty Ltd
Burswood Limited
Burswood Nominees Ltd
Burswood Resort (Management) Ltd
Capital Club Pty Ltd
Crown Asia Investments Limited
Crown Australia Pty Ltd
Crown Capital Golf Pty Ltd
Crown Cyprus Limited
Crown CCR Group Holdings One Pty Ltd
Crown CCR Group Holdings Two Pty Ltd
Crown CCR Group Holdings General Partnership
Crown CCR Group Investments One LLC
Crown CCR Group Investments Two LLC
Crown CCR Holdings LLC
Crown CPS Holdings Pty Ltd
Crown (Ellerston Leisure) Holdings Pty Ltd
Crown Entertainment Group Holdings Pty Ltd
Crown (Gaming Technology) Holdings Pty Ltd
Crown Gateway Luxembourg Pty Ltd
Crown Group Finance Limited
Crown Group Securities Ltd
Crown International Holdings Ltd
Crown Investment Holdings LLC
Crown Management Holdings Pty Ltd
Crown Management Pty Ltd
Crown Melbourne Limited
Crown North America Holdings One Pty Ltd
Crown North America Investments LLC
Crown Overseas Investments Pty Ltd
Crown Sydney Pty Ltd
Crown Sydney Gaming Pty Ltd
Crown Sydney Holdings Pty Ltd
Footnote
2017
2016
Country of
Incorporation
Beneficial Interest
Held by the
Consolidated Entity(1)
2017 %
2016 %
Australia
Parent Entity
USA
USA
USA
Australia
United Kingdom
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
USA
USA
USA
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Bahamas
USA
Australia
Australia
Australia
Australia
USA
Australia
Australia
Australia
Australia
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
B
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
88
88
88
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
74
74
74
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
CRL091.21 - AR17 FIN_SEC_AW.indd 121
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
121
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
29. Investment in Controlled Entities continued
Crown Sydney Property Pty Ltd
Crown US Investments LLC
Crown UK Investments Ltd
Crown (Western Australia) Pty Ltd
Crown (Western Australia) Finance Holdings Pty Ltd
Crown (Western Australia) Finance Pty Ltd
CrownBet Pty Ltd
CrownBet Holdings Pty Ltd
DGN Games LLC
Flienn Pty Ltd
Jade West Entertainment Pty Ltd
Jemtex Pty Ltd
Melbourne Golf Academy Pty Ltd
PBL Overseas (CI) Pty Ltd
PBL (CI) Finance Pty Ltd
Pennwin Pty Ltd
Publishing and Broadcasting (Finance) Ltd
Renga Pty Ltd
Footnote
2017
2016
Country of
Incorporation
Australia
USA
United Kingdom
A
A
A
A
A
A
B
B
B
B
B
B
B
B
Australia
Australia
Australia
Australia
Australia
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Beneficial Interest
Held by the
Consolidated Entity(1)
2017 %
2016 %
100
100
100
100
100
100
62
62
70
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
62
62
70
100
100
100
100
100
100
100
100
100
(1) The proportion of ownership interest is equal to the proportion of voting power held.
A These controlled entities have entered into a new deed of cross guarantee dated 21 June 2017 with the parent entity under ASIC Instrument
2016/785 - the “Closed Group” (refer note 30).
B These controlled entities were party to a deed of cross guarantee with the parent entity under ASIC Class Order 98/1418 that was revoked by a
Revocation Deed dated 21 June 2017.
30. Deed of Cross Guarantee
Crown Resorts Limited and certain controlled entities, as detailed in note 29, are parties to a Deed of Cross Guarantee
dated 21 June 2017 under which each company in the Closed Group guarantees the payment in full of all debts of the
other entities in the Closed Group in the event of their winding up.
By entering into the Deed, pursuant to ASIC Instrument 2016/785, certain controlled entities of Crown have been granted relief
from the Corporations Act 2001 requirements for preparation, audit and reporting of financial reports and directors’ reports.
The consolidated income statement and balance sheet of the entities which are members of the Closed Group are detailed
below.
Consolidated income statement
Profit / (loss) before income tax
Income tax (expense) / benefit
Net profit / (loss) after income tax
Retained earnings / (accumulated losses) at the beginning of the financial year
Retained earnings / (accumulated losses) of entities entering Closed Group
(Retained earnings) / accumulated losses of entities removed from Closed Group
Transfer from reserves
Dividends provided for or paid
Closed Group
2017
$’000
2016
$’000
1,391,647
1,463,462
(98,472)
1,293,175
4,116,295
34,514
222,905
630,061
(218,595)
1,244,867
3,250,193
-
-
-
(1,110,801)
(378,765)
Retained earnings / (accumulated losses) at the end of the financial year
5,186,149
4,116,295
122
CRL091.21 - AR17 FIN_SEC_AW.indd 122
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
30. Deed of Cross Guarantee continued
Consolidated balance sheet
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments
Other financial assets
Total current assets
Non-current assets
Receivables
Other financial assets
Investments
Investment in associates
Property, plant and equipment
Licences
Other intangible assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest-bearing loans and borrowings
Income tax payable
Provisions
Total current liabilities
Non-current liabilities
Other payables
Interest-bearing loans and borrowings
Deferred tax liability
Provisions
Other financial liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Contributed equity
Treasury shares
Reserves
Retained earnings
Total equity
Closed Group
2017
$’000
1,667,183
170,775
16,487
30,134
5,564
2016
$’000
291,182
184,272
15,472
25,255
9,639
1,890,143
525,820
1,650,516
2,213,288
1,933,675
2,837,265
-
39,025
3,331,839
997,296
320,632
233,763
51,994
2,017
1,409,167
3,416,365
1,013,959
326,167
190,362
58,583
8,558,740
11,467,173
10,448,883
11,992,993
351,075
350,109
113,266
188,829
1,003,279
379,500
85,715
133,086
170,348
768,649
165,995
163,294
2,038,496
3,529,667
352,008
334,469
62,274
2,790
58,580
22,060
2,621,563
4,108,070
3,624,842
4,876,719
6,824,041
7,116,274
1,630,078
2,180,793
(19,377)
27,191
5,186,149
6,824,041
(8,886)
828,072
4,116,295
7,116,274
CRL091.21 - AR17 FIN_SEC_AW.indd 123
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
123
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
31. Parent Entity Disclosures
N
o
t
e
s
Results of the parent entity
Profit after tax for the period
Other comprehensive income/(loss)
Total comprehensive income for the period
Financial position of the parent entity
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Issued capital
Employee equity benefits reserve
Accumulated losses
Total equity
Contingent liabilities
Crown Resorts Limited
2017
$’000
2016
$’000
1,166,786
516,023
-
-
1,166,786
516,023
5,355
2,290
14,597,467
14,575,150
14,602,822
14,577,440
178,471
135,972
5,130,692
4,703,798
5,309,163
4,839,770
9,427,208
9,927,204
13,010
(146,559)
13,010
(202,544)
9,293,659
9,737,670
There are no other contingent liabilities for the parent entity at 30 June 2017 (2016: $nil), other than those disclosed in
note 24.
Capital expenditure
The parent entity does not have any capital expenditure commitments for the acquisition of property, plant and equipment
contracted but not provided for at 30 June 2017 (2016: $nil).
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a deed of cross guarantee with the effect that the Company guarantees debts in respect
of its subsidiaries. Further details of the deed of cross guarantee and the subsidiaries subject to the deed, are set out in
notes 29 and 30.
32. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise receivables, payables, bank loans, capital market debt, finance lease
liabilities, investments, cash and short term deposits and derivatives.
The Group’s business activities expose it to the following risks; market risks (interest rate and foreign exchange), credit risk
and liquidity risk. For each of these risks, the Group considers the counterparties, geographical area, currency and
markets as applicable to determine whether there are concentrations of risk. Other than as described in this note, the
Group is satisfied that there are no material concentrations of risk.
The Group has policies in place to manage different types of risks to which it is exposed. Policies include monitoring the
level of interest rate and foreign exchange risk and assessments of market forecasts for interest rates and foreign exchange
rates. Ageing analysis of and monitoring of exposures to counterparties are undertaken to manage credit risk. Liquidity
risk is monitored through the employment of rolling cash flow forecasts.
CRL091.21 - AR17 FIN_SEC_AW.indd 124
14/9/17 12:30 pm
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
124
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
32. Financial Risk Management Objectives and Policies continued
Financial risk management is carried out under policies approved by the Board of Directors. The Group identifies,
evaluates and hedges financial risks in accordance with approved polices. The Board are informed on a regular basis of
risk management activities.
(a) Market Risk
(i)
Interest rate risk – cash flow
The Group’s exposure to market interest rates relates primarily to the Group’s cash and cash equivalents and long term
debt obligations as outlined in note 16.
At balance date, the Group had the following mix of financial assets and liabilities exposed to variable interest rates that are
not designated as cash flow hedges.
Financial assets
AUD cash on hand and at bank
AUD deposits at call
GBP cash on hand and at bank
EUR cash on hand and at bank
USD cash on hand and at bank
USD deposits at call
Total financial assets
Financial liabilities
AUD Bank loans
AUD Capital Market Debt
Finance Lease Liability
HKD Bank Loans
Total financial liabilities
Net exposure
2017
$’000
2016
$’000
122,415
136,426
1,435,586
20,690
105
53,005
4,668
28,064
47,387
220
76,778
9,746
1,636,469
298,621
20,000
810,307
142,596
38,391
1,011,294
625,175
20,000
333,334
127,806
55,552
536,692
(238,071)
As at balance date, the Group maintained floating rate liabilities of $1,011.3 million (2016: $536.7 million) that were not
hedged by interest rate swaps. The associated interest rate risk is mitigated by total financial assets of $1,636.5 million
(2016: $298.6 million). Under the financial liabilities outstanding, for AUD facilities, the Group pays the Bank Bill Swap rate
(BBSW) plus a margin of between 140 and 500 basis points, for the finance lease liabilities, the Group pays BBSW or USD
LIBOR plus a margin of between 140 and 180 basis points, and for HKD facilities, the Group pays HIBOR plus a margin of
55 basis points.
Of the AUD cash on hand and at bank $122.4 million is interest bearing and is invested at approximately BBSW. Deposits
at call of $1,435.6 million are invested at approximately BBSW. The Group maintains cash and cash equivalents on hand of
$134.7 million for operational purposes and is non interest bearing (2016: $151.0 million).
As at balance date, the Group maintained no floating rate borrowings in GBP (2016: $nil) and had cash and cash
equivalents of $20.7 million (2016: $47.4 million) which is interest bearing and accrues at the UK daily cash rate.
As at balance date, the Group maintained floating rate borrowings in HKD of $38.4m (2016: $55.6m) and had minimal
interest earning cash and cash equivalents (2016: minimal).
As at balance date, the Group had USD cash on hand and at bank of $53.0 million which is interest bearing and is invested
at approximately US LIBOR (2016: $76.8 million). In addition, the Group had USD deposits at call of $4.7 million, which is
invested at approximately US LIBOR (2016: $9.7 million). The Group maintained no floating rate borrowings in USD (2016:
$nil).
As at balance date, the Group maintained no floating rate borrowings in EUR (2016: $nil) and had minimal cash and cash
equivalents (2016: minimal).
CRL091.21 - AR17 FIN_SEC_AW.indd 125
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
125
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(i)
Interest rate risk – cash flow continued
Group Sensitivity
As a result of an increase of 50 basis points in AUD, HKD and USD interest rates, and an increase of 100 basis points in
GBP and EUR interest rates, the Group’s post-tax-profit for the year would have increased by $2.3 million (2016: decreased
by $0.9 million). As a result of a decrease of 50 basis points in AUD and USD interest rates, and a decrease of 25 basis
points in GBP, EUR and HKD interest rates, the Group’s post-tax-profit for the year would have decreased by $2.2 million
(2016: increased by $1.0 million).
The Group, where appropriate, uses interest rate swaps to manage the risk of adverse movements in interest rates for its
long term floating rate borrowings which are subject to variable rates.
The Group uses cross-currency interest rate swaps to manage the risk of adverse movements in interest rates for its long
term foreign currency denominated borrowings which are subject to variable rates.
As at balance date the notional principal amounts and period of expiry of the interest rate swap contracts were as follows:
Cash flow hedge
Maturity under 1 year
Maturity 1 -5 years
Maturity over 5 years
Closing Balance
2017
$’000
-
200,000
174,634
374,634
2016
$’000
-
800,000
174,634
974,634
The movement from 2016 to 2017 is a result of early termination of interest rate swaps.
As at balance date the key terms of the interest rate swap contracts were as follows:
Interest Rate
Interest Rate Swap Contract
Fair Value of
Hedge Type
Maturity Date
Received
Paid
$'(000)
Year Ended 30 June 2017
Interest Rate Swap Contract
December 2020
BBSW
2.55%
Cross Currency Swap Contract
June 2036
USD 4.91%
AUD 7.05%
Year Ended 30 June 2016
Interest Rate Swap Contract
Interest Rate Swap Contract
Interest Rate Swap Contract
Interest Rate Swap Contract
March 2019
March 2020
December 2019
December 2020
BBSW
BBSW
BBSW
BBSW
3.04%
3.18%
2.43%
2.55%
Cross Currency Swap Contract
June 2036
USD 4.91%
AUD 7.05%
(2,790)
21,892
(3,311)
(4,618)
(3,893)
(10,238)
13,544
The terms of each of the swap contracts are matched directly against the appropriate loan and interest expense and as
such are highly effective.
(ii) Interest rate risk - fair value
Where appropriate, the Group enters into fixed rate debt to mitigate exposure to interest rate risk. As the Group holds fixed
rate debt there is a risk that the fair value of financial instruments will fluctuate because of market movements in interest
rates. The level of fixed rate debt at balance date was $933.7 million (2016: $1,724.6 million). As at balance date, the
carrying amounts of the Group’s fixed rate debt were not materially different from the fair values (2016: not material).
As at balance date the Group had no interest rate swaps in place to hedge fixed rate debt issuances (2016: nil).
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
126
CRL091.21 - AR17 FIN_SEC_AW.indd 126
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(iii) Foreign exchange risk
The Group has currency exposure as a result of capital expenditure and investments/sales in currencies other than the
Group’s functional currency.
The Group uses forward exchange contracts to minimise the currency exposure on any significant receivables or payables
as is deemed appropriate.
All forward exchange contracts must be in the same currency as the firm commitment and the Group negotiates the terms
of the hedges to exactly match the underlying commitment to maximise hedge effectiveness. As at balance date, the
Group had hedged the majority of its foreign currency receivables and payables that are firm commitments.
As at balance date, the Group had the following material foreign exchange exposures that were not designated as cash
flow hedges:
USD Exposure
Financial assets
Cash and cash equivalents
Total financial assets
Net exposure
GBP Exposure
Financial assets
Cash and cash equivalents
Total financial assets
Net exposure
HKD Exposure
Financial assets
Cash and cash equivalents
Trade and other receivables
Total financial assets
Financial liabilities
Trade and other payables
HKD Debt Facilities
Total financial liabilities
Net exposure
Group sensitivity – USD
2017
$’000
7,731
7,731
7,731
2017
$’000
7,376
7,376
7,376
2017
$’000
5,833
43,784
49,617
7,599
38,391
45,990
3,627
2016
$’000
23,879
23,879
23,879
2016
$’000
4,356
4,356
4,356
2016
$’000
19,811
64,466
84,277
23,386
55,552
78,938
5,339
Based on the financial instruments held at balance date, the sensitivity to fair value movements through equity as a result of
the AUD strengthening or weakening by 10c against the USD would not be material as at balance date (2016: not material).
The sensitivity to fair value movements through profit and loss as a result of the AUD strengthening or weakening by 10c
against the USD would be $1.2 million higher or $0.9 million lower (2016: $3.7 million higher or $2.8 million lower).
Crown Resorts Limited Annual Report 2017
127
CRL091.21 - AR17 FIN_SEC_AW.indd 127
14/9/17 12:30 pm
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(iii) Foreign exchange risk continued
Group sensitivity – GBP
Based on the financial instruments held at balance date, the sensitivity to fair value movements through equity as a result of
the AUD strengthening or weakening by 5c against the GBP would not be material as at balance date (2016: not material).
The sensitivity to fair value movements through profit and loss as a result of the AUD strengthening or weakening by 5c
against the GBP would be $0.7 million higher or $0.6 million lower (2016: $0.4 million higher or $0.4 million lower).
Group sensitivity – HKD
Based on the financial instruments held at balance date, the sensitivity to fair value movements through equity as a result of
the AUD strengthening or weakening by 50c against the HKD would not be material as at balance date (2016: not material).
The sensitivity to fair value movements through profit and loss as a result of the AUD strengthening or weakening by 50c
against the HKD would be $0.3 million higher or $0.3 million lower (2016: $0.5 million higher or $0.4 million lower).
Foreign Exchange Contracts
The Group uses derivative instruments such as forward exchange contracts to manage the currency risks arising from the
Group’s operations and its sources of finance.
Derivatives are exclusively used for hedging purposes and not as trading or other speculative instruments. These
derivatives qualify for hedge accounting and are based on limits set by the Board.
Cash flow hedges
At balance date details of outstanding cash flow hedges denominated in AUD was:
Buy USD/Sell AUD
Maturity under 1 year
Maturity 1 -5 years
Closing Balance
Notional Amounts
Average Rate
2017
$’000
99,966
-
99,966
2016
$’000
70,225
12,063
82,288
2017
2016
0.8402
-
0.8402
0.8402
0.8290
0.8385
The forward exchange contracts and cash flow hedges are considered to be highly effective hedges as they are matched
against known and committed receivables and payments and any gain or loss on the hedged risk is taken directly to
equity.
(b) Price Risk
(i) Equity Securities Price Risk
The Group is exposed to equity securities price risk. Equity securities price risk arises from investments held by the Group
and classified on the balance sheet as investments.
Shares - listed
Shares - unlisted
Net exposure
128
2017
$’000
64,764
-
64,764
2016
$’000
49,743
2,017
51,760
CRL091.21 - AR17 FIN_SEC_AW.indd 128
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
32. Financial Risk Management Objectives and Policies continued
(b) Price Risk continued
(i) Equity Securities Price Risk continued
Group sensitivity
The Group’s sensitivity to equity securities price risk for the listed investments has been estimated by reference to
published price quotations in an active market. The sensitivity to movement in fair value for listed investments as a result of
a 10% movement in the share price of the listed shares at balance date was $4.5 million (2016: $2.6 million).
(ii) Commodity Price Risk
Neither the Group nor the parent entity is exposed to commodity price risk.
(c) Credit Risk
Credit risk arises from the financial assets of the Group, which comprise cash and cash equivalents, trade and other
receivables and derivative instruments. The Group’s exposure to credit risk arises from the potential default of the
counterparty, with a maximum exposure equal to the carrying amount of these instruments. Exposure at balance date is
outlined under each applicable note.
The Group does not hold any credit derivatives or collateral to offset its credit exposure.
All investment and financial instruments activity is with approved counterparties with investment grade ratings and is in
accordance with approved policies. There are no significant concentrations of credit risk within the Group and the
aggregate value of transactions is spread amongst a number of financial institutions to minimise the risk of default of
counterparties.
Credit risk in trade receivables is managed in the following ways:
(i) The provision of credit is covered by a risk assessment process for all customers.
(ii) Concentrations of credit risk are minimised by undertaking transactions with a large number of customers.
(iii) The provision of cheque-cashing facilities for gaming patrons is subject to detailed policies and procedures designed
to minimise any potential loss, including the taking up of bank opinions and the use of a central credit agency which
collates information from major casinos around the world.
In assessing the doubtful debts provisioning for trade receivables, the Group has measured credit risk using the ‘Simplified
Approach’. The simplified approach requires the recognition of lifetime expected credit losses at all times. The Group has
elected to use a provision matrix utilising historical default rates, as well as taking into account current conditions and
forecasts of future economic conditions. If the Group becomes aware of circumstances relevant to an individual or group
of debtors that results in the matrix not being an appropriate basis for provisioning, then management discretion will be
applied.
The Group has early adopted AASB 9 in its entirety from 1 July 2016 (refer to note 1 for further details). Under AASB 139
the opening trade receivables would have been $333.2 million, however with the adoption of AASB 9 this balance was
reduced by $84.6 million to $248.6 million.
(d) Liquidity Risk
It is the Group’s objective to maintain a balance between continuity of funding and flexibility through the use of cash
reserves, committed bank lines and capital markets debt in order to meet its financial commitments in a timely manner.
At balance date 18.0% or $350.1 million of the Group’s interest bearing liabilities will mature in less than 12 months (2016:
3.8%).
As at balance date the Group had $414.8 million in undrawn committed bank lines and $1,771.2 million in cash and cash
equivalents to mitigate the maturing liabilities (2016: $1,289.3 million and $449.7 million respectively).
CRL091.21 - AR17 FIN_SEC_AW.indd 129
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
129
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
32. Financial Risk Management Objectives and Policies continued
(d) Liquidity Risk continued
Maturity analysis of financial assets and liabilities
The table below analyses the Group’s contractual undiscounted cash flows of financial assets and financial liabilities, net
and gross settled derivative financial instruments into relevant maturity groupings based on the remaining period at balance
date to the contractual maturity date.
1 year or less
1 to 5 years
more than 5 years
Total
2017
2016
2017
2016
2017
2016
2017
2016
$’000
$’000
$’000
$’000
$’000
$’000
$’000
$’000
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
Financial assets
Cash and cash
equivalents
1,771,227 449,663
-
-
Receivables - trade
225,290
248,558
20,355
16,108
Receivables - other
-
-
125,380
125,380
78,064
79,195
-
13,423
-
-
-
-
-
-
-
-
1,771,227
449,663
245,645
264,666
125,380
125,380
78,064
92,618
8,066
8,322
32,264
33,286
112,924
124,823
153,254
166,431
2,082,647 785,738
177,999
188,197
112,924
124,823 2,373,570
1,098,758
446,503
475,240
66,293
182,329
158,509
157,160
671,305
814,729
11,718
10,163
130,878
51,098
-
66,545
142,596
127,806
Capital markets
300,000
-
259,070
750,000
1,184,941
1,307,968
1,744,011
2,057,968
Bank loans
38,391
75,552
20,000
-
72,556
70,225
-
12,063
1,585
5,215
3,900
14,502
-
-
-
-
-
-
58,391
75,552
72,556
82,288
5,485
19,717
Forward exchange
contracts receivable
Cross currency
interest rate swaps
receivable
Total financial
assets
Financial liabilities
Trade and other
payables
Finance lease
liabilities
Forward exchange
contracts payable
Interest rate swaps
payable
Cross currency
interest rate swaps
payable
Total financial
liabilities
12,312
12,312
49,248
49,248
172,364
184,675
233,924
246,235
883,065 648,707
529,389 1,059,240
1,515,814
1,716,348 2,928,268
3,424,295
Net maturity
1,199,582
137,031 (351,390)
(871,043) (1,402,890) (1,591,525)
(554,698) (2,325,537)
130
CRL091.21 - AR17 FIN_SEC_AW.indd 130
14/9/17 12:30 pm
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
s
e
t
o
N
32. Financial Risk Management Objectives and Policies continued
(e) Fair Value of Financial Instruments
The fair value of the Group’s financial assets and financial liabilities approximates the carrying value as at balance date.
The Group uses various methods in estimating the fair value of a financial instrument. The methods comprise:
Level One
Level Two
–
–
the fair value is calculated using quoted prices in active markets;
the fair value is estimated using inputs other than quoted prices included in Level One that are
observable for the asset or liability, either directly (as prices) or indirectly (derived from prices);
and
Level Three
–
the fair value is estimated using inputs for the asset or liability that are not based on observable
market data.
The fair value of the financial instruments as well as the methods used to estimate the fair value are summarised in the table
below.
Year ended 30 June 2017
Financial Assets
Foreign currency forward contracts
Cross currency swap contracts
Equity instruments
Financial Liabilities
Contingent consideration
Interest rate swap contracts
Year ended 30 June 2016
Financial Assets
Foreign currency forward contracts
Cross currency swap contracts
Equity instruments
Financial Liabilities
Contingent consideration
Interest rate swap contracts
Valuation Technique
Quoted
market price
Level One
$’000
Observable
inputs
Level Two
$’000
Non market
observable
Level Three
$’000
-
-
64,764
64,764
9,375
21,892
-
31,267
-
-
-
-
-
-
-
-
-
49,743
49,743
-
45,277
2,790
2,790
-
45,277
11,231
13,544
-
24,775
-
-
2,017
2,017
Total
$’000
9,375
21,892
64,764
96,031
45,277
2,790
48,067
11,231
13,544
51,760
76,535
-
-
-
-
154,094
22,060
22,060
-
154,094
154,094
22,060
176,154
There have been no transfers between fair value measurement levels during the financial year ended 30 June 2017.
CRL091.21 - AR17 FIN_SEC_AW.indd 131
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
131
FINANCIAL REPORT 2017 CONTINUED
Notes to the Financial Statements continued
For the year ended 30 June 2017
32. Financial Risk Management Objectives and Policies continued
N
o
t
e
s
(e) Fair Value of Financial Instruments continued
Reconciliation of Level Three fair value movements:
Financial Assets
Opening balance
Profit and Loss
Distributions received
Closing Balance - Financial Assets
Financial Liabilities
Opening balance
Acquisition of Subsidiary
Profit and Loss
Other Comprehensive Income
Closing Balance - Financial Liabilities
2017
$’000
2,017
38,113
(40,130)
-
2016
$’000
2,235
(218)
-
2,017
154,094
-
-
157,801
(104,085)
(4,732)
45,277
-
(3,707)
154,094
t
o
t
h
e
F
n
a
n
c
a
i
i
l
S
t
a
t
e
m
e
n
t
s
132
CRL091.21 - AR17 FIN_SEC_AW.indd 132
14/9/17 12:30 pm
Directors’ Declaration
1. In the opinion of the Directors:
a. the financial statements and notes of the consolidated entity are in accordance with the Corporations Act 2001
(Cth), including:
i.
ii.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2017 and of its
performance for the year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and the
Corporations Regulations 2001 (Cth);
b. the financial statements and notes also comply with International Financial Reporting Standards issued by the
International Accounting Standards Board as disclosed in Note 1 of the Financial Report; and
c. there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2. This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with section 295A of the Corporations Act 2001 (Cth) for the financial year ended 30 June 2017.
3. In the opinion of the Directors, as at the date of this declaration, there are reasonable grounds to believe that the
members of the Closed Group identified in Note 30 of the Financial Report will be able to meet any obligations or
liabilities to which they are or may become subject, by virtue of the Deed of Cross Guarantee.
n
o
i
t
a
r
a
c
e
D
l
’
s
r
o
t
c
e
r
i
D
Signed in accordance with a resolution of the Directors.
John Alexander
Director
Melbourne, 12 September 2017
CRL091.21 - AR17 FIN_SEC_AW.indd 133
15/9/17 1:55 pm
Crown Resorts Limited Annual Report 2017
133
Shareholder Information
Substantial shareholders as at 5 September 2017
The following information is extracted from substantial shareholder notices received by Crown.
Shareholder
Consolidated Press Holdings Pty Limited
Holders of each class of securities as at 5 September 2017
Crown has 688,847,822 ordinary shares on issue held by 64,436 shareholders.
Number of
ordinary
Shares
% of
Issued
Capital
333,789,924
48.46
Voting rights of ordinary shares
Crown’s Constitution sets out the information in relation to the voting rights attached to shares. In summary, at a general
meeting:
(a) on a show of hands, every member present has one vote; and
(b) on a poll, every member present has:
(i) one vote for each fully paid share held by the member and in respect of which the member is entitled to vote; and
(ii) a fraction of a vote for each partly paid share held by the member and in respect of which the member is entitled
to vote, equivalent to the proportion which the amount paid on the share bears to the total amount paid and
payable on the share.
Distribution of shareholders as at 5 September 2017
Size of Holdings
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total
Number of
Shareholders
% of Issued
Capital
42,829
19,100
1,729
723
55
64,436
2.53
5.93
1.79
2.29
87.46
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares is 2,165 (based on a closing market
price of ordinary shares on 5 September 2017).
On-market buy-back
Crown lodged an Appendix 3C with the Australian Securities Exchange on 4 August 2017.
Shares purchased on-market
During the 2017 financial year, 857,416 ordinary shares were purchased on-market at an average price per share of $13.65
for the purposes of the 2014 Crown Long Term Incentive Plan.
S
h
a
r
e
h
o
d
e
r
l
I
n
f
o
r
m
a
t
i
o
n
134
CRL091.21 - AR17 FIN_SEC_AW.indd 134
14/9/17 12:30 pm
The 20 largest shareholders as at 5 September 2017
Name
1. CPH CROWN HOLDINGS PTY LTD
2. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3.
J P MORGAN NOMINEES AUSTRALIA LIMITED
4. CITICORP NOMINEES PTY LIMITED
5. NATIONAL NOMINEES LIMITED
6. BNP PARIBAS NOMINEES PTY LTD
7. UBS NOMINEES PTY LTD
8. BNP PARIBAS NOMS PTY LTD
9. CONSOLIDATED PRESS HOLDINGS PTY LIMITED
10. CITICORP NOMINEES PTY LIMITED
No. of Shares
312,940,933
107,691,825
70,749,963
26,309,157
24,485,630
10,130,360
9,854,454
6,185,718
6,000,000
4,384,136
11. HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
3,479,447
12. ARGO INVESTMENTS LIMITED
13. NAVIGATOR AUSTRALIA LTD
14.
IOOF INVESTMENT MANAGEMENT LIMITED
15. AUST EXECUTOR TRUSTEES LTD
16. BNP PARIBAS NOMS (NZ) LTD
17. RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
18. AMP LIFE LIMITED
19. BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD DRP
20. NULIS NOMINEES (AUSTRALIA) LIMITED
2,609,184
2,107,837
1,923,950
1,537,557
966,820
820,380
753,709
742,301
722,939
n
o
i
t
a
m
r
o
f
n
I
l
r
e
d
o
h
e
r
a
h
S
% of Issued
Capital
45.43
15.63
10.27
3.82
3.55
1.47
1.43
0.90
0.87
0.64
0.51
0.38
0.31
0.28
0.22
0.14
0.12
0.11
0.11
0.10
Total
594,396,300
86.29
CRL091.21 - AR17 FIN_SEC_AW.indd 135
14/9/17 12:30 pm
Crown Resorts Limited Annual Report 2017
135
Additional Information
Shareholder enquiries
Shareholders may access their details by visiting the website of the Company’s Share Registry, Computershare, at
www.investorcentre.com. For security reasons, shareholders will be required to enter their Securityholder Reference
Number (SRN) or Holder Identification Number (HIN) and postcode to access personal information. Security holding
information may be updated online. Alternatively, the relevant forms may be downloaded from the Share Registry’s website
with completed forms mailed to the Share Registry. Shareholders with queries about their shareholdings should contact the
Share Registry Investor Services, by phone on 1300 659 795 (within Australia), or on +61 3 9415 4000 (outside Australia) or
alternatively by fax on +61 3 9473 2500.
Electronic shareholder communications
The Company encourages shareholders to elect to receive shareholder communications electronically instead of by post
as it enables shareholders to:
A
d
d
i
t
i
o
n
a
l
I
n
f
o
r
m
a
t
i
o
n
• receive important shareholder and company information faster;
• reduce the impact on the environment;
• securely store important shareholder documents online, reducing clutter in your home or office; and
• access all documents conveniently 24/7.
Shareholders who wish to receive email alerts with copies of the Annual Report, Notice of Meeting, Issuer Holding
Statements, Payment Advices and other company related information may either contact the Share Registry or update their
communication preference online at www.investorcentre.com.
Change of address
Issuer sponsored shareholders should notify the Share Registry immediately in writing or by telephone upon any change in
their address quoting their SRN. Changes in addresses for broker sponsored holders should be directed to the sponsoring
brokers with the appropriate HIN.
Direct payment to shareholders’ accounts
Dividends may be paid directly to any bank, building society or credit union account in Australia. Payments are
electronically credited on the dividend date with advisory confirmation containing payment details mailed to shareholders.
Shareholders who wish to have their dividends paid directly to their account may advise the Share Registry in writing or
may update their payment instructions online on www.investorcentre.com prior to the dividend record date.
Tax File Numbers
Crown is obliged to deduct tax at the top marginal tax rate plus the Medicare levy from unfranked or partially franked
dividends paid to Australian resident shareholders who have not supplied their Tax File Number (TFN) or exemption details.
If you wish to provide your TFN or exemption details, please contact the Share Registry or update your details online at
www.investorcentre.com.
Consolidation of multiple holdings
If you have multiple holdings which you wish to consolidate, please advise the Share Registry in writing. If your holdings are
broker sponsored, please contact the sponsoring broker directly.
Crown’s website
Crown has a dedicated corporate website at www.crownresorts.com.au which includes Crown’s Annual Reports, Notices
of Meeting and other Explanatory Memoranda and disclosures made to the ASX.
Investment warning
All information provided in the Annual Report is provided as at the date stated or otherwise as at the date of this Report.
This Report has not taken into account any particular investor’s investment objectives or other circumstances. Investors are
encouraged to make an independent assessment of Crown or to seek independent professional advice.
136
CRL091.21 - AR17 FIN_SEC_AW.indd 136
14/9/17 12:30 pm
Corporate Information
Directors
• John H Alexander, BA Executive Chairman
• The Honourable Helen A Coonan, BA, LLB
• Rowena Danziger, AM, BA, TC, MACE
• Andrew Demetriou, BA, BEd
• Geoffrey J Dixon
• Professor John S Horvath, AO, MB, BS (Syd), FRACP
• Michael R Johnston, BEc, CA
• Harold C Mitchell, AC
• James D Packer
Company Secretary
Mary Manos, BCom, LLB (Hons), GAICD
Crown’s registered office and principal corporate office
Level 3
Crown Towers
8 Whiteman Street
Southbank VIC 3006
Australia
Phone: +61 3 9292 8824
Share Registry
Computershare Investor Services Pty Limited
Yarra Falls
452 Johnston Street
Abbotsford VIC 3067
Phone: 1300 659 795 (within Australia)
+61 3 9415 4000 (outside Australia)
Fax: +61 3 9473 2500
Website: www.computershare.com.au
Securities Exchange Listing
Crown’s ordinary shares are listed on the Australian Securities Exchange under the code “CWN”.
Crown’s Subordinated Notes I are listed on the Australian Securities Exchange under the code “CWNHA”.
Crown’s Subordinated Notes II are listed on the Australian Securities Exchange under the code “CWNHB”.
The home exchange is Melbourne.
Website
Visit our website www.crownresorts.com.au for media releases and financial information.
Auditor
Ernst & Young
Banker
Australia and New Zealand Banking Group Limited
CROWN RESORTS LIMITED
ABN 39 125 709 953
CRL091.1 - AR17 COVERS_AW.indd 2
14/9/17 11:22 am
wCrown Resorts Limited Annual Report 2017ANNUAL REPORT 2017crownresorts.com.auCRL091.1 - AR17 COVERS_AW.indd 114/9/17 11:22 am