More annual reports from Crown Resorts Ltd:
2020 ReportPeers and competitors of Crown Resorts Ltd:
Bluegreen Vacations CorporationANNUAL REPORT 2018
CROWN RESORTS LIMITED
ABN 39 125 709 953
Contents
Executive Chairman’s Message
Financial Performance
About Crown Resorts
Crown’s Resort Portfolio
Australian Projects
Australian Resorts
International Interests
Crown Digital
Corporate Social Responsibility
Corporate Governance Statement
Directors’ Statutory Report
Remuneration Report
Auditor’s Independence Declaration
Independent Auditor’s Report
Financial Report
Directors’ Declaration
Shareholder Information
Additional Information
2
4
6
8
10
11
17
18
19
23
37
51
73
74
80
133
134
136
Corporate Information
Inside back cover
Financial Calendar
Record date for final dividend
21 September 2018
Payment of final dividend
5 October 2018
Annual General Meeting
1 November 2018
2019 half year results
February 2019
Annual General Meeting
.am (Perth time)
Thursday, 1 November 2018
Crown Ballroom
Lobby Level, Crown Towers Perth
Great Eastern Highway
Burswood, Western Australia
FRONT COVER IMAGE:
PROPOSED CONCEPT RENDER OF CROWN SYDNEY
Crown Resorts Limited Annual Report 2018
1
Executive Chairman’s Message
Crown is committed to its strategy of focusing on its high quality core Australian
operations and development projects as well as maximising shareholder returns.
Consistent with our objective to increase cash returns to
shareholders, in financial years 2017 and 2018 combined,
Crown’s capital management, which included ordinary
dividends, a special dividend and two on-market share
buy-backs, exceeded $2 billion. Crown has also announced
its intention to undertake a new $400 million on-market
share buy-back.
Looking forward, our focus will be to continue to improve
the underlying performance of our existing businesses as
well as execute on our development project pipeline.
Crown Melbourne
Normalised EBITDA from Crown Melbourne was
$645.0 million, up 9.5%. Reported EBITDA was
$586.0 million, up 2.7%, which takes into account an
unfavourable variance from the theoretical VIP program
play result.
Normalised revenue at Crown Melbourne was
$2,279.0 million, up 14.2%, with VIP program play up
73.9%, main floor gaming up 2.9%, driven by solid growth
in table games, and non-gaming slightly down. This
recovery in gaming revenues, combined with all three
hotels operating at over 90% occupancy, reaffirms
Crown Melbourne’s position as Australia’s leading
integrated resort and one of the most visited tourist
destinations in Australia.
Following the end of financial year 2018, the Victorian
Commission for Gambling and Liquor Regulation (VCGLR)
released its final report concerning the Sixth Review of the
Casino Operator and Licence held by Crown Melbourne.
The report concluded, among other matters, that Crown
Melbourne remains a suitable person to continue to hold
its licence to operate the Melbourne Casino. Crown will
continue to work with the VCGLR to improve the
operations of Crown Melbourne.
Crown Perth
Normalised EBITDA from Crown Perth was $248.8 million,
up 1.6%. Reported EBITDA for the period was $221.5 million,
down 13.9%. The reported EBITDA result takes into
account an unfavourable variance from the theoretical VIP
program play result.
Normalised revenue at Crown Perth was $844.5 million, up
1.7%, with main floor gaming down 2.1%, VIP program play
down 5.8% and non-gaming up 12.5%, primarily due to the
full year impact of Crown Towers Perth, which opened in
December 2016.
Crown is one of Australia’s largest entertainment groups
and makes a major contribution to Australian tourism,
employment, training and social responsibility programs.
Crown’s continued investment in our Australian resorts has
ensured that Crown’s portfolio includes some of the most
valuable current and future tourism assets in Australia
across Melbourne, Perth and Sydney.
We are proud to be the largest single-site private sector
employer in both Victoria and Western Australia with
approximately 18,000 people working across our resorts in
over 700 different roles. Crown also continues to be a
significant tax payer, having incurred more than $650 million
in taxes to all levels of government in Australia in financial
year 2018, representing over two thirds of Crown’s profit
before tax from its Australian operations.
Results
For the financial year ended 30 June 2018, Crown
announced a net profit of $326.7 million before significant
items, which was up 5.8% from the previous year. This
result reflects a solid performance from our Melbourne
operation, with VIP program play turnover up 73.9%,
partially offset by continued subdued trading in Perth.
A final dividend of 30 cents per share, franked to 60%,
was declared, bringing the total dividend for the year to
60 cents per share.
Major Focus
We have maintained our strategy of focusing on our
world-class Australian operations and development
projects as well as maximising shareholder returns.
Our actions over the past year demonstrate our ongoing
commitment to this strategy. In financial year 2018, we
completed the sale of a number of significant assets
including the Alon Las Vegas land for US$300 million, our
interest in CrownBet for $150 million, our interest in
Ellerston for $62.5 million and our shares in Caesars
Entertainment Corporation for US$53.3 million. Crown’s
balance sheet, with a net cash position of $221 million at
30 June 2018, is well placed to fund our Australian
development project pipeline.
2
Executive Chairman’s Message
Despite subdued trading due to the challenging economic
conditions in Western Australia, we were pleased to have
maintained the level of visitation to the complex during the
period with approximately 10 million local and international
visits in financial year 2018.
Crown remains focused on continuing to identify
opportunities to deliver improved operating performance
at both Crown Melbourne and Crown Perth.
Australian Projects
Work continues on the delivery of the Crown Sydney Hotel
Resort at Barangaroo, Sydney’s first six-star hotel and a
landmark building with views of some of Australia’s most
celebrated icons, the Sydney Harbour Bridge and Sydney
Opera House.
The Crown Sydney Hotel Resort podium is rising on the
Barangaroo foreshore and the tower core structure has
been constructed to Level 12. The Crown Sydney
Residences have received strong interest from both
domestic and international buyers and the project remains
on schedule for completion in the first half of calendar
year 2021.
We believe that Crown Sydney will become an international
tourism icon and will help Sydney attract high net worth
travellers from all parts of the world.
In Victoria, Crown and its joint venture partner, the
Schiavello Group, were granted planning approval
in February 2017 to construct the proposed
One Queensbridge project. The project would include a
new 388 room luxury six-star hotel, which would be
connected to Crown Melbourne by a sculptural pedestrian
bridge. The project remains subject to financing.
Crown Digital
Crown’s wagering and online social gaming operations
saw strong revenue growth and improved profitability
during the year, with EBITDA of $26.9 million, up 81.8%.
This includes CrownBet’s consolidated result from 1 July
2017 to 28 February 2018 (during which Crown held a
62% interest in CrownBet).
The current assets and investments in Crown Digital —
Betfair Australasia, DGN Games and Chill Gaming — are
expected to provide a continued source of future growth
for Crown.
Our Commitment to Community
Crown’s Melbourne and Perth resorts are significant tourist
attractions, serving millions of visitors each year with
approximately 18,000 people working towards the delivery
of a world-class customer experience. We are grateful to
our employees for their dedication and acknowledge our
responsibility to create a safe and rewarding workplace.
Similarly, we recognise our responsibility to the
communities in which we operate, and are proud of the
employee-led community partnerships and work
undertaken through the Crown Resorts Foundation.
Crown’s commitment to providing strong skills-based
training and leadership development to all employees has
again been recognised, with Crown College Perth being
named by the Tourism Council of WA as the Gold winner
for Tourism Education and Training for the second year in a
row. This is Crown’s fifth year in a row to win this category
in the combined state tourism awards, with Crown College
Melbourne winning in 2013, 2014 and 2015 and receiving
Hall of Fame status in 2015.
We have maintained our focus on diversity and inclusion
through programs including the Indigenous Employment
Program, CROWNability, Gender Equity, Crown Pride, the
Family Support Network and the Cultural and Linguistic
Diversity Employee Network. Through our Indigenous
Employment Program, we have provided more than 775
Indigenous employment opportunities. In addition, our
CROWNability program was a finalist at the National
Employment Services Association Excellence Awards for
Innovation.
The Crown Resorts Foundation continues to support
effective programs which provide young Australians with
opportunities to engage in education, the arts and culture,
and continues to partner with organisations that encourage
and foster social cohesion. In financial year 2018, in
partnership with the Packer Family Foundation, support
was provided to more than 120 programs across Australia.
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
Australian development projects.
John Alexander
Executive Chairman
Crown Resorts Limited
Crown Resorts Limited Annual Report 2018
3
Financial Performance
The 018 full year result reflected a solid performance from our Melbourne operation
and continued subdued trading in Perth.
• Crown’s Australian resorts normalised EBITDA increased by 7.2%, with normalised revenue increasing
by 10.6%. This was primarily driven by normalised VIP program play revenue, which increased 54.5%
across Crown Melbourne and Crown Perth combined.
• Crown reported a normalised net profit after tax (NPAT) of $386.8 million for the full year ended
30 June 2018, up 12.7%, while reported NPAT before significant items was $326.7 million, up 5.8%.
• Net gain from significant items of $232.2 million includes the reversal of an impairment of the Alon
Las Vegas land and an associated net foreign currency gain, as well as net gains from the sales of
CrownBet and Ellerston.
• A final dividend of 30 cents per share, franked to 60%, was declared, bringing the full year dividend
to 60 cents per share.
Group performance for the year ended 30 June 2018
Normalised revenue1
Normalised expenditure1
Normalised EBITDA²
Normalised EBIT³
Normalised NPAT⁴ attributable to Crown
Reported NPAT before significant items attributable to Crown
Significant items attributable to Crown⁵
Reported NPAT after significant items attributable to Crown
FY18
$m
FY17
$m
3,485.3
3,231.3
(2,607.0)
(2,403.3)
878.3
592.4
386.8
326.7
232.2
558.9
828.0
531.2
343.1
308.9
1,557.2
1,866.1
%
change
7.9%
(8.5%)
6.1%
11.5%
12.7%
5.8%
(85.1%)
(70.0%)
. Normalised results have been adjusted to exclude the impact of any variance from theoretical win rate on VIP program play and significant items.
. Normalised earnings before interest, tax, depreciation and amortisation.
3. Normalised earnings before interest and tax.
. Normalised net profit after tax.
. Significant items of $1,557.2 million in FY17 include a net gain on the sale of Crown’s interest in Melco Resorts & Entertainment Limited (MRE) of
$1,745.5 million. Crown held a 27.4% interest in MRE from 1 July 2016 to 20 December 2016 and a 24.6% interest from 21 December 2016 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.
4
Crown’s Major Focus Areas
Continue to improve the underlying performance of Crown Melbourne and Crown Perth
Deliver the Crown Sydney project on time and on budget
Develop a financing solution for the proposed One Queensbridge project
Continue growing Crown Digital, including wagering and online social gaming
Australian Resorts Normalised Revenue
Australian Resorts Normalised EBITDA
n
o
i
l
l
i
m
$
3,500
3,000
2,500
2,000
1,500
1,000
500
0
F14
F15
F16
F17
F18
n
o
i
l
l
i
m
$
1,000
900
800
700
600
500
400
300
200
100
0
F14
F15
F16
F17
F18
Melbourne
Perth
Melbourne
Perth
Crown Resorts Limited Normalised NPAT¹
Australian Resorts Head Count2
450
400
350
300
250
200
150
100
50
0
n
o
i
l
l
i
m
$
F14
F15
F16
F17
F18
18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
F14
F15
F16
F17
F18
Employees
Tenancy
Contractors
F14 to F17 excludes Crown’s share of MRE’s normalised NPAT. Crown completed the sale of its interest in MRE in F17 and, as a result, no longer holds an
interest in MRE.
F to F7 head count differs from previous Annual Reports mainly due to a change in the reporting of contractors.
Crown Resorts Limited Annual Report 2018
5
About Crown Resorts
Crown is one of Australia’s largest entertainment groups with its core businesses and
investments in the integrated resorts sector.
CROWN RESORTS
GROUP
AUSTRALIAN
RESORTS
AUSTRALIAN
PROJECTS
CROWN
DIGITAL
Crown Digital comprises
online betting exchange
Betfair Australasia (100%
owned), global online social
gaming business DGN
Games (85% owned) and
Chill Gaming (50% owned).
During the year, Crown sold
its 62% interest in online
wagering business
CrownBet.
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 owns and
operates Crown Aspinalls in
London, one of the high-
end licensed casinos in the
West End entertainment
district.
Crown’s development
projects include the Crown
Sydney Hotel Resort at
Barangaroo on Sydney
Harbour and the proposed
One Queensbridge project
in Melbourne.
Crown has interests in
various digital businesses,
including Betfair Australasia
(100%), DGN Games (85%)
and Chill Gaming (50%), and
holds equity interests in
UK-based Aspers Group
(50%) and Nobu (20%).
Crown Melbourne is
Australia’s leading
integrated resort, featuring
luxury accommodation and
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.
Work continues on the
Crown Sydney Hotel Resort
at Barangaroo. Crown
Sydney, which is expected
to be completed in the first
half of calendar 2021, will be
Sydney’s first six-star hotel
and a landmark building with
views of some of Australia’s
most celebrated icons, the
Sydney Harbour Bridge and
the Sydney Opera House.
Crown Melbourne’s
proposed fourth hotel, One
Queensbridge, is a joint
venture with the Schiavello
Group. The proposed
project includes 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.
6
Proposed concept render
Proposed concept render
ICONIC PROJECTS
EXCLUSIVE CLUBS
Proposed concept render
LUXURY SPAS
HIGH-END RETAIL
SIGNATURE RESTAURANTS
WORLD-CLASS GAMING
AWARD-WINNING HOTELS
LUXURY BARS
7
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
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: 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 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 2018
9
Crown Sydney
100% owned
• Crown Sydney, located at Barangaroo on the
foreshore of Sydney Harbour, will be the city’s first
six-star hotel and a landmark building with views of
some of Australia’s most celebrated icons, the
Sydney Harbour Bridge and Sydney Opera House.
• Construction of Crown Sydney is progressing on
schedule and the resort will include 349 hotel rooms
and suites, luxury residences, signature restaurants,
bars, luxury retail outlets, pool and spa facilities,
conference rooms and VIP gaming facilities.
• The Crown Sydney Residences, which will be situated
above the Crown Sydney Hotel Resort, has launched a
marketing suite and has received strong interest from
both domestic and international buyers.
• Almost all of the construction work is being
undertaken by Australian businesses, creating
hundreds of construction jobs and benefitting the
New South Wales economy.
• Crown Sydney remains on schedule for completion
in the first half of calendar year 2021 and the total
gross project cost is expected to be approximately
$2.2 billion, with a net project cost of approximately
$1.4 billion.
One Queensbridge
50% equity interest
• One Queensbridge, a joint venture with the
Schiavello Group, is a proposed fourth hotel
development to meet tourism demand at Crown
Melbourne.
• The proposed project was granted planning
approval in February 2017 for a new 388 room
luxury six-star hotel and approximately 700 luxury
apartments located on one of the last significant
development sites adjacent to the Crown
Melbourne complex.
• The proposed project represents Crown’s
continued investment in the Southbank arts and
entertainment precinct and would be connected to
the Crown Melbourne complex by a sculptural
pedestrian bridge spanning Queensbridge Street.
• The proposed project remains subject to financing.
Australian Projects
Proposed concept render
10
Proposed concept render
Australian Resorts
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.
Barry Felstead
CEO, Australian Resorts
Crown’s Australian resorts’ full year result reflected a
solid performance from our local Melbourne operation,
continued subdued trading in Perth and strong growth
in VIP program play.
Main floor gaming revenue increased 1.5% with modest
growth in Melbourne offset by softness in Perth. VIP
program play turnover in Australia of $51.5 billion
(growth of 54.5%) was a pleasing outcome given the
difficult trading conditions in the prior corresponding
period (pcp). Normalised EBITDA increased 7.2% for
Crown’s Australian resorts, primarily due to strong
growth in VIP program play.
Margin performance declined slightly on the prior year
largely due to a change in the mix of business, with
strong growth coming from lower margin VIP program
play, combined with an increase in fixed costs such as
energy, particularly at Crown Melbourne.
Crown’s Australian resorts are some of the finest
resorts in the world and continue to attract a growing
share of visitors as well as prestigious industry awards.
All major capital expenditure projects in Melbourne and
Perth are now complete.
The Crown Rewards loyalty program rewards members
with a range of offers, including invitations to special
events and other unique experiences. The appeal of the
Crown Rewards program is demonstrated by the
ongoing growth in its membership base and Crown
will continue to develop the proposition over the
coming year.
Our Employees
At Crown, our aim is to create tangible career pathways
for our employees. Crown College is a dedicated training
facility which delivers on Crown’s commitment to the
learning and development of our employees. In the 2018
financial year, over 640 employees were enrolled in
Certificates III, IV and Diploma level qualifications, with
over 8,500 apprentices and trainees graduating since
the inception of Crown College.
Our employees are instrumental in ensuring that Crown
consistently delivers exceptional levels of customer
service. As such, Crown is committed to continuing to
provide its employees with meaningful learning and
development opportunities.
Crown College International, which offers international
students with vocational education and training across
hospitality, tourism and management, is an expansion of
our training program. Crown College International
continues to grow with 100 students enrolled at 30
June 2018. The College’s innovative programs create
pathways for students to graduate with skills that meet
industry needs.
Crown’s commitment to inclusive employment practices
has continued to strengthen. Crown is progressing the
implementation of a Gender Action Plan and Crown
Pride Action Plan, which will detail our formal
commitment to Gender Equity and LGBTIQ+ inclusion.
These plans are in addition to the well-established
Reconciliation Action Plan and the CROWNability Action
Plan. All of these programs and plans are complemented
by a range of employee networks which support our
people.
11
Australian Resorts continued
Indigenous Employment Program
Crown’s award-winning Indigenous Employment
Program (IEP) continues to make a positive impact on
the lives of hundreds of Aboriginal and Torres Strait
Islander people in Australia. Crown’s IEP has provided
over 775 Indigenous employment opportunities with a
consistent focus on hiring, developing and retaining
employees.
Crown’s Indigenous employment efforts extend to
Crown Sydney with our sponsorship of the iTradies
program. Fourteen Indigenous men and women have
graduated from the program with a Certificate I in
construction, which allows them to pursue further
opportunities in the building industry.
Developing our third Reconciliation Action Plan (RAP)
was a key priority during the 2018 financial year. Our key
objective is to retain ‘Elevate’ status, which Crown
achieved through its second RAP 2015-2017. ‘Elevate’
status, which is the highest level of endorsement
granted by Reconciliation Australia, affirms that Crown
is a leader in advancing national reconciliation.
The dedicated RAP steering committees across
Melbourne and Perth have determined that the third
RAP will focus on identifying the strengths of Indigenous
employment and championing these within the wider
industry.
The 2018 financial year has welcomed numerous
success stories from our Indigenous employees in
relation to career development as well as personal
achievements outside of the organisation. Crown will
continue to work collaboratively with other businesses
and external stakeholders to ensure that we achieve
targets beyond direct employment, including
procurement, community and cultural awareness
outcomes.
CROWNability
Crown is one of Australia’s most significant private
sector employers dedicated to creating an accessible
and inclusive environment for staff and patrons. We are
committed to transforming perceptions of disability
within our organisation and the broader community.
The CROWNability program was launched in 2014 to
support the employment, development and retention of
people with disability at Crown. Through the program,
we strive to ensure that people with disability are given
the opportunity to gain employment at Crown within the
diverse range of roles available. We recognise that the
program is about more than just employment and, as
such, members of the CROWNability program have
access to Crown’s various training and development
opportunities. Our goal is to create a disability confident
organisation.
Our CROWNability Action Plan 2018 – 2021 was
launched in December 2017, which coincided with
International Day of People with Disability. This is the
second CROWNability Action Plan and it is strategically
focussed on building meaningful careers for employees
with disability and ensuring access and inclusion extends
well beyond their employment.
Our dedicated CROWNability team, which works
proactively with industry partners and stakeholders, has
successfully placed and supported over 240 candidates
into meaningful careers. In total, CROWNability has
provided 350 employment opportunities for people
with disability, which includes contractors and
employees.
Crown is proud of its continued association with
Program Ambassador and Australian Paralympic Gold
Medallist, Kurt Fearnley AO. In his role as Ambassador,
Kurt has attended Crown Melbourne and Crown Perth
to promote positive attitudes towards living and working
with people with disability.
The CROWNability program has been recognised with
several accolades, including atWork Australia Employer
of the Year for Innovation 2017, National Employer of
the Year from OCTEC Employment Services and finalist
at the National Employment Services Association
Excellence Awards for Innovation 2017.
12
Health, Safety & Employee Wellbeing
Crown remains committed to the continuous
improvement of workplace health and safety outcomes.
A strategic, integrated and sustainable approach to
support the health and wellbeing of our employees was
developed and implemented, with recent developments
in the area of mental health. The Mental Health
Awareness Program, which is due to be rolled out over
the next 12 months, aims to increase the capability and
confidence of Crown managers when dealing with
general mental health situations, whilst providing all
employees with access to specialised counselling and
information services.
Crown has strengthened its partnerships with local
specialised medical providers to further expand its
targeted pre-employment functional assessment
programs. This program is aimed at delivering long-term
benefits in relation to injury prevention.
In August 2017, members of Crown’s executive and
senior management participated in health and safety
due diligence sessions aimed at reinforcing their
understanding of occupational health and safety legal
requirements and providing them with the tools
necessary to meet these obligations. In addition, Crown
has strengthened employee participation in emergency
training and practice scenarios during the year.
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.
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. Crown
Melbourne remains Victoria’s largest single-site private
sector employer, with almost 12,000 people working
across the resort.
Property Update
Crown Melbourne continued its investment in capital
improvements across the property during the 2018
financial year.
Crown Towers maintained its world-class standard with
refurbishments undertaken to its premium suites and villas.
A number of restaurants and outlets received upgrades,
notably Rockpool Bar & Grill where significant front of
house renovations were completed along with a state-of-
the-art on show kitchen. At Crown Metropol, new retail
tenants were introduced to the level one retail precinct.
The main gaming floor central area was enhanced,
introducing a new Crown Rewards operational model
which adopted the use of individual kiosks to create a
more interactive patron experience.
Local Gaming
Crown Melbourne continued to invest in new
technology, including the introduction of some of the
latest gaming products, system upgrades and
innovations. Crown Melbourne now has one of the
largest installations of the popular Lightning Link and
Dragon Link gaming machine products in the world.
These investments, together with the Crown Rewards
program, allowed us to deliver differentiated market-
leading experiences to our patrons.
13
Australian Resorts continued
Crown Melbourne hosted its twenty-first Aussie Millions
Poker Championship in January 2018, welcoming
participants from more than 30 countries and a prize-
pool of over $20 million. Aussie Millions is a major event
on the international poker circuit and, combined with
Crown’s enhanced digital marketing approach through
the use of live streaming and social media, a new record
was set for entrants into the main event.
VIP Program Play
Normalised VIP program play revenue at Crown
Melbourne was $591.8 million, up 73.9% with turnover
of $43.8 billion.
Hotels
Crown Melbourne features more than 1,600 guest
rooms across three luxury hotel brands – Crown Towers,
Crown Metropol and Crown Promenade. Together, the
three hotels provided for more than 878,000 guests
during the year, with a combined occupancy
exceeding 93%.
The hotel digital strategy continued during the period
with a focus on personalisation, driving increased leisure
visitation to the hotels and building online brand loyalty.
Crown also continued to refine its Crown Direct
offering, an online portal that allows hotel customers
to receive exclusive benefits when they book directly
with Crown.
Crown Towers retained the prestigious Forbes Travel
Guide Global 5 Star Award in 2018 and is the only hotel
in Melbourne to achieve this status. Additional accolades
include Best Club Lounge of the Year both with Qantas
Business Travel Awards and TAA Victoria as well as
Winner of TAA Victoria’s Front Office Employee of the
Year and Best Environment and Energy Efficiency
Practice.
Crown Towers was also acknowledged in the 2018
Travel & Leisure World’s Best Awards Gold List as a
Finalist for Best Australian Hotel.
Food and Beverage
Crown Melbourne’s award-winning restaurants and bars
include world-class, distinctive culinary brands that are
unrivalled in Australia. Crown’s signature restaurants
continue to receive favourable accolades and reviews,
with Dinner by Heston Blumenthal securing Number 25
at The Australia 100 Awards in 2017.
Crown’s 2018 Melbourne Food & Wine Festival
activation delivered 13 innovative food experiences
across our premium dining portfolio, including Dinner
by Heston Blumenthal, Bistro Guillaume, Long Chim and
Nobu. These events were executed both in-house and
along the riverside, delivering record crowds and
reaching over 15 million people through PR, traditional
media and social media.
Our casual dining portfolio saw year-on-year growth
driven by the ‘Taste the Season’ campaign, which offers
gaming customers dishes crafted by our chefs using
fresh seasonal ingredients.
Crown’s bar offering and in-venue experience continued
to evolve, delivering market-first and industry-leading
customer experiences with our key beverage partners.
These included the Heineken Melbourne Grand Prix,
Carlton Draught Front Bar during the AFL season, the
activation of the globally renowned Robokeeper with
Hahn Super Dry, as well as Budweiser, Moet and Piper
Heidsieck during major events including the FIFA World
Cup, State of Origin, Spring Racing Carnival and the
Christmas period.
This year’s major live performances at The Palms
included sell-out performances by Burn The Floor,
Wayne Brady, Jimeoin, James Reyne, FAST LOVE –
A Tribute to George Michael as well as an 11 day season
of Legends in Concert, the longest running tribute show
in Las Vegas.
Crown’s nightclubs continued to secure top global
artists and DJs including Drake, Ne-Yo, Kelly Rowland,
Mario, Sean Kingston, Will Sparks, Usain Bolt, Mya and
many more.
14
Events and Conferencing
Events and Conferencing had a challenging year due to
increased competition from new entrants in the
Melbourne and Sydney markets. Despite this, Crown
Melbourne continued to be at the forefront of events in
Australia with over 1,500 events and conferences
booked for the year. The largest events included the
Tertiary Education Management Conference 2017, CPA
Congress 2017 Melbourne and CleanUP 2017
Conference. Key charitable events hosted at Crown
Melbourne included Diamonds are a Girl’s Best Friend
Dinner, Australian Cystic Fibrosis Conference and Myer
Stores Community Fund – Precious Metal Ball.
Crown has become a major partner with Meetings &
Events Australia (MEA), the event industry’s Registered
Training Organisation. Crown is MEA’s education
partner and is working with MEA to build national
professional development programs.
Crown Perth
Overview
Crown Perth is Western Australia’s only fully integrated
entertainment resort. Following the extensive
development and renovation since its acquisition in
2004, Crown Perth has been transformed into a
premium tourist destination, this year attracting
approximately 10 million visits. Crown Perth remains
the State’s largest single-site private sector employer,
with almost 6,000 people working on site.
Property Update
Following a number of years of extensive development
on the property, Crown has focussed the last twelve
months on enhancing the property’s existing assets.
A number of venues have been added or modified to
optimise the property during peak customer periods.
The elegant Fusion cocktail bar has been extended to
allow improved service during peak periods while
retaining its luxury lounge feel during non-peak times.
The Epicurean and Merrywell alfresco areas have been
enclosed to substantially increase capacity to these
already successful venues. Also introduced this year
was Crown Perth’s first rooftop pop-up venue, Hi-Line
Bar. With views of the Perth CBD, Hi-Line Bar has
turned a previously vacant space into a popular
destination.
A number of facilities have been introduced around the
property as part of our CROWNability and Crown Pride
programs. These include improved pedestrian crossings
to all major car parks, Crown Perth’s first LGBTIQ+
bathrooms and a new disability-friendly staff entrance.
The final stage of Crown Perth’s roadworks strategy
has now been completed with the introduction of a
roundabout to Glenn Place and modification to the
existing western car park entries. These works have
considerably improved vehicle access between the main
Crown Perth complex and the Crown Towers hotel and
has significantly reduced peak period multilevel car park
congestion, further improving customer satisfaction.
Local Gaming
Crown Perth’s local gaming revenue declined by 2.1%,
reflecting the subdued local economic conditions.
Investment in gaming technology has provided a suite
of new products to enhance the customer experience.
These enhancements have provided growth in casual
gaming segments, in particular electronic table games
and mainstream gaming machines.
Further supporting the growth in casual gaming
segments was the Value Guarantee campaign, which
provides special offers for hotels, entertainment,
theatre and dining at Crown Perth. This campaign
resonated well in what remains a challenging market
and delivered positive customer outcomes across the
business.
VIP Program Play
Normalised VIP program play revenue at Crown Perth
was $103.0 million, down 5.8% with turnover of
$7.6 billion.
15
Australian Resorts continued
Hotels
Crown Towers continued to position itself as the
premier destination in Perth and drew a wide range of
guests attracted to the hotel’s luxury elements and
resort-style features. The Crown Towers brand
continued to attract international guests and a number
of high profile entertainment groups.
Crown Towers increased visitation to Crown Perth with
the three hotels providing for approximately 575,000
guests during the year, up 30% on the prior period.
Market conditions in Perth, which continued to be
challenged, impacted rate performance during the year.
However, Crown Perth’s combined average room rates
remained at an approximately 40% premium compared
to the broader Perth market. Crown Perth’s three hotels
grew combined occupancy to 83% (up three percentage
points) while occupancy rates across the Perth market
declined by one percentage point to 75%.
Most recently, Crown Towers Perth was awarded Best
Deluxe Accommodation Hotel and Best Accommodation
Hotel Overall at the AHA 2018 Perth Airport WA
Accommodation Awards for Excellence.
Food and Beverage
Crown Perth’s restaurant and bar operations exceeded
expectations after subdued trading conditions last year.
Crown Perth’s Value Guarantee campaign continued to
prove popular, and the new restaurants and bars located
within Crown Towers performed strongly in their first
full financial year of operation since opening in
December 2016.
Bar operations were enhanced with the opening of
Hi-Line Rooftop Bar in February 2018 and the
refurbishment of Fusion on the main gaming floor. In
addition, TWR won Best Bar in the 2018 Australian
Gourmet Traveller Hotel Awards.
Crown’s premium restaurants received two Gold Plate
Awards at the Catering Institute of Australia’s 2017 Gala
Ball – Silks for Licensed Chinese Restaurant and Modo
Mio received the Prix D’Honneur Award (Hall of Fame).
At the AHA 2017 Accommodation Awards for
Excellence, TWR received the Cocktail Bar Award and
Nobu won the Premium Restaurant Award. In May 2018,
The Merrywell was awarded Perth’s Best Steak
Sandwich by the Australian Hotels Association. Crown
Perth also successfully partnered with the Good Food
Guide for the first time and hosted the 2018 Good Food
Guide Awards in October 2017.
Events, Conferencing and Entertainment
Events and Conferences achieved a record revenue
result in the 2018 financial year.
The new Crown Towers Ballroom allowed for increased
conference and event business with over 200,000
delegates attending Crown Perth’s convention facilities,
up 12% on the previous year. There were a number of
significant residential conferences which included large
scale Asia Pacific groups, including Hewlett Packard and
Canalys, which together attracted approximately 1,600
delegates. The activation of Crown’s unique premium
spaces, including the Crown Towers private pool, the
Mansions and the Crystal Club, were key to the success
of these events.
Crown Perth’s premier event venues also secured a
number of large events during the year. The key events
included the 2018 Oasis Ball, RQCC Perth 2017,
ASOHNS Annual Scientific Meeting, Mastercard Hopman
Cup NYE Gala, Suited – The NYE Ball 2017, Classique
Melbourne Cup, Ronald McDonald House Charities WA
Ball, the AHA-Aon Hospitality Awards for Excellence,
Variety of Chefs 2017 Ball, Altitude 2017, the AHA
Accommodation Awards for Excellence & Gala Ball,
Parkerville Children and Youth Care Charity Lunch, and
the 2017 HIA-CSR Housing Awards.
In a first for Crown Perth, the Grand Ballroom held
a very successful ticketed event for the Mayweather
versus McGregor boxing match broadcast in August
2017.
Crown Theatre had several long-running shows
throughout the year including seasons of Mamma Mia!,
The Rocky Horror Show and The Unbelievables as well
as a number of smaller shows.
16
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 $12.0 million, down 54.8% on the previous period. This reflects a
softening in volumes across the London high-end casino market and disruption from refurbishment. Reported
EBITDA for the period was $12.4 million, an increase of $17.9 million on the previous period.
The reported EBITDA result takes into account a favourable variance from the theoretical VIP program play result,
which had a positive EBITDA impact of $0.4 million. This compares to a negative EBITDA impact of $32.1 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 lifestyle hotel and restaurant brands. Nobu
operates 15 owned restaurants in the US, London and Tokyo, 24 international licenced restaurants and manages eight
Nobu hotels in Ibiza, Las Vegas, London, Malibu, Manila, Marbella, Miami Beach and Palo Alto. The other investors in
Nobu are Nobu Matsuhisa, Robert De Niro and Meir Teper. The restaurant business has a pipeline of four new owned
restaurants and ten new licensed restaurants. The managed hotels business has a pipeline of seven new hotel
openings, which include Atlanta, Chicago, Los Cabos, Riyadh, Toronto, Barcelona and Sao Paulo.
Asset Sales
During the year, and consistent with our strategy to focus on our world-class core Australian operations and
development projects, Crown sold the Alon Las Vegas land to Wynn Resorts, Limited for US$300 million (Crown’s
share of the proceeds was approximately US$264 million) and its 4.2 million shares in Caesars Entertainment
Corporation for US$53.3 million.
17
Crown Resorts Limited Annual Report 2018 Crown Digital
EBITDA from Crown’s wagering and online social gaming operations was $26.9 million, up 81.8% on the pcp. This
includes CrownBet’s consolidated result from 1 July 2017 to 28 February 2018.
During the year, Crown completed the sale of its 62% interest in CrownBet, together with loans advanced by it to
CrownBet, for $150 million and no longer holds any interest in CrownBet.
Crown’s wagering and online social gaming operations now comprises Betfair Australasia (a 100% owned, online
betting exchange) and DGN Games (an 85% owned, online social gaming business). In addition, Crown equity accounts
its investment in Chill Gaming.
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 2018 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 is 85% 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 5-reel game. While both games are performing
well, “Lucky Time Slots” is driving DGN’s growth.
During the period, Crown increased its interest in DGN Games from 70% to 85% in exchange for an earn-out payment
to the founders of US$8.4 million
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. Chill Gaming will focus on innovation and developing new entertaining products.
18
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’s two Australian resorts are significant employers in
both Melbourne and Perth, providing employment for
approximately 18,000 people.
Crown is committed to creating real opportunities through
employment as demonstrated by our 20 year award-
winning history in the training sector, specialising in
hospitality, tourism, commercial cookery and management.
Crown’s dedicated training facility, Crown College, is a
Registered Training Organisation which enables employees
to receive on-site access to world-class training and
development programs.
The training that employees undertake at Crown College is
relevant to their roles and is nationally recognised as it is
aligned with the Australian Qualification Framework.
Crown is a leader in the tourism industry with Crown
College Perth being named by the Tourism Council of WA
as the Gold winner for Tourism Education and Training for
the second year in a row. This is Crown’s fifth year in a row
to win this category in the combined state tourism awards,
with Crown College Melbourne winning in 2013, 2014 and
2015 and receiving Hall of Fame status in 2015. Crown
Perth also won the Training Initiative Award at the 2017
AHA Awards for Excellence.
Crown’s aim is to create career pathways for its employees
and, in the 2018 financial year, over 640 employees were
enrolled in Certificates III, IV and Diploma level
qualifications. Since its inception, over 8,500 apprentices
and trainees have graduated from Crown College.
Crown’s training program expanded significantly in the past
financial year with the opening of Crown College
International in July 2017. Crown College International
provides vocational education and training, specialising in
delivering qualifications in hospitality, tourism and
management. The high quality and innovative programs at
the college are expected to create pathways for students
from all over the world who graduate job-ready to meet
industry needs.
As at 30 June 2018, Crown College International reached
over 100 student enrolments and has a large number of
ongoing applications.
Diversity and inclusion
Crown’s whole-of-business approach to diversity and
inclusion ensures that our workplace remains a dynamic,
positive environment where all employees feel valued in
their role and comfortable and confident in bringing
their whole self to work.
Our diversity and inclusion strategy encompasses
several programs including the Indigenous Employment
Program (IEP), CROWNability, Gender Equity, Crown
Pride, the Family Support Network and the Cultural and
Linguistic Diversity Employee Network.
Crown’s commitment to workplace diversity and
inclusion has been recognised through several external
accolades, including the Moulis Legal Award for Diversity
at the 2017 Property Council of Australia Awards,
atWork Australia Employer of the Year for Innovation
2017 and National Employer of the Year from OCTEC
Employment Services.
In the past financial year, Crown has worked diligently to
progress Gender Equity, including as a member of both
the national Male Champions of Change program and
Western Australia’s CEOs for Gender Equity. Crown also
introduced a Paid Parental Leave scheme with effect
from July 2017.
Gender Fitness, which was launched in December 2017,
is an innovative in-house digital solution that contributes
to Crown’s diversity and inclusion strategy. Gender
Fitness captures real-time data from meeting
interactions to increase awareness of diversity and
inclusion with the aim of delivering an improved gender
balance across Crown.
Crown’s work in Gender Equity highlighted an
opportunity to expand its program to support employees
in their personal lives. As such, in February 2018, the
Family Support Network launched at Crown Melbourne.
Culture was also identified as a key area for expansion in
Crown’s diversity and inclusion program given the
multicultural composition of Crown’s workforce and
patronage. In May 2018, the Cultural and Linguistic
Diversity Employee Network launched at Crown
Melbourne.
19
Crown Resorts Limited Annual Report 2018 Corporate Social Responsibility continued
Crown’s LGBTIQ+ strategy framework is currently being
drafted by Crown’s established LGBTIQ+ Steering
Committee, which oversees the Crown Pride
Committees at each property. To assist with the
development of Crown Pride and the LGBTIQ+
framework, in January 2018, Crown gained membership
to Pride in Diversity, the national not-for-profit employer
support program for LGBTIQ+ inclusion.
Customers and employees benefit from continuous
responsible gaming awareness campaigns about
Crown’s responsible gaming programs and services,
and the Responsible Gambling Code of Conduct.
Multiple communication channels are used throughout
each resort to ensure important information reaches a
wide audience. Information is available in multiple
languages.
Commitment to responsible gaming
Crown is committed to the responsible service of
gaming at each of its resorts, engaging internally and
externally to achieve socially responsible outcomes.
Crown recognises that in delivering its responsible
gaming programs and services, it does so as a shared
responsibility as part of the gaming industry, with
government, communities and individuals all working
in partnership.
Mindful of developments and initiatives in social
safeguards nationally and internationally, Crown ensures
it actively engages in committees, working groups,
conferences and think tanks. These provide the
opportunity to exchange information and ideas, and allow
Crown to share advances in its own programs and
services via conference presentations and panel
memberships. For example, Crown presented at the
2017 National Association for Gambling Studies annual
conference, contributed as part of the organising
committee, and was invited to participate as part of a
panel at the International Association of Gaming Advisors
Best Practices Institute education series in Las Vegas.
In Western Australia, Crown Perth is a member of the
Problem Gambling Support Services Committee and
the Gaming Community Trust Committee, as well as
the Responsible Gambling Awareness Week Planning
Committee.
In Victoria, Crown Melbourne is a member of the
Responsible Gambling Ministerial Advisory Council and
participates in the Victorian Responsible Gambling
Foundation Industry Forum and the Responsible
Gambling Awareness Week Reference Group. This is in
addition to regular engagement with gambling help
services in both states and various community groups.
Responsible gaming culture is embedded throughout
Crown at each resort. This is achieved through extensive
and ongoing employee training in the responsible
service of gaming.
Responsible Gaming Centres at each resort are the focal
point for interaction with customers. Staffed by a
dedicated and professional team within each resort,
the Responsible Gaming Centres provide free and
confidential services, programs and referrals and are
available 24 hours a day, seven days a week.
A testament to Crown’s commitment to responsible
gaming is the Crown Resorts Limited Responsible
Gaming Board 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.
Crown remains committed to developing new, as well as
refining existing, responsible gaming programs and
services, and will continue its strong engagement with
stakeholders to contribute to informed delivery in the
area of responsible gaming.
Progress towards environmental goals
Crown continues 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 2018 financial year, Crown achieved a
reduction in greenhouse gas emissions intensity of 2.8%
per area, Crown Melbourne reported a decrease in
water consumption of 4.4% and Crown Perth recorded a
2% reduction in overall electricity consumption. Crown’s
Recycle90 Program continues to be integral to our
overall waste management strategy with approximately
70% of Crown’s waste diverted from landfill.
Crown Melbourne and Crown Perth work collaboratively,
aligning strategies and programs across both properties
that will further reduce the environmental impact and
contribute to developing more sustainable practices.
20
Crown’s well-established, employee-led CROWNEARTH
Committees were very active across both properties
during the period, focussing on a number of energy,
water and waste management initiatives to improve
the overall sustainability performance of the business.
Crown Melbourne was excited to announce the
successful installation of a 300 kilowatt PV solar power
system on its Clarke Street building in February 2018.
The system consists of over 900 solar panels and was
recognised as the largest solar installation in the
Melbourne CBD. The system has the capacity to produce
over 400,000 kWh of renewable energy annually,
equivalent to the power consumed by over 70 homes. It
will reduce annual emissions by over 460,000 kg
CO2-e, comparable to planting approximately 12,000
trees. This project showcases Crown’s commitment to
sustainability, being just one of many energy
conservation projects that Crown has completed over
the last few years.
In 2018, Crown was pleased to launch its Sustainable
Supply Chain Policy. This policy was developed to
provide guidance in integrating environmental and social
considerations in procurement decisions to promote a
more sustainable way of doing business. Crown’s vision
is to contribute to environmental sustainability and
community development, whilst reducing the impact of
our own operations through considered procurement
decisions. Crown intends to leverage its influence as a
large buyer and further support its suppliers to improve
their own sustainability practices.
Crown recognises that policies and systems, whilst
important, are not enough. Employees need to understand
and be aligned with Crown’s environmental objectives,
otherwise change is difficult to achieve and may be
short-lived. The 2018 financial year saw a major focus on
staff engagement across Crown’s resorts with regular
events, training and communications to ensure staff and
contractors are informed of Crown’s environmental
objectives and progress, as well as to continue to embed
sustainability as part of Crown’s culture.
In addition to the 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,
National Recycling Week, Plastic Free July and the
Carbon Disclosure Project (for the ninth year running).
Supporting our communities
Crown believes in supporting the communities in which it
operates. Recognising our role within our communities, we,
together with our employees, support many community
causes and organisations through our resort-specific
community partnerships, employee volunteering
opportunities and the Crown Resorts Foundation.
Crown’s community support comes in many different
forms. At a resort level we are able to support charities
through subsidising, promoting and hosting their
fundraising events and providing raffle prizes. Many of our
employees enthusiastically volunteer their time to
support a wide range of causes.
This year, the Children’s Cancer Foundation’s Million
Dollar Lunch was once again hosted by Crown Melbourne.
Crown, with the support of its suppliers, committed to
delivering the event cost-free, which significantly assisted
the Children’s Cancer Foundation to raise over $2.5
million. These funds will be used to fund childhood cancer
research programs, clinical care and family support.
Complementing our community partnerships are the
fundraising events organised by teams throughout
Crown. Operations teams across Crown 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,
participated in the St Vincent de Paul CEO Sleepout in
Perth for the ninth consecutive year. To date, Barry has
raised over $860,000 for Perth’s St Vincent de Paul’s
homeless and emergency housing services.
The Crown Resorts Foundation
$200 million National Philanthropic Fund
The Crown Resorts Foundation continues to support
effective programs which provide young Australians
with opportunities to engage in education, the arts and
culture, and continues to partner with organisations that
encourage and foster social cohesion. Underlying these
priorities are learning, accessibility and engagement
outcomes for young Australians – staying engaged with
school and learning is the key to long-term positive
outcomes, and this is the approach and message that
our program partners are delivering.
21
Crown Resorts Limited Annual Report 2018 Corporate Social Responsibility continued
In the 2018 financial year, in partnership with the Packer
Family Foundation, the Foundations provided over
$16 million in grants to more than 120 organisations
across Australia. These grants ranged from smaller
one-off employee nominated donations to significant
annual grants which are 10 year commitments.
Over 77,500 students across Australia participated in
the Arts Education programs that the Foundations
support, undertaking a combined total of 750,000
hours of creative learning. This included over 90,000
hours of engagement with creative education programs
for over 3,750 Aboriginal and Torres Strait Islander
students and more than 88,000 hours of engagement
for over 980 people with disability. In addition, over 700
teachers undertook more than 7,800 hours in teacher
training programs focussed on the arts, creativity and
innovation, paid for by the Foundations.
Supporting Indigenous education
Providing assistance to increase and improve the
education opportunities for Aboriginal and Torres Strait
Islander Australians is a priority for the Crown Resorts
and Packer Family 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 educational program.
The Foundations’ Boards believe that this approach is
important as these programs establish the trust and
sense of security that enable children not only to benefit
from a consistent school-based education but to thrive
in such a setting.
This year, the Foundations undertook their second
Indigenous education grant round with the successful
organisations being AIME, Australian Indigenous
Education Foundation, The Australian Literacy and
Numeracy Foundation, Clontarf Foundation, Ganbina
and National Centre of Indigenous Excellence. With the
exception of Ganbina, all of these organisations had
previously received multi-year grants from the
Foundations.
Supporting our local communities –
Crown employees lead the way
The Crown Resorts Foundation Employee Advisory
Committee (EAC) continues to deliver a creative
employee focussed program aimed at recognising the
work our employees undertake in their community and
providing opportunities for employees to engage with
the Foundations’ partners as well as other charities with
which our employees are engaged.
The EAC has launched its CROWNversations series, a
program which invites philanthropists and representatives
from not-for-profit organisations to speak to employees
about their programs and experiences. The EAC has also
launched CROWNverteering, which enables Crown
employees to volunteer for charities in their area of
interest. In addition, the EAC continues to deliver
employee-driven fundraising opportunities.
The Annual Crown Metropol Stair Climb has raised
$180,000 over the past three years and is mainly made
up of employee donations, matched by the Crown
Resorts Foundation. In December 2017, the money
raised was donated to STEP BACK THINK for the
prevention of social violence. The EAC again partnered
with Crown’s wagering businesses to organise the event,
which raised $50,000 and had more than 140
participants.
The EAC also oversees the Crown Melbourne
Community Grants Program, which focusses on
providing monetary support to charities and non-for-
profit organisations nominated by employees. To date,
over $200,000 has been donated to organisations
nominated by employees.
Supporting Australian culture
Our Western Sydney Arts Initiative and Melbourne and
Perth Arts Education Initiative programs combined, will
account for $55 million of our $200 million National
Philanthropic Fund commitment. These programs, which
are focussed on supporting education and promoting
creativity, use art as a vehicle with which to engage
participants with learning and their community.
Currently we are supporting 66 programs across Western
Sydney, Melbourne and Perth within our arts education
grants initiative. The programs range from violin lessons
in low socio-economic primary schools provided by
Symphony Orchestra members to drama and literacy
programs delivered in juvenile detention centres.
22
Corporate Governance Statement
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 11 September 2018 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
Occupational Health
and Safety Committee
Responsible Gaming
Committee
Risk Management
Committee
Helen Coonan (Chair)
Michael Johnston
Antonia Korsanos
Helen Coonan (Chair)
John Horvath AO
Harold Mitchell AC
Helen Coonan (Chair)
Michael Johnston
Antonia Korsanos
Guy Jalland (Chair)
John Alexander
Michael Johnston
Geoff Dixon (Chair)
John Horvath AO
Harold Mitchell AC
John Horvath AO (Chair)
Jane Halton AO PSM
Michael Johnston
John Horvath AO (Chair)
John Alexander
Antonia Korsanos
Geoff Dixon (Chair)
Andrew Demetriou
Jane Halton AO PSM
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.
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
23
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
Director probity reviews and elections
Director and Senior Executive agreements
Every appointment of a Crown Director is subject to the
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.
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 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 for
Directors. 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 the 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
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 as
set out below:
Objective
Crown’s Progress
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.
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 shortlisted for 86% of Senior Management and
Senior Executive positions within the group for which a recruitment process
was undertaken during the financial year. For the positions that did not have a
female candidate shortlisted, there were no female applicants.
A female from Senior Management was involved in the interview process for all
Senior Management and Senior Executive positions within the group for which
a recruitment process was undertaken.
During the financial year, Crown Melbourne, Crown Perth, Aspinalls and Betfair
achieved 44% female participation in leadership and development programs.
Whilst the participation rate was slightly below the target percentage, Crown
Melbourne achieved a 45% participation rate, Crown Perth achieved an
improved participation rate of 41% and Aspinalls achieved a 50% participation
rate. Betfair, with its smaller employee numbers, only had one participant
during the financial year who was not female.
Crown has continued to apply a variety of internal and external equity testing
processes in relation to remuneration decisions at various points throughout
the financial year, of which gender equity has been a key feature.
The internal testing and analysis applied has included:
• validation of salaries at the start of the recruitment process, whereby
salaries of non-Enterprise Agreement roles are validated prior to approval
to hire in order to remove any unintended bias;
• 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 ‘like for like’ roles and to ensure there is no gender based inequity.
The internal testing and analysis conducted into ‘like for like’ roles provided an
unclear result in relation to pay parity. As a result, Crown engaged Mercer, a
workforce consultancy firm, to undertake an independent external gender pay
gap analysis for all salaried roles below the Business Operations Team at
Crown Melbourne and Crown Perth.
The analysis conducted by Mercer utilised a validated predictive tool to
analyse the pay data with consideration of all pay drivers to pinpoint any
gender pay gaps and determine where corrections may be necessary.
The external analysis found that no meaningful gender pay gap existed for any
of the salaried roles within the scope of the review.
The results of the external analysis, which considered like for like roles, are
inconsistent with the WGEA data as the WGEA data considers the average
pay of all salaried roles within the group, including senior executive positions
up to and including the CEO.
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
25
Crown Resorts Limited Annual Report 2018
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.
Ken Barton, Crown’s Chief Financial Officer and CEO Crown Digital, has
continued to represent Crown in the Male Champions of Change (MCC)
program.
Crown’s continued participation in a variety of discussion groups, seminars
and forums hosted by the MCC program assists with increasing Crown’s
knowledge and understanding of best practice diversity and inclusion
programs. Throughout the financial year, the following initiatives were
achieved at Crown, in alignment with the MCC Action Group meetings:
Flexible work arrangements
• Enhancements were made to Crown’s online application to allow
employees to arrange shift swaps and increase or reduce shifts to suit their
personal circumstances.
Violence against women
• Crown’s Family and Domestic Violence Support Policy was updated to
provide paid leave entitlements to employees experiencing, or supporting
someone experiencing, family violence.
• A dedicated family violence support line was introduced for employees
through Benestar, our Employee Assistance Provider.
• Dedicated training in relation to family violence for the Crown Melbourne
operational Human Resources team was introduced.
• Dedicated family violence Contact Officers were appointed at Crown
Melbourne.
Financial security for women
• A paid parental leave scheme was introduced.
• The statutory qualifying periods for full-time and part-time employees
taking parental leave was removed.
• Financial and superannuation seminars were provided to employees with a
specific focus for women.
Further MCC initiatives
• Crown supported the report of the MCC and Chief Executive Women
– Backlash and Buy-in: Responding to the Challenges in Achieving Gender
Equality.
• Mercer, a workforce consultancy firm, was engaged to undertake an
independent external gender pay gap analysis (as described in more detail
above).
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
Objective
Crown’s Progress
5. To task the Gender Equity Group to
develop a Gender Action Plan for
FY18 to FY21.
The draft Crown Resorts Gender Action Plan for FY18 to FY21 (GAP), which
has been prepared by the Gender Equity Advisory Groups, is in the process
of being finalised.
Meanwhile, a number of initiatives from the GAP have progressed including:
• each of the initiatives listed in Objective 4 above under the sub-heading
Financial security for women;
• the ability for full-time and part-time employees to accrue Long Service
Leave entitlements in the first 12 months of parental leave; and
• the launch of Gender Fitness at Crown in December 2017. Gender Fitness
is an innovative, in-house digital solution that contributes to our diversity
and inclusion strategy. The core value of the solution is to capture real-time
data from meeting interactions to increase awareness of diversity and
inclusion and to deliver an improved gender balance across Crown.
The proportion of women employees in the group, women in senior executive positions and women on the Board as at
30 June 2018 is as follows:
Measure
Result
Proportion of women
employees in the group
There were 5,170 women in the group. This represents 42.5% of the total workforce of
12,169 employees.
Proportion of women in senior
executive positions in the
group
Proportion of women on the
Board
There were 18 women in senior executive positions in the group. This represents 24.3%
of senior executive positions in the group. This is a 6.3% increase on FY17.
There were three female Directors out of a total of ten Directors, or 30%.
For the purpose 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.
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 Objectives 3 to 5. In summary:
Objective 3
Objective 3 has been strengthened to require that an external validation review be undertaken every two years to ascertain
the existence of any gender pay gaps and to implement action plans to address any such gaps. This is in addition to the
required annual internal review. This has resulted in the existing objective improved to read as follows:
To conduct an internal review on an annual basis of the remuneration for key roles within the group, with an external
validation review to be undertaken every second year, to ascertain the existence of any gender pay gaps and to
implement action plans to address any such gaps.
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
27
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
Objective 4
Objective 4 has been amended to reflect that Crown
participates in programs that promote gender equity
beyond the Male Champions of Change program. This
has resulted in the existing objective improved to read as
follows:
To participate in local and national programs which
promote gender equity and to implement relevant
actions arising out of those programs.
Objective 5
Objective 5 has been updated to reflect that the Gender
Action Plan for FY18 to FY21 has largely been developed
and therefore, going forward, the Company should assess
its progress against the Plan’s objectives. This has
resulted in the existing objective improved to read as
follows:
To progress the objectives of the Gender Action Plan
for FY18 to FY21 (the Plan) and to annually assess the
progress of the Plan’s objectives.
Accordingly, the Audit and Corporate Governance
Committee adopted the following revised Gender
Objectives with effect from 1 July 2018:
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.
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 2017-2018 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 of 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.
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.
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.
3. To conduct an internal review on an annual basis of the
remuneration for key roles within the group, with an
external validation review to be undertaken every second
year, to ascertain the existence of any gender pay gaps
and to implement action plans to address any such gaps.
(Modified Objective).
4. To participate in local and national programs which
promote gender equity and to implement relevant actions
arising out of those programs. (Modified Objective).
5. To progress the objectives of the Gender Action Plan for
FY18 to FY21 (the Plan) and to annually assess the
progress of the Plan’s objectives. (Modified Objective).
A report on the progress against the revised objectives will
be provided in the 2019 Corporate Governance
Statement.
An evaluation of the Board and its Committees took place
following the end of the 2018 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 2018 financial year and in accordance with the
processes described in the Remuneration Report.
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
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 AO and Harold Mitchell AC 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 2018 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 2019;
• the short term incentive payments made to senior
executives referable to the financial year ended 30 June
2018; and
• the issue of options to a small number of senior
executives under the Crown Senior Executive Incentive
Plan.
A summary of current remuneration arrangements is set
out in more detail 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.
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
29
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
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.
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 11 September
2018.
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.
d
r
a
o
B
10
10
10
10
9
10
8
8
10
5
10
8
4
4
4
4
7
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
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
t
n
e
m
t
s
e
v
n
I
e
c
n
a
n
i
F
3
3
3
3
3
3
3
2
3
1
3
2
0
1
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
2
3
1
3
2
0
1
1
1
2
3
3
3
3
3
3
2
2
3
1
3
3
1
1
2
2
2
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
1
3
2
0
0
1
1
3
3
3
3
3
2
3
3
2
3
2
3
2
1
2
1
1
2
3
3
3
3
3
3
3
3
3
2
3
3
2
2
2
2
3
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
The Board Skills Matrix, albeit important, is only part of the Selection Procedure that 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.
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, which sets out the Crown Directors as at 11 September 2018, 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
11 September 2018:
Name of Director
John H alexander BA
Executive Chairman
the Hon. Helen a Coonan BA, LLB
Non-Executive Director
andrew Demetriou BA, BEd
Non-Executive Director
Geoffrey J Dixon
Non-Executive Director
Jane Halton AO PSM, BA (Hons) Psychology,
FIML, FIPAA, NAM, Hon. FAAHMS, Hon. FACHSE,
Hon. DLitt (UNSW)
Non-Executive Director
professor John S Horvath AO, MB, BS (Syd),
FRACP
Non-Executive Director
Guy Jalland LLB
Non-Executive Director
Michael r Johnston BEc, CA
Non-Executive Director
antonia Korsanos BEc, CA
Non-Executive Director
Harold C Mitchell AC
Non-Executive Director
Independence
Status
Length of Tenure
(By years and complete months)
Non-independent
11 Years, 2 Months
Independent
6 Years, 9 Months
Independent
3 Years, 8 Months
Independent
11 Years, 2 Months
Independent
4 Months
Independent
8 Years
Non-independent
5 Months
Non-independent
11 Years, 2 Months
Independent
4 months
Independent
7 Years, 7 Months
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
31
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
Independent Board Directors
The Crown Board is currently comprised of ten Directors,
seven 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.
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 to reinforce 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 action 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
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 must encourage
the reporting and investigating of 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.
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
Principle 4: Safeguard integrity in
corporate reporting
• the opinion has been formed on the basis of a sound
system of risk management and internal control which
is operating effectively.
audit and Corporate Governance Committee
auditor’s attendance at aGMs
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), Michael
Johnston and Antonia Korsanos. 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.
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
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 that any information that could be market
sensitive or could involve reputational or material
regulatory issues or risks are communicated to the
Disclosure Officer;
• the assessment of information by the Disclosure
Committee and, where appropriate, the Board, and for
the disclosure of material information to the market; and
• the broader publication of material information to the
media, analysts and investors.
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, Constitution, Policies
and Codes, describes Crown’s Board Committees and
includes copies of current and historical Corporate
Governance Statements and Remuneration Reports.
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
33
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
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.
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
Full copies of Crown’s Continuous Disclosure
Policy and Communications Policy are 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 is 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), Andrew Demetriou and Jane
Halton AO PSM. The current Committee members are
each independent, Non-executive 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.
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
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 a framework 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 in a Risk Profile
to the Crown Board. The Framework has been developed
using the model outlined in AS/NZS ISO 31000:2009 Risk
Management – Principles and Guidelines.
Crown’s Risk Profile 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 on an ongoing
basis.
Management is required to conduct an annual review of its
Risk Profile to ensure that risk ratings and definitions
remain appropriate for Crown, and that adequate controls
are in place to manage them.
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 as 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 head of the
Internal Audit department reports to the CEO – Australian
Resorts. Further, the head of the department 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 CSR
policies and programs and assessing Crown’s CSR
performance. The Corporate Social Responsibility
Committee has adopted a formal Charter that outlines its
duties and responsibilities.
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
35
Crown Resorts Limited Annual Report 2018
CorporatE GovErnanCE StatEMEnt CONTINUED
The current members of the Corporate Social
Responsibility Committee are Helen Coonan (Chair),
Professor John Horvath AO and Harold Mitchell AC.
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 CSR policies and programs
for Crown;
• monitoring and reviewing the operation and
effectiveness of Crown’s CSR policies and programs;
• promoting and supporting continuous improvement in
Crown’s CSR 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 CSR related
issues at Crown among Crown’s staff and other
stakeholders.
The Committee oversees 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.
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 in more detail in the Remuneration Report. Crown
separately discloses the policies and practices regarding
the remuneration of Key Management Personnel in the
Remuneration Report.
restrictions on dealing in equity based
remuneration
The rules of the 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 Senior Executive
Incentive Plan also require participants to comply with
Crown’s Securities Trading Policy at all times.
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
36
Directors’ Statutory Report
Company Information
Principal Activities
Crown is one of Australia’s largest entertainment groups
with its core businesses and investments in the integrated
resorts sector.
In Australia, Crown owns and operates two of Australia’s
leading integrated resorts – Crown Melbourne and Crown
Perth. Overseas, Crown owns and operates Crown
Aspinalls in London, one of the high-end licensed casinos
in the West End entertainment district.
Crown’s development projects include the Crown Sydney
Hotel Resort at Barangaroo on Sydney Harbour and the
proposed One Queensbridge project in Melbourne.
Crown has interests in various digital businesses, including
Betfair Australasia (100%), DGN Games (85%) and Chill
Gaming (50%), and holds equity interests in UK-based
Aspers Group (50%) and Nobu (20%).
Significant changes in state of affairs
Some of the significant changes in the state of affairs of
the consolidated group since 1 July 2017 include:
Significant Transactions
• In December 2017, Crown completed the on-market
sale of its approximately 4.2 million shares in Caesars
Entertainment Corporation for US$53.3 million.
• On 29 January 2018, Crown announced that its
majority owned subsidiary, Alon Las Vegas Resort,
LLC, had completed the sale of its interest in a 34.6
acre vacant site on Las Vegas Boulevard to a
subsidiary of Wynn Resorts, Limited for US$300 million.
Crown’s share of the proceeds (after taking into
account minority interests) was approximately US$264
million.
• On 2 February 2018, Crown completed the sale of its
interest in part of the property and operations at
Ellerston in the Hunter Valley for $62.5 million. While
Crown no longer holds an interest in Ellerston, Crown
has ongoing access rights to the golf course and other
facilities at Ellerston in line with its commitment to the
NSW Government.
• On 28 February 2018, Crown announced that it had
completed the sale of its 62% interest in CrownBet,
together with loans advanced by it to CrownBet, for
$150 million.
Capital Management Initiatives
• On 4 August 2017, Crown announced its intention to
buy back up to approximately 29.3 million of its ordinary
shares. The share buy-back expired on 22 August
2018, with 1,426,628 shares having been bought back
at a total consideration of approximately $18.7 million.
• On 29 June 2018, Crown announced the cancellation
of the buy-back of the Subordinated Notes listed on the
ASX under the code “CWNHA” (CWNHA Notes) with a
total of 1,342,270 CWNHA Notes bought back.
Board Changes
• On 3 August 2017, Crown announced that the
appointment of James Packer as a Director of Crown
had become effective following the receipt of all
necessary consents and approvals. On 21 March 2018,
Crown announced the resignation of James Packer as
a Director of Crown.
• On 16 April 2018, Crown announced that the
appointment of Guy Jalland as a Director of Crown had
become effective following the receipt of all necessary
regulatory approvals.
• On 2 May 2018, Crown announced the appointment of
John Poynton AO as a Director of Crown subject to the
receipt of all necessary regulatory approvals.
• On 23 May 2018, Crown announced that the
appointment of Jane Halton AO PSM and Antonia
Korsanos as Directors of Crown had become effective
following the receipt of all necessary regulatory
approvals.
Significant events after Balance Date
• On 19 July 2018, Crown announced its election to
redeem all of the outstanding CWNHA Notes on the
first call date of 14 September 2018 in accordance with
the terms of the CWNHA Notes.
• On 3 August 2018, the Victorian Commission for
Gambling and Liquor Regulation released its final report
concerning the Sixth Review of the Casino Operator
and Licence held by Crown Melbourne Limited (Crown
Melbourne), a subsidiary of Crown, which concluded
that:
– Crown Melbourne remains a suitable person to
continue to hold its licence to operate the Melbourne
Casino;
– Crown Melbourne is complying with relevant
legislation and agreements; and
– it is in the public interest that the licence should
continue in force.
The report made 20 recommendations in relation to the
operations of Crown Melbourne which Crown
Melbourne has accepted, subject to the matters set
out in Crown Melbourne’s response to the report.
• On 9 August 2018, Crown announced its intention to
undertake a new on-market share buy-back of
approximately $400 million worth of shares.
• Subsequent to year end, the Directors of Crown
declared a final dividend on ordinary shares of 30 cents
per share in respect of the financial year ended 30 June
2018. The final dividend will be 60% franked with the
unfranked component of the dividend declared to be
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
37
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
conduit foreign income. The final dividend has not been
provided for in the 30 June 2018 financial statements.
Performance for the year ended
30 June 2018
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 include:
• reporting of greenhouse gas emissions, energy
consumption and production by large corporations;
• corporate level public disclosure of greenhouse gas
emissions and energy information; and
• providing 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, prospects for future financial
years and material risks, on the basis that the Directors
have reasonable grounds to believe that disclosure would
likely result in unreasonable prejudice to Crown.
Crown reported a consolidated net profit after tax (NPAT)
attributable to the parent of $558.9 million and a
normalised NPAT1 of $386.8 million for the 12 months
ended 30 June 2018. Crown Melbourne and Crown Perth
normalised EBITDA increased by 7.2%, and normalised
revenue increased by 10.6%, predominantly due to the
increase in normalised VIP program play revenue which
was up 54.5%.
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
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
3,485.3
(2,607.0)
878.3
592.4
386.8
326.7
232.2
558.9
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 the reversal of an impairment of the Alon Las Vegas land
and an associated net foreign currency gain, as well as net gains from
the sales of CrownBet and Ellerston, partially offset by restructuring
and other expenses, equity accounted investments, tax amounts in
significant items and non-controlling interests.
Review of operations
Crown’s full year result reflects a solid performance from
the Melbourne operation and continued subdued trading
in Perth. Total normalised revenue across Crown’s
Australian resorts increased by 10.6% on the prior
comparable period (pcp). Main floor gaming revenue
increased by 1.5%, with modest growth in Melbourne
offset by softness in Perth. VIP program play turnover in
Australia of $51.5 billion (up 54.5%) was a pleasing
outcome, particularly at Crown Melbourne (up 73.9%),
given the difficult trading conditions in the pcp.
The activities and results of Crown’s operations are
discussed in further detail below.
crown Melbourne
Normalised EBITDA from Crown Melbourne was
$645.0 million, up 9.5% on the pcp. Reported EBITDA for
the period was $586.0 million, up 2.7% 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 $59.0 million. This
compares to a negative EBITDA impact of $18.2 million in
the pcp.
Normalised revenue of $2,279.0 million was up 14.2% on
the pcp. During the period, main floor gaming revenue
was $1,217.0 million, up 2.9% on the pcp, and non-gaming
revenue declined 0.3% to $470.2 million.
Main floor gaming revenue comprises table games
(non-program play) revenue of $767.1 million, up 4.6% on
the pcp, and gaming machine revenue of $449.9 million,
up 0.2% on pcp.
Normalised VIP program play revenue was $591.8 million,
up 73.9% on the pcp with turnover of $43.8 billion.
Crown Towers Melbourne hotel occupancy was 96.3%
with an average room rate of $384. Crown Metropol
Melbourne achieved hotel occupancy of 93.8% with an
average room rate of $262. Crown Promenade Melbourne
hotel occupancy was 94.1% with an average room rate of
$234. These high occupancy rates reflect the very strong
demand for luxury hotel accommodation in Melbourne.
The overall normalised operating margin decreased from
29.5% to 28.3%. The decline in margin is largely due to a
change in the mix of business and the impact of higher
fixed costs, including energy.
crown Perth
Normalised EBITDA from Crown Perth was $248.8 million,
up 1.6% on the pcp. Reported EBITDA for the period was
$221.5 million, down 13.9% 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 $27.3 million. This compares to
a positive EBITDA impact of $12.5 million in the pcp.
Normalised revenue of $844.5 million was up 1.7% on the
pcp. During the period, main floor gaming revenue was
$463.9 million, down 2.1% on the pcp, and non-gaming
revenue grew 12.5% to $277.6 million, primarily due to the
full year impact of Crown Towers Perth, which opened in
December 2016.
Main floor gaming revenue comprises table games
(non-program play) revenue of $198.8 million, down
4.1% on the pcp, and gaming machine revenue of
$265.1 million, down 0.6% on the pcp.
Normalised VIP program play revenue was $103.0 million,
down 5.8% on the pcp with turnover of $7.6 billion.
Crown Towers Perth hotel occupancy was 76.9% with an
average room rate of $312. Crown Metropol Perth hotel
occupancy was 86.1% with an average room rate of $235.
Hotel occupancy at Crown Promenade Perth was 89.8%
with an average room rate of $182.
The overall normalised operating margin was flat at 29.5%.
This reflects the additional operating costs of the
expanded property following the completion of Crown
Towers Perth, offset by a favourable mix of business.
crown Aspinalls
Normalised EBITDA from Crown Aspinalls was
$12.0 million, down 54.8% on the pcp. This reflects a
softening in volumes across the London high-end casino
market and disruption from refurbishment. Reported
EBITDA for the period was $12.4 million, an increase of
$17.9 million 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 $0.4 million. This compares to a negative EBITDA
impact of $32.1 million in the pcp.
crown Digital
EBITDA from Crown’s wagering and online social gaming
operations was $26.9 million, up 81.8% on the pcp. This
includes CrownBet’s consolidated result from 1 July 2017
to 28 February 2018.
On 28 February 2018, Crown announced it had completed
the sale of its 62% interest in CrownBet, together with
loans advanced by it to CrownBet, for $150 million. Crown
no longer holds any interest in CrownBet.
Crown’s wagering and online social gaming operations
now comprises Betfair Australasia (a 100% owned, online
betting exchange) and DGN Games (an 85% owned,
online social gaming business). During the period, Crown
increased its interest in DGN Games from 70% to 85% in
exchange for an earn-out payment to the founders of
US$8.4 million.
cash Flow and Debt
Net operating cash flow for the period of $731.7 million
compared to net operating cash flow of $465.7 million in
the pcp. After taking into account the net proceeds
received from the sale of investments of $256.0 million,
net capital expenditure of $55.1 million, net repayment of
borrowings of $428.5 million, dividend payments of
$413.4 million and share buy-back payments of
$18.8 million, the Group’s net cash position at 30 June
2018 was $221.0 million (excluding working capital cash
of $130.9 million). This consisted of total debt of
$1,492.7 million and cash (excluding working capital cash)
of $1,713.7 million.
At 30 June 2018, total liquidity (excluding working capital
cash of $130.9 million) was $1,889.8 million. This
consisted of $1,713.7 million in available cash and
$176.1 million in committed undrawn bank facilities.
Normalised net interest expense for the year was
$46.0 million, $55.6 million below the pcp, which
reflects lower net debt levels.
Significant items
During the period, there were events or transactions
arising that were unusual in terms of both their size and
their nature, which have been classified as significant
items. Significant items for the year included a net asset
impairment reversal of $122.3 million predominately
relating to assets held by Crown’s majority owned
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
39
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
subsidiary, Alon Las Vegas, and a $76.9 million foreign currency gain on the subsequent disposal of the Alon Las Vegas
assets (previously recorded in reserves). Crown also disposed of its interest in CrownBet and Ellerston resulting in gains on
disposal of $87.5 million and $5.9 million respectively. During the period, Crown also recognised $15.5 million in significant
item expenses, predominately relating to restructuring costs.
Business Strategies
Crown’s strategy is to continue focusing on its world-class Australian operations and development projects as well as
maximising shareholder returns.
Crown’s actions over the past year demonstrate its ongoing commitment to this strategy. In financial year 2018, Crown
completed the sale of a number of significant assets including the Alon Las Vegas land for US$300 million, its interest in
CrownBet for $150 million, its interest in Ellerston for $62.5 million and its shares in Caesars Entertainment Corporation for
US$53.3 million. Crown’s balance sheet, which shows a net cash position of $221 million at 30 June 2018, is well placed to
fund its Australian development project pipeline.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
R
e
p
o
r
t
Business Risks
Crown has established a framework 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 through the Crown Risk Management Committee which administers Crown’s Risk Management Policy.
Crown’s Risk Profile 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 on an ongoing basis.
Crown is committed to operating in a manner that is sustainable into the future. Crown is working towards aligning its
strategies and activities in line with this commitment.
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.
Dividends and distributions
Interim Dividend: Crown paid an interim dividend of 30 cents per ordinary share on 4 April 2018. The 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 21 September 2018.
The final dividend will be 60% franked. The unfranked portion of the final dividend has been declared to be conduit foreign
income.
In summary:
Interim Dividend paid
Final Dividend declared
Total
Dividend per share
$
30.0 cents per share
$206,654,347
30.0 cents per share
$206,226,3581
60.0 cents per share
$412,880,705
1 Dollar value based on the total number of shares on issue as at the date of declaration of the 2018 final dividend.
Crown paid shareholders a final dividend in respect of the 2017 financial year of $206.7 million.
40
Directors and officers
Director details
Set out below are the names of each person who has been a Director of Crown during the year or since year end and the
period for which they have been a Director. There are currently ten Directors.
Name
John Henry Alexander
The Hon. Helen Anne Coonan
Rowena Danziger
Andrew Demetriou
Geoffrey James Dixon
Jane Halton AO PSM
Professor John Stephen Horvath AO
Guy Jalland
Michael Roy Johnston
Antonia Korsanos
Harold Charles Mitchell AC
James Douglas Packer
Date Appointed
Date ceased
6 July 2007
2 December 2011
6 July 2007
26 October 2017
29 January 2015
6 July 2007
23 May 2018
9 September 2010
16 April 2018
6 July 2007
23 May 2018
10 February 2011
3 August 2017
21 March 2018
On 2 May 2018, the Board approved the appointment of Mr John Poynton AO as a Director, subject to the receipt of all
necessary regulatory approvals. Mr Poynton’s appointment will only become effective once the necessary approvals have
been received.
At Crown’s 2017 Annual General Meeting, Andrew Demetriou and Harold Mitchell AC stood for re-election as Directors.
Both Directors were re-elected at that meeting.
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
41
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
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
John H Alexander, BA
Executive Chairman
The Honourable Helen A Coonan, BA, LLB
Non-executive Director
John 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 and Burswood 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.
Board committee memberships:
• Member of the Investment Committee
• Member of the Responsible Gaming Committee
Directorships of other Australian listed companies held
during the last three years:
• Seven West Media Limited from May 2013 to current
The Honourable Helen 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 the inaugural Chair of the Australian
Financial Complaints Authority (AFCA). She is a Non-
executive Director of Snowy Hydro Limited and is Chair of
Snowy Hydro Retail Board 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 of the Australian Children’s
Television Foundation. She is a consultant to Samsung
Electronics Australia and Chairs the Advisory Board of
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 start up fintech hub
Stone and Chalk.
Ms Coonan is Chair of the Crown Resorts Foundation.
Board committee memberships:
• Chair of the Audit and Corporate Governance
Committee
• Chair of the Corporate Social Responsibility Committee
• Chair of the Finance Committee
Andrew Demetriou, BA, BEd
Non-executive Director
Geoffrey J Dixon
Non-executive Director
Andrew Demetriou was Chief Executive Officer of the
Australian Football League (AFL) from 2003 until June
2014.
Geoff Dixon is an experienced and successful corporate
executive with a background in the media, mining, aviation
and tourism industries.
Mr Dixon was Managing Director and Chief Executive
Officer of Qantas Airways for eight years until 2008
– joining Qantas in 1994, he also served as Chief
Commercial Officer and, for two years, as Deputy
Managing Director.
Mr Dixon was Chairman of the Australian Government’s
principal tourism authority, Tourism Australia, for six years
until 2014 and Chairman of the Garvan Medical Research
Foundation for 10 years until 2018.
He has served on a number of public companies and
not-for-profit boards including Leighton Holdings, Adslot
Limited, the Business Council of Australia, the Museum of
Contemporary Art Australia and is a long time
Ambassador for the Australian Indigenous Education
Foundation.
Board committee memberships:
• Chair of the Nomination and Remuneration Committee
• Chair of the Risk Management Committee
Directorships of other Australian listed companies held
during the past three years:
• Adslot Limited from December 2013 to December 2016
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, Co-Chair of the National
Basketball League (NBL) Advisory Board, Chairman and
Non-Executive Director of Capitol Health Limited and
Transitional Chairman of Cox Architecture.
Mr Demetriou 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. He recently completed a
two year term on the Australian Referendum Council for
Indigenous recognition in the Constitution.
Board committee memberships:
• Member of the Risk Management Committee
Directorships of other Australian listed companies held
during last three years:
• Capitol Health Limited from November 2014 to current
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
43
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
Jane Halton, AO, PSM, BA (Hons) Psychology, FIML,
FIPAA, NAM, Hon. FAAHMS, Hon. FACHSE, Hon. DLitt
(UNSW)
Non-executive Director
Jane Halton’s 33 year career in the public service includes
the positions of Secretary of the Australian Department of
Finance, Secretary of the Australian Department of Health,
Secretary for the Department of Health and Ageing and
Executive Co-ordinator (Deputy Secretary) of the
Department of the Prime Minister and Cabinet.
Ms Halton is a current Director of Australia and New
Zealand Banking Group Limited and Clayton Utz, is the
current Chair of Vault Systems and Council on the Ageing
Australia and is the Chair and a Director of Coalition of
Epidemic Preparedness Innovations (Norway).
Ms Halton’s other roles include Member of the Executive
Board of the Institute of Health Metrics and Evaluation at
the University of Washington, Adjunct Professor of the
University of Sydney and the University of Canberra and
Council Member of Australian Strategic Policy Institute.
Ms Halton brings to the Board extensive experience in
finance, risk management, information technology, human
resources and public policy.
Board committee memberships:
• Member of the Occupational Health and Safety
Committee
• Member of the Risk Management Committee
Directorships of other Australian listed companies held
during the past three years:
• Australia and New Zealand Banking Group Limited from
October 2016 to current
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 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.
Professor Horvath sits on the Crown Melbourne Limited
and the Crown Resorts Foundation Boards.
Board committee memberships:
• Chair of the Occupational Health and Safety Committee
• Chair of the Responsible Gaming Committee
• Member of the Corporate Social Responsibility
Committee
• Member of the Nomination and Remuneration
Committee
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
Guy Jalland, LLB
Non-executive Director
Michael R Johnston, BEc, CA
Non-executive Director
Guy Jalland is the Chief Executive Officer of Consolidated
Press Holdings Pty Limited (CPH), having worked in the
Consolidated Press Holdings and Publishing &
Broadcasting Limited (PBL) groups since 1998.
In the past, Mr Jalland has held the role of Group General
Counsel and Joint Company Secretary of CPH and PBL.
He has represented CPH as a Director on the boards of
Consolidated Media Holdings Limited, Foxtel and Fox
Sports.
Board committee memberships:
• Chair of the Investment Committee
Michael 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.
Board committee memberships:
• Member of the Audit and Corporate Governance
Committee
• Member of the Finance Committee
• Member of the Investment Committee
• Member of the Occupational Health and Safety
Committee
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
45
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
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
Antonia Korsanos, BEc, CA
Non-executive Director
Harold C Mitchell, AC
Non-executive Director
Antonia Korsanos was the Chief Financial Officer (2009 to
2018) and Company Secretary (2011 to 2018) of Aristocrat
Leisure Limited. She has over 20 years’ experience in
financial and general management at companies including
Kellogg’s Australia and New Zealand, Goodman Fielder
Limited and Coopers & Lybrand in Sydney.
Mrs Korsanos brings to the Board extensive experience in
the gaming industry and experience in the areas of
technology, finance, strategy, mergers and acquisitions,
risk management and financial and regulatory compliance.
Mrs Korsanos has a Bachelor of Economics (Accounting &
Finance) from Macquarie University and is a Member of
the Institute of Chartered Accountants. Mrs Korsanos is
also a Member of Chief Executive Women and a Non-
Executive Director of Webjet Limited, Ardent Leisure
Limited and Ardent Leisure Management Limited.
Mrs Korsanos is a Director of Crown Melbourne Limited.
Board committee memberships:
• Member of the Audit and Corporate Governance
Committee
• Member of the Finance Committee
• Member of the Responsible Gaming Committee.
Directorships of other Australian listed companies held
during the past three years:
• Webjet Limited from June 2018 to current
• Ardent Leisure Limited and Ardent Leisure Management
Limited from July 2018 to current
Harold 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.
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 sits on the Crown Resorts Foundation Board.
Board committee memberships:
• Member of the Corporate Social Responsibility
Committee
• Member of the Nomination and Remuneration
Committee
company secretary details
Mary Manos, LLB (Hons), BCom,
GAICD
General Counsel and
Company Secretary
other officer details
Mary Manos is Crown’s General Counsel and Company Secretary. Ms Manos is
also Secretary of Crown Melbourne Limited, Burswood Limited and Crown
Resorts Foundation Limited.
Ms Manos was formerly 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 Laws (Hons) and Bachelor of Commerce degrees
from the University of Melbourne.
She is also a Graduate of the Australian Institute of Company Directors.
Kenneth M Barton, BEc
Chief Financial Officer
CEO Crown Digital
Barry Felstead
Chief Executive Officer -
Australian Resorts
W Todd Nisbet, BSc
Executive Vice President -
Strategy and Development
Ken Barton has been Chief Financial
Officer of Crown Resorts Limited since
March 2010 and CEO Crown Digital
since February 2017. Mr Barton also
sits on the Crown Melbourne Limited,
Burswood Limited and Crown Resorts
Foundation Boards.
He was previously Chief Financial
Officer of Boral Limited for seven years
having also held roles at Pioneer
International and Arthur Andersen.
Mr Barton holds a Bachelor of
Economics degree from the University
of Sydney, is an Associate of the
Institute of Chartered Accountants in
Australia and a Fellow of the Financial
Services Institute of Australia. He also
joined the Male Champions of Change
program in 2017.
Barry Felstead has been Chief
Executive Officer – Australian Resorts
since August 2013. Mr Felstead sits on
the Crown Melbourne Limited and
Burswood Limited Boards.
Prior to August 2013, Mr Felstead was
Chief Executive Officer of Crown Perth
(formerly Burswood) since March
2007, after holding the position of
Chief Operating Officer – Gaming of
Crown Perth from 2005. Mr Felstead
has held multiple management
positions at Crown Melbourne.
Mr Felstead is Chairman of FutureNow,
a Board member of Burswood Park
Board, Alumni of Celebrate WA and a
Board Member of Australasian Gaming
Council (AGC).
Todd Nisbet joined the Crown Resorts
team in October 2007. In his role as
Executive Vice President – Strategy
and Development, Mr Nisbet is
responsible for all project development
and construction operations of Crown
Resorts.
From August 2000 through to July
2007, Mr Nisbet held the position of
Executive Vice President – Project
Director for Wynn Design and
Development, a development
subsidiary of Wynn Resorts Limited.
Serving this role with Wynn Resorts
Limited, he was responsible for all
project development and construction
operations undertaken by Wynn
Resorts. Prior to joining Wynn, Mr
Nisbet was the Vice President of
Operations for Marnell Corrao
Associates. During his 14 years at
Marnell Corrao (1986 to 2000), he was
responsible for managing various
aspects of the construction of some of
Las Vegas’ most elaborate and
industry-defining properties.
Mr Nisbet holds a Bachelor of Science
degree in Finance from the University
of Nevada, Las Vegas.
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
47
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
Relevant interests of Directors
Details of relevant interests of current Directors in Crown shares as at 30 June 20181 were as follows:
Director
John Alexander
The Hon. Helen Coonan
Andrew Demetriou
Geoff Dixon
Jane Halton AO PSM
Professor John Horvath AO
Guy Jalland
Michael Johnston
Antonia Korsanos
Harold Mitchell AC
Total number
of ordinary
shares
Total
number of
options
399,557
5,000,000
-
-
-
948
-
-
-
-
114,887
-
-
-
-
-
-
-
-
-
1 For more information on relevant interests of current Directors, please see the Remuneration Report.
Other than in connection with Crown’s 2017 Senior Executive Incentive Plan which is 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.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
R
e
p
o
r
t
48
Board and Committee meetings
Set out below are details of the number of Board meetings and Committee meetings held by Crown during the 2018
financial year together with each Director’s attendance details.
Audit and
Corporate
Governance
Committee
Meetings
Corporate
Social
Responsibility
Committee
Meetings
Investment
Committee
Meetings
Nomination and
Remuneration
Committee
Meetings
Occupational
Health
and Safety
Committee
Meetings
Responsible
Gaming
Committee
Meetings
Risk
Management
Committee
Meetings
Board
Meetings
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
Held
Attended
J H Alexander1
H A Coonan
R Danziger2
A Demetriou3
G J Dixon
J Halton AO PSM4
J S Horvath AO5
G Jalland6
M R Johnston7
A Korsanos8
H C Mitchell AC9
J D Packer10
11
11
4
11
11
1
11
2
11
1
11
7
11
11
4
11
11
1
11
2
9
1
9
5
3
2
1
3
0
3
2
1
3
0
1
1
2
2
2
2
1
1
1
1
7
7
7
7
1
0
5
5
1
0
5
5
2
1
7
7
4
4
4
0
4
4
3
0
6
2
6
0
6
2
6
0
1. Mr Alexander ceased as a member of the Risk Management Committee on 20 June 2018.
2. Mrs Danziger ceased as a Director of Crown, as member of the Crown Audit and Corporate Governance, Responsible Gaming and Risk Management
Committees and as Chair of the Crown Occupational Health and Safety Committee on 26 October 2017.
3. Mr Demetriou was appointed as a member of the Risk Management Committee on 25 October 2017. Mr Demetriou was appointed as a member of the
Audit and Corporate Governance Committee on 29 January 2018 and ceased as a member of that Committee on 20 June 2018.
4. Ms Halton AO PSM was appointed as a Director of Crown on 23 May 2018 and was subsequently appointed as a member of the Occupational Health
and Safety and Risk Management Committees on 20 June 2018.
5. Professor Horvath AO was appointed as Chair of the Crown Occupational Health and Safety Committee on 13 December 2017.
6. Mr Jalland was appointed as a Director of Crown and as Chair of the Crown Investment Committee on 16 April 2018.
7. Mr Johnston was ineligible to attend two meetings of the Crown Board that considered related party transactions.
8. Mrs Korsanos was appointed as a Director of Crown on 23 May 2018 and was subsequently appointed as a member of the Crown Audit and Corporate
Governance, Finance and Responsible Gaming Committees on 20 June 2018.
9. Mr Mitchell AC was ineligible to attend one meeting of the Crown Board that considered a related party transaction.
10. Mr Packer was appointed as a director of Crown on 3 August 2017 and ceased as a director of Crown on 21 March 2018. Mr Packer was ineligible to
attend two meetings of the Crown Board that considered related party transactions.
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 seven written resolutions and the Investment Committee assented to three written resolutions in the 2018
financial year. The Finance Committee did not formally meet in the 2018 financial year.
Shares and Options
As at the date of this Report, Crown has 21.175 million unquoted options on issue (as set out below). Each option is granted
over one fully paid ordinary share in Crown.
In April 2017, Crown issued 14 million options under the 2017 Senior Executive Incentive Plan to John Alexander and a
small number of senior executives. The options, with an expiry date of 22 February 2021, were granted 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.
In August 2018, Crown issued an additional 7.175 million options under the 2017 Senior Executive Incentive Plan to a small
number of senior executives, none of which were members of Crown’s key management personnel. 540,000 of the options
were issued to Mr Karl Bitar – the Executive Vice President – Group Marketing & Brand Strategy. The options, with an
t
r
o
p
e
R
y
r
o
t
u
t
a
t
S
’
s
r
o
t
c
e
r
i
D
49
Crown Resorts Limited Annual Report 2018
DiRectoRS’ StAtutoRy RePoRt CONTINUED
expiry date of 8 August 2022, were granted with an initial
exercise price of $13.35. The exercise price of $13.35 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 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.
D
i
r
e
c
t
o
r
s
’
S
t
a
t
u
t
o
r
y
R
e
p
o
r
t
50
Auditor Information
Auditor details
Ernst & Young has been appointed Crown’s auditor. Mr
Michael Collins was the Ernst & Young partner responsible
for the audit of Crown’s accounts for the year ended 30
June 2018.
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 sale of Crown’s interest in CrownBet and Ellerston;
• the sale of Crown’s interest in Melco Resorts &
Entertainment Limited;
• proposed developments; and
• ongoing taxation matters.
The ratio of non-audit to audit services provided by Ernst
& Young to Crown at the conclusion of the 2018 financial
year was approximately 3.3:1.
Based on advice received from the Audit and Corporate
Governance Committee, the Directors are satisfied that
the provision of non-audit services during the 2018
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 this Report and in the Financial
Report have been rounded to the nearest hundred
thousand dollars unless otherwise stated under the option
available to the Company under ASIC Corporations
(Rounding in Financial/Directors’ Reports) Instrument
2016/191. Crown is an entity to which this Instrument
applies.
Remuneration Report
This Remuneration Report for the year ended 30 June
2018 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
Executive Directors
• John H Alexander (Executive Chairman)
Other Company Executives
• Kenneth M Barton (Chief Financial Officer and CEO
Crown Digital)
• Barry Felstead (Chief Executive Officer – Australian
Resorts)
• W Todd Nisbet (Executive Vice President – Strategy
and Development)
In this Report, the group of persons comprised in the
categories of Executive Directors and Other Company
Executives (listed above) are collectively referred to as
“Senior Executives”.
This Report contains a similar level of disclosure to the
2017 Remuneration Report. 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 other than in relation to the 2014 Crown
Long Term Incentive Plan. As the 2014 Crown Long Term
Incentive Plan has now expired and no Plan Year Bonus
was paid in respect of the financial year ended 30 June
2018, an abbreviated summary of the terms of the 2014
Crown Long Term Incentive Plan is included in this Report.
Overview of Remuneration Policy
6. Remuneration details for Non-executive Directors
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 properties and digital assets. 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.
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
• The Hon. Helen A Coonan
• Rowena Danziger (until 26 October 2017)
• Andrew Demetriou
• Geoffrey J Dixon
• Jane Halton AO PSM (from 23 May 2018)
• Professor John S Horvath AO
• Guy Jalland (from 16 April 2018)
• Michael R Johnston
• Antonia Korsanos (from 23 May 2018)
• Harold C Mitchell AC
• James D Packer (from 3 August 2017 until 21 March 2018)
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
51
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
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.
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
Executive, other benefits such as a motor vehicle,
additional contributions 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.
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 64 to 67 of this Report.
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
52
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; and
• Long Term Incentives (the 2014 Crown Long Term Incentive Plan and the 2017 Senior Executive 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 Short Term Incentives and the 2014 Crown
Long Term Incentive Plan link back to key elements of the business plan and budget and long term financial plan. The 2017
Senior Executive 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.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
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.
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.
Typical Non-Financial Objectives
• Progress on Crown Sydney, including project management, realisation of
apartment proceeds and preparation for the commencement of operations.
• 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.
• Successful execution of strategic initiatives including the sale of non-core
assets and businesses.
• 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 and 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.
• Management of, and responding to, regulatory and compliance matters.
Financial performance objectives are derived from Crown’s Annual Business Plan and Budget as the Crown Board
considers that 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 STI bonus where financial performance objectives have not been met, but other objectives have
been achieved.
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).
53
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Appropriate non-financial performance objectives (such as
those set out in the table 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.
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
bonuses, subject to final approval by the Nomination and
Remuneration Committee and the Board.
The Executive Chairman’s eligibility for an STI bonus is
determined by the Nomination and Remuneration
Committee on behalf of the Board.
For a more detailed commentary on financial year 2018
STI bonuses see page 68.
Long term incentives
During the year, Crown had the following two long term
incentive plans in place:
• the 2014 Crown Long Term Incentive Plan; and
• the 2017 Senior Executive Incentive Plan.
This section of the Report describes these two Plans.
2014 Crown Long term incentive Plan (2014 Crown Lti)
The 2014 Crown LTI, which expired on 30 June 2018, was
made available to selected senior executives with effect
from 1 July 2014.
As the 2014 Crown LTI has now expired and no Plan Year
Bonus was paid in respect of the financial year ended 30
June 2018, an abbreviated summary of the terms of the
2014 Crown LTI follows.
A detailed description, including all permutations under
the 2014 Crown LTI, is set out in the 2015, 2016 and 2017
Annual Reports.
Operation of the 2014 Crown LTI
The award of a long term incentive bonus under the 2014
Crown LTI was dependent on Crown achieving certain
earnings per share hurdles (EPS Hurdles) in respect of, or
in relation to, the four financial years ended 30 June 2015,
30 June 2016, 30 June 2017 and 30 June 2018 (each a
Plan Year).
The 2014 Crown LTI rules provided that the earnings per
share (EPS) target would exclude the contribution from
Melco Resorts & Entertainment Limited (MRE) (formerly
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
54
Melco Crown Entertainment Limited) and would 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 EPS Hurdles in financial year 2015, financial year 2016
and financial year 2017 were 98% of the EPS Target for
the relevant year in the Four Year Financial Plan. The EPS
Hurdle in financial year 2018 was 100% of the EPS Target
for the relevant year in the Four Year Financial Plan.
How bonuses accrued
If an EPS Hurdle was achieved in respect of a Plan Year, a
Participant became entitled to a portion of the potential
maximum bonus (Maximum Bonus) which may have been
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 provided that bonuses would 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 below for further details.
Effect of achieving an EPS Hurdle
If an EPS Hurdle was met in respect of a Plan Year, the 2014 Crown LTI provided that Crown would 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 was Plan Year 1, Plan Year 2 or Plan Year 3, the 2014 Crown LTI provided that Crown would 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 provided that Crown would pay that Plan Year Bonus to the Participant in
cash and also advise the Trustee, who would arrange for any shares held in trust to be transferred to the relevant
Participant. The Plan Year Bonus for Plan Year 4 was designed to be paid in cash because the Participant would be
required to pay tax on the Bonus at that time.
The EPS Hurdles for Plan Year 1 and Plan Year 2 were met, however the EPS Hurdles for Plan Year 3 and Plan Year 4 were
not met.
As previously disclosed, participants received their Plan Year Bonuses in respect of Plan Year 1 and Plan Year 2 in Crown
shares. Participants did not receive any Plan Year Bonus for Plan Year 3 and Plan Year 4.
The Trustee will therefore be instructed to transfer the shares held in trust in respect of Plan Year 1 and Plan Year 2 to the
relevant participants.
What happened to dividends earned on Crown shares acquired under the 2014 Crown LTI?
All dividends received on shares held in trust were passed through to the Participant.
What happened if an executive’s employment with Crown ceased?
If a Participant’s employment with Crown ceased, then the Participant was not entitled to any part of his or her 2014 Crown
LTI bonus, except where the Participant’s employment was terminated by Crown without cause, in which case the
Participant would be entitled to any tranche (in the form of shares held on trust) which had vested prior to the date of
termination.
Review of EPS Hurdles
After 30 June 2018, the Crown Nomination and Remuneration Committee conducted a review of the 2014 Crown LTI EPS
Hurdles to consider whether the EPS Hurdles had been achieved.
Having conducted its review of the 2014 Crown LTI and the EPS Hurdles, the Nomination and Remuneration Committee
concluded that the EPS Hurdles for the 2018 financial year were not met and, accordingly, no part of the 2014 Crown LTI
vested for financial year 2018.
Disclosure of EPS Targets
Set out below are the EPS Targets and EPS Hurdles which applied for financial years 2015, 2016, 2017 and 2018 together
with Crown’s actual EPS for financial years 2015, 2016, 2017 and 2018.
ePS target
(2014 Four Year
Financial Plan)
ePS target
Growth
(2014 Four Year
Financial Plan)
FY15
FY16
FY17
FY18
51.5 cents
57.6 cents
60.9 cents
70.6 cents
N/A
11.8%
5.7%
15.9%
ePS Hurdle
(Crown Lti)*
50.5 cents
56.4 cents
59.7 cents
70.6 cents
actual ePS
Growth (from
previous year)
N/A
7.7%
(25.6%)
36.5%
actual ePS
53.0 cents
57.1 cents
42.5 cents
58.0 cents
tranche
Vested?
Yes
Yes
No
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. In financial
year 2018, the EPS Hurdle was 100% of the EPS Target for the relevant year in the Four Year Financial Plan.
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 in previous Annual Reports.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
55
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Details of Participation of Senior Executives in 2014 Crown LTI
All the Senior Executives named in this Report participated in the 2014 Crown LTI. Details of potential 2014 Crown LTI
bonuses were as follows:
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
Senior executive
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
maximum Value
over four year
period
$
4,500,000
4,050,000
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
945,000
945,000
$
900,000
810,000
1,260,000
1,260,000
$
1,125,000
1,012,500
1,575,000
1,575,000
$
1,800,000
1,620,000
2,520,000
2,520,000
As noted in the tables above, in financial years 2017 and 2018, Crown did not meet the relevant EPS Hurdle and
accordingly, no entitlement to the EPS Bonus for financial years 2017 and 2018 vested, being 65% of the Maximum Value
over the four year period.
Set out below are the vested bonus amounts for the above participants in respect of financial years 2015, 2016, 2017 and
2018:
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
Vested in relation
to the financial year
ended 30 June 2018
Senior executive
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
$
675,000
607,500
945,000
945,000
$
900,000
810,000
1,260,000
1,260,000
$
Nil
Nil
Nil
Nil
$
Nil
Nil
Nil
Nil
2017 Senior executive incentive Plan (2017 incentive Plan)
Outline of the Plan and the Offer
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.
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.
The Awards that have been granted to the 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 the 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 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 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).
56
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
Key Features of the 2017 Incentive Plan
The key features of the 2017 Incentive Plan are set out below:
Feature
Options
Description
The Awards are Options which have a four year term from their agreed date of issue.
The Options expire on the Expiry Date (i.e. 22 February 2021).
Option Exercise Price
The Options have an Exercise Price of $11.43 per Option.
Options Issued for Value
Participants were required to pay value for their Options. The Options were not free.
Consideration for the Issue
of Options
Each participant was required to pay a Fee equal to the market value of the Options
through an Acquisition Loan advanced by Crown.
Vesting Condition
The Options are subject to a single Vesting Condition, being the continued employment
of the relevant participant for four years after the grant date, or the classification of the
Senior Executive as a good leaver at the expiry date.
Malus and Board Discretion
The Board may deem all unvested Options to have lapsed where a participant acts
fraudulently or dishonestly, or wilfully breaches their duties.
All unvested Options will automatically be forfeited where a participant is considered
a ‘bad leaver’ which extends to serious and wilful misconduct, material breach of
the terms of the employment contract, gross negligence or other conduct justifying
termination without notice.
A participant will also be considered a ‘bad leaver’ if the participant resigns from his or
her employment or office.
Board discretion to buy back at
any time
The Board may cause the company to buy back Options held by a participant at any
time, for the Market Value of the Options without the agreement of a participant.
Dividend and Voting Rights
No ordinary dividend or voting rights attach to the Options unless and until Crown
shares are delivered on exercise.
Adjustments to the Exercise
Price
Any special dividends (but not ordinary dividends) or capital returns are reflected as
adjustments to the Exercise Price of the Options.
Shareholder Approval Not
Required
Shareholder approval was not required for the 2017 Incentive Plan or the issue of
Options under the Plan.
Set out below is a description of how a selection of these features apply and why Crown considers these features to be
appropriate for Crown.
Option Exercise Price
An initial Exercise Price of $11.43 per Option was determined by reference to the volume weighted average price (VWAP) of
Crown shares at the time that the Crown Board approved the offer of Options at its February 2017 meeting.
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.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
57
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Senior Executives participating in the 2017 Incentive Plan
were invited to acquire Options for a Fee equal to the
market value of those Options.
The market value was based on the option valuation
methodology 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 (i.e. $12.14), 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.
Single Vesting Condition of Continued Employment
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 Board considered that, following the restructure
announced in February 2017, the Senior Executives that
remained should be given the opportunity to benefit from
the increase in the value of Crown shares over the
following four years. Further, the 2017 Incentive Plan
seeks to reward and retain those Senior Executives who
have primary responsibility for delivering Crown’s key
strategic priorities over the coming years.
The Options have an implicit performance hurdle in that
the Options have no value upon vesting unless the Crown
share price exceeds the Exercise Price of the Options plus
the Fee (i.e. $12.14). This creates alignment with
shareholders through share price appreciation and
motivates the performance and retention of Senior
Executives.
Malus and Board Discretion
The 2017 Incentive Plan provides that where, in the
opinion of the Board, a participant acts fraudulently or
dishonestly, or wilfully breaches their duties, then the
Board may deem all unvested Options of that participant
to have lapsed.
In addition, all unvested Options will automatically be
forfeited where a participant is considered a ‘bad leaver’.
Circumstances in which a participant would be considered
a ‘bad leaver’ include where a participant’s employment is
terminated or a participant is dismissed due to serious
and wilful misconduct, material breach of the terms of the
employment contract, gross negligence or other conduct
justifying termination without notice. A participant will also
be considered a ‘bad leaver’ if the participant resigns from
his or her employment or office.
Voting Rights and Rights to Dividends
No ordinary dividend or voting rights attach to the Options
unless and until Crown shares are delivered on exercise.
Any special dividends (but not ordinary dividends) or
capital returns will be reflected as adjustments to the
Exercise Price of the Options.
Shareholder Approval Not Required
The terms of the 2017 Incentive Plan specifically provide
that, upon vesting and exercise of the Options, Directors
of Crown may only receive Crown shares that have been
purchased on-market. The issue of such Options to
Directors of Crown will therefore not be dilutive of existing
shareholders and the shares delivered to Option holders
will reflect the market value of the shares at the time. As a
result, shareholder approval was not required under the
ASX Listing Rules for the 2017 Incentive Plan or any
Options issued under the 2017 Incentive Plan. Neither the
letter nor the spirit of the ASX Listing Rules requires such
approval, which would therefore not serve any purpose.
As a condition of the fact that the 2017 Incentive Plan was
not approved by shareholders, new Crown shares must
not be issued to a Director of Crown under the terms of
the 2017 Incentive Plan.
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.
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
58
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) the Fee 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.
Based on this approach, from an accounting perspective, the Options have been valued using an assumed “exercise price”
of $12.14 and assumes that there is no Acquisition Loan.
The fair value of the Options was determined at the commencement of the Plan to be $0.53 per Option (equivalent to
approximately 4.6% of the actual 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.
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
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 expired 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 expired 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 bonus 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 was 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 four years of the 2017 Incentive Plan may result in a benefit to
participants.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
59
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
This year, normalised EBITDA generated by Crown Melbourne and Crown Perth, Crown’s wholly owned Australian casinos,
grew by 7.2%. The compound annual normalised EBITDA growth for Crown Melbourne and Crown Perth for the five year
period to 30 June 2018 was 2.6% per annum. Normalised Crown group NPAT was up by 12.7% in financial year 2018. The
compound annual normalised NPAT growth (including NPAT from MRE until financial year 2017) for the Crown group for the
five year period to 30 June 2018 was negative 4.0% per annum.
The table and graph below set out information about movements in shareholder wealth for the financial years ended
30 June 2014 to 30 June 2018.
Year Ended
30 June 2014
Year Ended
30 June 2015
Year Ended
30 June 2016
Year Ended
30 June 2017
Year Ended
30 June 2018
Share price at start of period
Share price at end of period
$12.11
$15.12
$15.12
$12.20
$12.20
$12.61
$12.61
$12.28
$12.28
$13.50
Full year dividend
37.0 cents1
37.0 cents2
72.5 cents3
143.0 cents4
60.0 cents5
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
Basic/diluted earnings per share6:
Australian resorts and other
MRE component
Total basic/diluted earnings
per share
56.95 cps
39.49 cps
96.44 cps
44.53 cps
16.75 cps
61.28 cps
48.18 cps
37.34 cps
47.44 cps
5.86 cps
5.21 cps
-
54.04 cps
42.55 cps
47.44 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 Franked to 60% with none of the unfranked component of the interim dividend comprising conduit foreign income and all of the unfranked component of
the final dividend comprising conduit foreign income.
6 Excluding the effect of significant items.
e
r
a
h
s
r
e
p
s
g
n
i
n
r
a
e
d
e
t
u
l
i
d
/
c
i
s
a
B
$1.20
$1.00
$0.80
$0.60
$0.40
$0.20
$-
Year ended
30 June 2014
Year ended
30 June 2015
Year ended
30 June 2016
Year ended
30 June 2017
Year ended
30 June 2018
EPS - MRE component
EPS - Australian Resorts and Other
Share price at the end of period
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
$-
60
Policy on entering into transactions in associated
products which limit economic risk
The rules of the 2014 Crown LTI specifically provided that
a Participant could 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 were transferred from the Trustee to
the participant in accordance with the Plan rules. A
Security Interest was 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 would 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.
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. Prior to the sale of Crown’s interest
in CrownBet in February 2018, Crown’s nominee on the
CrownBet Board was 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 Corporate Social
Responsibility Committee, the Occupational Health and
Safety Committee, the Nomination and Remuneration
Committee, the Responsible Gaming 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 during the
financial year ended 30 June 2018 were as follows:
Base Board Fees:
Active Board Committees:
- Chair
- Member
Crown Melbourne Board:
CrownBet Board:
$150,000
$25,000
$15,000
$60,000
$75,000
In accordance with Crown’s constitution, Non-executive
Directors’ fees were within the aggregate Non-executive
Directors’ Fee cap of $2,500,000 per annum.
Set out below is a table showing Non-executive Director
remuneration for financial years 2018 and 2017.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
61
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Remuneration table – non-executive Directors
Short term Benefits
Long term incentives
Helen Coonan
Non-executive Director
Rowena Danziger1,2
Non-executive Director
Andrew Demetriou3
Non-executive Director
Geoffrey Dixon
Non-executive Director
Jane Halton AO PSM4
Non-executive Director
John Horvath AO2,5
Non-executive Director
Guy Jalland6,7
Non-executive Director
Michael Johnston7
Non-executive Director
Antonia Korsanos8
Non-executive Director
Harold Mitchell AC
Non-executive Director
James Packer7,9
Non-executive Director
2018 TOTALS
2017 TOTALS10
Financial
Year
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
2018
2017
Salary
& Fees
200,000
161,041
130,833
256,666
218,620
208,333
200,000
180,000
16,304
-
285,516
256,666
-
-
-
-
16,304
-
180,000
160,000
-
-
1,247,577
1,222,706
non
monetary other
Post -
employment
Benefit -
Superannuation
Cash
Based
equity
Based
ter-
mination
Benefits
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
19,000
15,299
10,079
19,616
20,769
19,616
19,000
17,100
1,549
-
20,049
19,616
-
-
-
-
1,549
-
17,100
15,200
-
-
109,095
106,447
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
total
219,000
176,340
140,912
276,282
239,389
227,949
219,000
197,100
17,853
-
305,565
276,282
-
-
-
-
17,853
-
197,100
175,200
-
-
1,356,672
1,329,153
1
2
3
4
5
6
7
8
Mrs Danziger ceased as a Director of Crown, as member of the Crown Audit and Corporate Governance, Responsible Gaming and Risk Management
Committees and Chair of the Crown Occupational Health and Safety Committee on 26 October 2017.
Mrs Danziger and Professor Horvath AO each received Directors’ fees at a rate of $60,000 per annum for their participation on the Crown Melbourne
Limited Board.
Mr Demetriou was appointed as a member of the Risk Management Committee on 25 October 2017. Mr Demetriou was appointed as a member of the
Audit and Corporate Governance Committee on 29 January 2018 and ceased as a member of that Committee on 20 June 2018. Mr Demetriou also
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 from 1
July 2017 up to and including 27 February 2018.
Ms Halton AO PSM was appointed as a Director of Crown on 23 May 2018 and was subsequently appointed as a member of the Crown Occupational
Health and Safety and Risk Management Committees on 20 June 2018.
Professor Horvath AO was appointed as Chair of the Crown Occupational Health and Safety Committee on 13 December 2017.
Mr Jalland was appointed as a Director of Crown on 16 April 2018.
Messrs Jalland, Johnston and Packer did not receive remuneration from Crown for their services to Crown.
Mrs Korsanos was appointed as a Director on 23 May 2018 and was subsequently appointed as a member of the Crown Audit and Corporate
Governance and Responsible Gaming Committees on 20 June 2018.
9
Mr Packer was appointed as a Director of Crown on 3 August 2017 and ceased as a Director of Crown on 21 March 2018.
10 Total Non-executive Director remuneration for the 2017 financial year excludes remuneration of $130,031 for the Non-executive Directors who ceased
in the 2017 financial year.
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
62
Remuneration details for Senior Executives
Senior Executives are employed under service agreements with Crown or a subsidiary of Crown. Common features of
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 a period
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, Western Australian
Gaming and Wagering Commission and the New South Wales Independent Liquor and Gaming Authority);
• 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 2018 financial year are
summarised in the tables on the following pages.
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
63
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Summary of Contracts of employment applicable at 30 June 2018
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.
$3,501,826 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $20,049 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile tele-
phone 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 participated in the 2014 Crown LTI and participates in the 2017 Incentive
Plan. Refer to pages 54 to 59.
2018 Percentage
breakdown of remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive
Plan
75%
11%
0%
14%
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
64
Remuneration Report
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.
$1,813,752 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $20,049 per annum.
Complimentary privileges at Crown Melbourne and Crown Perth facilities, mobile tele-
phone 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 participated in the 2014 Crown LTI and participates in the 2017 Incentive Plan.
Refer to pages 54 to 59.
2018 Percentage
breakdown of remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive
Plan
62%
25%
0%
13%
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
65
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
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 Felstead
Chief Executive Officer – Australian Resorts (from 1 August 2013): Mr Felstead’s current
employment agreement with Crown Resorts Limited has no fixed term.
$2,272,202 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $20,049 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 participated in the 2014 Crown LTI and participates in the 2017 Incentive
Plan. Refer to pages 54 to 59.
2018 Percentage
breakdown of remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive
Plan
64%
25%
0%
11%
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
66
Remuneration Report
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.
$2,272,202 per annum.
Compulsory Superannuation Guarantee Contributions up to the maximum contribution
base, equating to $20,049 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 participated in the 2014 Crown LTI and participates in the 2017 Incentive Plan.
Refer to pages 54 to 59.
2018 Percentage
breakdown of
remuneration
Fixed remuneration
(Includes voluntary and
compulsory superannuation)
STI
2014 Crown LTI
2017 Incentive
Plan
66%
25%
0%
9%
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
67
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
Remuneration table for Senior executives
Long Term Incentives (LTI)
As summarised earlier, each Senior Executive participated
in the 2014 Crown LTI. The Plan Year 4 EPS Hurdle
adopted under the 2014 Crown LTI was not achieved. In
the 2017 financial year, Crown amended its provisioning in
relation to the 2014 Crown LTI resulting in a reversal of
amounts previously expensed. As such, no disclosure is
required for the 2018 financial year as this was accounted
for in the 2017 financial year.
As summarised earlier, the Senior Executives also
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.
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 2018 and 30 June 2017 is set out on the
following pages.
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 tables
set out on the following pages.
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
Messrs Alexander, Barton, Felstead and Nisbet received
an increase to their fixed remuneration of 1.5% for the
2018 Financial Year, in the case of Mr Alexander, on a pro
rata basis.
Short Term Incentives (STI)
Senior Executives have a potential or target STI bonus,
which is subject to Crown group’s performance and the
achievement of the Senior Executive’s KPOs established
at the beginning of each financial year. In the 2018
financial year, the Group’s financial performance
objectives were met.
The performance of each Senior Executive against the
non-financial KPOs (described earlier) was reviewed by the
Executive Chairman, having regard to the operational
performance of the business and the function in which the
Senior Executive is involved.
The Executive Chairman’s recommended STI bonus was
approved by the Nomination and Remuneration
Committee on behalf of the Board.
STI bonuses at Crown Melbourne, Crown Perth and
Crown Resorts were generally paid at 100% of target STI
bonuses. However, individual STI bonuses were adjusted
to reflect the extent to which non-financial objectives were
achieved. Messrs Alexander, Barton, Felstead and Nisbet
received their maximum STI bonus entitlement.
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
68
Remuneration Report
l
a
t
o
T
s
t
i
f
e
n
e
B
3
7
1
0
2
-
n
a
P
l
n
o
i
t
a
n
m
i
e
v
i
t
n
e
c
n
I
n
w
o
r
C
4
1
0
2
-
r
e
T
i
r
o
n
e
S
e
v
i
t
u
c
e
x
E
-
d
e
s
a
B
y
t
i
u
q
E
-
t
s
o
P
-
s
t
i
f
e
n
e
B
t
n
e
m
y
o
p
m
e
l
h
s
a
C
d
e
s
a
B
-
r
e
p
u
S
f
o
%
2
n
o
i
t
a
u
n
n
a
I
T
S
t
e
g
r
a
t
I
T
S
,
8
6
0
6
9
6
4
,
,
3
2
1
3
0
2
2
,
,
7
1
2
0
4
0
3
,
,
5
6
6
8
5
7
1
,
,
3
1
2
6
3
7
3
,
,
4
7
0
5
7
8
1
,
,
1
2
5
7
4
5
4
,
,
8
9
7
5
4
4
2
,
9
1
0
,
0
2
0
,
6
1
0
6
6
,
2
8
2
,
8
-
-
-
-
-
-
-
-
-
-
5
2
2
7
5
6
,
0
0
0
5
7
2
,
5
3
3
4
9
3
,
0
0
0
5
6
1
,
5
3
3
4
9
3
,
0
0
0
5
6
1
,
5
3
3
4
9
3
,
0
0
0
5
6
1
,
-
I
T
L
-
)
0
0
0
5
7
6
,
(
)
6
0
7
7
0
6
,
(
-
-
)
0
0
0
5
4
9
,
(
)
0
0
0
5
4
9
,
(
0
3
2
,
0
4
8
,
1
-
0
0
0
,
0
7
7
)
6
0
7
,
2
7
1
3
(
,
-
-
-
-
-
-
-
-
-
-
9
4
0
,
0
2
6
1
6
,
9
1
0
0
0
,
5
2
6
1
6
,
9
1
9
4
0
,
0
2
6
1
6
,
9
1
9
4
0
,
0
2
6
1
6
,
9
1
7
4
1
,
5
8
4
6
4
,
8
7
%
0
0
1
0
0
0
,
0
0
5
%
5
2
%
0
5
1
%
7
6
0
0
0
,
0
5
7
0
0
0
,
5
3
3
%
0
0
1
0
0
9
,
6
1
9
%
0
3
0
0
0
,
0
7
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
1
r
e
h
t
O
8
2
7
,
2
0
4
2
,
4
1
6
2
8
,
1
0
5
,
3
8
1
0
2
1
y
r
a
t
e
n
o
M
s
e
e
F
r
a
e
Y
n
o
N
&
y
r
a
l
a
S
l
a
i
c
n
a
n
F
i
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
-
-
-
-
1
8
0
,
2
6
1
0
8
,
8
0
8
,
1
8
1
0
2
n
o
t
r
a
B
n
e
K
1
7
6
,
9
5
4
8
0
,
7
8
7
,
1
7
1
0
2
&
r
e
c
fi
f
O
l
i
a
c
n
a
n
F
i
f
i
e
h
C
l
i
a
t
i
g
D
O
E
C
7
2
7
,
2
3
1
2
0
2
,
2
7
2
,
2
8
1
0
2
l
d
a
e
t
s
e
F
y
r
r
a
B
9
9
6
,
6
2
1
9
5
7
,
8
3
2
,
2
7
1
0
2
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
-
%
0
0
1
6
2
1
,
6
4
1
,
1
2
1
2
,
6
6
3
7
9
5
,
8
4
3
2
0
2
,
2
7
2
,
2
8
1
0
2
i
t
e
b
s
N
d
d
o
T
%
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
6
2
0
,
3
1
3
,
3
0
4
9
,
8
6
3
5
4
6
,
7
5
5
1
3
0
,
5
5
8
,
9
0
0
0
,
5
6
0
1
,
8
8
4
,
5
3
4
5
9
0
,
8
2
5
9
1
3
,
8
7
5
,
8
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
8
1
0
2
4
S
L
A
T
O
T
7
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
s
e
v
i
t
n
e
c
n
I
m
r
e
T
g
n
o
L
s
t
i
f
e
n
e
B
m
r
e
T
t
r
o
h
S
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
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
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
.
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
M
d
n
a
2
0
8
,
8
3
$
d
a
e
t
s
e
F
l
r
M
,
6
6
4
,
0
3
$
n
o
t
r
a
B
r
M
,
0
1
5
,
8
5
$
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
8
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
2
.
2
0
8
,
8
3
$
t
e
b
s
N
i
.
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
e
v
i
t
u
c
e
x
E
r
o
n
e
S
7
1
0
2
i
e
h
T
.
r
a
e
y
l
i
a
c
n
a
n
i
f
7
1
0
2
e
h
t
n
i
d
e
s
a
e
c
o
h
w
e
v
i
t
u
c
e
x
E
r
o
n
e
S
e
h
t
i
r
o
f
5
3
2
,
5
1
0
,
7
$
f
o
n
o
i
t
a
r
e
n
u
m
e
r
s
e
d
u
c
x
e
l
r
a
e
y
l
i
a
c
n
a
n
i
f
7
1
0
2
e
h
t
r
o
f
n
o
i
t
a
r
e
n
u
m
e
r
e
v
i
t
u
c
e
x
E
r
o
n
e
S
i
l
a
t
o
T
3
4
t
r
o
p
e
R
n
o
i
t
a
r
e
n
u
m
e
R
69
Crown Resorts Limited Annual Report 2018
RemuneRation RePoRt CONTINUED
l
a
t
o
t
n
o
i
t
a
n
m
r
e
t
i
-
d
e
s
a
B
y
t
i
u
q
e
s
t
i
f
e
n
e
B
i
t
L
n
w
o
r
C
4
1
0
2
-
r
e
p
u
S
n
o
i
t
a
u
n
n
a
d
e
t
s
e
V
f
o
t
n
e
n
o
p
m
o
C
,
3
4
8
3
6
6
3
,
,
1
4
1
2
3
0
3
,
,
2
8
8
0
3
2
2
,
,
1
7
3
6
7
5
2
,
,
8
7
9
4
9
6
2
,
,
4
7
0
5
8
3
3
,
,
0
6
0
2
4
3
3
,
,
8
9
7
0
9
8
3
,
,
3
6
7
1
3
9
1
1
,
4
8
3
,
4
8
8
,
2
1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
9
4
0
,
0
2
6
1
6
,
9
1
0
0
0
,
5
2
6
1
6
,
9
1
9
4
0
,
0
2
6
1
6
,
9
1
9
4
0
,
0
2
6
1
6
,
9
1
7
4
1
,
5
8
4
6
4
,
8
7
-
i
t
S
0
0
0
,
5
2
1
0
0
0
,
5
3
3
0
0
0
,
0
1
7
0
0
0
,
0
7
2
0
0
0
,
0
0
0
,
1
-
-
-
-
8
2
7
,
2
1
r
e
h
t
o
9
7
5
,
2
2
6
n
o
n
1
y
r
a
t
e
n
o
m
s
e
e
F
&
y
r
a
a
S
l
0
4
2
,
4
1
9
2
2
,
6
7
1
8
0
,
2
6
1
7
6
,
9
5
6
2
8
,
1
0
5
,
3
7
1
7
,
3
1
3
,
2
1
0
8
,
8
0
8
,
1
4
8
0
,
7
8
7
,
1
7
2
7
,
2
3
1
9
9
6
,
6
2
1
2
0
2
,
2
7
2
,
2
9
5
7
,
8
3
2
,
2
0
0
0
,
5
3
3
2
1
2
,
6
6
3
0
0
0
,
0
0
0
,
1
7
2
9
,
6
6
3
7
9
5
,
8
4
3
6
9
4
,
5
6
2
2
0
2
,
2
7
2
,
2
9
5
7
,
8
3
2
,
2
0
0
0
,
5
6
0
,
1
0
4
9
,
8
6
3
5
4
6
,
7
5
5
1
3
0
,
5
5
8
,
9
0
0
0
,
0
1
7
,
2
6
0
5
,
9
8
9
5
9
0
,
8
2
5
9
1
3
,
8
7
5
,
8
r
a
e
Y
8
1
0
2
7
1
0
2
8
1
0
2
7
1
0
2
8
1
0
2
7
1
0
2
8
1
0
2
7
1
0
2
l
i
a
c
n
a
n
F
i
r
e
c
i
f
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
-
i
t
e
b
s
N
d
d
o
T
l
t
n
e
m
p
o
e
v
e
D
&
y
g
e
t
a
r
t
S
-
t
n
e
d
s
e
r
i
i
P
e
c
V
e
v
i
t
u
c
e
x
E
d
a
e
t
s
l
e
F
y
r
r
a
B
l
i
a
t
i
g
D
O
E
C
S
L
A
T
O
T
8
1
0
2
S
L
A
T
O
T
7
1
0
2
&
r
e
c
i
f
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
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
g
n
w
o
i
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
r
o
n
e
S
e
h
t
i
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
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
.
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
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
r
o
n
e
S
h
c
a
e
i
r
o
f
r
a
e
y
l
i
a
c
n
a
n
i
f
t
n
a
v
e
e
r
l
t
c
e
l
f
e
r
t
o
n
s
e
o
d
d
n
a
s
d
r
a
d
n
a
t
S
g
n
i
t
n
u
o
c
c
A
n
a
i
l
a
r
t
s
u
A
e
h
t
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
70
.
t
r
o
p
e
R
s
h
t
i
f
o
s
r
e
s
u
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
i
g
n
w
o
l
l
o
f
e
h
t
n
i
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
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 2018
Crown Directors
Directors (including
Directors who left the
Board during the year)
John Alexander
Rowena Danziger
Jane Halton AO PSM
Harold Mitchell AC
James Packer
Balance
1 July 2017
issued under
2014 Crown Lti
other net change
30 June 2018
Balance
399,557
30,896
9482
114,887
342,527,7953
-
-
-
-
-
-
-
-
-
399,557
30,8961
948
114,887
(25,599,493)
316,928,3024
1 Mrs Danziger ceased as a director on 26 October 2017. As required by the ASX Listing Rules, Mrs Danziger provided Crown with an Appendix 3Z
detailing her interests in Crown shares on the date of her resignation. The interests in respect of Mrs Danziger are therefore as at 26 October 2017.
2 Ms Halton AO PSM was appointed as a director on 23 May 2018. As required by the ASX Listing Rules, Ms Halton provided Crown with an Appendix
3X detailing her interests in Crown shares on the date of her appointment. The interests in respect of Ms Halton are therefore as at 23 May 2018.
3 Mr Packer was appointed as a director on 3 August 2017. As required by the ASX Listing Rules, Mr Packer provided Crown with an Appendix 3X
detailing his interests in Crown shares on the date of his appointment. The interests in respect of Mr Packer are therefore as at 3 August 2017.
4 Mr Packer ceased as a director on 21 March 2018. 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 March 2018.
Crown Executives
executives
Ken Barton
Barry Felstead
Todd Nisbet
30 June 2017
Crown Directors
Directors (including
Directors who left the
Board during the year)
John Alexander
Rowen Craigie
Rowena Danziger
Harold Mitchell AC
Balance
1 July 2017
issued under
2014 Crown Lti
other net change
30 June 2018
Balance
143,128
178,374
229,531
-
-
-
-
-
-
143,128
178,374
229,531
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
357,1351
30,896
114,887
1 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
71
Crown Resorts Limited Annual Report 2018
R
e
m
u
n
e
r
a
t
i
o
n
R
e
p
o
r
t
RemuneRation RePoRt CONTINUED
Crown Executives
executives
Ken Barton
Barry Felstead
Todd Nisbet
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
Senior executive option Holdings
Set out below is a summary of Options held directly, indirectly or beneficially by KMPs, close family or controlled entities.
Senior
executives
John Alexander
Ken Barton
Barry Felstead
Todd Nisbet
Balance
1 July 2017
options
granted
options
exercised
other net
change
Balance
30 June 2018
5,000,000
3,000,000
3,000,000
3,000,000
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
3,000,000
3,000,000
3,000,000
options
vested
during year
-
-
-
-
Loans to Key management Personnel
As noted above, Options under the 2017 Incentive Plan were issued to the 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
executive Chairman
Melbourne, 11 September 2018
72
Auditor’s Independence Declaration
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
Audit or ’s Independence Declar at ion t o t he Direct ors of Crown Resort s Limit ed
As lead auditor for the audit of Crown Resorts Limited for the financial year ended 30 June 2018, I
declare t o t he best of my knowledge and belief, t here have been:
a) no cont ravent ions of t he audit or independence requirements of the Corporations Act 2001 in
relation t o the audit ; and
b) no cont ravent ions of any applicable code of professional conduct in relat ion t o t he audit .
This declaration is in respect of Crown Resorts Limited and the entities it controlled during the
financial year.
Ernst & Young
Michael Collins
Partner
Melbourne
11 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
l
n
o
i
t
a
r
a
c
e
D
e
c
n
e
d
n
e
p
e
d
n
i
s
’
r
o
t
i
d
u
a
73
Crown Resorts Limited Annual Report 2018
Independent Auditor’s Report
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 Audit or's Report t o t he Members of Crown Resort s Limit ed
Report on t he Audit of t he Financial Report
Opinion
We have audited the financial report of Crown Resorts Limited (the Company) and its subsidiaries
(collectively the Group), which comprises the consolidated statement of financial position as at 30 June
2018, the consolidated statement of profit or loss, consolidated statement of comprehensive income,
consolidat ed statement of changes in equit y and consolidated cash flow st at ement for t he year then
ended, notes t o t he financial statement s, including a summary of significant accounting policies, and t he
direct ors' declarat ion.
In our opinion, the accompanying financial report of the Group is in accordance wit h t he Corporations Act
2001, including:
a)
giving a t rue and fair view of the consolidated financial position of the Group as at 30 June 2018
and of its consolidated financial performance for the year ended on that date; and
b)
complying wit h Aust ralian Account ing Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Aust ralian Auditing Standards. Our responsibilities under
t hose st andards are furt her described in t he Auditor’s Responsibilit ies for t he Audit of t he Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirement s of t he Corporations Act 2001 and the ethical requirements of the Accounting
Professional and Ethical Standards Board’s APES 110 Code of Et hics for Professional Account ant s (the
Code) that are relevant to our audit of the financial report in Australia. We have also fulfilled our other
et hical responsibilities in accordance wit h t he Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Key Audit Mat t ers
Key audit matters are those matters that, in our professional judgment, 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 t hereon, but we do not provide a separat e
opinion on t hese mat ters. For each matt er below, our descript ion of how our audit addressed t he mat ter
is provided in t hat context .
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
i
n
d
e
p
e
n
d
e
n
t
a
u
d
i
t
o
r
’
s
R
e
p
o
r
t
74
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 t he performance of procedures designed t o respond t o our assessment of the risks of mat erial
misstatement of the financial report. The results of our audit procedures, including the procedures
performed to address the matters below, provide t he basis for our audit opinion on t he accompanying
financial report .
1. Carrying value of t rade receivables
Why significant
How our audit addressed t he key audit mat t er
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 t he credit terms extended to
customers.
The Group applies Australian Accounting
Standard - AASB 9 Financial Instrument s in
calculating the provision for doubtful debts,
applying a forward-looking expected loss
impairment model. This involves judgement as
t he expected credit losses must reflect
informat ion about past event s, current
conditions and forecasts of future conditions, as
well as t he time value of money.
The Group’s disclosures are included in Note 1.5
and Note 6 of the financial report, which outlines
t he accounting policy for determining t he
allowance for doubtful debts and details of the
period on period movement in gross and net
t rade receivables.
In assessing the carrying value of trade receivables,
we:
►
►
►
►
►
►
►
►
tested the ageing of trade receivables for a
sample of customer t ransactions;
evaluated receipt s after year-end to determine
any remaining exposure at t he date of t he
financial report ;
considered t he Group’s assessment of individual
customers debtor circumstances along with
other informat ion available relating to
customers;
evaluated whet her the expected credit loss
impairment model was calculated in accordance
wit h AASB 9 and tested t he mathematical
accuracy of the calculations;
compared the Group’s provisioning rates against
historical collect ion data;
assessed whet her t he time value of money was
considered in t he impairment model;
assessed the effectiveness of relevant controls in
relation to t he grant ing of credit facilit ies,
including credit checks; and
assessed the adequacy of the Group’s
disclosures in relat ion to t rade receivables
included in t he financial report .
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
t
r
o
p
e
R
s
’
r
o
t
i
d
u
a
t
n
e
d
n
e
p
e
d
n
i
75
Crown Resorts Limited Annual Report 2018
inDePenDent auDitoR’S RePoRt CONTINUED
i
n
d
e
p
e
n
d
e
n
t
a
u
d
i
t
o
r
’
s
R
e
p
o
r
t
76
2.
Impairment t est ing of indefinit e lived int angibles asset s
Why significant
How our audit addressed t he key audit mat t er
The Group has goodwill of $338.4 million and
licence int angible assets of $1,080.6 million held
on the consolidated st at ement of financial
position at 30 June 2018. The Group performs
an impairment assessment on an annual basis t o
support the carrying value of goodwill and other
indefinite life intangible asset s. In addit ion, an
impairment assessment is performed when there
is an impairment indicat or present .
The impairment assessment is complex and
judgemental, as it includes modelling a range of
assumptions and estimates that are affected by
expect ed fut ure performance and market
conditions such as cash flow forecasts, growth
rates, discount rates and terminal value
assumpt ions. Accordingly, the Group’s
impairment assessment was considered to be a
key audit matt er.
Key assumpt ions, judgement s and est imat es
used in t he Group’s assessment of impairment of
intangibles asset s are set out in Note 13 of t he
financial report . In addit ion licenses are disclosed
in Note 11 and Goodwill in Note 12 of the
financial report .
We evaluated the cash flow forecasts, which
supported the value-in-use impairment models for
goodwill and other indefinit e lived intangible assets.
We compared the forecasts to the Board approved
budget s and long t erm financial plan. We also
considered the historical reliabilit y of the Group’s
cash flow forecasting process.
We involved our valuat ion specialists t o assess
whether t he methodology applied was in accordance
wit h Aust ralian Accounting St andards and t o
evaluate the key assumpt ions applied in t he
impairment models. These included the discount
rates and t erminal value assumptions.
We t ested whether t he models used were
mat hematically accurat e.
We performed sensit ivit y analysis around t he key
assumpt ions t o ascert ain t he ext ent of change in
t hose assumptions t hat would eit her individually or
collectively result in an impairment charge. In
addition, we assessed t he sensitivit y analysis
performed by the Group.
We assessed the adequacy of the disclosures
included in Not es 11, 12 and 13 of the financial
report .
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Informat ion Ot her t han t he Financial Report and Audit or’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Company’s 2018 Annual Report, but does not include the financial report and our
audit or’s report thereon.
Our opinion on t he financial report does not cover t he ot her information and accordingly we do not
express any form of assurance conclusion t hereon, wit h t he exception of t he Remuneration Report and
our related assurance opinion.
In connection wit h our audit of the financial report, our responsibility is to read the other information and,
in doing so, consider whet her the other informat ion is mat erially inconsist ent wit h t he financial report or
our knowledge obtained in the audit or ot herwise appears t o be materially misst at ed.
If, based on t he work we have performed, we conclude that there is a mat erial misst at ement of t his other
information, we are required to report t hat fact . We have not hing to report in t his regard.
Responsibilit ies of t he Direct or s for t he 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 Aust ralian Account ing St andards and t he Corporations Act 2001 and for
such internal cont rol as t he direct ors determine is necessary t o enable the preparat ion of the financial
report that gives a t rue and fair view and is free from material misstatement, whether due to fraud or
error.
In preparing t he financial report , t he direct ors are responsible for assessing t he Group’s abilit y to
continue as a going concern, disclosing, as applicable, mat ters relating t o going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Audit or 's Responsibilit ies for t he Audit of t he Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement , whet her due t o fraud or error, and t o issue an audit or’s report t hat includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee t hat an audit
conducted in accordance with t he Aust ralian Auditing St andards will always detect a material
misst at ement when it exist s. Misst at ements can arise from fraud or error and are considered mat erial if,
individually or in t he aggregate, they could reasonably be expected t o influence t he economic decisions of
users t aken on t he basis of t his financial report .
As part of an audit in accordance wit h the Aust ralian Audit ing Standards, we exercise professional
judgment and maint ain professional scepticism t hroughout 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 t hose risks, and obt ain 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 cont rol.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
t
r
o
p
e
R
s
’
r
o
t
i
d
u
a
t
n
e
d
n
e
p
e
d
n
i
77
Crown Resorts Limited Annual Report 2018
inDePenDent auDitoR’S RePoRt CONTINUED
i
n
d
e
p
e
n
d
e
n
t
a
u
d
i
t
o
r
’
s
R
e
p
o
r
t
78
•
•
•
•
•
Obt ain an understanding of int ernal cont rol relevant to t he audit in order to design audit
procedures t hat are appropriat e in t he circumstances, but not for t he purpose of expressing an
opinion on t he effectiveness of t he Group’s int ernal cont rol.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
est imat es and relat ed disclosures made by t he directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on t he audit evidence obtained, whet her a material uncert aint y exists relat ed t o events or
condit ions t hat may cast significant doubt on t he Group’s abilit y t o continue as a going concern. If
we conclude t hat a mat erial uncertaint y exists, we are required to draw at tent ion in our audit or’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 act ivit ies wit hin t he Group t o express an opinion on t he financial report . We are
responsible for the direction, supervision and performance of the Group audit . We remain solely
responsible for our audit opinion.
We communicate wit h 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 t he direct ors wit h a statement that we have complied wit h relevant et hical requirements
regarding independence, and t o communicate with t hem all relationships and other mat ters that may
reasonably be t hought t o bear on our independence, and where applicable, related safeguards.
From t he mat ters communicated to t he direct ors, we det ermine t hose mat ters t hat were of most
significance in the audit of the financial report of t he current year and are t herefore t he key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about t he mat ter or when, in ext remely rare circumstances, we det ermine t hat a mat ter should
not be communicated in our report because the adverse consequences of doing so would reasonably be
expect ed to outweigh t he public int erest benefits of such communicat ion.
Report on t he Audit of t he Remunerat ion Report
Opinion on t he Remunerat ion Report
We have audited the Remuneration Report included in pages 51 to 72 of the directors' report for the year
ended 30 June 2018.
In our opinion, the Remuneration Report of Crown Resorts Limited for the year ended 30 June 2018,
complies with section 300A of the Corporations Act 2001.
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
Independent Auditor’s Report
Responsibilit ies
The directors of t he Company are responsible for the preparat ion and present at ion of t he Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibilit y is t o express an
opinion on t he Remuneration Report , based on our audit conduct ed in accordance with Aust ralian
Audit ing Standards.
Ernst & Young
Michael Collins
Partner
Melbourne
11 September 2018
A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation
t
r
o
p
e
R
s
’
r
o
t
i
d
u
A
t
n
e
d
n
e
p
e
d
n
I
79
Crown Resorts Limited Annual Report 2018
FINANCIAL REPORT 2018
Financial Report
81
Statement of
Profit or Loss
83
Statement of
Financial Position
85
Statement of
Changes in Equity
82
Statement of
Comprehensive Income
84
Cash Flow Statement
86
Notes to the
Financial Statements
i
F
n
a
n
c
a
i
l
R
e
p
o
r
t
80
Statement of Profit or Loss
For the year ended 30 June 2018
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
Note
2018
$m
2017
$m
3
3
3
2,9
3
2,5
3,493.0
172.5
3,344.1
1,835.4
(2,851.8)
(3,143.3)
6.6
820.3
(76.1)
744.2
(171.0)
573.2
558.9
14.3
573.2
39.2
2,075.4
(143.6)
1,931.8
(106.8)
1,825.0
1,866.1
(41.1)
1,825.0
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
2018
Cents
per share
2017
Cents
per share
81.16
81.16
257.03
257.03
Note
26
26
4
4
30.00
30.00
30.00
113.00
s
s
o
L
r
o
t
i
f
o
r
P
f
o
t
n
e
m
e
t
a
t
S
81
Crown Resorts Limited Annual Report 2018
Statement of Comprehensive Income
For the year ended 30 June 2018
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
Items reclassified to profit or loss:
Foreign currency translation
Items that will not be reclassified subsequently to profit or loss:
Employee benefits reserve
Other comprehensive income / (loss) for the period, net of income tax
Total comprehensive income / (loss) for the period
Attributable to:
Equity holders of the Parent
Non-controlling interests
2018
$m
2017
$m
573.2
1,825.0
7.6
1.4
(33.5)
18.0
(76.9)
(88.8)
-
(67.9)
505.3
491.7
13.6
505.3
(3.2)
(107.5)
1,717.5
1,759.5
(42.0)
1,717.5
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
82
FINANCIAL REPORT 2018 CONTINUED
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 2018
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
Intangible assets - 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
(1) Certain amounts have been restated, refer note 20
Note
22
6
7
6
7
8
9
10
11
12
5
14
15
16
17
15
16
5
17
18
18
19
19
2018
$m
1,844.6
172.3
17.3
32.8
9.2
2,076.2
143.0
23.3
-
187.8
3,880.7
1,080.6
462.8
266.9
50.4
6,095.5
8,171.7
427.5
25.7
165.3
225.1
843.6
287.6
1,467.0
380.9
32.6
2.1
2,170.2
3,013.8
5,157.9
(71.9)
(15.7)
(60.5)
5,306.0
5,157.9
-
5,157.9
Restated (1)
2017
$m
1,771.2
225.3
17.5
35.4
9.4
2,058.8
145.7
21.9
64.8
235.5
3,959.2
1,097.3
562.7
354.7
52.0
6,493.8
8,552.6
453.0
350.1
118.2
210.8
1,132.1
274.0
1,594.9
377.4
51.8
2.7
2,300.8
3,432.9
5,119.7
(53.2)
(19.4)
14.4
5,153.1
5,094.9
24.8
5,119.7
The above Statement of Financial Position should be read in conjunction with the accompanying notes.
.
83
Crown Resorts Limited Annual Report 2018
Cash Flow Statement
For the year ended 30 June 2018
Note
2018
$m
2017
$m
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Dividends received
Interest received
Borrowing costs paid
Income tax paid
Net cash flows from/(used in) operating activities
22b
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 the acquisition of subsidiaries
Net proceeds from the disposal of subsidiaries
Loans to associated entities
3,676.8
(2,815.0)
9.1
28.8
(108.7)
(59.3)
731.7
(393.7)
338.6
(6.9)
70.7
62.5
(10.6)
141.8
(1.5)
3,352.5
(2,685.1)
70.6
6.3
(170.7)
(107.9)
465.7
(404.5)
56.4
(5.9)
39.0
3,134.1
-
-
(2.0)
Net cash flows from/(used in) investing activities
200.9
2,817.1
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
Cash and cash equivalents at the end of the financial year
22a
The above Cash Flow Statement should be read in conjunction with the accompanying notes.
79.7
(508.2)
(413.4)
(18.8)
270.1
(614.5)
(1,110.8)
(499.9)
(860.7)
(1,955.1)
71.9
1,327.7
1,771.2
1.5
1,844.6
449.7
(6.2)
1,771.2
l
C
a
s
h
F
o
w
S
t
a
t
e
m
e
n
t
84
FINANCIAL REPORT 2018 CONTINUED
Statement of Changes in Equity
For the year ended 30 June 2018
Ordinary
Shares
$m
Shares
Held in
Trust
$m
Retained
Earnings Reserves
$m
$m
Total
$m
Non-
Controlling
Interest
$m
Total
Equity
$m
(53.2)
-
(19.4)
-
5,153.1
558.9
14.4
-
5,094.9
558.9
24.8
14.3
5,119.7
573.2
-
-
-
-
-
-
-
(67.2)
(67.2)
(0.7)
(67.9)
558.9
(67.2)
491.7
13.6
505.3
(413.4)
-
(413.4)
-
(413.4)
-
-
7.4
-
-
(7.4)
-
(18.7)
-
-
3.7
(15.7)
-
-
5,306.0
(2.1)
1.8
(60.5)
(2.1)
5.5
5,157.9
(37.0)
-
-
(37.0)
(18.7)
-
(1.4)
-
-
(3.5)
5.5
5,157.9
Year ended 30 June 2018
Balance at 1 July 2017 - Restated(1)
Profit for the period
Other comprehensive income/(loss)
Total comprehensive income for the
period
Dividends paid
Transactions with non-controlling
interests
Share buy-back
Transfers
Movement in non-controlling interest
put option
Share based payments
Balance at 30 June 2018
-
-
-
-
(18.7)
-
-
-
(71.9)
Year ended 30 June 2017 - Restated(1)
Balance at 1 July 2016
446.8
(8.9)
3,767.7
634.8
4,840.4
80.3
4,920.7
Profit for the period
Other comprehensive income/(loss)
Total comprehensive income for the
period
Dividends paid
Share buy-back
Transfers
Movement in non-controlling interest
put option
Share based payments
Change in ownership of subsidiary
Balance at 30 June 2017
-
-
-
-
(500.0)
-
-
-
-
(53.2)
(1) Certain amounts have been restated, refer note 20.
-
-
-
-
-
-
-
(10.5)
-
(19.4)
1,866.1
-
-
(106.6)
1,866.1
(106.6)
(41.1)
(0.9)
1,825.0
(107.5)
1,866.1
(106.6)
1,759.5
(42.0)
1,717.5
(1,110.8)
-
630.1
-
-
-
5,153.1
-
-
(630.1)
(1,110.8)
(500.0)
-
115.4
0.9
-
14.4
115.4
(9.6)
-
5,094.9
-
-
-
(1,110.8)
(500.0)
-
0.3
-
(13.8)
24.8
115.7
(9.6)
(13.8)
5,119.7
The above Statement of Changes in Equity should be read in conjunction with the accompanying notes.
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
85
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements
For the year ended 30 June 2018
1. Significant Accounting Policies
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 amounts contained in this report and in the financial
report have been rounded to the nearest hundred thousand
dollars unless otherwise stated under the option available to
the Company under ASIC Corporations (Rounding in
Financial/Directors’ Reports) Instrument 2016/191. Crown is
an entity to which this Instrument applies.
The financial report of Crown Resorts Limited and its
controlled entities (the Group) for the year ended 30 June 2018
was authorised for issue in accordance with a resolution of the
directors on 11 September 2018 subject to final approval by a
subcommittee. Crown is a for profit company limited by shares
incorporated in Australia whose shares are publicly traded on
the Australian Stock Exchange.
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 standards,
which became applicable from 1 July 2017:
• AASB 2016-1 Amendments to Australian Accounting
Standards-Recognition of Deferred Tax Assets for
Unrealised Losses
•
AASB 2016-2 Amendments to Australian Accounting
Standards-Disclosure Initiative: Amendments to AASB 107
The adoption of these standards did not have a material effect
on the financial position or performance on the Group during
the period.
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
ended 30 June 2018 which may impact the entity in the period
of initial application are outlined below:
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 standard requires an entity to recognise
revenue when it transfers promised goods or services to
customers at the transaction price, at an amount that reflects
what it expects to be entitled to receive in exchange for the
goods or services. It also requires more detailed disclosures
to enable users of financial statements to understand the
nature, amount, timing and uncertainty of revenue and cash
flows arising from contracts with customers.
The Group will adopt the new standard on 1 July 2018 on a full
retrospective basis, which will be reflected in future financial
statements.
Under the new standard, certain commission arrangements
will be reclassified out of operating expenses and will be
recognised as a reduction to revenue. Upon retrospective
application on 1 July 2018, Crown estimates that the revenues
and operating expenses for amounts previously reported for
the year ended 30 June 2018 will decrease by approximately
$409.9 million. Promotional allowances provided to
customers were previously netted against the revenue of the
relevant complimentary privilege provided. Under the new
standard, the majority of such promotional allowances will be
allocated against revenue from services. This change will
primarily result in a reclassification of revenue between
revenue from services and revenue from sale of goods with no
net impact on total revenue. The adoption of this standard is
not expected to have a material impact on the net profit or
cash flows of the Group.
This standard also imposes additional disclosure
requirements. The Group is continuing to assess the impact of
these requirements.
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 its financial position, 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 assess the impact the application of
this standard will have on the Group.
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
86
FINANCIAL REPORT 2018 CONTINUED
1. Significant Accounting Policies continued
Impairment of non-financial assets
1.3 Standards issued but not yet effective continued
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
2018 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 (the Group). 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:
The Group determines whether goodwill and intangibles 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 intangibles
with indefinite useful lives are allocated. The assumptions used
in this estimation of recoverable amount and the carrying
amount of goodwill and intangibles with indefinite useful lives
are discussed in note 13.
Fair value of financial instruments
In accordance with accounting standards the Group uses the
Level Three method in estimating the fair value of certain
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.
Management periodically evaluates positions taken in the tax
returns with respect to situations in which applicable tax
regulations are subject to interpretation and establishes
provisions where appropriate.
Doubtful debts
An allowance for doubtful debts is recognised based on the
expected credit loss from the time the financial instrument is
initially recognised.
The allowance for doubtful debts is based on a provision
matrix that reflects the Group’s historical credit loss
experience, adjusted for management’s knowledge of specific
customers’ circumstances, as well as current collection trends
and business conditions.
Put option liability
Crown entered into an agreement with the DGN minority
shareholders, which contained put options and call options
over the remaining non-controlling interest. Crown has
recognised a financial liability to reflect the carrying amount of
the put option. In arriving at the carrying value of the put
option liability, management estimated the future expected
cash outflow upon exercise of the put option by the
counterparty, discounted to present value using an
appropriate discount rate.
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
87
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
1. Significant Accounting Policies continued
N
o
t
e
s
1.5 Significant accounting judgements, estimates
and assumptions continued
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.
1.6 Summary of significant accounting policies
(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:
• 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
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
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.
(b) Other taxes
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.
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 for
Group reporting purposes.
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
FINANCIAL REPORT 2018 CONTINUED
1. Significant Accounting Policies continued
1.6 Summary of significant accounting policies
continued
(c) Foreign currency translation continued
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
recognised through Other Comprehensive Income (OCI) and
accumulated in the foreign currency translation reserve in
equity.
On disposal of a foreign entity, the deferred cumulative
amount recognised in in the foreign currency translation
reserve 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.
(e) Trade and other receivables
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 in the associates’ OCI or
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 OCI or in
the Statement of Profit or Loss.
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.
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 in 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.
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
89
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
1. Significant Accounting Policies continued
(j)
Intangible assets
1.6 Summary of significant accounting policies
continued
(h) Investments and other financial assets continued
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:
• Buildings - 40 to 75 years;
• Fixtures and Fitting in buildings - 4 to 20 years; and
• Plant and equipment - 2 to 20 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.
The recoverable amount of property, plant and equipment is
the greater of fair value less costs of disposal 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
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.
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.
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 aggregate of the consideration transferred and
the amount recognised for non-controlling interest and any
previous interest held over the net identifiable assets acquired
and liabilities assumed. 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.
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.
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
90
FINANCIAL REPORT 2018 CONTINUED
1. Significant Accounting Policies continued
Borrowing costs
1.6 Summary of significant accounting policies
continued
(j)
Intangible assets continued
Other intangible assets continued
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 non-financial 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 of
disposal 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 inflows 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 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 6.0%
(2017: 6.2%).
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.
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.
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
91
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
1. Significant Accounting Policies continued
1.6 Summary of significant accounting policies
continued
(p) Leases
Group as lessee
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.
Group as lessor
Leases in which the Group does not transfer substantially all
the risks and rewards of ownership of an asset are classified
as operating leases. Initial direct costs incurred in negotiating
and arranging an operating lease are added to the carrying
amount of the leased asset and recognised over the lease
term on the same basis as rental income. Contingent rents are
recognised as revenue in the period in which they are earned.
(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
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 through OCI are accumulated in the cash
flow hedge reserve in 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 the hedging relationship is discontinued, amounts
previously recognised in equity remain in equity until the
forecast transaction occurs.
(s) Put options over non-controlling interests
Put options granted to holders of non-controlling interests
(‘NCI puts’) at the date of acquiring control of a subsidiary (or
after gaining control) gives rise to a financial liability.
When the Group does not have a present ownership interest
in the shares subject to the NCI put, the Group applies the
partial recognition of NCI approach. Under this approach, the
following accounting method is applied at the end of each
reporting period:
• The Group determines the amount that would have
been recognised for the NCI, including an update to
reflect allocations of profit or loss, allocations of
changes in other comprehensive income and dividends
declared for the reporting period;
• The Group derecognises the NCI as if it was acquired at
that date;
• The Group recognises a financial liability and continues
to re-assess the liability at the present value of the
amount payable on exercise of the NCI put; and
• The Group accounts for the difference between the NCI
derecognised and the financial liability recognised as an
equity transaction.
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
92
FINANCIAL REPORT 2018 CONTINUED
1. Significant Accounting Policies continued
Dividends
1.6 Summary of significant accounting policies
continued
(s) Put options over non-controlling interests continued
If the NCI put is exercised, the same treatment is applied up to
the date of exercise. The amount recognised as the financial
liability at that date is extinguished by the payment of the
exercise price.
If the NCI put expires unexercised, the position is unwound so
that the NCI is recognised at the amount it would have been,
as if the NCI put had never been granted. The financial liability
is derecognised as an equity transaction.
(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:
Rendering of services
Gaming revenue is the net difference between gaming wins
and losses.
Revenue from exchange betting represents commission and
other charges earned on betting activity.
Hotel, entertainment and other operating revenues are
recognised as services are performed.
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.
Food and beverage revenue is recognised as the goods are
provided.
Leases
Lease revenue is recognised on a time proportion basis over
the lease term. Contingent lease revenue is recognised in the
period in which it is earned.
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.
Revenue is recognised when the shareholders’ right to receive
the payment is established.
(v) Share-based payments
Employees (including senior executives) of the Group receive
remuneration in the form of share-based payments, whereby
employees render services as consideration for equity
instruments.
The cost of equity-settled transactions is determined by the
fair value at the date when the grant is made using an
appropriate valuation model.
That cost is recognised in employee benefits expense,
together with a corresponding increase in equity (reserves),
over the period in which the service is fulfilled (the vesting
period). The cumulative expense recognised for equity-settled
transactions at each reporting date until the vesting date
reflects the extent to which the vesting period has expired.
If the terms of an equity-settled award are modified, the
minimum expense recognised is the grant date fair value of the
unmodified award, provided the original terms of the award
are met. An additional expense, measured as at the date of
modification, is recognised for any modification that increases
the total fair value of the share-based payment transaction, or
is otherwise beneficial to the employee. Where an award is
cancelled by the entity or by the counterparty, any remaining
element of the fair value of the award is expensed immediately
through profit or loss.
The dilutive effect of outstanding options is reflected as
additional share dilution in the computation of diluted earnings
per share.
(w) 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.
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
93
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
1. Significant Accounting Policies continued
1.6 Summary of significant accounting policies
continued
(x) Segment Information
The Group’s operating segments have been determined
based on geographic location, management reporting
structure and the nature of the products and services offered
by the Group. Crown has identified the Board of Directors as
its chief operating decision maker that allocates resources
and assesses the performance of the operating segments.
The segment information presented below is consistent with
internal management reporting.
The Group has four operating segments being Crown
Melbourne, Crown Perth, Crown Aspinalls and Wagering &
Online.
(y) 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.
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
94
FINANCIAL REPORT 2018 CONTINUED
l
a
u
t
c
A
n
w
o
r
C
p
u
o
r
G
m
$
.
9
5
6
9
.
0
5
1
7
.
9
9
3
7
.
3
6
4
0
1
,
)
0
2
.
(
.
1
5
6
4
3
,
.
1
0
3
)
2
(
2
.
5
9
4
,
3
0
2
.
4
.
2
9
7
)
.
7
4
7
6
2
,
(
)
.
9
5
8
2
(
5
.
6
0
5
.
9
6
7
.
5
7
8
9
5
.
.
3
2
2
1
)
.
5
5
1
(
-
-
-
-
-
-
-
-
-
-
-
-
-
.
9
6
7
.
5
7
8
9
5
.
.
3
2
2
1
)
.
5
5
1
(
-
-
)
.
3
8
1
(
-
-
)
.
3
8
1
(
-
-
-
-
-
-
-
-
.
8
5
2
.
)
1
0
6
(
.
6
6
)
.
7
2
(
)
)
.
0
6
4
(
-
.
0
1
7
1
(
)
.
7
6
2
(
2
.
3
7
5
.
7
7
4
2
)
.
3
4
1
(
)
.
5
5
1
(
9
.
8
5
5
2
.
2
3
2
.
)
1
0
6
(
-
-
-
-
-
3
9
.
)
.
0
6
4
(
)
.
1
0
7
1
(
2
1
.
6
.
5
8
3
8
.
6
8
3
m
$
)
3
(
s
m
e
t
I
t
n
a
c
i
f
i
n
g
S
i
m
$
-
t
s
u
d
A
j
)
1
(
t
n
e
m
m
$
m
$
m
$
d
e
t
a
c
o
l
l
a
n
U
e
n
i
l
n
O
&
s
l
l
i
a
n
p
s
A
g
n
i
r
e
g
a
W
n
w
o
r
C
)
1
(
t
l
u
s
e
R
d
e
s
i
l
a
m
r
o
N
-
0
2
.
)
9
.
5
8
(
3
.
8
7
8
)
4
.
4
5
(
9
.
6
2
0
.
2
1
-
)
.
9
5
8
2
(
)
.
7
4
(
)
8
.
4
1
(
)
9
.
1
(
)
9
.
5
8
(
4
.
2
9
5
.
)
1
9
5
(
1
.
2
1
1
.
0
1
-
)
3
.
8
1
(
.
1
0
3
5
.
3
1
5
,
3
5
.
4
0
.
3
9
2
4
.
4
6
5
.
4
4
8
0
.
9
7
2
,
2
)
.
6
7
6
(
)
.
1
7
0
6
2
,
(
)
.
9
8
5
(
)
1
.
6
6
2
(
)
4
.
2
5
(
)
7
.
5
9
5
(
)
0
.
4
3
6
,
1
(
0
.
3
9
2
4
.
4
6
5
.
4
4
8
0
.
9
7
2
,
2
m
$
n
w
o
r
C
p
u
o
r
G
.
9
5
6
9
.
0
5
1
7
2
.
8
5
7
.
3
6
4
0
1
,
)
0
2
.
(
.
4
3
8
4
3
,
-
-
-
5
4
.
5
4
.
-
-
-
0
.
3
9
2
-
-
0
.
1
4
.
3
6
m
$
n
w
o
r
C
h
t
r
e
P
8
.
8
9
1
1
.
5
6
2
0
.
3
0
1
6
.
7
7
2
m
$
n
w
o
r
C
e
n
r
u
o
b
e
M
l
1
.
7
6
7
9
.
9
4
4
8
.
1
9
5
2
.
0
7
4
8
.
8
4
2
)
0
.
7
8
(
8
.
1
6
1
0
.
5
4
6
”
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
)
5
.
7
7
1
(
5
.
7
6
4
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
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
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
s
e
s
n
e
p
x
e
t
n
a
c
i
f
i
n
g
s
i
r
e
h
t
o
&
g
n
i
r
u
t
c
u
r
t
s
e
R
l
a
s
o
p
s
d
i
t
e
B
n
w
o
r
C
n
o
i
n
a
g
t
e
N
l
a
s
o
p
s
d
i
n
o
t
s
r
e
l
l
E
n
o
i
n
a
g
t
e
N
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
)
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
”
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
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
n
o
i
t
a
m
r
o
n
f
I
t
n
e
m
g
e
S
.
2
8
1
0
2
e
n
u
J
0
3
i
s
e
n
h
c
a
m
r
o
o
l
f
i
n
a
M
l
s
e
b
a
t
r
o
o
l
f
i
n
a
M
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
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
e
u
n
e
v
e
r
t
s
e
r
e
t
n
I
t
n
e
m
g
e
s
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
)
4
(
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
)
4
(
l
y
a
p
m
a
r
g
o
r
p
P
V
I
.
s
m
e
t
i
t
n
a
c
i
f
i
i
n
g
s
d
n
a
)
s
l
l
i
a
n
p
s
A
n
w
o
r
C
d
n
a
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
I
e
t
a
r
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
e
d
u
c
x
e
l
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
,
s
e
x
a
t
i
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
j
o
t
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
r
e
v
o
l
I
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
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
2
.
2
$
s
e
d
u
c
n
l
i
n
o
i
l
l
i
m
2
.
5
9
4
,
3
$
f
o
e
u
n
e
v
e
r
l
a
t
o
T
.
e
r
u
s
a
e
m
S
R
F
I
-
n
o
n
a
e
r
a
s
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
N
.
e
s
n
e
p
x
e
x
a
t
e
m
o
c
n
i
d
n
a
s
e
s
n
e
p
x
e
r
e
h
t
o
&
s
n
o
s
s
m
m
o
c
i
i
)
1
(
)
2
(
y
c
n
e
r
r
u
c
i
n
g
e
r
o
f
t
e
n
a
d
n
a
l
i
a
s
o
p
s
d
n
o
t
s
r
e
l
l
E
n
o
i
n
a
g
t
e
n
a
i
,
l
a
s
o
p
s
d
t
e
B
n
w
o
r
C
n
o
n
a
g
i
t
e
n
a
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
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
a
f
i
o
t
s
s
n
o
c
n
o
i
l
l
i
m
2
.
2
3
2
$
.
s
t
s
e
r
e
t
n
i
d
e
t
n
u
o
c
c
a
y
t
i
u
q
e
s
’
n
w
o
r
C
o
t
g
n
i
t
a
e
r
l
s
m
e
t
i
t
n
a
c
i
f
i
i
n
g
s
d
n
a
s
e
s
n
e
p
x
e
t
n
a
c
i
f
i
n
g
s
i
r
e
h
t
o
&
g
n
i
r
u
t
c
u
r
t
s
e
r
y
b
t
e
s
f
f
o
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
i
n
g
e
r
o
f
f
o
f
o
l
a
s
o
p
s
d
n
o
i
i
n
a
g
s
m
e
t
i
t
n
a
c
i
f
i
n
g
S
i
)
3
(
e
h
t
m
o
r
f
e
u
n
e
v
e
r
o
t
n
o
i
t
c
u
d
e
r
a
e
b
l
l
i
w
d
n
a
s
e
s
n
e
p
x
e
g
n
i
t
a
r
e
p
o
f
o
t
u
o
d
e
i
f
i
s
s
a
c
e
r
l
e
b
l
l
i
i
w
h
c
h
w
n
o
i
l
l
i
.
m
9
9
0
4
$
f
o
e
s
n
e
p
x
e
i
i
n
o
s
s
m
m
o
c
l
y
a
p
m
a
r
g
o
r
p
P
V
s
e
d
u
c
n
I
l
i
n
o
i
l
l
i
m
7
.
4
7
6
,
2
$
f
o
s
e
s
n
e
p
x
e
g
n
i
t
a
r
e
p
O
)
4
(
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
95
.
s
r
e
m
o
t
s
u
C
h
t
i
w
s
t
c
a
r
t
n
o
C
m
o
r
f
e
u
n
e
v
e
R
5
1
B
S
A
A
h
t
i
w
e
c
n
a
d
r
o
c
c
a
n
i
8
1
0
2
y
u
J
l
1
i
g
n
c
n
e
m
m
o
c
d
o
i
r
e
p
g
n
i
t
r
o
p
e
r
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
m
$
n
w
o
r
C
p
u
o
r
G
.
7
0
4
9
.
0
6
1
7
.
3
5
0
6
l
a
u
t
c
A
.
7
4
7
0
1
,
)
.
1
1
(
6
9
.
.
6
5
3
3
3
,
.
)
2
(
2
5
4
3
3
,
.
1
1
3
.
0
9
7
)
.
8
7
9
4
2
,
(
)
.
8
6
9
2
(
5
.
3
9
4
.
5
5
4
7
1
,
-
-
-
-
.
6
8
4
-
.
6
8
4
6
.
8
4
-
-
-
-
-
.
5
5
4
7
1
,
.
8
8
8
.
6
8
4
.
8
8
8
.
6
8
4
)
.
2
0
6
2
(
)
.
2
0
6
2
(
)
.
6
9
8
(
)
.
6
9
8
(
.
2
9
3
-
)
.
0
4
3
1
(
)
.
8
6
0
1
(
)
.
4
2
3
(
.
3
0
2
N
o
t
e
s
t
o
t
h
e
F
n
a
n
c
a
i
i
m
$
)
3
(
s
m
e
t
I
t
n
a
c
i
f
i
n
g
S
i
m
$
-
t
s
u
d
A
j
)
1
(
t
n
e
m
-
-
-
-
.
8
6
5
-
.
8
6
5
8
.
6
5
l
S
t
a
t
e
m
e
n
t
s
m
$
n
w
o
r
C
p
u
o
r
G
.
7
0
4
9
.
0
6
1
7
.
5
8
4
5
.
1
6
2
0
1
,
)
.
1
1
(
.
2
0
3
2
3
,
-
-
-
3
3
.
3
3
.
6
9
.
8
.
9
3
2
,
3
3
.
3
3
.
3
0
3
8
.
9
9
1
.
0
3
8
8
.
4
9
9
,
1
3
.
3
0
3
8
.
9
9
1
.
0
3
8
8
.
4
9
9
,
1
m
$
m
$
m
$
d
e
t
a
c
o
l
l
a
n
U
e
n
i
l
n
O
&
s
l
l
i
a
n
p
s
A
g
n
i
r
e
g
a
W
n
w
o
r
C
)
1
(
t
l
u
s
e
R
d
e
s
i
l
a
m
r
o
N
-
-
-
3
.
3
0
3
-
-
0
.
1
8
.
8
9
m
$
n
w
o
r
C
h
t
r
e
P
3
.
7
0
2
8
.
6
6
2
4
.
9
0
1
7
.
6
4
2
m
$
n
w
o
r
C
e
n
r
u
o
b
e
M
l
5
.
3
3
7
2
.
9
4
4
3
.
0
4
3
8
.
1
7
4
-
.
1
1
.
)
7
7
3
(
0
.
8
2
8
.
)
0
7
4
(
8
.
4
1
-
)
.
8
6
9
2
(
)
.
4
5
(
)
3
.
2
2
(
-
-
-
-
-
)
5
4
.
(
-
.
0
8
-
-
-
-
-
.
7
3
4
)
.
6
1
0
1
(
)
.
1
5
3
1
(
.
)
7
7
3
(
2
.
1
3
5
)
4
.
2
5
(
)
5
.
7
(
)
.
5
4
9
(
)
.
3
3
0
4
2
,
(
)
.
3
0
5
(
)
5
.
8
8
2
(
)
2
.
3
7
(
6
.
6
2
)
9
.
0
(
7
.
5
2
)
3
.
5
8
5
(
8
.
4
4
2
)
6
.
9
7
(
2
.
5
6
1
)
0
.
6
0
4
,
1
(
8
.
8
8
5
”
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
)
6
.
8
8
1
(
2
.
0
0
4
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
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
d
n
e
d
v
d
i
i
l
i
a
c
e
p
s
E
R
M
)
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
s
e
s
n
e
p
x
e
t
n
a
c
i
f
i
n
g
s
i
r
e
h
t
o
&
g
n
i
r
u
t
c
u
r
t
s
e
R
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
)
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
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
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
e
u
n
e
v
e
r
t
s
e
r
e
t
n
I
t
n
e
m
g
e
s
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
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
,
t
s
e
r
e
t
n
i
e
r
o
f
e
b
s
g
n
n
r
a
E
i
l
y
a
p
m
a
r
g
o
r
p
P
V
I
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
7
1
0
2
e
n
u
J
0
3
96
i
s
e
n
h
c
a
m
r
o
o
l
f
i
n
a
M
l
s
e
b
a
t
r
o
o
l
f
i
n
a
M
e
u
n
e
v
e
r
g
n
i
t
a
r
e
p
O
0
.
5
2
8
,
1
.
0
1
2
5
,
1
)
2
.
4
3
(
.
1
1
4
.
1
6
6
8
,
1
2
.
6
3
.
2
7
5
5
1
,
-
)
2
.
4
3
(
2
.
8
3
3
9
4
.
.
1
3
4
3
.
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
(
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
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
.
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
2
.
5
4
3
,
3
$
f
o
e
u
n
e
v
e
r
l
a
t
o
T
.
e
r
u
s
a
e
m
S
R
I
-
n
o
n
a
e
r
a
s
t
l
u
s
e
r
d
e
s
i
l
a
m
r
o
N
.
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
)
2
(
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
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
)
1
(
FINANCIAL REPORT 2018 CONTINUED
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 gain on CrownBet disposal
Net gain on Ellerston disposal
Net foreign currency gain on disposal of foreign operations
(c) Expenses
Cost of sales
Operating activities
Net asset impairment/(reversal)
Restructuring & other expenses
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
2018
$m
2017
$m
2,989.5
435.5
30.1
1.7
36.2
3,493.0
2.2
-
87.5
5.9
76.9
172.5
159.1
2,736.0
(122.3)
15.5
63.5
2,851.8
95.4
162.6
258.0
20.3
7.6
27.9
285.9
106.4
(30.3)
76.1
-
76.1
7.6
67.8
923.5
(8.1)
2,837.9
415.0
9.6
51.9
29.7
3,344.1
1.1
1,745.5
-
-
88.8
1,835.4
153.6
2,584.2
260.2
89.6
55.7
3,143.3
96.3
170.5
266.8
20.3
9.7
30.0
296.8
151.2
(40.0)
111.2
32.4
143.6
8.0
64.8
940.0
(2.8)
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
97
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
3. Revenue and Expenses continued
N
o
t
e
s
(e) Significant items - income / (expense)
Net asset (impairment)/reversal
Net foreign currency gain on disposal of foreign operations
Net gain on CrownBet disposal
Net gain on Ellerston disposal
Restructuring & other significant expenses
Associates significant items
Net gain on sale of MRE
MRE special dividend
Early debt retirement costs
Tax amounts in significant items
4. Dividends Paid and Declared
2018
$m
122.3
76.9
87.5
5.9
(15.5)
(2.7)
-
-
-
(26.7)
247.7
2017
$m
(260.2)
88.8
-
-
(89.6)
-
1,745.5
48.6
(32.4)
20.3
1,521.0
2018
$m
2017
$m
(a) Dividends declared and paid during the financial year
Prior year final dividend (paid 6 October 2017)
Paid at 30.0 cents (2016: 39.5 cents) per share franked at 60% (2016: 70% franked) at the
Australian tax rate of 30% (2016: 30%)
206.7
287.7
Current year interim dividend (paid 4 April 2018)
Paid at 30.0 cents (2017: 113.0 cents) per share franked at 60% (2017: 60% franked) at the
Australian tax rate of 30% (2017: 30%)
Total dividends appropriated
206.7
413.4
823.1
1,110.8
(b) Dividends declared and not recognised as a liability
Current year final dividend (expected to be paid 5 October 2018)
Declared at 30.0 cents (2017: 30.0 cents) per share and franked at 60% (2017: 60% franked)
at the Australian tax rate of 30% (2017: 30%)
206.2 (1)
206.7
(c) Franking credits
The tax rate at which the final dividend will be franked is 30% (2017: 30%). The franking
account disclosures have been calculated using the franking rate applicable at 30 June 2018.
The amount of franking credits available for the subsequent financial year:
Franking account balance as at the end of the financial year at 30% (2017: 30%)
34.7
91.2
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
13.2
47.9
(18.2)
73.0
(53.0)
(5.1)
(53.1)
19.9
(1) Dollar value based on the total number of shares on issue as at the date of declaration of the 2018 final dividend.
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
FINANCIAL REPORT 2018 CONTINUED
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% (2017: 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)
2018
$m
2017
$m
744.2
223.2
1,931.8
579.5
1.7
(2.0)
(1.6)
(3.8)
2.4
1.7
(11.7)
-
8.6
(11.5)
(56.4)
(470.5)
0.4
7.1
4.2
6.5
171.0
106.8
84.3
57.6
2.4
26.7
103.1
35.5
(11.5)
(20.3)
171.0
106.8
266.9
(380.9)
(114.0)
354.7
(377.4)
(22.7)
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
99
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
5.
Income Tax continued
N
o
t
e
s
Statement of
Financial Position
Statement of
Profit or Loss
2018
$m
2017
$m
2018
$m
2017
$m
(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
Deferred income tax expense/(income)
113.3
38.6
25.9
1.8
54.6
(14.5)
(226.6)
(139.7)
18.9
18.4
(4.7)
99.1
37.2
52.3
3.0
64.8
(14.9)
(229.6)
(120.5)
5.5
88.6
(8.2)
Net deferred income tax assets/(liabilities)
(114.0)
(22.7)
(d) Movements in deferred income tax assets and liabilities during the financial year
Carrying amount at the beginning of the year
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
Disposal of subsidiaries
Carrying amount at the end of the year
(14.8)
(2.9)
11.0
1.2
(1.1)
(0.4)
(2.5)
19.3
(10.7)
70.2
(4.7)
64.6
2018
$m
(22.7)
(57.6)
(6.9)
(0.1)
(0.6)
(26.1)
(114.0)
(11.5)
(1.4)
(6.1)
1.4
(10.9)
(0.4)
(1.4)
33.1
4.6
19.8
(7.8)
19.4
2017
$m
4.4
(35.5)
16.1
-
(7.7)
-
(22.7)
(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
Total tax losses not brought to account
Potential tax benefit at respective tax rates
489.8
637.7
515.5
608.2
1,127.5
1,123.7
280.9
361.4
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
FINANCIAL REPORT 2018 CONTINUED
5.
Income Tax continued
(f) Unrecognised temporary differences
At 30 June 2018, there is no recognised or unrecognised deferred income tax liability (2017: $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.
6. Trade and Other Receivables
Current
Trade receivables
Provision for doubtful debts (a)
Other receivables
Non-current
Other receivables
2018
$m
580.8
(425.7)
155.1
17.2
172.3
2017
$m
581.9
(367.6)
214.3
11.0
225.3
143.0
143.0
145.7
145.7
(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 model from the time the financial
instrument is initially recognised.
Allowance for doubtful debts at the beginning of the year
Net doubtful debt expense (1)
Disposal of subsidiaries
Net Amounts written off
Exchange differences
(1) Amounts are included in other expenses.
2018
$m
(367.6)
(67.2)
1.7
12.8
(5.4)
(425.7)
2017
$m
(319.6)
(57.3)
-
5.0
4.3
(367.6)
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
101
Crown Resorts Limited Annual Report 2018
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
Notes to the Financial Statements continued
For the year ended 30 June 2018
6. Trade and Other Receivables continued
(a) Allowance for Doubtful Debts continued
Ageing analysis of trade receivables
0-30 days
$m
>30 days
$m
2018 - consolidated
Current
Past due not impaired
Considered impaired
2017 - consolidated
Current
Past due not impaired
Considered impaired
7. Other Financial Assets
Current
Receivable on foreign exchange contracts
Non-current
Receivable on cross currency swaps
94.0
-
-
94.0
92.7
-
3.2
95.9
-
61.1
425.7
486.8
-
121.6
364.4
486.0
2018
$m
9.2
9.2
23.3
23.3
Details of the Group’s exposure to interest rate risk and foreign currency changes are provided in note 32.
8.
Investments
At fair value
Shares - listed (USA)
Crown disposed of its interest in Caesar’s Entertainment Corporation during the period.
9.
Investments in Associates
2018
$m
-
-
Total
$m
94.0
61.1
425.7
580.8
92.7
121.6
367.6
581.9
2017
$m
9.4
9.4
21.9
21.9
2017
$m
64.8
64.8
Investment details:
Associated entities - unlisted shares
Total investments in associates
Share of profits of associates
Melco Resorts & Entertainment Ltd (1)
Nobu Group
Aggregate share of profit from non material associates
2018
$m
2017
$m
187.8
187.8
235.5
235.5
-
7.2
(0.6)
6.6
37.9
6.4
(5.1)
39.2
(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 year ended 30 June 2017.
102
FINANCIAL REPORT 2018 CONTINUED
9.
Investments in Associates continued
Investments in Associates
Nobu Group
Aspers Holdings (Jersey) Ltd
Chill Gaming Pty Ltd
Zengaming Inc
Draftstars Pty Ltd
Ellerston Leisure Pty Ltd
Reporting
Date
31 Dec(1)
30 June
30 June
31 Dec(1)
30 June
30 June
Principal Activity
Restaurants/Hotels
Casino and gaming machine operator
Gaming software developer
eSports
Daily fantasy sports
Accommodation/Recreation
(1) The Group uses 30 June results to equity account for the investments.
Principal
Place
of Business
USA
UK
Australia
USA
Australia
Australia
% Interest
30 June
2018
20.0
50.0
50.0
36.9
-
-
30 June
2017
20.0
50.0
50.0
30.0
50.0
50.0
s
t
n
e
m
e
t
a
t
S
l
i
i
a
c
n
a
n
F
e
h
t
o
t
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.
s
e
t
o
N
Carrying amount of investment - Nobu Group:
Balance at the beginning of the financial year
Share of associates’ net profit/(loss) for the year
Foreign exchange movements
Dividends received
2018
$m
2017
$m
130.4
135.5
7.2
5.0
(7.4)
6.4
(4.2)
(7.3)
Carrying amount of investment in the Nobu Group at the end of the financial year
135.2
130.4
10. Property, Plant and Equipment
Freehold
land &
buildings
Buildings
on
leasehold
land
Plant &
equipment
Construction
work in
progress
Leased
plant &
equipment
Total
property,
plant &
equipment
$m
$m
$m
$m
$m
$m
Year ended 30 June 2018
At 1 July 2017, net of accumulated
depreciation and impairment
Additions
Disposals
Depreciation expense
Impairment reversal
Exchange differences
Reclassification/ transfer
At 30 June 2018, net of
accumulated depreciation and
impairment
At 30 June 2018
Cost (gross carrying amount)
Accumulated depreciation and
impairment
Net carrying amount
130.0
3,959.2
1,964.8
0.9
(265.0)
(44.6)
89.1
(6.3)
2.8
872.2
13.9
(6.7)
(50.8)
-
0.7
0.4
646.5
95.9
(31.5)
(158.4)
-
1.9
345.7
321.2
(4.6)
-
-
-
-
(30.0)
(4.2)
-
-
109.9
(17.3)
(95.8)
431.9
(337.8)
(258.0)
89.1
(3.7)
-
1,741.7
829.7
664.3
645.0
-
3,880.7
2,182.7
1,598.1
2,437.8
645.0
(441.0)
1,741.7
(768.4)
829.7
(1,773.5)
664.3
-
645.0
-
-
-
6,863.6
(2,982.9)
3,880.7
During the period, a majority owned subsidiary of Crown, Alon Las Vegas Resort, LLC, entered into an agreement with a
subsidiary of Wynn Resorts, Limited to sell its interest in a 34.6 acre vacant site on Las Vegas Boulevard for US$300
million. The transaction was completed in January 2018. Crown’s share of the proceeds (after taking into account minority
interests) was approximately US$264 million.
103
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
10. Property, Plant and Equipment continued
As a result of the sale agreement, prior to disposal, Crown reassessed the recoverable amount of the Alon land and related
intangibles, resulting in an $89.1 million impairment reversal to land and a $36.5 million impairment reversal to Other
intangible assets (refer note 12). These amounts have been included as asset impairment reversals in the Statement of
Profit or Loss.
Freehold
land &
buildings
Buildings
on
leasehold
land
Plant &
equipment
Construction
work in
progress
Leased
plant &
equipment
Total
property,
plant &
equipment
$m
$m
$m
$m
$m
$m
Year ended 30 June 2017
At 1 July 2016, net of accumulated
depreciation and impairment
Additions
Disposals
Depreciation expense
Impairment
Exchange differences
Reclassification/ transfer
At 30 June 2017, net of
accumulated depreciation
and impairment
At 30 June 2017
1,578.4
36.5
(0.1)
(37.9)
(241.5)
(9.4)
638.8
914.7
17.7
-
613.1
89.1
(57.9)
(58.3)
(156.6)
-
(0.9)
(1.0)
(1.0)
(0.4)
839.2
304.5
-
-
-
-
123.6
4,069.0
25.3
-
(13.9)
(5.0)
-
-
473.1
(58.0)
(266.7)
(247.5)
(10.7)
-
160.2
(798.0)
1,964.8
872.2
646.5
345.7
130.0
3,959.2
Cost (gross carrying amount)
2,604.5
1,607.6
2,303.3
345.7
158.4
7,019.5
Accumulated depreciation and
impairment
Net carrying amount
(639.7)
1,964.8
(735.4)
872.2
(1,656.8)
646.5
-
(28.4)
(3,060.3)
345.7
130.0
3,959.2
11. Intangible Assets - Licences
Balance at the beginning of the financial year
Amortisation expense
Balance at the end of the financial year
Cost (gross carrying amount)
Accumulated amortisation and impairment
Net carrying amount
2018
$m
1,097.3
(16.7)
1,080.6
2017
$m
1,114.0
(16.7)
1,097.3
1,297.0
(216.4)
1,080.6
1,297.0
(199.7)
1,097.3
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 ($440.4 million) is assessed as
having an indefinite useful life, as it has no fixed term, and therefore no amortisation is charged. Amortisation will
commence on the Crown Sydney licence once the property is operational.
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
FINANCIAL REPORT 2018 CONTINUED
12. Other Intangible Assets
Year ended 30 June 2018
At 1 July 2017, net of accumulated amortisation and
impairment
Additions
Impairment reversal (2)
Exchange differences
Amortisation expense
Disposals
Casino
Management
Agreement (1)
Goodwill (1)
$m
$m
346.5
122.7
-
-
6.1
-
(14.2)
-
-
-
(3.7)
-
Other
$m
Total
$m
93.5
2.0
36.5
(2.6)
(6.0)
562.7
2.0
36.5
3.5
(9.7)
(118.0)
(132.2)
At 30 June 2018, net of accumulated amortisation and
impairment
338.4
119.0
5.4
462.8
At 30 June 2018
Cost (gross carrying amount)
Accumulated amortisation and impairment
Net carrying amount
Year ended 30 June 2017
At 1 July 2016, net of accumulated amortisation and
impairment
Additions
Impairment
Exchange differences
Amortisation expense
338.4
-
338.4
459.5
-
(110.3)
(2.7)
-
245.3
(126.3)
119.0
126.3
-
-
-
(3.6)
20.5
(15.1)
604.2
(141.4)
5.4
462.8
154.8
1.6
(49.4)
(5.3)
(8.2)
740.6
1.6
(159.7)
(8.0)
(11.8)
At 30 June 2017, net of accumulated amortisation and
impairment
346.5
122.7
93.5
562.7
At 30 June 2017
Cost (gross carrying amount)
Accumulated amortisation and impairment
Net carrying amount
456.8
(110.3)
346.5
245.3
(122.6)
122.7
166.1
(72.6)
93.5
868.2
(305.5)
562.7
(1) Purchased as part of business combinations. Disposal of goodwill relates to Crown’s disposal of its interest in CrownBet.
(2) Impairment reversal relates to intangible assets associated with the Alon land, which was subsequently disposed. Refer note 10 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 2018 is allocated to Crown Melbourne $26.9 million (2017: $26.9 million), Crown Perth
$144.0m (2017: $144.0 million), Crown Aspinalls $52.5 million (2017: $49.7 million) and Wagering & Online $115.0 million
(2017: $125.9 million).
The useful life of the Crown Melbourne casino management agreement is amortised on a straight line basis to 2050.
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
105
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
13. Impairment Testing of Intangible Assets
Intangible assets deemed to have indefinite lives are allocated to the Group’s cash generating units (CGUs) identified
according to 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.
The allocation of goodwill and other intangible assets with indefinite useful lives to the Group’s CGUs are outlined in Note
11 and Note 12.
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 CGU. 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, risk
adjusted where applicable.
(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
CGU held at 30 June 2018, based on the nature of the products and industries in which each CGU operates. The implied
terminal growth rates beyond the five year period do not exceed the forecasted long term Australian inflation rate of 2.25%
(2017: 3.0%). The exception to this is DGN, which has an implied terminal growth rate of 2.9% based on the start-up nature
of the business and the industry in which the CGU operates. This implied terminal growth rate does not exceed the
long-term average forecast and historical growth rates for the products and industry in which DGN operates.
(d) Discount rates
A weighted average cost of capital (after tax) of between 8% and 10% (2017: 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, no impairment loss has been recorded against the Group’s intangible
assets during the year.
In the prior period, an impairment loss of $159.7 million was recorded against the Group’s intangible assets, of which
$110.3 million related to DGN goodwill and $49.4 million related to Alon finite life intangible assets. The balance of DGN
goodwill at 30 June 2018 was $95.1 million (2017: $91.6 million)
(f) Sensitivity analysis
The key estimates and assumptions used to determine the value in use of a CGU are based on management’s current
expectations based on past experience, future plans and external market information. They are considered to be
reasonably achievable, however significant changes in any of the key estimates and assumptions may result in a CGU’s
carrying value exceeding its recoverable value, resulting in an impairment charge.
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.
In relation to Crown Perth and DGN, it is noted that a negative terminal growth rate for Crown Perth and a terminal growth
rate less than 1% for DGN respectively could give rise to an impairment. An impairment charge for DGN could also impact
on the carrying value of the contingent consideration on the acquisition of Winners Club Limited. The remaining contingent
consideration as at 30 June 2018 is due in December 2020, based on the 2020 earnings of the DGN Group. 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.
The Group will continue to monitor the performance of all CGUs going forward, and consider the impact on the respective
CGUs’ impairment testing assumptions and carrying value.
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
FINANCIAL REPORT 2018 CONTINUED
14. Other Assets
Non-current
Prepaid casino tax at cost
Accumulated amortisation
Other prepayments
15. Trade and Other Payables
Current - unsecured
Trade and other payables
Other
Non-current - unsecured
Casino licence payable (2)
Contingent consideration
Other (3)
(1) Certain amounts have been restated, refer note 20.
(2) Net present value of the $250.0 million payment due in 2033 relating to the Crown Melbourne Casino licence.
(3) Includes put option relating to DGN, refer note 20.
16. Interest-Bearing Loans and Borrowings
Current
Bank Loans - unsecured
Capital Markets Debt - unsecured
Finance Lease - secured (2)
Non-current
Bank Loans - unsecured
Capital Markets Debt - unsecured (1)
Other loans - unsecured
Finance Lease - secured (2)
2018
$m
2017
$m
100.8
100.8
(52.5)
48.3
2.1
50.4
(51.0)
49.8
2.2
52.0
2018
$m
2017 (1)
$m
425.9
1.6
427.5
163.0
47.0
77.6
287.6
2018
$m
25.7
-
-
25.7
451.0
2.0
453.0
158.5
45.3
70.2
274.0
2017
$m
38.4
300.0
11.7
350.1
28.9
20.0
1,437.1
1,444.0
1.0
-
-
130.9
1,467.0
1,594.9
(1) On 19 July 2018, Crown announced its election to redeem all of the outstanding Subordinated Notes listed on the ASX under the code
“CWNHA” (the “Notes”) on the first call date of 14 September 2018 in accordance with the terms of the Notes. This is expected to reduce
Crown’s gross debt by approximately $400 million.
(2) During the period, Crown provided early termination notices in relation to its outstanding finance leases, which were terminated in
September 2017.
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
107
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
16. Interest-Bearing Loans and Borrowings continued
Fair Value Disclosures
Details of the fair value disclosures of the Group’s interest bearing liabilities are set out in note 32.
N
o
t
e
s
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:
Facility Type
Bank Facilities
Bilateral Multi Option Facilities
GBP Syndicated Facility
Letter of Credit Facilities
Debt Capital Markets
Euro Medium Term Notes
Australian Medium Term Notes
AUD Subordinated Notes (1)
Other
Other Loans
Facility
Amount
$m
170.0
89.2
312.5
571.7
174.6
259.1
1,003.4
1,437.1
Drawn
Letters of
Amount Credit Issued
Available
$m
$m
$m
Expiry
Dates
45.7
8.9
-
54.6
174.6
259.1
1,003.4
1,437.1
28.5
-
312.5
341.0
-
-
-
-
-
95.8 Feb 19 / Nov 19
80.3
Aug 2020
- Jan 20 - Jan 22
176.1
-
-
Jul 2036
Nov 2019
- Sep 72 / Apr 75
-
-
Jun 2021
1.0
1.0
Total at 30 June 2018
2,009.8
1,492.7
341.0
176.1
Total at 30 June 2017
2,647.5
1,802.4
430.3
414.8
(1) On 19 July 2018, Crown announced its election to redeem all of the outstanding Subordinated Notes listed on the ASX under the code
“CWNHA” (the “Notes”) on the first call date of 14 September 2018 in accordance with the terms of the Notes. This is expected to reduce
Crown’s gross debt by approximately $400 million.
The bank facilities are provided on an unsecured basis by domestic and international banks. Refer note 32(a)(i) for further
details regarding interest rates.
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.
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
FINANCIAL REPORT 2018 CONTINUED
17. Provisions
At 1 July 2017
Arising during the year
Utilised during the year
Disposal of subsidiaries
At 30 June 2018
Current 2018
Non-current 2018
At 30 June 2018
Current 2017
Non-current 2017
At 30 June 2017
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
Shares transferred under 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
$m
198.0
154.4
(143.8)
(6.9)
201.7
186.3
15.4
201.7
161.3
36.7
198.0
Other
$m
64.6
20.2
(28.6)
(0.2)
56.0
38.8
17.2
56.0
49.5
15.1
64.6
Total
$m
262.6
174.6
(172.4)
(7.1)
257.7
225.1
32.6
257.7
210.8
51.8
262.6
2018
$m
2017
$m
(71.9)
(53.2)
(53.2)
(18.7)
(71.9)
(19.4)
3.7
(15.7)
2018
No.
446.8
(500.0)
(53.2)
(8.9)
(10.5)
(19.4)
2017
No.
687,421,194
688,847,822
688,847,822
728,394,185
(1,426,628)
(39,546,363)
687,421,194
688,847,822
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
109
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
18. Contributed Equity continued
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 2018, shares to a value of $18.7 million (2017: $500.0 million) have been purchased.
Subsequent to 30 June 2018, Crown announced its intention to undertake a new on-market share buy-back of
approximately $400 million of shares (the “New Share Buy-Back”). Crown may, at its discretion, vary, suspend or terminate
the New Share Buy-Back at any time.
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 2018, the Group paid dividends of $413.4 million (2017: $1,110.8 million). The Group’s dividend policy is to pay 60
cents per share on a full year basis, subject to Crown’s financial position.
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
110
FINANCIAL REPORT 2018 CONTINUED
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 gain 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
Net Unrealised Gains Reserve (1)
The net unrealised gains reserve records the movement from changes in ownership
interests in a subsidiary, investments and associates equity, which do not impact
control.
Balance at the beginning of the financial year
Transfer to retained earnings
Movement in non-controlling interest put option
Balance at the end of the financial year
(1) Certain amounts have been reinstated, refer to note 20
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
2018
$m
(42.5)
15.6
(54.9)
21.3
(60.5)
26.1
7.6
(76.9)
0.7
(42.5)
13.8
1.8
15.6
(45.4)
(7.4)
(2.1)
(54.9)
19.9
0.5
1.0
(0.1)
21.3
2017
$m
26.1
13.8
(45.4)
19.9
14.4
147.5
(33.5)
(88.8)
0.9
26.1
16.1
(2.3)
13.8
469.3
(630.1)
115.4
(45.4)
1.9
13.5
5.8
(1.3)
19.9
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
111
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
19. Reserves and Retained Earnings continued
Retained Earnings
Balance at the beginning of the financial year
Transfer from unrealised gains reserve (1)
Net profit after tax attributable to equity holders of the parent
Total available for appropriation
Dividends provided for or paid
Balance at the end of the financial year
2018
$m
5,153.1
7.4
558.9
5,719.4
(413.4)
5,306.0
2017
$m
3,767.7
630.1
1,866.1
6,263.9
(1,110.8)
5,153.1
(1) On disposal of CrownBet, balances relating to CrownBet in the unrealised gains reserve were transferred to retained earnings.
The prior period transfer from unrealised gains reserve relates to Crown’s disposal of MRE.
20. Restatement of Prior Period Balances
As of 1 July 2016
Statement of Financial Position
Other payables - non-current
Reserves
Non-Controlling Interest
As of 30 June 2017
Statement of Financial Position
Trade and other payables - current
Other payables - non-current
Reserves
Non-Controlling Interest
As restated
$m
As Previously
Reported
$m
Impact of
Restatement
$m
510.9
634.8
80.3
453.0
274.0
14.4
24.8
339.5
796.6
89.8
446.5
224.8
60.8
34.1
171.4
(161.8) ^
(9.5) ^
6.5
49.2
(46.4) ^
(9.3) ^
^ Also reflected in the Statement of Changes in Equity.
As part of the purchase agreement of DGN in 2015, Crown entered into an agreement with the DGN minority shareholders,
which contained two put options and two call options over the remaining non-controlling interest in two instalments of 15%
each. As at the acquisition date, Crown did not recognise the put option liability in its financial statements. In its current
year financial statements Crown has restated its comparative information to reflect the carrying value of the put option,
resulting in adjustments as described in this note. This has impacted the Statement of Financial Position and the
Statement of Changes in Equity. There has been no impact on the Statement of Profit or Loss, the Statement of
Comprehensive Income or the Statement of Cash Flows.
Upon acquisition during the financial year ended 30 June 2016, Crown should have recognised a financial liability for the
put option and a corresponding reduction in non-controlling interest and reserves. As at 1 July 2016, the carrying value of
the put option liability amounted to $171.4 million.
For the year ended 30 June 2017, the carrying value of the put option was re-measured to $55.7 million, resulting in a
reduction of $115.7 million in Other payables with a corresponding decrease in Reserves and Non-Controlling Interest.
In addition, given the first put option was exercisable within twelve months of balance date, $6.5 million has been classified
as current Trade and other payables.
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
FINANCIAL REPORT 2018 CONTINUED
21. Lease and Expenditure Commitments
(a) Capital expenditure commitments
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 – Group as lessee
Payable within one year
Payable after one year but not more than five years
Payable more than five years
2018
$m
425.9
420.8
846.7
2018
$m
7.3
16.3
9.8
33.4
2017
$m
220.0
813.9
1,033.9
2017
$m
15.0
48.5
503.1
566.6
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 (2017: 6 years) excluding the land lease 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.
During the period, Crown, through its majority owned subsidiary, Alon, disposed of the leasehold portion of the land in Las
Vegas. The prior period comparative included the lease commitment on this land which would have expired in 2097.
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.
(c) Non-cancellable finance lease commitments – Group as lessee
Payable within one year
Payable after one year but not more than five years
Payable more than five years
(d) Non-cancellable operating lease commitments – Group as lessor
Payable within one year
Payable after one year but not more than five years
Payable more than five years
2018
$m
-
-
-
-
2018
$m
22.4
52.6
14.6
89.6
2017
$m
11.7
75.1
55.8
142.6
2017
$m
21.5
66.6
13.6
101.7
The Group has entered into operating leases for retail tenancies within its Crown Melbourne and Crown Perth properties.
The leases have terms between 3 and 25 years. The total contingent rent recognised as income during the year is
$5.7 million (2017: $5.9 million).
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
113
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
22. Cash Flow Statement Reconciliation
N
o
t
e
s
(a) Cash balance represents:
Cash on hand and at bank
Deposits at call
t
o
t
h
e
F
n
a
n
c
a
i
i
2018
$m
355.8
1,488.8
1,844.6
2017
$m
331.0
1,440.2
1,771.2
The above closing cash balances includes $130.9 million (2017: $134.7 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 $1,713.7 million (2017: $1,636.5 million) for other purposes. All deposits at call are with approved counterparties with
investment grade ratings. Refer note 32(c) for further details.
(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 gain on disposal of subsidiaries and associates
Working Capital changes:
- (Increase) / decrease in trade receivables and other assets
- (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
(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
2018
$m
2017
$m
573.2
1,825.0
285.9
(122.3)
(6.6)
(8.1)
(76.9)
(4.7)
296.8
260.2
(39.2)
(2.8)
(88.8)
(16.2)
7.4
18.7
(2.2)
(93.4)
60.4
0.2
138.4
(19.6)
731.7
(1.1)
(1,745.5)
(36.3)
(1.2)
6.6
(10.5)
465.7
2018
2017
A$20 million
A$20 million
US$10 million
US$10 million
£20 million
£20 million
As at 30 June 2018 there were no drawn down amounts on the overdraft facilities (2017: nil).
l
S
t
a
t
e
m
e
n
t
s
114
FINANCIAL REPORT 2018 CONTINUED
23. Events After the Reporting Period
On 19 July 2018, Crown announced its election to redeem all of the outstanding Subordinated Notes listed on the ASX
under the code “CWNHA” (the “Notes”) on the first call date of 14 September 2018 in accordance with the terms of the
Notes. This is expected to reduce Crown’s gross debt by approximately $400 million.
Subsequent to 30 June 2018, Crown announced its intention to undertake a new on-market share buy-back of
approximately $400 million of shares (the “New Share Buy-Back”). Crown may, at its discretion, vary, suspend or terminate
the New Share Buy-Back at any time.
Subsequent to 30 June 2018, the directors of Crown declared a final dividend on ordinary shares in respect of the year
ending 30 June 2018. The total amount of the dividend is expected to be $206.2 million, which represents a dividend of
30.0 cents per share franked at 60%. The unfranked portion of the dividend has been declared to be conduit foreign
income.
24. Contingent Liabilities and Related Matters
On 15 February 2016 Crown was issued with amended assessments and notices of penalty by the Australian Taxation
Office (“ATO”) for a total of approximately $362 million which comprise primary tax, interest and penalties. The amended
assessments are in respect of income tax paid for the financial years ended 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 (“Cannery”) in North
America. Crown formally objected to the amended assessments and notices of penalty, but those objections were
disallowed in full by the ATO. On 10 July 2018 Crown lodged applications for an appeal against the objection decisions
relating to the amended assessments in the Federal Court. On 7 September 2018 Crown applied to the Administrative
Appeals Tribunal for a review of the objection decisions relating to the notices of penalty.
Crown was issued with further amended assessments and notices of penalty dated 31 August 2018 in respect of the
financial years ended 30 June 2014 to 30 June 2016 (inclusive). The further amended assessments and notices of penalty
have been issued for a total of approximately $34 million which comprise primary tax, interest and penalties, and similarly
relate to some of the financing for Crown’s investment in Cannery.
Crown considers that it has paid the correct amount of tax in respect of these matters and intends to continue to pursue all
available avenues of objection.
As announced by Crown on 4 December 2017, Maurice Blackburn Lawyers have commenced a class action proceeding
against Crown in the Federal Court of Australia. The proceeding has been filed on behalf of persons who acquired an
interest in Crown shares between 6 February 2015 and 16 October 2016. Crown has announced that it intends to
vigorously defend the proceeding.
In addition to the above matters, 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.
The group has no other material contingent liabilities at 30 June 2018.
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
115
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
25. Auditors’ Remuneration
N
o
t
e
s
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
Amounts received, or due and receivable, by non Ernst & Young audit firms for:
Auditing services
2018
$
2017
$
1,100,926
1,045,386
3,411,650
8,180,666
256,097
1,440,858
161,080
507,335
1,885,599
286,677
5,437,088
12,839,186
-
64,230
26. Earnings Per Share (EPS)
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 ($m)
558.9
1,866.1
Weighted average number of ordinary shares used in calculating basic and diluted
EPS ($m)
688.7
726.0
2018
2017
During the year, Crown undertook an on-market share buy-back to a value of $18.7 million (2017: $500.0 million).
Following the completion of the buy-back, Crown’s shares on issue reduced by approximately 1.4 million to
approximately 687.4 million.
27. Key Management Personnel Disclosures
(a) Details of key management personnel
(i) Directors
John H Alexander
Executive Chairman
The Hon. Helen A Coonan
Non-Executive Director
Rowena Danziger
Andrew Demetriou
Geoffrey J Dixon
Non-Executive Director (resigned 26 October 2017)
Non-Executive Director
Non-Executive Director
Jane Halton AO PSM
Non-Executive Director (appointed 23 May 2018)
Professor John S Horvath AO
Non-Executive Director
Guy Jalland
Non-Executive Director (appointed 16 April 2018)
Michael R Johnston
Non-Executive Director
Antonia Korsanos
Non-Executive Director (appointed 23 May 2018)
Harold C Mitchell AC
Non-Executive Director
James D Packer
Non-Executive Director (appointed 3 August 2017, resigned 21 March 2018)
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
FINANCIAL REPORT 2018 CONTINUED
27. Key Management Personnel Disclosures continued
Prior to 30 June 2018, the Board approved the appointment of Mr John Poynton AO as a director, subject to the receipt of
all necessary consents and regulatory approvals. Mr Poynton’s appointment will only become effective once the necessary
approvals have been received.
(ii) Executives
Kenneth M Barton
Chief Financial Officer & Chief Executive Officer – Crown Digital
Barry Felstead
Chief Executive Officer – Australian Resorts
W Todd Nisbet
Executive Vice President – Strategy and Development
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) 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:
s
e
t
o
N
Remuneration by category
Short term benefits
Post employment benefits
Long term incentives
Termination benefits
2018
$m
15.4
0.2
1.8
-
17.4
2017
$m
14.1
0.2
(3.8)
6.3
16.8
Further details regarding key management personnel and detailed disclosures of share based payment arrangements are
contained in the Remuneration Report.
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
Based on a substantial shareholder notice dated 7 March 2018 lodged by Consolidated Press Holdings Group (“CPH”),
comprising Consolidated Press Holdings Pty Limited and its related corporations, a group related to Mr James Packer, at
the balance date, CPH had a relevant interest in 316,928,302 of the Company’s fully paid ordinary shares. This equates to
46.10% of the Company’s fully paid ordinary shares (2017: 49.72%) based on the total number of shares on issue at the
balance date.
(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.
117
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
28. Related Party Disclosures continued
N
o
t
e
s
(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 (2017: $4.0 million). CPH paid costs on behalf of Crown to third
parties totalling $1.0 million during the year (2017: $2.2 million). At 30 June 2018 there was $2.2 million owing to CPH
(2017: $4.2 million).
Crown and its controlled entities provided CPH with hotel and banqueting services of $22,000 during the year (2017:
$0.1m). At 30 June 2018 there were no amounts owing from CPH (2017: $nil).
On 14 December 2017, Crown agreed to sell its interest (through certain security holdings) in part of the property and
operations at Ellerston in the Hunter Valley for $62.5 million to Consolidated Press Holdings Pty Limited and an entity
associated with Ms Gretel Packer. The sale was approved by Crown’s independent directors and was completed in
February 2018. Following completion of the sale, Crown continues to have ongoing access rights to the golf course and
other facilities at Ellerston for an annual fee of $1.0 million, in line with its commitment to the NSW Government.
Crown entered into an agreement with Mr James Packer to sell two floors of the Crown Sydney Residences at the
Crown Sydney Hotel Resort to Mr Packer for $60 million. The floors are located above the mid-levels of the Crown
Sydney Hotel Resort. The sale documentation is on the same, or materially the same, terms as the documents entered
into with other purchasers. The sale was approved by Crown’s independent directors.
During the year, Crown entered into an agreement with a company controlled by Mr Harold Mitchell AC, a Director of
Crown, in relation to the sale of its interest in an aircraft (a 16 year old Bombardier Global Express) for US$4.35 million.
The disposal of the aircraft was approved by Crown’s independent directors. Prior to the sale, Mr Mitchell was provided
with access to the aircraft for which he was charged $0.2 million. These amounts were charged at normal market
prices.
(ii) Associates
During the period, Crown paid the Nobu Group $2.6 million (2017: $2.5 million) in license and management fees relating
to restaurants at Crown Melbourne and Crown Perth.
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
FINANCIAL REPORT 2018 CONTINUED
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 Resort, 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
Club Gaming 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 Queensbridge Development Pty Ltd
Crown Queensbridge Holdings Pty Ltd
Footnote
2018
2017
Country of
Incorporation
Beneficial Interest
Held by the
Consolidated Entity(1)
2018 %
2017 %
Australia
Parent Entity
USA
USA
USA
Australia
United Kingdom
Australia
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
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
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
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
A
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
119
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
29. Investment in Controlled Entities continued
Footnote
2018
2017
Country of
Incorporation
Beneficial Interest
Held by the
Consolidated Entity(1)
2018 %
2017 %
Crown Queensbridge Property (Hotel) Pty Ltd
Crown Queensbridge Property (Residential) Pty Ltd
Crown Sydney Pty Ltd
Crown Sydney Gaming Pty Ltd
Crown Sydney Holdings Pty Ltd
Crown Sydney Property Pty Ltd
Crown Training 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
Royal Gaming Pty Ltd
A
A
A
A
A
A
A
A
Australia
Australia
Australia
Australia
Australia
Australia
Australia
USA
United Kingdom
Australia
Australia
Australia
Australia
Australia
USA
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
A
A
A
A
A
A
100
100
100
100
100
100
100
100
100
100
100
100
-
-
85
100
100
100
100
100
100
100
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 deed of cross guarantee dated 21 June 2017 with the parent entity under ASIC Instrument
2016/785 - the “Closed Group” (refer note 30).
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
FINANCIAL REPORT 2018 CONTINUED
29. Investment in Controlled Entities continued
CrownBet Sale
On 28 February 2018, Crown announced that it had completed the sale of its 62% interest in CrownBet, together with
loans advanced by it to CrownBet, for $150 million. The purchaser was an entity associated with other shareholders in
CrownBet, including the CrownBet management team led by Matthew Tripp, or its nominee. The net gain generated on
the sale amounted to $87.5 million.
Financial information related to the sale of CrownBet is set out in the table below.
CrownBet Sale
Total proceeds
Loans repaid
Proceeds attributable to the sale of the business
The assets and liabilities at the date of disposal were:
Cash and cash equivalents
Trade and other receivables
Prepayments
Property, plant and equipment
Other intangible assets
Deferred tax assets
Other non-current assets
Trade and other payables
Provisions
Deferred tax liabilities
Other non-current liabilities
Minority Interest
Crown’s Share of net asset / (liabilities)
Profit on disposal
Transaction costs
Net Gain on Sale of CrownBet
$m
150.0
(71.8)
78.2
$m
8.2
5.3
4.6
42.8
20.3
29.3
7.1
117.6
119.2
7.1
3.2
9.9
139.4
8.3
(13.5)
91.7
(4.2)
87.5
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
121
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
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 Statement of Profit or Loss and Statement of Financial Position of the entities which are members of the
Closed Group are detailed below.
Consolidated Statement of Profit or Loss
Profit / (loss) before income tax
Income tax (expense) / benefit
Net profit / (loss) after income tax
Closed Group
2018
$m
485.5
(166.3)
319.2
2017
$m
1,391.7
(98.5)
1,293.2
Retained earnings / (accumulated losses) at the beginning of the financial year
5,186.1
4,116.2
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
(12.9)
-
-
34.5
222.9
630.1
(413.4)
(1,110.8)
Retained earnings / (accumulated losses) at the end of the financial year
5,079.0
5,186.1
Consolidated Statement of Financial Position
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
Investment in associates
Property, plant and equipment
Intangible assets - 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
Closed Group
2018
$m
2017
$m
1,822.0
86.9
16.3
29.9
9.2
1,964.3
885.0
1,839.9
46.3
3,782.0
980.6
315.3
243.8
50.4
8,143.3
10,107.6
391.7
25.7
164.8
204.3
786.5
1,667.2
170.8
16.5
30.1
5.6
1,890.2
1,650.5
1,933.7
39.0
3,331.8
997.3
320.6
233.8
52.0
8,558.7
10,448.9
351.1
350.1
113.3
188.8
1,003.3
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
122
FINANCIAL REPORT 2018 CONTINUED
30. Deed of Cross Guarantee continued
Consolidated Statement of Financial Position
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
31. Parent Entity Disclosures
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
Closed Group
2018
$m
2017
$m
191.8
1,989.1
380.1
48.3
2.1
2,611.4
3,397.9
6,709.7
1,611.4
(15.7)
35.0
5,079.0
6,709.7
166.0
2,038.5
352.0
62.3
2.8
2,621.6
3,624.9
6,824.0
1,630.1
(19.4)
27.2
5,186.1
6,824.0
Crown Resorts Limited
2018
$m
2017
$m
428.8
1,166.8
-
-
428.8
1,166.8
44.9
5.4
14,700.3
14,597.4
14,745.2
14,602.8
241.9
178.5
5,212.7
5,130.6
5,454.6
5,309.1
9,408.6
9,427.2
13.0
(131.0)
13.0
(146.5)
9,290.6
9,293.7
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
123
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
31. Parent Entity Disclosures continued
Contingent liabilities
There are no other contingent liabilities for the parent entity at 30 June 2018 (2017: $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 2018 (2017: $nil).
Parent entity guarantees in respect of debts of its subsidiaries
The parent entity has entered into a deed of cross guarantee as well as bank and capital market debt facilities 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 and further details on bank and capital market debt
facilities are set out in note 16.
32. Financial Risk Management Objectives and Policies
The Group’s principal financial instruments comprise receivables, payables, bank loans, capital market debt, 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 is undertaken to manage credit risk. Liquidity risk
is monitored through the employment of rolling cash flow forecasts.
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.
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
124
FINANCIAL REPORT 2018 CONTINUED
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(i)
Interest rate risk – cash flow continued
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
GBP bank loans
AUD capital market debt
Finance lease liability
HKD bank loans
Total financial liabilities
Net exposure
2018
$m
128.6
1,487.1
8.8
-
87.5
1.7
2017
$m
122.4
1,435.6
20.7
0.1
53.0
4.7
1,713.7
1,636.5
20.0
8.9
803.4
-
25.7
858.0
855.7
20.0
-
810.3
142.6
38.4
1,011.3
625.2
As at balance date, the Group maintained floating rate liabilities of $858.0 million (2017: $1,011.3 million) that were not
hedged by interest rate swaps. The associated interest rate risk is mitigated by total financial assets of $1,713.7 million
(2017: $1,636.5 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 GBP facilities the Group pays GBP LIBOR plus a margin of
70 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 $128.6 million is interest bearing and is invested at approximately BBSW. Deposits
at call of $1,487.1 million are invested at approximately BBSW. The Group maintains cash and cash equivalents on hand of
$130.9 million for operational purposes and is non interest bearing (2017: $134.7 million).
As at balance date, the Group maintained floating rate borrowings in GBP of $8.9 million (2017: $nil) and had cash and
cash equivalents of $8.8 million (2017: $20.7 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 $25.7 million (2017: $38.4 million) and had
minimal interest earning cash and cash equivalents (2017: minimal).
As at balance date, the Group had USD cash on hand and at bank of $87.5 million which is interest bearing and is invested at
approximately US LIBOR (2017: $53.0 million). In addition, the Group had USD deposits at call of $1.7 million, which is invested
at approximately US LIBOR (2017: $4.7 million). The Group maintained no floating rate borrowings in USD (2017: $nil).
Group Sensitivity
As a result of an increase in interest rates of 50 basis points the Group’s post-tax-profit for the year would have increased
by $3.0 million (2017: $2.3 million). As a result of a decrease in interest rates of 50 basis points the Group’s post-tax-profit
for the year would have decreased by $3.0 million (2017: $2.2 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.
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
125
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(i)
Interest rate risk – cash flow continued
Group Sensitivity continued
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:
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
Cash flow hedge
Maturity under 1 year
Maturity 1 -5 years
Maturity over 5 years
Closing Balance
2018
$m
-
200.0
174.6
374.6
2017
$m
-
200.0
174.6
374.6
As at balance date the key terms of the interest rate swap contracts were as follows:
Hedge Type
Maturity Date
Received
Paid
$m
Interest Rate
Interest Rate Swap Contract
Fair Value of
Year Ended 30 June 2018
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 2017
Interest Rate Swap Contract
December 2020
BBSW
2.55%
Cross Currency Swap Contract
June 2036
USD 4.91%
AUD 7.05%
(2.1)
23.3
(2.7)
21.9
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 $634.7 million (2017: $933.7 million). The Group pays between 4.5%
and 8.5% (2017: 4.5% and 7.2%) on fixed rate debt. As at balance date, the carrying amounts of the Group’s fixed rate debt
were not materially different from the fair values (2017: not material).
As at balance date the Group had no interest rate swaps in place to hedge fixed rate debt issuances (2017: nil).
(iii) Foreign exchange risk
The Group has currency exposure as a result of capital expenditure and investments/sales in currencies other than the
functional currency of the relevant entity.
The Group uses forward exchange contracts and cash flow hedges 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.
126
FINANCIAL REPORT 2018 CONTINUED
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(iii) Foreign exchange risk continued
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
2018
$m
6.0
6.0
6.0
2018
$m
7.9
7.9
7.9
2018
$m
4.0
27.1
31.1
9.6
25.7
35.3
(4.2)
2017
$m
7.7
7.7
7.7
2017
$m
7.4
7.4
7.4
2017
$m
5.8
43.8
49.6
7.6
38.4
46.0
3.6
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 (2017: not material).
The sensitivity to fair value movements through profit or loss as a result of the AUD strengthening or weakening by 10c
against the USD would be $0.9 million higher or $0.7 million lower (2017: $1.2 million higher or $0.9 million lower).
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 (2017: not material).
The sensitivity to fair value movements through profit or loss as a result of the AUD strengthening or weakening by 5c
against the GBP would be $0.8 million higher or $0.7 million lower (2017: $0.7 million higher or $0.6 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 (2017: not material).
The sensitivity to fair value movements through profit or loss as a result of the AUD strengthening or weakening by 50c
against the HKD would be $0.3 million higher or $0.4 million lower (2017: $0.3 million higher or $0.3 million lower).
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
127
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
32. Financial Risk Management Objectives and Policies continued
(a) Market Risk continued
(iii) Foreign exchange risk continued
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
Closing Balance
Notional Amounts
Average Rate
2018
$m
76.2
76.2
2017
$m
100.0
100.0
2018
2017
0.8294
0.8402
The 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 recognised through OCI and accumulated in the cash
flow hedge reserve in equity.
(b) Price Risk
(i) Equity Securities Price Risk
Neither the Group nor the parent entity is exposed to equity securities risk.
(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.
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
128
FINANCIAL REPORT 2018 CONTINUED
32. Financial Risk Management Objectives and Policies continued
(c) Credit Risk continued
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.
(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 1.7% or $25.7 million of the Group’s interest bearing liabilities will mature in less than 12 months (2017:
18.0% or $350.1 million).
As at balance date the Group had $176.1 million in undrawn committed bank lines and $1,844.6 million in cash and cash
equivalents to mitigate the maturing liabilities (2017: $414.8 million and $1,771.2 million respectively).
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
129
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
32. Financial Risk Management Objectives and Policies continued
N
o
t
e
s
(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
2018
2017 (1)
2018
2017 (1)
$m
$m
$m
$m
2018
$m
2017 (1)
$m
2018
$m
2017 (1)
$m
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
Receivables - trade
172.3
225.3
17.6
20.3
1,844.6
1,771.2
-
-
-
-
-
125.4
125.4
78.1
-
-
-
-
-
-
-
-
-
-
1,844.6
1,771.2
189.9
125.4
245.6
125.4
-
78.1
Receivables - other
Forward exchange
contracts receivable
Cross currency
interest rate swaps
receivable
Total financial
assets
Financial liabilities
Trade and other
payables
Finance lease and
other loan liabilities
Capital markets
Forward exchange
contracts payable
Interest rate swaps
payable
Cross currency
interest rate swaps
payable
Total financial
liabilities
8.4
8.1
33.5
32.3
117.3
112.9
159.2
153.3
2,025.3
2,082.7
176.5
178.0
117.3
112.9
2,319.1
2,373.6
427.5
453.0
124.6
115.5
163.0
158.5
715.1
727.0
-
-
11.7
1.0
130.9
-
-
1.0
142.6
300.0
259.1
259.1
1,178.0
1,184.9
1,437.1
1,744.0
-
72.6
-
-
0.8
1.6
1.1
3.9
-
-
-
-
-
-
54.6
58.4
-
72.6
1.9
5.5
Bank loans
25.7
38.4
28.9
20.0
12.3
12.3
49.2
49.2
160.1
172.4
221.6
233.9
466.3
889.6
463.9
578.6
1,501.1
1,515.8
2,431.3
2,984.0
Net maturity
1,559.0
1,193.1
(287.4)
(400.6)
(1,383.8)
(1,402.9)
(112.2)
(610.4)
(1) Certain amounts have been restated, refer note 20.
130
FINANCIAL REPORT 2018 CONTINUED
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 – the fair value is calculated using quoted prices in active markets;
Level Two – 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, including cash flow forecasts, implied growth rates and implied discount rates.
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 2018
Financial Assets
Foreign exchange contracts
Cross currency swap contracts
Financial Liabilities
Contingent consideration
Interest rate swap contracts
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
Valuation Technique
Quoted
market price
Observable
inputs
Non market
observable
Level One
Level Two
Level Three
$m
$m
$m
-
-
-
-
-
-
-
-
64.8
64.8
-
-
-
9.2
23.3
32.5
-
2.1
2.1
9.4
21.9
-
31.3
-
2.8
2.8
-
-
-
47.0
-
47.0
-
-
-
-
45.3
-
45.3
Total
$m
9.2
23.3
32.5
47.0
2.1
49.1
9.4
21.9
64.8
96.1
45.3
2.8
48.1
There have been no transfers between fair value measurement levels during the financial year ended 30 June 2018.
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
131
Crown Resorts Limited Annual Report 2018
Notes to the Financial Statements continued
For the year ended 30 June 2018
32. Financial Risk Management Objectives and Policies continued
(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
Profit and Loss
Other Comprehensive Income
Closing Balance - Financial Liabilities
2018
$m
-
-
-
-
45.3
-
1.7
47.0
2017
$m
2.0
38.1
(40.1)
-
154.1
(104.1)
(4.7)
45.3
(f) Changes in liabilities arising from financing activities
Capital
Markets
Debt
- Unsecured
Finance
Leases
- Secured
Bank Loans
- Unsecured
$m
$m
$m
58.4
(3.8)
1,744.0
(307.6)
-
-
-
-
-
0.7
54.6
1,437.1
75.5
(17.3)
0.2
-
-
2,058.0
(317.5)
-
-
3.5
58.4
1,744.0
142.6
(118.1)
0.5
-
(25.0)
-
127.8
(9.6)
(0.6)
-
25.0
142.6
Other
Loans
- Unsecured Derivatives
Total
Liabilities
from
Financing
Activities
$m
-
1.0
-
-
-
1.0
-
-
-
-
-
-
$m
$m
2.7
-
-
(0.6)
-
2.1
1,947.7
(428.5)
0.5
(0.6)
(24.3)
1,494.8
22.1
2,283.4
-
-
(4.8)
(14.6)
2.7
(344.4)
(0.4)
(4.8)
13.9
1,947.7
Year ended 30 June 2018
At 1 July 2017
Cash flows
Foreign exchange variations
Movement in fair value
Other
At 30 June 2018
Year ended 30 June 2017
At 1 July 2016
Cash flows
Foreign exchange variations
Movement in fair value
Other
At 30 June 2017
N
N
o
o
t
t
e
e
s
s
t
t
o
o
t
t
h
h
e
e
F
F
n
n
a
a
n
n
c
c
a
a
i
i
i
i
l
l
S
S
t
t
a
a
t
t
e
e
m
m
e
e
n
n
t
t
s
s
132
FINANCIAL REPORT 2018 CONTINUED
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.
giving a true and fair view of the consolidated entity’s financial position as at 30 June 2018 and of its
performance for the year ended on that date; and
ii. 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 2018.
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 29 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
Executive Chairman
Melbourne, 11 September 2018
133
Crown Resorts Limited Annual Report 2018
Shareholder Information
Substantial shareholders as at 3 September 2018
The following information is extracted from substantial shareholder notices received by Crown.
Shareholder
Date Received
Number of
ordinary
Shares
Consolidated Press Holdings Pty Limited
7 March 2018
316,928,302
Schroder Investment Management Australia Limited
20 November 2017
34,732,148
* Percentage of Issued Capital based on the total number of ordinary shares on issue at 3 September 2018.
% of
Issued
Capital*
46.10%
5.05%
Holders of each class of securities as at 3 September 2018
Crown has 687,421,194 ordinary shares on issue held by 54,605 shareholders.
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 amounts paid and payable
on the share.
Distribution of shareholders as at 3 September 2018
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
37,311
15,324
1,373
544
53
54,605
% of
Issued
Capital
2.11
4.77
1.42
1.70
90.00
100.00
The number of shareholders holding less than a marketable parcel of ordinary shares is 1,376 (based on a closing market
price of ordinary shares on 3 September 2018).
On-market buy-back
Crown lodged an Appendix 3C with the Australian Securities Exchange on 9 August 2018.
S
h
a
r
e
h
o
d
e
r
l
I
n
f
o
r
m
a
t
i
o
n
134
The 20 largest shareholders as at 3 September 2018
Name
CPH CROWN HOLDINGS PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
J P MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
BNP PARIBAS NOMINEES PTY LTD
Continue reading text version or see original annual report in PDF format above