A B N 5 1 0 0 0 0 0 5 1 0 3
EVENT HOSPITALITY & ENTERTAINMENT LIMITED
Annual
Report
2019
E V E N T H O S P I T A L I T Y & E N T E R T A I N M E N T L I M I T E D
A B N 5 1 0 0 0 0 0 5 1 0 3
2 0 1 9 A N N U A L R E P O R T
C O N T E N T S
Section
Directors’ Report
Message from the Chairman regarding the Remuneration Report
Directors’ Report: Remuneration Report – Audited
Lead Auditor’s Independence Declaration
Statement of Financial Position
Income Statement
Statement of Comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Section 1 – Basis of preparation
1.1 – Reporting entity
1.2 – Basis of preparation
1.3 – Foreign currency
1.4 – New and amended accounting standards adopted by the Group
1.5 – New standards and interpretations not yet adopted by the Group
Section 2 – Performance for the year
2.1 – Revenue
2.2 – Segment reporting
2.3 – Individually significant items
2.4 – Discontinued operations
2.5 – Taxation
2.6 – Earnings per share
Section 3 – Operating assets and liabilities
3.1 – Trade and other receivables
3.2 – Inventories
3.3 – Property, plant and equipment
3.4 – Investment properties
3.5 – Goodwill and other intangible assets
3.6 – Trade and other payables
3.7 – Provisions
3.8 – Other liabilities
Section 4 – Capital structure and financing
4.1 – Share capital
4.2 – Dividends
4.3 – Reserves
4.4 – Loans, borrowings and financing arrangements
4.5 – Financial risk management
Section 5 – Group composition
5.1 – Business combinations
5.2 – Subsidiaries
5.3 – Interests in other entities
Section 6 – Employee benefits and related party transactions
6.1 – Share-based payments
6.2 – Director and executive disclosures
6.3 – Related parties
Section 7 – Other information
7.1 – Commitments and leases
7.2 – Contingent liabilities
7.3 – Reconciliation of profit for the year to net cash provided by operating activities
7.4 – Auditors’ remuneration
7.5 – Parent entity disclosures
7.6 – Events subsequent to reporting date
7.7 – Deed of Cross Guarantee
Directors’ Declaration
Independent Auditor’s Report
Shareholder Information
Other Information
1 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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D I R E C T O R S ’ R E P O R T
The directors present their report together with the financial report of EVENT Hospitality & Entertainment Limited, being the
Company and its controlled entities (“Group”), for the year ended 30 June 2019 and the auditor’s report thereon.
DIRECTORS
The directors of the Company in office at any time during or since the end of the year are:
AG Rydge (Chairman)
Director since 1978
KG Chapman
Director since 2010
PR Coates
Director since 2009
VA Davies
Director since 2011
DC Grant
Director since 2013
JM Hastings (Managing Director and Chief Executive Officer)
Director since 2017.
PM Mann
Director since 2013
RG Newton
Director since 2008.
Directors’ qualifications, experience and independent status
Alan Rydge
Non-executive Chairman, Board member since 1978, Chairman of the Board since 1980. Member of the Audit and Risk
Committee and member of the Nomination and Remuneration Committee.
Experience
A company director with 40-plus years experience in the film, hospitality, leisure and tourism industries. Joined the Greater
Union group in 1971 and was formerly the Group Managing Director.
Directorships
Mr Rydge is also a director of the listed company, Carlton Investments Limited (appointed 1980, chairman since 1980). In
addition, Mr Rydge is chairman of Alphoeb Pty Limited and Enbeear Pty Limited.
Kenneth Chapman MB BS, FAICD
Independent non-executive director and Board member since 2010.
Experience
A company director with 20-plus years senior executive experience in the tourism and real estate sectors. Currently, chief
executive officer of Skyrail-ITM and executive director of the Chapman group of companies.
Directorships
Positions held by Mr Chapman during the last three years include:
•
•
•
•
•
director of Aquis Entertainment Limited (appointed 14 August 2015, resigned 3 November 2016);
chairman of Skyrail Pty Ltd trading as Skyrail Rainforest Cableway;
chairman of Far North Queensland Hospital Foundation;
chairman of Skyrail Rainforest Foundation Limited; and
director of various entities associated with the privately held Chapman group of companies.
2 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Directors’ qualifications, experience and independent status (continued)
D I R E C T O R S ’ R E P O R T
Peter Coates AO, BSc (Mining Engineering), FAICD, FAusIMM
Independent non-executive director and Board member since 2009. Mr Coates served as a member of the Audit and Risk
Committee and as a member and Chairman of the Nomination and Remuneration Committee until 2015. Mr Coates is the
lead independent director.
Experience
A company director with more than 50 years of resource industry experience including as chief executive officer of Xstrata
and Glencore’s global coal businesses until his retirement in December 2007. Mr Coates was a past non-executive chairman
of Santos Limited, Sphere Minerals Limited and Minara Resources Ltd, and a past chairman of the Minerals Council of
Australia, NSW Minerals Council and Australian Coal Association. He was made an Officer of the Order of Australia in 2009
and awarded the Australasian Institute of Mining and Metallurgy Medal in 2011.
Directorships
Positions held by Mr Coates during the last three years include:
•
•
•
director of Glencore plc;
chairman of the Industry Advisory Council for the School of Minerals and Energy Resource Engineering, UNSW; and
director of Santos Limited (resigned 19 February 2018).
Valerie Davies FAICD
Independent non-executive director and Board member since 2011.
Experience
A company director with more than two decades of broad experience across diverse sectors, including tourism, property,
health and media. In parallel, Ms Davies has more than 20 years senior executive experience in corporate communications,
as principal of her own consultancy One.2.One Communications Pty Ltd.
Directorships
Positions held by Ms Davies during the last three years include:
•
•
•
director of Cedar Woods Properties Limited;
director of HBF Health Limited (resigned 24 October 2017); and
commissioner of Tourism Western Australia.
David Grant BComm, CA, GAICD
Independent non-executive director, Board member since 2013, Chairman of the Audit and Risk Committee and Chairman of
the Nomination and Remuneration Committee.
Experience
Mr Grant is a Chartered Accountant with 25-plus years accounting and finance experience spanning both the accounting
profession and the commercial sector. Mr Grant’s executive career included roles with Goodman Fielder Limited and Iluka
Resources Limited as well as co-founding a privately held resource exploration venture in New Zealand. Mr Grant was
formerly a non-executive director of iiNet Limited.
Directorships
Positions held by Mr Grant during the last three years include:
•
•
director of Murray Goulburn Co-operative Co. Limited (appointed 27 October 2017); and
director of Retail Food Group Limited (appointed 25 September 2018).
3 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Directors’ qualifications, experience and independent status (continued)
D I R E C T O R S ’ R E P O R T
Jane Hastings BComm
Managing Director and Chief Executive Officer (“CEO”) from 1 July 2017.
Experience
Ms Hastings has more than 20 years’ experience in the tourism, hospitality and entertainment sectors. Ms Hastings was
previously CEO of New Zealand Media and Entertainment (NZME) (2014 − 2016). Ms Hastings was appointed as the Group’s
Chief Operating Officer in 2016 and CEO in 2017.
Directorships
Ms Hastings was previously a New Zealand Film Commission board member.
Patria Mann BEc, FAICD
Independent non-executive director and Board member since 2013. Member of the Audit and Risk Committee and member
of the Nomination and Remuneration Committee.
Experience
Mrs Mann qualified as a Chartered Accountant and was a former partner of KPMG. She has been a professional non-
executive director for over 15 years. Mrs Mann has extensive audit, investigation, risk management and corporate
governance experience.
Directorships
Positions held by Mrs Mann during the last three years include:
•
•
•
•
director of Bellamy’s Australia Limited (appointed 10 March 2016, resigned 18 May 2017);
director of Ridley Corporation Limited;
director of Perpetual Superannuation Limited (resigned 31 October 2016); and
director of Allianz Australia Limited.
Richard Newton BBus (Marketing), FAICD
Independent non-executive director and Board member since 2008.
Experience
A company director with 20-plus years senior executive experience in property investment and development, specifically in
hotel operations.
Directorships
Positions held by Mr Newton during the last three years include:
•
•
chairman of Capricorn Village Joint Venture, WA;
chairman and director of Selpam (Australia) Pty Limited and a director of various companies wholly owned by Selpam
(Australia) Pty Limited; and
director of Bonsey Jaden Pte Ltd, a digital advertising agency.
•
Explanation of abbreviations and degrees: AO Officer of the Order of Australia; BBus (Marketing) Bachelor of Business (Marketing); BComm Bachelor of
Commerce; BEc Bachelor of Economics; BSc (Mining Engineering) Bachelor of Science (Mining Engineering); CA Member of Chartered Accountants Australia
and New Zealand; FAICD Fellow of the Australian Institute of Company Directors; FAusIMM Fellow of the Australasian Institute of Mining and Metallurgy;
GAICD Graduate Member of the Australian Institute of Company Directors; and MB BS Bachelor of Medicine and Bachelor of Surgery.
COMPANY SECRETARIES
GC Dean CA, ACIS was appointed to the position of Company Secretary for EVENT Hospitality & Entertainment Limited in
December 2002. GC Dean was Accounting Manager for the Company (2001 – 2002) and is a Chartered Accountant and a
member of the Governance Institute of Australia.
DI Stone FCA, ACIS was appointed to the position of Company Secretary for EVENT Hospitality & Entertainment Limited in
February 2012. Prior to this appointment, DI Stone was an audit senior manager at KPMG. DI Stone is a Fellow of the Institute
of Chartered Accountants in England and Wales and a member of the Governance Institute of Australia.
4 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
CORPORATE GOVERNANCE
The Board endorses the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations, 3rd
edition. The Group has disclosed its 2019 Corporate Governance Statement in the Corporate Governance section on the EVENT
website (https://www.evt.com/investors/). As required, the Group has also lodged the 2019 Corporate Governance Statement
and Appendix 4G with the ASX.
DIRECTORS’ MEETINGS
The number of directors’ meetings (including meetings of committees of directors) and the number of meetings attended by
each of the directors of the Company during the year are set out below:
Directors’
meetings
Audit and Risk
Committee
meetings
Nomination and
Remuneration
Committee meetings
Other special purpose
committee meetings
Entitled
to attend
Attended
Entitled
to attend
Attended
Entitled
to attend
Attended
Entitled
to attend
Attended
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
12
4
–
–
–
4
4
4
–
4
–
–
–
4
4
4
–
4
–
–
–
4
4
4
–
4
–
–
–
4
4
4
–
4
–
4
–
4
4
–
–
4
–
4
–
4
4
–
–
AG Rydge
KG Chapman
PR Coates
VA Davies
DC Grant
JM Hastings (a)
PM Mann
RG Newton
(a)
JM Hastings attended Audit and Risk Committee and certain Nomination and Remuneration Committee meetings by invitation. Other directors
who are not members of a committee may attend meetings by invitation from time to time.
(b) Other special purpose committees were formed during the year to assist the Board with the sale of the Entertainment Germany division (see page
7) and the sale of the Group’s ordinary shares in Carlton Investments Limited (see page 26).
During the year, directors also visited various sites to improve their understanding of the Group’s locations and operations.
PRINCIPAL ACTIVITIES
The principal activities of the Group during the course of the year included the following:
•
•
•
•
•
•
cinema exhibition operations in Australia, including technology equipment supply and servicing, and the State Theatre;
cinema exhibition operations in New Zealand;
cinema exhibition operations in Germany;
ownership, operation and management of hotels and resorts in Australia and overseas;
operation of the Thredbo resort including property development activities; and
property development, investment properties, and investment in shares in listed and unlisted companies.
On 22 October 2018, the sale of the German cinema exhibition operation to Vue International Bidco plc, subject to Federal
Cartel Office (“FCO”) approval, was announced; see page 7 for further details. There were no other significant changes in the
nature of the activities of the Group during the year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 22 October 2018, the sale of the German cinema exhibition operation to Vue International Bidco plc, subject to FCO
approval, was announced; see page 7 for further details. There were no other significant changes in the state of affairs of the
Group during the year.
OPERATING AND FINANCIAL REVIEW
Overview of the Group
Reported net profit after discontinued operations was $111,889,000 (2018: $111,910,000), $21,000 below the prior year
result. The normalised result before interest and income tax expense from continuing operations was $158,945,000 (2018:
$170,352,000), a decrease of $11,407,000 or 6.7% and the normalised result after tax from continuing operations was
$104,271,000 (2018: $111,657,000), a decrease of $7,386,000 or 6.6% below the prior year result.
5 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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6
D I R E C T O R S ’ R E P O R T
Overview of the Group (continued)
An analysis of the last five years is outlined below:
Total revenue and other income ($’000)
Basic earnings per share (cents)
Dividends declared(a) ($’000)
Dividends per share (cents)
Special dividend per share (cents)
2019
2018
2017
2016
2015
1,304,288
69.6
83,822
52
–
1,289,738
69.8
83,670
52
–
1,294,269
69.6
81,886
51
–
1,280,889
82.2
81,886
51
–
1,174,662
68.9
85,097
45
8
(a) Includes the interim dividend paid and the final and special dividends declared in relation to the financial year ended 30 June.
Discontinued operation – CineStar Germany
On 22 October 2018, the sale of the German cinema exhibition operation to Vue International Bidco plc, subject to FCO approval,
was announced. As a result, the Entertainment Germany result has been reported as a discontinued operation. The sale includes
a completion payment of €130 million (A$206 million) and variable consideration of up to €81.8 million (A$130 million) depending
on German market admissions for the 2019 calendar year and up to a further €10 million (A$16 million) subject to the satisfaction
of other agreed conditions. The variable consideration is based on German market admissions in the 2019 calendar year reaching
a minimum of 105 million with the full consideration paid at 115 million admissions. The FCO review is in progress. This operation
was not a discontinued operation at the end of the prior year (30 June 2018) and the comparative Income Statement for the year
to 30 June 2018 has been re-presented to show the discontinued operation separately from continuing operations.
Individually significant items
Individually significant items comprised the following:
Reversal of impairment charges booked in previous years
Impairment charges
Redundancies and restructure costs
Hotel and cinema pre-opening costs
Legal and other costs associated with the sale of a business segment
Other (expense)/income
Individually significant items expense before income tax
Income tax benefit
Individually significant items income/(expense) after income tax
2019
$’000
9,809
–
(3,869)
(3,473)
(1,775)
(1,194)
(502)
3,310
2,808
2018
$’000
–
(15,454)
(1,698)
(1,293)
–
3,877
(14,568)
4,370
(10,198)
Investments
The Group acquired property, plant and equipment totalling $118,482,000 during the year. The significant acquisitions and capital
additions include the following:
• QT Perth and Atura Adelaide Airport hotel developments;
•
•
cinema developments at Coomera (QLD), Kawana (QLD) and Tauranga Crossing (NZ); and
refurbishment requirements for the cinemas, hotels and resorts.
Property
The Group’s interest in land and buildings and integral plant and equipment, including long term leasehold land and
improvements, is independently valued by registered qualified valuers on a progressive three year cycle. Independent valuations
for the majority of the Group’s properties have been obtained at 30 June 2019, and the revised total value of the Group’s interest
in land and buildings, excluding investment properties, based on these independent valuations is $1,947,644,000 (refer to Note
3.3 to the financial statements) whilst the total written-down book value of these land and buildings including integral plant and
equipment at 30 June 2019 was $1,073,567,000. The total value of the investment properties at 30 June 2019 was $76,200,000.
Capital structure
Cash and term deposits at 30 June 2019 totalled $71,925,000 and total bank debt outstanding was $376,909,000.
7 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Treasury policy
The Group manages interest rate risk in accordance with a Board approved treasury policy covering the types of instruments,
range of protection and duration of instruments. The financial instruments cover interest rate swaps and forward rate
agreements. Maturities of these instruments are up to a maximum of five years. Interest rate swaps and forward rate agreements
allow the Group to raise long term borrowings at floating rates and swap a portion of those borrowings into fixed rates.
The approved range of interest rate cover is based on the projected debt levels for each currency and reduced for each future
year. At 30 June 2019, the Group had no interest rate hedges (2018: no interest rate hedges).
$545,000,000 revolving multi-currency loan facility; and
$15,000,000 credit support facility (for the issue of letters of credit and bank guarantees).
Liquidity and funding
The Group’s secured bank debt facilities were amended and restated on 15 August 2017 and comprise the following:
•
•
The above facilities mature on 15 August 2020 and are supported by interlocking guarantees from most Group entities and are
secured by specific property mortgages. Debt drawn under these facilities bears interest at the relevant inter-bank benchmark
reference rate plus a margin of between 1.15% and 2.1% per annum.
Cash flows from operations
Net operating cash inflows decreased to $171,369,000 from $207,749,000 recorded in the prior comparable year. This movement
was driven by an increase in cash payments made in the ordinary course of operations from the Group’s major operating
businesses. A review of operations by division is set out below.
Impact of legislation and other external requirements
There were no changes in environmental or other legislative requirements during the year that have significantly impacted the
results of operations of the Group.
REVIEW OF OPERATIONS BY DIVISION
ENTERTAINMENT
Entertainment – Australia
As at 30 June
Cinema locations*
Cinema screens*
2019
75
701
2018
Movement
77
703
(2)
(2)
* Managed and joint venture cinema sites (excludes Moonlight Cinema sites and screens and the State Theatre).
Australian Entertainment revenue was relatively flat with prior year at $451.2 million (-0.6%). This result was achieved despite a
less desirable genre mix of films for our audience. Within the top 50 films, there was a lack of blockbuster and action adventure
films during the year (-$121 million nationwide box office) with the line-up skewed toward more adult dramas (+$64.9 million
nationwide box office) and family films (+$96 million nationwide box office). Pleasingly, the Group achieved market share
growth on blockbusters (+0.5 percentage points) and whilst we typically attract a lower market share on family films, the Group
managed to grow market share for this segment by 1.2 percentage points. Despite the genre challenge, overall market share for
the Group remained relatively stable in the second half of the year.
The titles that grossed over $30 million at the Australian box office during the period included: Avengers: Endgame ($83.9
million); Bohemian Rhapsody ($55.0 million); Aquaman ($41.7 million); Captain Marvel ($41.6 million); A Star Is Born ($36.5
million); and Aladdin ($30.9 million). The top 20 films nationwide (representing 48% of box office) grossed $576 million, $6.7
million below the top 20 films in the prior year which grossed $583 million. However, the balance of the 2019 slate was up 4.7%
on prior year.
Average admission price increased 3% as a result of targeted demand pricing. In addition, more customers chose to see a film in
one of the Group’s premium cinemas − up 2% on prior year and up 5% in the second half. Given the increased number of family
films during the year, attracting a more price sensitive market, this was a pleasing result.
Merchandising spend per customer increased as a result of: new merchandising layouts; the introduction of premium brand
Parlour Lane popcorn and choc tops; eCommerce enhancements; and new family targeted offers. As a result, the Group
experienced five record months of merchandising spend during the second half of the year.
8 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Strong growth in online revenue continued over the prior period up 16% year on year. Importantly, the power of the Group’s
direct customer relationships continues to grow with almost 2.2 million active CineBuzz members. CineBuzz members accounted
for 67% of total admissions for the year. The Group continues to explore new ways to leverage and monetise this valuable asset.
Earnings before interest, tax, depreciation and amortisation (“EBITDA”) was $89,463,000, 6.6% below the prior year. Adjusting
for the impact of the new revenue accounting standard AASB 15 and the decline in screen advertising revenue, EBITDA was 3.5%
below the prior year. The normalised profit before interest and income tax expense was $60,198,000, 12.2% below the prior
comparable year. The adoption of AASB 15 changed the measurement of loyalty points and the timing that unredeemed or
expired vouchers can be recognised. Whilst this is only a timing difference, without this impact the overall decrease to
normalised profit was 10.7%.
Excluding the adoption of AASB 15, Australian cinema earnings were impacted a couple of key factors: a decrease in screen
advertising earnings, and increases in rent and depreciation. The decrease in screen advertising earnings of $1.7 million,
reflected weakness in the broader cinema advertising market. The increase in rent ($5.0 million) and depreciation ($0.6 million)
principally related to previously committed new cinema openings, of which some are taking longer than expected to mature.
However, performance is expected to improve going forward. It is pleasing to highlight that Event Cinemas Kawana (opened
November 2018) delivered a positive result in the first month of operation and incorporates our new cinema concepts.
The past 12 months have focussed on the development of new innovative cinema experiences as part of the Group’s ‘Future of
Cinema’ strategy. Innovating upon global best practice, a series of concepts have been developed, implemented at select sites
and validated via customer research. These exciting new cinema experiences have been endorsed by customers as something
they would ‘pay more for’. Whilst this portfolio of growth concepts will continue to evolve, these new experiences will be
integrated into the targeted cinema upgrade program. Over the next three years, the Group aims to upgrade the best locations.
These concepts include:
•
new eCommerce functionality and technology to capture customer data, grow eCommerce revenue and streamline
operations;
enhanced food and beverage Marketplaces designed to increase customer spend via optimised flows, proprietary premium
brands and driving an increase in impulse purchases; and
new premium cinema experiences founded on the principle of ‘Your Cinema, Your Way’ enabling customers to choose their
experience and price point. This includes: the new three-seat format of daybeds, reclining seats and premium fixed back
seating; Boutique Cinemas (the next level of Gold Class) with premium designer recliners and configurable spaces for events;
and 4DX, the first and leading 4D movie technology in the world.
•
•
Further screen upgrades to commence at priority locations in the next financial year will include Macquarie, Chermside, Robina,
Tuggerah, Shellharbour and Toowoomba Central.
During the year, the Group opened two new cinemas. Whilst the cinema footprints had been pre-committed, these included
some of the new concepts. The new Event Cinemas in Coomera (Gold Coast) include two Gold Class experiences, two new three-
seat Vmax experiences and four premium seat traditional screens with daybeds, leveraging underutilised cinema space for a
premium return. Kawana (Sunshine Coast) includes three enhanced Gold Class experiences, two new three-seat Vmax
experiences and four premium seating traditional screens. Elements of the new marketplace design were also incorporated.
Since opening, the new concepts have achieved an average admit price, occupancy and merchandising spend per head
materially above the circuit average. Coomera, positioned in a growth corridor on the Gold Coast, is yet to mature at an
admissions level but is trading favourably in comparison to forecast across key performance metrics. Kawana, as noted above,
has made a positive impact from opening and is trading above expectations.
As noted above, due to the application of the new revenue standard (AASB 15) a change has been made to the measurement of
loyalty points and the timing of breakage revenue recognition. Unredeemed and expired gift cards and vouchers were previously
recognised at expiry, and under AASB 15, a portion of the estimated breakage is recognised before the gift cards and vouchers
have actually expired. Whilst this is only a timing difference, there was a reduction in revenue from gift card and voucher
breakage recognised during the year. The total impact of the adoption of AASB 15 in the year ended 30 June 2019 was a
reduction in normalised profit of $1,094,000.
9 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Entertainment – New Zealand
As at 30 June
Cinema locations *
Cinema screens *
* Managed and joint venture cinema sites.
D I R E C T O R S ’ R E P O R T
2019
20
135
2018
Movement
19
129
1
6
New Zealand Entertainment revenue was $89.8 million or 5.3% above the prior year. New Zealand nationwide box office
increased by 1.4% and the Group out-performed the market with box office revenue up 2.7%. Market share also increased by
0.59 percentage points on prior year; half of this share increase was related to the new site opening in Tauranga.
The five highest-grossing titles within the New Zealand market included: Avengers: Endgame (NZ$13.8 million), Bohemian
Rhapsody (NZ$7.6 million); Aquaman (NZ$6.5 million); Incredibles 2 (NZ$6.2 million) and Mamma Mia: Here We Go Again!
(NZ$6.1 million). These five titles achieved a combined total of NZ$40.2 million compared to the top five titles in the prior year
which collectively grossed NZ$38.2 million. The top 20 films nationwide (representing 49% of box office) grossed $94.3 million,
$3.3 million ahead of the top 20 films in the prior year which grossed $91.0 million. However, the balance of the 2019 slate was
0.6% below the prior year. The Group also achieved strong growth in respect of world films (box office up 7%) and alternative
content (box office up 55%).
Average admission price increased by 4.8% as a result of targeted demand-based variable pricing. Merchandising spend per head
increased by 3.8%, driven by a very strong second half of the year with growth of 6.5%. This result benefited from a focus on the
core product range, introduction of owned brand Parlour Lane, new family value deals and sales programs.
Similar to Australia, Cinebuzz continues to strengthen with a 47% growth in active membership year on year and now represents
close to 50% of all transactions. Online booking fee revenue increased 21% over the prior year.
During the year the Group opened a six screen cinema in Tauranga. Whilst the footprint had been pre-committed, new concepts
were incorporated with every auditorium having the new three-seat concept including daybeds, full recliners and standard seats.
Tauranga is delivering results above expectations and as with Kawana in the Australian circuit, delivered a positive result within
every month since opening and is tracking above expectations.
EBITDA was $15,575,000, 8.5% below the prior year. However, last year’s result included insurance proceeds totalling $2,010,000
relating to the Queensgate cinema which was closed due to earthquake damage in 2016 and will reopen mid-2021. Adjusting for
the impact of this item, the New Zealand division delivered a strong result with an increase in EBITDA of 3.8%. The normalised
profit before interest and income tax expense of $10,015,000 was 10.2% below the prior year; however, adjusting for the impact
of the Queensgate insurance proceeds received in the prior year, normalised profit increased by 9.6%.
Under construction and due to open in early 2020 is a new cinema complex in Newmarket, Auckland which will incorporate the
Group’s new Boutique premium cinema concept, two three-seat Vmax concept auditoriums and three traditional cinemas with
two seating configurations. Upgrades are also underway in Auckland at Event Cinemas Queen Street and Westgate including new
seating concepts and foyer area upgrades targeted for completion by December 2019. Event Cinemas in Albany and Manukau will
each have two traditional cinemas converted to the new three-seat Vmax concept and these new auditoriums are due to open by
December 2019.
Discontinued operation – Entertainment Germany
As noted above, this division has been presented as a discontinued operation in the Income Statement for the year ended 30
June 2019.
The German market box office was €867 million, down €60 million (-6.5%) year on year. The primary impacts included the
extended 2018 summer with record warm weather, the disruption caused by the FIFA World Cup, a comparative decrease in
contribution from local German film content, down €30 million (-15%) on the prior year, and to a lesser extent a Hollywood line
up that had less appeal for German audiences down 3% year on year. As a result, German market admissions fell by 5.5%.
CineStar traded in line with the market. The decrease in admissions also impacted cinema advertising earnings, which were
down 31.6%. Costs were well managed and all variable costs were flexed wherever possible to respond to the softening of the
admission levels.
The highest-grossing titles within the German market included: Avengers: Endgame (5 million admissions); Fantastic Beasts: The
Crimes of Grindelwald (3.7 million admissions); the German title All About Me (3.6 million admissions); Bohemian Rhapsody (3.5
million admissions); and Hotel Transylvania 3: Summer Vacation (2.5 million admissions).
10 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
The Group exited from cinemas at Kassel and Osnabrück during the year and two cinemas opened including the nine-screen
cinema at Augsberg (opened 20 September 2018) and the five-screen cinema at Remscheid (opened 12 December 2018).
The reported net profit after income tax from Entertainment Germany was $4,810,000. Profit before interest, income tax
expense and individually significant items was $9,463,000, a decrease of $10,455,000 or 52.5% below the prior year
HOSPITALITY AND LEISURE
Hotels and Resorts
As at 30 June
Locations *
Rooms *
Locations (owned)
Rooms (owned)
2019
62
10,001
27
3,915
2018
55
8,975
26
3,742
Movement
7
1,026
1
173
* Owned, managed and other hotels with which the Group has a branding and/or service agreement.
Overall Hotels revenue was $353.4 million, an increase of 4.9% on the prior year. This growth was primarily due to two new
hotel openings including QT Perth (August 2018) and Atura Adelaide Airport (September 2018), growth in conference and event
revenues and growth in food and beverage revenue. Fee income, from existing managed hotels and new management
agreements, increased by 13.6%. This was a pleasing result in a very competitive market.
Across key Australian and New Zealand markets, the year was characterised by a record increase in supply of new rooms and less
key events which slowed demand. Whilst record occupancy levels were not experienced, it was pleasing to see that there was a
continued high level of demand for hotel rooms particularly in major markets such as Sydney, Melbourne and Queenstown
which traded at occupancy levels of 86.3%, 84.7% and 81.8% respectively.
Despite a more competitive market with softer overall demand, the Group performed well. Occupancy in the Group’s owned
hotels (all brands) was in line with the comparable record period at 79.4% (-0.1 percentage point). Average room rate (all
brands) had a marginal decline of 0.7% to $184. As a result, revenue per available room (revpar) was $146, down 0.8%.
However, occupancy, average room rate and revpar in like-for-like hotels increased by 0.3%, 0.05% and 0.5% respectively which
was a pleasing result.
Occupancy in the Group’s owned Rydges hotels increased by 0.3% to 80.6%. Average room rate declined 1.8%, resulting in a
revpar decline of 1.3% to $127. Pleasingly, adjusting for the partial closure of Rydges Queenstown (March 2019), revpar
increased across the Group. Rydges is in a transitional period where we are in the process of upgrading key properties. The
Group is advanced with plans to fully upgrade Rydges North Sydney, a key asset in a strong location, with the hotel expected to
close for renovations at the end of the 2020 financial year. Rydges Melbourne food and beverage areas were upgraded this year
and a soft refurbishment to rooms is planned in the 2020 financial year. Rydges Geelong upgrade works have commenced
including ground floor and a soft upgrade of rooms due to be completed in November 2019.
Occupancy in the Group’s Atura hotels increased by 3.4 percentage points, whilst revpar increased by 3.6%. This result was
supported by the addition of Atura Adelaide Airport which is trading strongly and contributed positively to earnings in its first 10
months of trading.
The strength of the differentiated QT brand experience resulted in a strong performance across all QT hotels relative to market.
Occupancy in the Group’s like-for-like QT hotels increased by 0.4 percentage points to 81.1% and average room rate increased
by 2.8% to $242, resulting in an increase in revpar of 3.3%. A 16-room extension to QT Wellington was completed in November
2018, and QT Sydney public areas and guest rooms were upgraded including the addition of a new food and beverage venue.
New meeting room spaces were introduced at both QT Sydney and QT Melbourne, leveraging underutilised areas which is
aligned with the Group’s goal of maximising key assets.
Conference and events revenue for the Group’s owned and managed hotels increased by 9.6% as a direct result of new
strategies and programs across the Group whilst total food and beverage revenue increased by 6.3% across the Group. New
eCommerce websites were developed and launched for Rydges and Atura in April 2019, achieving immediate improvements in
conversion within the first few weeks. New operating systems to enhance revenue management were implemented, increasing
the number to 17 hotels with this technology. A new rostering system was also implemented, resulting in payroll as a
percentage of revenue remaining in line with prior year on a like-for-like basis and allowing for the Rydges Queenstown impact,
a positive result considering annual pay increases for the award in both Australia (3.5%) and New Zealand (4.8% − April 2018 and
7.3% − April 2019).
11 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Six new hotels under management and licence agreements joined the Group during the year. The hotels included Rydges Darwin
Central, The Ultimo Sydney, All Suites Perth, Pensione Perth, Rydges Norwest (formally Novotel Norwest) and Rydges Wellington
Airport. In addition, five new management and licence agreements have been signed for Rydges affiliate hotels in Armidale and
Tamworth (joined the Group in July 2019), and QT hotels in Auckland (opening early 2020), QT Newcastle (opening late 2020)
and QT Adelaide (opening mid 2021). This resulted in a record year for new hotel agreements for the Group.
EBITDA was $97,943,000, up $1,758,000 (1.8%) on prior year or up 3.6% adjusted for the closure of rooms at Rydges
Queenstown. The normalised profit before interest and income tax expense was $69,502,000, 0.3% above the prior comparable
record year or up 2.7% adjusting for the closure of Rydges Queenstown rooms. This record earnings result in a more competitive
market reflects the strength of the Group’s locations, successful brand differentiation strategy, eCommerce enhancements and
investment in operating systems. Profit margin was impacted primarily by the closure of the east and west wings of Rydges
Queenstown and early trading days for QT Perth. Rydges Queenstown closed 93 rooms contained in the east and west wings in
order to bring forward development plans for this site and address seismic rating issues within these wings. This impacted
earnings by approximately $1.5 million. QT Perth, whilst trading ahead of the most recent forecast, negatively contributed to
the hotels result and is the primary reason for the decline in margin from the Group’s hotel business. Adjusting for QT Perth, the
overall Group margin improved by 1 percentage point.
Thredbo Alpine Resort
Thredbo revenue was $81,820,000, up 12.1% on the prior year following a strong 2018 snow season and continued growth in
summer mountain biking revenues.
The 2018 snow season was consistent with good snowfall and snowmaking with lift pass revenue up 10.5% and a 2.8% increase
in skier visits with yield improvement. Strong food and beverage revenues also contributed to overall growth.
Summer revenues continue to grow, underpinned by growth in mountain biking visitation with total summer revenue increasing
by 7.8% over the prior year. The new Easy Street beginner’s mountain biking trail was completed and opened for the 2018/19
summer season, further supporting this continued growth in mountain biking revenue.
EBITDA was $28,923,000, an increase of $3,218,000 or 12.5% above the prior comparable year, whilst the normalised profit
before interest and income tax expense was $25,017,000, an increase of $3,179,000 or 14.6%.
The profit for the year included $0.9 million associated with the sale of an undeveloped lot in Woodridge, Thredbo Village.
Development plans to increase capacity and continue to improve the skier experience are well advanced. During this season a
soft upgrade to the Thredbo Alpine Hotel and outdoor venues has been completed. Development approval has been obtained
for the replacement of Merritt’s Chairlift with a high-speed detachable gondola in time for the 2020 ski season. The gondola will
reduce guest ride times from 23 minutes to 6 minutes and increase capacity from 520 guests to 1,600 guests per hour,
enhancing the guest experience and unlocking Merritt’s Mountain House potential as an event destination. To further support
summer mountain biking revenue, development approval has been obtained for the new High Noon Flow Trail which is due to
open prior to Christmas 2019. Further future developments including a chairlift replacement plan, increased car parking, and
improved and extended Friday Flat facilities are also in progress, subject to all necessary approvals.
PROPERTY AND OTHER INVESTMENTS
The normalised profit before interest and income tax expense was $13,436,000, a decrease of $3,092,000 below the prior
comparable year. The result included a fair value increment of $1,931,000, versus the $5,750,000 increment in the prior year.
The prior year included a significant uplift associated with the Forum Building and whilst the valuation of each of the Group’s
three investment properties increased in the year ended 30 June 2019, this increase was lower than in the prior year. Rental
income increased 6.0%.
During the year, strong progress was made in regard to the two major development projects. The Concept Development
Application for the proposed 525 George Street, Sydney development was lodged in July 2019 for a mixed-use development of
up to 43 storeys to include a podium with prime ground floor retail space (830m2) on George Street, a seven-screen cinema
complex, and a tower including a new Atura hotel with approximately 450 rooms, a conference centre, and 72 residential
apartments. Subject to market conditions, this development is expected to take five to seven years to complete.
The Concept Development Application for the proposed 458-472 George Street, Sydney development was lodged in August 2019
for a mixed-use development of up to 30 storeys to include a podium with prime ground floor retail space (340m2) on George
Street, an extension of the QT Sydney hotel with 72 additional rooms and conference centre, QT rooftop bar and a commercial
office tower. Subject to market conditions, this development is expected to take four to six years to complete.
12 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
UNALLOCATED REVENUES AND EXPENSES
The unallocated revenues and expenses include the Group’s corporate functions and various head office expenses and increased
12.8%. However, an incremental bonus expense was incurred during the year following the record result for the year ended 30
June 2018. Excluding the incremental bonus expenditure, unallocated revenue and expenses were relatively flat with the prior
year, despite a negative impact from increased insurance premiums and associated costs of $510,000.
During the year, the Group invested in its compliance, risk management, facilities management and work health and safety
functions to further enhance the management of these important areas and ensure that the Group remains ahead of
requirements as they continue to evolve. Further details regarding the Group’s management of work health and safety risk
matters have been included in section 5.10 of the 2019 Corporate Governance Statement.
BUSINESS STRATEGIES AND PROSPECTS FOR FUTURE FINANCIAL YEARS
The Group’s strategic plan will depend on industry, economic and political conditions, the potential impact of global events, the
future financial performance and available capital, the competitive environment, evolving customer needs and trends, and the
availability of attractive opportunities. It is likely that the Group’s strategies will continue to evolve and change in response to
these and other factors, and there can be no absolute assurance that these current strategies, as detailed below, will be achieved.
PROPERTY
The Group has a property portfolio including land and buildings, integral plant and equipment and long term leasehold land and
improvements with a fair value at 30 June 2019 of $1.95 billion (see Note 3.3 to the financial statements). The Group will pursue
the following strategies in relation to the property portfolio:
•
optimising the potential future development of the properties located at 458-472 George Street, Sydney and 525 George
Street, Sydney;
•
identifying other potential future developments of the Group’s freehold properties; and
• managing and maximising rental income associated with the Group’s investment properties.
Industry developments and risk factors
The independently-determined fair value of the Group’s property portfolio may rise or fall according to a number of factors
outside of the Group’s control including changes in applicable property market conditions.
The Group’s property portfolio includes property in zones of earthquake risk in New Zealand. A catastrophic incident affecting a
Group property could have a material adverse impact on the Group’s earnings as a result of catastrophic damage and loss of
future profits.
ENTERTAINMENT
Whilst the Group has no control over the general audience appeal of available films, providing consumers with a demonstrably
superior experience in the cinema to that which can be achieved in the home is a central strategic platform. To achieve this, the
Group will pursue the following strategies:
•
refurbishing key premium locations;
•
implementing new pricing strategies;
•
developing new food and beverage concepts;
•
enhancing the Cinebuzz loyalty program;
•
growing alternative content;
•
identifying other sources of entertainment income;
•
to grow advertising and sponsorship revenue; and
•
leveraging technology to increase efficiency through automation.
Industry developments and risk factors
The Group believes that there are certain current issues pertaining to the industry that have the capacity to impact the strategic
plans and future direction of the cinema operations. The Group will continue to monitor developments in relation to the following
issues:
•
alternative film delivery methods and the rise in popularity of other forms of entertainment (including over-the-top (“OTT”)
internet content, subscription-based streaming services and video on demand (“VOD”));
shortening of the release window of film to other formats such as OTT and VOD;
increase in unauthorised recording (piracy) of visual recordings for commercial sale and distribution via the internet;
increase in competition including in relation to pricing;
international media industry consolidation which may reduce the number of distributors of Hollywood film titles;
changes in operating expenses including employee expenses and energy costs; and
impact of weather on cinema attendance.
•
•
•
•
•
•
13 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
HOTELS AND RESORTS
The Group will continue to provide hotel guests with accommodation that consistently delivers a product and service that meets
or exceeds guest expectations. To provide this, the Group will continue to pursue the following strategies:
•
•
upgrading key properties;
adding new rooms to the Group’s portfolio including through new hotel management or other agreements, redevelopment of
existing properties and freehold acquisitions;
enhancing the Priority Guest Rewards loyalty program;
growing conference and events revenue;
improving and innovating food and beverage offerings; and
leveraging technology to increase efficiency through automation.
•
•
•
•
Industry developments and risk factors
The Group believes that there are certain current issues pertaining to the industry that have the capacity to impact the strategic
plans and future direction of the hotel operations. The Group will continue to monitor developments in relation to the following
issues:
•
•
•
•
new hotel supply in key markets increasing competition for the Group’s hotels in those markets;
competition for the distribution of rooms from online travel agents;
changes in operating expenses including employee expenses and energy costs; and
growth and market penetration of alternative accommodation providers.
THREDBO ALPINE RESORT
The key strategy for the Thredbo Alpine Resort is to maintain the facility as one of the premier Australian holiday destinations. This
strategy includes:
•
•
continuing to ensure the popularity, high quality and ambience of the winter-time resort facility;
enhancing the Resort’s lift infrastructure, including the replacement of Merritt’s chairlift with a high-speed detachable
gondola during the year ending 30 June 2020;
continuing to improve snowmaking capability to mitigate risk in poor snow seasons;
increasing the number and quality of sporting and cultural events to increase visitation outside of the snow season;
expanding the mountain bike trail network to appeal to a broader range of riders; and
ensuring that the environmental integrity of the Resort is maintained and, where possible, improved.
•
•
•
•
Industry developments and risk factors
The Group believes that there are certain current issues pertaining to the industry that have the capacity to impact the strategic
plans and future direction of Thredbo’s operations. The Group will continue to monitor developments in relation to the following
issues:
•
•
•
reliance on natural snowfall, which is partially mitigated by the Group’s snowmaking capability;
changes in operating expenses including employee expenses and energy costs; and
short and long-term climate-related physical, regulatory and transition risks. Further information regarding the Group’s
response to climate change is available in section 5.8 of the 2019 Corporate Governance Statement.
DIVIDENDS
Dividends paid or declared by the Company since the end of the previous year were:
Declared and paid during the year
Final 2018 dividend
Interim 2019 dividend
Declared after the end of the year
Final 2019 dividend
Per share
Cents
31
21
Total
amount
$’000
49,880
33,851
83,731
Date of payment
Tax rate for
franking
credit
20 September 2018
21 March 2019
30%
30%
31
49,971
19 September 2019
30%
All the dividends paid or declared by the Company since the end of the previous year were 100% franked.
14 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
REMUNERATION REPORT
The Remuneration Report, which forms part of the Directors’ Report, is set out on pages 18 to 30 and has been audited as
required by section 308(3C) of the Corporations Act 2001.
EVENTS SUBSEQUENT TO REPORTING DATE
There has not arisen in the interval between the end of the year and the date of this report, any item, transaction or event of a
material and unusual nature likely, in the opinion of the directors of the Company, to affect significantly the operations of the
Group, the results of those operations, or the state of affairs of the Group, in future years.
LIKELY DEVELOPMENTS
Likely developments in the operations of the Group are referred to in the Review of Operations by Division, set out within this
report.
DIRECTORS’ INTERESTS
The relevant interest of each director of the Company in share capital of the Company, as notified by the directors to the ASX in
accordance with section 205G(1) of the Corporations Act 2001, at the date of this report is as follows:
Director
AG Rydge
KG Chapman
PR Coates
VA Davies
DC Grant
JM Hastings
PM Mann
RG Newton
Ordinary shares held
directly
4,431,663
3,000
−
−
7,500
6,000
−
−
Ordinary shares held
by companies in which
a director has a
beneficial interest(a)
68,948,033
54,000
46,960
14,000
−
−
7,000
66,000
Performance shares
held directly
−
−
−
−
−
−
−
−
Performance rights
held directly
−
−
−
−
−
201,997
−
−
(a) Relevant interest under the Corporations Act 2001 differs from the disclosure required under Australian Accounting Standards as presented in the
Remuneration Report.
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company’s constitution provides an indemnity to each person, including AG Rydge, KG Chapman, PR Coates, VA Davies, DC
Grant, JM Hastings, PM Mann and RG Newton, who is or who has been a director or alternate director of the Company or of any
related body corporate of the Company. The indemnity also extends to such other officers or former officers, including executive
officers or former executive officers, of the Company and of any related body corporate of the Company as the directors of the
Company determine.
In terms of the indemnity, the Company will indemnify the directors and other officers of the Company acting as such, to the full
extent permitted by law, against any liability to another person (other than the Company or a related body corporate) incurred in
acting as a director or officer of the Company, unless the liability arises out of conduct involving a lack of good faith. The indemnity
includes any liability for costs and expenses incurred by such person in defending any proceedings, whether civil or criminal, in
which judgement is given in that person’s favour, or in which the person is acquitted and in making an application in relation to
any proceedings in which the court grants relief to the person under the law.
The Company has provided directors’ and officers’ liability insurance policies that cover all the directors and officers of the
Company and its controlled entities. The terms of the policies prohibit disclosure of details of the amount of the insurance cover,
its nature and the premium paid.
OFFICERS WHO WERE PREVIOUSLY PARTNERS OF THE AUDIT FIRM
Mrs PM Mann was previously a partner of the current audit firm, KPMG, at a time when KPMG undertook an audit of the Group.
AUDITOR INDEPENDENCE
The lead auditor’s independence declaration is set out on page 31 and forms part of the Directors’ Report for the year ended 30
June 2019.
NON-AUDIT SERVICES PROVIDED BY KPMG
During the year, KPMG, the Group’s auditor, performed certain other services in addition to their statutory duties.
15 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
The Board has considered the non-audit services provided during the year by the auditor and in accordance with written advice
provided by resolution of the Audit and Risk Committee is satisfied that the provision of those non-audit services during the year
by the auditor is compatible with, and did not compromise, the auditor independence requirements of the Corporations Act 2001
for the following reasons:
•
•
all non-audit services were subject to the corporate governance procedures adopted by the Group and have been reviewed
by the Audit and Risk Committee to ensure they do not impact the integrity and objectivity of the auditor; and
the non-audit services provided do not undermine the general principles relating to auditor independence as set out in APES
110 Code of Ethics for Professional Accountants, as they did not involve reviewing or auditing the auditor’s own work, acting
in a management or decision-making capacity for the Group, acting as an advocate for the Group or jointly sharing risks and
rewards.
A copy of the auditors’ independence declaration as required under section 307C of the Corporations Act 2001 has been included
in this Directors’ Report.
Details of the amounts paid to the auditor of the Group, KPMG, and its related practices for audit and non-audit services provided
during the year are set out in Note 7.4 to the financial statements.
ROUNDING OFF
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191 as
issued by the Australian Securities and Investments Commission (“ASIC”). In accordance with that Instrument, amounts in the
Directors’ Report and financial report have been rounded off to the nearest thousand dollars, unless otherwise stated.
Signed in accordance with a resolution of the directors:
AG Rydge
Director
JM Hastings
Director
Dated at Sydney this 22nd day of August 2019.
16 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
MESSAGE FROM THE CHAIRMAN REGARDING THE REMUNERATION REPORT
Dear Shareholder
On behalf of the Board, I am pleased to introduce the EVENT Hospitality & Entertainment Limited 2019 Remuneration Report.
Remuneration arrangements for the CEO
In accordance with the CEO’s contract, a review of Ms Hastings’ remuneration arrangements was conducted by the Board during
the year ended 30 June 2019, including consideration of updated market benchmarking information. Market benchmarking for the
CEO role considers the market capitalisation of the Group and the size, diversity and complexity of the Group’s operations, noting
that by market capitalisation the Group is within the top 150 companies of the All Ordinaries index. Following this review,
reasonable adjustments were made to the CEO’s fixed annual remuneration and maximum short term incentive opportunity with
effect from 1 July 2019. Details of these new arrangements are set out on page 22.
Short term incentive (“STI”) assessment for the CEO
The STI payment for the CEO disclosed in this Remuneration Report represented 100% of the total potential STI for the year ended
30 June 2018. This reflects the Group’s strong financial performance, and the full achievement by the CEO of the other STI targets
set by the Board. Whilst the details are considered commercially sensitive, the STI targets included business transformation
initiatives, management of current property developments, and other business growth targets. Further details regarding the
Group STI arrangements are set out on pages 19 and 26.
The Remuneration Report provides further details regarding the above matters as well as important material on remuneration
strategy, structure and outcomes. The Board commends the Remuneration Report to you.
AG Rydge
Chairman
17 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
REMUNERATION REPORT – AUDITED
This report outlines the remuneration arrangements in place for the Group’s key management personnel (“KMP”) as defined in
AASB 124 Related Party Disclosures including non-executive directors, the CEO (who is also the Managing Director), and other
senior executives who have authority for planning, directing and controlling the activities of the Group. The KMP for the financial
year are set out on page 23.
Remuneration philosophy
The Nomination and Remuneration Committee is responsible for making recommendations to the Board on remuneration policy
and packages applicable to the Board members and senior executives. The objective of the remuneration policy is to ensure the
remuneration package properly reflects the person’s duties and responsibilities, and that remuneration is competitive in
attracting, motivating and retaining people of the appropriate quality.
Remuneration levels are competitively set to attract appropriately qualified and experienced directors and executives. The
Nomination and Remuneration Committee obtains independent advice on the level of remuneration packages. The remuneration
packages of the CEO and other senior executives include at-risk components that are linked to the overall financial and operational
performance of the Group and based on the achievement of specific goals of the Group. Executives participate in the Group’s
Executive Performance Rights Plan. The long term benefits of the Executive Performance Rights Plan are conditional upon the
Group achieving certain performance criteria, details of which are outlined below.
Further details in relation to the Group’s share plans are provided in Note 6.1 to the financial statements.
Remuneration structure
In accordance with best practice corporate governance, the structure of non-executive director remuneration is separate and
distinct from senior executive remuneration.
Non-executive director remuneration
Objective
The Group’s remuneration policy for non-executive directors aims to ensure that the Group can attract, retain and appropriately
remunerate suitably skilled, experienced and committed individuals to serve on the Board and its committees.
Structure
The Company’s constitution and the ASX Listing Rules specify that the aggregate remuneration of non-executive directors shall be
determined from time to time by a general meeting. The latest determination was at the Annual General Meeting held on 22
October 2010 when shareholders approved a maximum aggregate remuneration of $1,500,000 per year. Non-executive directors
do not receive any performance related remuneration nor are they issued shares or performance rights.
The amount of aggregate remuneration sought to be approved by shareholders and the manner in which it is apportioned among
directors are reviewed annually. The Board considers the fees paid to non-executive directors of comparable companies when
undertaking the annual review process.
Each director receives a fee for being a director of the Company. A committee fee is also paid for being a member of the Audit and
Risk Committee and the Nomination and Remuneration Committee. The payment of the committee fee recognises the additional
time commitment required by directors who serve on those committees. Other Board committees may be established from time
to time to deal with issues associated with the conduct of the Group’s various activities, and directors serving on such committees
may receive an additional fee in recognition of this additional commitment.
The Board has approved non-executive director fees for the year ending 30 June 2020 as follows:
Chairman (including committee fee)
Other non-executive directors
Base fee
Committee fee
Additional fee for the Chairman of the Board committees
18 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2020
$
2019
$
335,000
328,000
137,000
21,000
19,000
134,000
21,000
18,000
D I R E C T O R S ’ R E P O R T
Non-executive director remuneration (continued)
Structure (continued)
The remuneration of non-executive directors for the year ended 30 June 2019 is detailed on page 24.
Directors’ fees cover all main Board activities. Non-executive directors are also entitled to be reimbursed for all reasonable
business related expenses, including travel, as may be incurred in the discharge of their duties.
CEO and other executive remuneration
Objective
The Group’s remuneration policy aims to reward the CEO and other executives with a level and mix of remuneration
commensurate with their position and responsibilities within the Group, and to:
•
reward executives for Group, applicable business unit and individual performance against targets set by reference to
appropriate benchmarks and key performance indicators (“KPIs”);
align the interests of executives with those of shareholders;
link reward with the strategic goals and performance of the Group; and
ensure total remuneration is competitive by market standards.
•
•
•
Structure
In determining the level and composition of executive remuneration, the Nomination and Remuneration Committee obtains
independent advice on the appropriateness of remuneration packages for senior executives, based on remuneration trends in the
market, from which recommendations are made to the Board.
It is the Group’s policy that employment contracts are entered into with the CEO and other senior executives. Details of these
employment contracts are provided on page 22.
Remuneration consists of both fixed and variable remuneration components. The variable remuneration component includes a
short term incentive (“STI”) plan and a long term incentive (“LTI”) plan. The proportion of fixed and variable remuneration
(potential STI and LTI) is set and approved for each senior executive by the Board based on recommendations provided by the
Nomination and Remuneration Committee.
Fixed annual remuneration
Objective
Remuneration levels for executives are reviewed annually to ensure that they are appropriate for the responsibilities,
qualifications and experience of each executive and are competitive with the market.
The Nomination and Remuneration Committee establishes and issues an appropriate guideline for the purpose of the annual
review of fixed remuneration levels. The guideline is based on both current and forecast Consumer Price Index, remuneration
trends on the market and general market conditions. There are no guaranteed fixed remuneration increases in any executives’
contracts.
Structure
Executives have the option to receive their fixed annual remuneration in cash and a limited range of fringe benefits such as motor
vehicles and car parking. Fixed annual remuneration includes superannuation and all fringe benefits, including fringe benefits tax.
Variable remuneration – STI
Objective
The objective of the STI plan is to link the achievement of key operational targets with the remuneration received by the
executives charged with meeting those targets. The total potential STI available is set at a level to provide sufficient incentive to
the executive to achieve the operational targets and ensuring that the cost to the Group is reasonable in the circumstances.
Structure
Actual STI payments to each executive are determined based on the extent to which specific operating targets, set at the
beginning of the year, are met. The targets consist of a number of KPIs covering both financial and non-financial measures of
performance. Typically, KPIs and assessment criteria include pre-determined growth in Group and divisional earnings over the
prior year, and other strategic and operational objectives.
A work, health and safety gateway applies to the STI plan and executives will only be eligible for a payment under the plan if the
requirements of the gateway have been satisfied.
19 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Variable remuneration – STI (continued)
Structure (continued)
The Group has pre-determined benchmarks which must be met in order to trigger payments under the STI. The measures were
chosen to directly align the individual’s STI to the KPIs of the Group and to its strategies and performance.
On an annual basis, an earnings performance rating for the Group and each division is assessed by the Nomination and
Remuneration Committee and approved by the Board. The individual performance of each executive is also assessed and rated
and the ratings are taken into account when determining the amount, if any, of the STI to be allocated to each executive.
The aggregate of annual STI payments available for executives across the Group is subject to review by the Nomination and
Remuneration Committee and approval by the Board. STI payments are delivered as a cash bonus.
For the CEO and other executive KMP, the general target bonus opportunity range is from 50% to 90% of fixed annual
remuneration. The target bonus range for the CEO and other executive KMP is detailed below:
Maximum STI calculated
on fixed annual
remuneration(a)
Group
earnings
Allocated between:
Divisional
earnings
Special
projects
CEO and Managing Director
JM Hastings(b)
90%
50%
–
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(c)
53%
52.5%
52.5%
50%
53%
16.5%
27.5%
27.5%
10%
16.5%
16.5%
–
–
20%
16.5%
30%
–
–
19%
16%
–
Other
KPIs
10%
20%
25%
6%
4%
20%
(a) Fixed annual remuneration is comprised of base salary, superannuation and benefits provided through salary sacrificing arrangements.
(b) The targets set for the CEO’s STI relate to the Group’s performance, the management of current property developments and other business growth targets.
The Board considers the specific targets to be commercially sensitive and accordingly further details of these targets have not been disclosed.
JM Rodgers ceased employment with the Group on 7 June 2019.
(c)
Bonuses may be paid above these levels at the discretion of the Nomination and Remuneration Committee and the Board, if it is
assessed that an exceptional contribution has been made by an executive. There is no separate profit-share plan.
Variable remuneration – LTI
Objective
The objectives of the LTI plan are to:
•
•
•
align executive incentives with shareholder interests;
balance the short term with the long term Group focus; and
retain high calibre executives by providing an attractive equity-based incentive that builds an ownership of the Group
mindset.
Structure
Executives are awarded performance rights which will only vest on the achievement of certain performance hurdles and service
conditions. An offer is made under the Executive Performance Rights Plan to executives each financial year and is based on
individual performance as assessed by the annual appraisal process. If an executive does not sustain a consistent level of high
performance, they will not be nominated for Executive Performance Rights Plan participation. The Nomination and Remuneration
Committee reviews details of executives nominated for participation subject to final Board approval. In accordance with the ASX
Listing Rules, approval from shareholders is obtained before participation in the Executive Performance Rights Plan commences
for the CEO.
Only executives who are able to directly influence the long term success of the Group participate in the Executive Performance
Rights Plan.
20 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Variable remuneration – LTI (continued)
Structure (continued)
Each award of performance rights is divided into equal portions, with each portion being subject to a different performance
hurdle. The performance hurdles are based on earnings per share (“EPS”) growth and relative total shareholder return (“TSR”) of
EVENT Hospitality & Entertainment Limited as determined by the Board over a three year period (“Performance Period”). The
extent to which the performance hurdles have been met will be assessed by the Board at the expiry of the Performance Period.
Performance rights do not carry the right to vote or to receive dividends during the Performance Period.
The performance hurdles for the awards of performance rights to executives in the financial year ended 30 June 2019 are based
on EVENT Hospitality & Entertainment Limited’s EPS growth and relative TSR performance over the Performance Period of the
three years to 30 June 2021, with EPS performance measured against the year ended 30 June 2018 (being the base year).
The performance hurdles for the awards of performance rights to executives in the financial year ended 30 June 2019 are as
follows:
EPS hurdle
The EPS hurdle requires that the Group’s EPS growth for the Performance Period must be greater than the target set by the Board.
The EPS hurdle was chosen as it provides evidence of the Group’s growth in earnings. The hurdle is as follows:
•
if annual compound EPS growth over the Performance Period is less than 4%, no performance rights will vest with the
executive;
if annual compound EPS growth over the Performance Period is equal to or greater than 4% but less than 6%, the proportion
of performance rights vesting will be increased on a pro-rata basis between 50% and 100%; or
if annual compound EPS growth over the Performance Period is equal to or greater than 6%, all of the performance rights
awarded (and attaching to this hurdle) will vest with the executive.
•
•
TSR hurdle
The TSR hurdle requires that the Group’s relative TSR performance must be above the median of the Company’s comparator
group (“comparator group”). The comparator group is the S&P/ASX 200 (excluding trusts, infrastructure groups and mining
companies). TSR is defined as share price growth and dividends paid and reinvested on the ex-dividend date (adjusted for rights,
bonus issues and any capital reconstructions) measured from the beginning to the end of the Performance Period.
The TSR performance hurdle was chosen as it is widely recognised as one of the best indicators of shareholder value creation. The
comparator group for TSR purposes has been chosen as it represents the group with which the Group competes for shareholders’
capital. The hurdle is as follows:
•
if the Company’s TSR ranking relative to the comparator group over the Performance Period is less than the 51st percentile,
no performance rights will vest;
if the Company’s TSR ranking relative to the comparator group over the Performance Period is equal to or exceeds the 51st
percentile but is less than the 75th percentile, the proportion of performance rights vesting will be increased on a pro-rata
basis between 50% and 100%; or
if the Company’s TSR ranking relative to the comparator group over the Performance Period is equal to or greater than the
75th percentile, all of the performance rights awarded will vest.
•
•
After the Board has assessed the extent to which the above performance hurdles and criteria have been achieved, executives will
be allocated ordinary shares equal to the number of vested performance rights held.
The Board has retained the discretion to vary the performance hurdles and criteria.
Group performance
To provide further context on the Group’s performance and returns for shareholders, the following table outlines a five year
history of key financial metrics:
2019
2018
2017
2016
2015
Net profit before individually significant
items and income tax ($)(a)
Dividends per share (cents)
Special dividend per share (cents)
Share price at year end ($)
158,524,000
52
–
12.50
183,214,000
52
–
13.39
160,937,000
51
–
13.37
177,914,000
51
–
14.53
152,367,000
45
8
12.54
(a) Refer to page 6 in the Directors’ Report for a reconciliation to reported net profit for the year. The net profit above includes the result from discontinued
operations.
21 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Employment contracts for the CEO and other executive KMP
A summary of the key terms of Ms Hastings’ employment contract is set out in the table below:
Contract term Ms Hastings’ appointment is ongoing and there is no fixed term.
Fixed annual
remuneration
Effective from 1 July 2019, a remuneration package to the value of $1,500,000 per annum, comprising base
salary, superannuation and, if applicable, any fringe benefits or voluntary superannuation contributions.
Incentives
Ms Hastings is eligible to participate in the Group’s incentive arrangements (including STI and LTI).
Ms Hastings is eligible to receive an annual STI bonus payment with a target award of up to 80% of her fixed
annual remuneration, subject to the achievement of performance criteria determined by the Board. The
maximum award to Ms Hastings under the STI plan is 90% of fixed annual remuneration.
Ms Hastings is also eligible to participate in the Group’s LTI. The current LTI is the Executive Performance Rights
Plan approved by shareholders at the 2013 Annual General Meeting. Subject to any required or appropriate
shareholder approval, Ms Hastings’ allocation of performance rights under the LTI will be determined based on
a face value of 100% of the fixed annual remuneration.
Termination
Either party may terminate the agreement at any time by giving six months’ notice.
On termination, the Group may at its discretion make a payment in lieu of all or part of the notice period based
on Ms Hastings’ fixed annual remuneration at the time of the notice of termination.
Ms Hastings may terminate immediately if there is a fundamental change in her responsibilities or authority
without her consent. In that case, Ms Hastings is entitled to a payment equivalent to six months’ fixed
remuneration.
The Group may terminate the agreement immediately in circumstances of misconduct, or if Ms Hastings
breaches any material term of the agreement, in which case there is no payment in lieu of notice.
Restraint
The agreement contains non-solicitation and other restraints that apply for a restriction period of up to 12
months. Ms Hastings may receive a restraint payment for some or all of the restriction period, calculated based
on her fixed remuneration at the termination date.
The CEO’s contract provides for an annual review of the CEO’s fixed annual remuneration and maximum incentive opportunities.
Employment contracts typically outline the components of remuneration paid to the CEO and other senior executives but do not
prescribe how remuneration levels are to be modified from year to year. Generally, remuneration levels are reviewed each year to
take into account Consumer Price Index changes, remuneration trends in the market, any change in the scope of the role
performed by the executive and any changes required to meet the principles of the remuneration policy.
Termination provisions in the employment contracts with other executive KMP are summarised in the table below:
Termination by
the executive
The notice
period is one
month.
Executive
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(a)
Expiry date of
contract
Not applicable,
rolling contracts.
Termination by the Group
The notice period is one month. On termination, the Group
may make a payment in lieu of notice, equal to the notice
period.
The Group retains the right to terminate the contract
immediately under certain conditions. On termination, the
executive is entitled to accrued annual and long service
benefits. There are no other termination payments.
Payment of any LTI (or pro-rata thereof) is subject to the
rules in operation at the termination date and at the
discretion of the Board.
(a)
JM Rodgers ceased employment with the Group on 7 June 2019.
22 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Use of remuneration consultants
No remuneration consultants were engaged during the year to provide remuneration recommendations as defined in section 9B
of the Corporations Act 2001.
Key management personnel
The KMP for the financial year are set out in the table below:
Name
Position
Period of responsibility
Employing company
Non-executive directors
Alan Rydge
Chairman and non-executive director
1 July 2018 to 30 June 2019
Kenneth Chapman
Independent non-executive director
1 July 2018 to 30 June 2019
Peter Coates
Independent non-executive director
and lead independent director
1 July 2018 to 30 June 2019
Valerie Davies
Independent non-executive director
1 July 2018 to 30 June 2019
David Grant
Independent non-executive director
1 July 2018 to 30 June 2019
Patria Mann
Independent non-executive director
1 July 2018 to 30 June 2019
Richard Newton
Independent non-executive director
1 July 2018 to 30 June 2019
Executive director
Jane Hastings
CEO and Managing Director
1 July 2018 to 30 June 2019
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
Other executive KMP
Norman Arundel
Gregory Dean
Director of Hotels and Resorts
Operations
Director Finance & Accounting,
Company Secretary
1 July 2018 to 30 June 2019
Rydges Hotels Limited
1 July 2018 to 30 June 2019
EVENT Hospitality &
Entertainment Limited
EVENT Hospitality &
Entertainment Limited
The Greater Union
Organisation Pty Limited
Kosciuszko Thredbo Pty
Limited
Mathew Duff
Director Commercial
1 July 2018 to 30 June 2019
Hans Eberstaller
Managing Director of Commercial,
UK and Europe
1 July 2018 to 30 June 2019
Jordan Rodgers
Director of Thredbo Operations
1 July 2018 to 7 June 2019
23 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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2
D I R E C T O R S ’ R E P O R T
Directors’ and executives’ remuneration (continued)
(a)
Amounts disclosed above for remuneration of directors and other executive KMP exclude insurance premiums paid by the Group in respect of
directors’ and officers’ liability insurance contracts as the contracts do not specify premiums paid in respect of individual directors and officers.
Information relating to the insurance contracts is set out within the Remuneration Report. The amounts disclosed in the table above relate to
premiums paid by the Group for salary continuance insurance.
Amounts disclosed above for remuneration relating to performance rights have been determined in accordance with the requirements of AASB 2
Share-based Payment. AASB 2 requires the measurement of the fair value of performance rights at the grant date and then to have that value
apportioned in equal amounts over the period from grant date to vesting date. Details of performance shares and performance rights on issue are set
out within the Remuneration Report and further details on the terms and conditions of these performance shares and performance rights are set out
in Note 6.1 to the financial statements.
JM Rodgers ceased employment with the Group on 7 June 2019.
(b)
(c)
Analysis of STI bonuses included in remuneration
The bonus table below is calculated on the basis of including bonuses awarded during the year ended 30 June 2019. It only
includes remuneration relating to the portion of the relevant periods that each individual was a KMP. Details of the vesting
profile of the STI bonuses awarded as remuneration to the CEO and other executive KMP of the Group are shown below:
Included in remuneration(a)
$
Awarded in year
Not awarded in year(b)
1,040,000
100.0%
−%
CEO and Managing Director
JM Hastings(c)
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(d)
218,350
253,500
309,050
122,886
222,750
12.7%
22.0%
4.9%
36.6%
1.0%
Amounts included in remuneration for the year represent the amounts that were awarded in the year based on achievement of certain specific goals
and satisfaction of specified performance criteria for the 30 June 2018 year. No amounts vest in future years in respect of the STI bonus schemes for
the 2018 year.
The amounts not awarded are due to the performance criteria not being met in relation to the assessment period.
The amount awarded to the CEO reflects the Group’s financial performance for the year ended 30 June 2018, business transformation initiatives,
management of current property developments, and other business growth targets. The Board considers the specific targets to be commercially
sensitive and accordingly further details of these targets have not been disclosed.
JM Rodgers ceased employment with the Group on 7 June 2019.
87.3%
78.0%
95.1%
63.4%
99.0%
(a)
(b)
(c)
(d)
Other transactions with key management personnel and their related parties
AG Rydge is a director of Carlton Investments Limited. Carlton Investments Limited rents office space from a controlled
entity. Rent is charged to Carlton Investments Limited at a market rate. Rent and office service charges received during the
year were $22,954 (2018: $21,368). The Company previously held ordinary shares in Carlton Investments Limited, and
continues to hold preference shares in Carlton Investments Limited. Dividends received during the year from Carlton
Investments Limited totalled $793,023 (2018: $755,213), comprised of $787,711 (2018: $749,901) from ordinary shares and
$5,312 (2018: $5,312) from preference shares.
Following a strategic review of the Group’s assets, the Board resolved (with AG Rydge absenting) to consider a divestment of
the Group’s shares in Carlton Investments Limited, and on 22 March 2019 the Group completed a sale of its ordinary
shareholding. A total of 630,169 ordinary shares were sold at $28.50 per share, representing a discount of 7.8% to the ASX
closing price on that date. The sale was conducted by a broker on behalf of the Group, and the Board (with AG Rydge
absenting) obtained independent advice regarding the sale process including the acceptable range of discounts to the ASX
share price. Of the ordinary shares sold by the Group, a total of 495,082 shares was acquired by AG Rydge, with the
remaining shares acquired by unrelated third parties.
AG Rydge paid rent, levies and other costs to Group entities during the year amounting to $102,976 (2018: $101,539). Rent is
charged to AG Rydge at market rates.
A controlled entity has entered into a lease agreement for a cinema complex in Townsville with an entity related to KG
Chapman. Rent paid under the lease is at market rates.
26 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Other transactions with key management personnel and their related parties (continued)
Apart from the details disclosed in the Remuneration Report, no KMP has entered into a material contract with the Group
since the end of the previous year and there were no material contracts involving directors’ interests existing at reporting
date.
From time to time, KMP of the Group, or their related parties, may purchase goods or services from the Group. These
purchases are usually on the same terms and conditions as those granted to other Group employees. Where the purchases
are on terms and conditions more favourable than those granted to other Group employees, the resulting benefits form part
of the total remuneration outlined within the Remuneration Report.
Executive Performance Rights Plan − current LTI plan
Analysis of LTI performance rights granted as remuneration
Details of the vesting profile of performance rights granted as remuneration to the CEO and other executive KMP are shown
below:
Number
Grant date
CEO and Managing Director
JM Hastings
88,957
82,737
30,303
21 Feb 2019
15 Feb 2018
16 Feb 2017
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(a)
18,745
19,888
13,144
13,650
22,665
25,855
20,538
19,755
22,665
25,855
20,538
19,755
10,731
12,333
10,235
10,349
12,515
14,319
12,121
12,587
21 Feb 2019
15 Feb 2018
16 Feb 2017
18 Feb 2016
21 Feb 2019
15 Feb 2018
16 Feb 2017
18 Feb 2016
21 Feb 2019
15 Feb 2018
16 Feb 2017
18 Feb 2016
21 Feb 2019
15 Feb 2018
16 Feb 2017
18 Feb 2016
21 Feb 2019
15 Feb 2018
16 Feb 2017
18 Feb 2016
Vested during
the year
Forfeited
during the
year
Year in which
the grant
vests
Performance
right – EPS
$
Performance
right – TSR
$
Fair value
–
–
–
–
–
–
–
–
–
–
–
–
30 Jun 2022
30 Jun 2021
30 Jun 2020
30 Jun 2022
30 Jun 2021
30 Jun 2020
8,531
5,119
30 Jun 2019
–
–
–
–
–
–
30 Jun 2022
30 Jun 2021
30 Jun 2020
12,347
7,408
30 Jun 2019
–
–
–
–
–
–
30 Jun 2022
30 Jun 2021
30 Jun 2020
12,347
7,408
30 Jun 2019
–
–
–
–
–
–
30 Jun 2022
30 Jun 2021
30 Jun 2020
6,468
3,881
30 Jun 2019
–
–
–
12,515
14,319
30 Jun 2022
30 Jun 2021
–
30 Jun 2020
7,867
4,720
30 Jun 2019
11.21
11.82
11.09
11.21
11.82
11.09
14.01
11.21
11.82
11.09
14.01
11.21
11.82
11.09
14.01
11.21
11.82
11.09
14.01
11.21
11.82
11.09
14.01
5.11
6.80
3.92
5.11
6.80
3.92
11.40
5.11
6.80
3.92
11.40
5.11
6.80
3.92
11.40
5.11
6.80
3.92
11.40
5.11
6.80
3.92
11.40
(a)
JM Rodgers ceased employment with the Group on 7 June 2019 and the performance rights granted on 15 February 2018 and 21 February 2019 were
forfeited at that time.
27 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Executive Performance Rights Plan − current LTI plan (continued)
Analysis of movements in performance rights
The movement during the year, by value, of performance rights in the Company held by the CEO and other executive KMP is
detailed below:
CEO and Managing Director
JM Hastings
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(c)
Granted during
the year (a)
$
Exercised during
the year (b)
$
Performance
rights exercised
Number
Amount paid per
right exercised
$
725,886
152,956
184,943
184,943
87,562
102,119
–
115,598
167,306
167,306
87,644
106,600
–
8,531
12,347
12,347
6,468
7,867
–
–
–
–
–
–
(a)
(b)
(c)
The value of performance rights granted in the year is the fair value of the performance rights calculated at grant date, estimated using a Binomial
tree model for those rights that have EPS hurdles and a Monte Carlo simulation model for those rights that have TSR hurdles. The total value of the
performance rights granted is included in the table above. This amount is allocated to remuneration over the vesting period.
The value of performance rights exercised during the year is calculated as the five-day volume weighted average price of shares of the Company on
the ASX on the date that the performance rights were exercised.
JM Rodgers ceased employment with the Group on 7 June 2019.
No performance rights have been granted since the end of the year.
Performance rights holdings and transactions
The movement during the year in the number of performance rights in EVENT Hospitality & Entertainment Limited held by
the CEO and other executive KMP is detailed below:
CEO and Managing Director
JM Hastings
2019
2018
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(a)
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Held at
the beginning of
the year
Granted
Exercised
Forfeited
Other(a)
113,040
30,303
46,682
46,342
66,148
64,163
66,148
65,960
32,917
35,409
39,027
39,985
88,957
82,737
18,745
19,888
22,665
25,855
22,665
25,855
10,731
12,333
12,515
14,319
–
–
(8,531)
(18,845)
(12,347)
(23,011)
(12,347)
(24,744)
(6,468)
(14,292)
(7,867)
(14,728)
–
–
(5,119)
(703)
(7,408)
(859)
(7,408)
(923)
(3,881)
(533)
–
–
–
–
–
–
–
–
–
–
(31,554)
(549)
(12,121)
–
Held at
the end of
the year
201,997
113,040
51,777
46,682
69,058
66,148
69,058
66,148
33,299
32,917
–
39,027
(a)
JM Rodgers ceased employment with the Group on 7 June 2019, and this movement represents the balance of performance rights held at that date.
No performance rights have been granted since the end of the year. No performance rights are held by any related parties of
KMP.
28 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Executive Performance Share Plan − previous LTI plan
Performance shares exercised during the year
Details of performance shares in the Company exercised during the year by the CEO and other executive KMP are shown
below:
CEO and Managing Director
JM Hastings
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(b)
Exercised during
the year(a)
$
Performance
shares exercised
Number
Amount paid per
performance share
$
–
–
–
173,703
76,123
–
–
–
–
13,454
5,896
–
–
–
–
–
–
–
(a)
(b)
The value of performance shares exercised during the year is calculated as the five-day volume weighted average price of shares of the Company on
the ASX as at the date that the performance shares were exercised.
JM Rodgers ceased employment with the Group on 7 June 2019.
Performance share holdings and transactions
The movement during the year in the number of performance shares in EVENT Hospitality & Entertainment Limited held by
the CEO and other executive KMP is detailed below:
Held at
the beginning
of the year
Granted
Exercised
Forfeited
Other
CEO and Managing Director
JM Hastings
Other executive KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(a)
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
–
–
23,502
23,502
–
–
35,943
47,048
15,772
26,614
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(13,454)
(11,105)
(5,896)
(10,842)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
Held at
the end of
the year
–
–
23,502
23,502
–
–
22,489
35,943
9,876
15,772
–
–
(a)
JM Rodgers ceased employment with the Group on 7 June 2019.
No performance shares have been granted since the end of the year. There were no performance shares held by the related
parties of KMP.
29 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
D I R E C T O R S ’ R E P O R T
Equity holdings and transactions
The movement during the year in the number of ordinary shares of EVENT Hospitality & Entertainment Limited held, directly,
indirectly or beneficially, by each KMP, including their related parties, is as follows:
Directors
AG Rydge (Chairman)
KG Chapman
PR Coates
VA Davies
DC Grant
PM Mann
RG Newton
JM Hastings
(CEO)
Other KMP
NC Arundel
GC Dean
MR Duff
HR Eberstaller
JM Rodgers(a)
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Held at
the beginning of
the year
Purchases
73,396,103
72,788,603
–
607,500
57,500
57,500
46,960
46,960
14,000
14,000
7,000
5,000
6,142
6,142
66,840
66,840
–
–
40,011
32,666
145,875
122,864
36,609
23,199
11,800
11,100
12,582
17,854
–
–
–
–
–
–
500
2,000
1,000
–
–
–
6,000
–
–
–
–
–
–
–
–
–
–
–
Received on
release of
performance
shares or
rights
Sales
Other(a)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
8,531
18,845
12,347
23,011
25,801
35,849
12,364
25,134
7,867
14,728
(10,000)
(11,500)
–
–
–
(22,439)
(24,164)
(24,434)
(10,400)
(20,000)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
(10,049)
–
Held at
the end of
the year
73,396,103
73,396,103
57,500
57,500
46,960
46,960
14,000
14,000
7,500
7,000
7,142
6,142
66,840
66,840
6,000
–
38,542
40,011
158,222
145,875
62,410
36,609
–
11,800
–
12,582
(a)
JM Rodgers ceased employment with the Group on 7 June 2019, and this movement represents the balance of ordinary shares held at that date.
Other than the arrangements disclosed above, no shares were granted to KMP as compensation in the year ended 30 June 2019.
Performance rights were granted to certain KMP as disclosed on page 27.
End of Directors’ Report: Remuneration Report – Audited
30 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Lead Auditor’s Independence Declaration under
Section 307C of the Corporations Act 2001
To the Directors of Event Hospitality & Entertainment Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Event Hospitality & Entertainment
Limited for the financial year ended 30 June 2019 there have been:
(i)
no contraventions of the auditor independence requirements as set out in the Corporations Act 2001 in
relation to the audit; and
(ii)
no contraventions of any applicable code of professional conduct in relation to the audit.
KPM_INI_01
KPMG
Anthony Travers
Partner
Sydney
22 August 2019
31
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
S T A T E M E N T O F F I N A N C I A L P O S I T I O N
A S A T 3 0 J U N E 2 0 1 9
Note
2019
$’000
2018
$’000
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments and other current assets
Assets held for sale
Total current assets
Non-current assets
Trade and other receivables
Other financial assets
Other investments
Investments accounted for using the equity method
Property, plant and equipment
Investment properties
Goodwill and other intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Loans and borrowings
Current tax liabilities
Provisions
Deferred revenue
Other current liabilities
Liabilities held for sale
Total current liabilities
Non-current liabilities
Loans and borrowings
Deferred tax liabilities
Provisions
Deferred revenue
Other non-current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained earnings
Total equity
4.4
3.1
3.2
2.4
3.1
4.5
5.3
3.3
3.4
3.5
2.5
3.6
4.4
3.7
3.8
2.4
4.4
2.5
3.7
3.8
4.1
4.3
71,925
53,605
18,474
10,840
144,665
299,509
1,542
1,086
78
11,113
1,276,309
76,200
93,324
25,337
1,906
95,564
55,293
21,552
16,482
−
188,891
1,042
1,396
20,924
14,368
1,321,917
74,000
101,323
4,771
1,947
1,486,895
1,541,688
1,786,404
1,730,579
84,622
−
25,688
20,335
55,648
4,119
50,289
240,701
377,154
11,988
10,634
8,611
5,848
414,235
654,936
106,947
1,127
1,298
20,665
90,170
5,852
−
226,059
376,355
11,731
16,443
9,202
2,191
415,922
641,981
1,131,468
1,088,598
219,126
73,945
838,397
219,126
64,896
804,576
1,131,468
1,088,598
The Statement of Financial Position is to be read in conjunction with the notes to the financial statements on pages 37 to 96.
32 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
I N C O M E S T A T E M E N T
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
Continuing operations
Revenue and other income
Revenue from sale of goods and rendering of services
Other revenue and income
Expenses
Employee expenses
Occupancy expenses
Film hire and other film expenses
Purchases and other direct expenses
Depreciation, amortisation and impairments
Other operating expenses
Advertising, commissions and marketing expenses
Finance costs
Equity accounted profit
Share of net profit of equity accounted associates and joint ventures
Profit before tax
Income tax expense
Profit after tax from continuing operations
Discontinued operations
Profit after tax from discontinued operations
Profit for the year
Earnings per share
Basic earnings per share
Continuing operations
Discontinued operations
Total
Diluted earnings per share
Continuing operations
Discontinued operations
Total
Note
2019
$’000
2018
$’000
2.1
2.1
5.3
2.5
2.4
2.6
2.6
2.6
2.6
967,476
41,833
1,009,309
(276,257)
(161,392)
(144,787)
(90,554)
(70,118)
(76,118)
(31,678)
(9,882)
944,280
38,003
982,283
(252,966)
(151,801)
(143,981)
(93,665)
(82,328)
(71,278)
(30,730)
(6,402)
(860,786)
(833,151)
565
778
149,088
(42,009)
107,079
149,910
(48,451)
101,459
4,810
111,889
10,451
111,910
2019
Cents
2018
Cents
66.6
3.0
69.6
66.1
3.0
69.1
63.3
6.5
69.8
62.8
6.5
69.3
The Income Statement is to be read in conjunction with the notes to the financial statements on pages 37 to 96.
33 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
Profit for the year
Other comprehensive income
Items that may be reclassified to profit or loss
Foreign currency translation differences for foreign operations – net of tax
Net change in fair value of investments designated as at fair value through other
comprehensive income (“FVOCI”) – net of tax
Net change in fair value of cash flow hedging instruments – net of tax
Other comprehensive income for the year – net of tax
Total comprehensive income for the year
2019
$’000
2018
$’000
111,889
111,910
8,598
5,192
(2,155)
(19)
6,424
697
18
5,907
118,313
117,817
The Statement of Comprehensive Income is to be read in conjunction with the notes to the financial statements on pages 37
to 96.
34 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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5
3
S T A T E M E N T O F C A S H F L O W S
F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
Cash flows from operating activities
Cash receipts in the course of operations
Cash payments in the course of operations
Cash provided by operations
Dividends from joint ventures
Other revenue
Dividends received
Interest received
Finance costs paid
Income tax paid
Net cash provided by operating activities
7.3
Cash flows from investing activities
Payments for property, plant and equipment and redevelopment of properties
Finance costs paid in relation to qualifying assets
Purchase of management and leasehold rights, software and other intangible assets
Payments for interest in joint venture
Decrease in loans from other entities
Payments for businesses acquired, including intangible assets
Proceeds from disposal of other non-current assets
Net cash used by investing activities
Cash flows from financing activities
Proceeds from borrowings
Repayments of borrowings
Dividends paid
Net cash used by financing activities
Net decrease in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Effect of exchange rate fluctuations on cash held
Cash and cash equivalents at the end of the year
Attributable to:
Continuing operations
Discontinued operations
Cash and cash equivalents at the end of the year
4.2
2.4
Note
2019
$’000
2018
$’000
1,373,787
(1,207,918)
1,333,797
(1,131,180)
165,869
2,340
55,192
805
539
(10,461)
(42,915)
171,369
(114,236)
(4,515)
(5,117)
−
(144)
−
34,464
(89,548)
106,000
(107,647)
(83,731)
(85,378)
(3,557)
95,564
1,754
93,761
71,925
21,836
93,761
202,617
2,252
59,024
771
599
(7,736)
(49,778)
207,749
(163,230)
(6,158)
(3,352)
(3,266)
(1,609)
(1,141)
91
(178,665)
169,665
(115,191)
(83,564)
(29,090)
(6)
92,318
3,252
95,564
39,846
55,718
95,564
The Statement of Cash Flows is to be read in conjunction with the notes to the financial statements on pages 37 to 96.
36 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
This section explains the basis of preparation for the Group’s financial statements, including information
regarding the impact of the adoption of new accounting standards.
1.1 – REPORTING ENTITY
EVENT Hospitality & Entertainment Limited (“Company”) is a company domiciled in Australia. The consolidated financial
report of the Company as at and for the year ended 30 June 2019 comprises the Company and its subsidiaries (collectively
referred to as the “Group”) and the Group’s interest in associates, joint ventures and joint operations.
EVENT Hospitality & Entertainment Limited is a for-profit company incorporated in Australia and limited by shares. The
shares are publicly traded on the ASX. The nature of the operations and principal activities of the Group are described in Note
2.2.
The financial report was authorised for issue by the Board of Directors of EVENT Hospitality & Entertainment Limited on 22
August 2019.
1.2 – BASIS OF PREPARATION
Statement of compliance
The financial report is a general purpose financial report which has been prepared in accordance with Australian Accounting
Standards (“AASBs”) (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board
and the Corporations Act 2001. The financial report also complies with International Financial Reporting Standards and
interpretations adopted by the International Accounting Standards Board.
Basis of measurement
The financial report is prepared on the historical cost basis except for the following material items in the Statement of
Financial Position which are measured at fair value: derivative financial instruments, investments designated as at FVOCI,
liabilities for cash-settled share-based payments and investment properties. Assets held for sale are stated at the lower of
carrying amount, and fair value less costs to sell.
The Company is of a kind referred to in ASIC Corporations (Rounding in Financial/Directors’ Reports) Instrument 2016/191
and in accordance with the Instrument, amounts in the financial report and Directors’ Report have been rounded off to the
nearest thousand dollars, unless otherwise stated.
Use of estimates and judgements
The preparation of a financial report in conformity with AASBs requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and reported amounts of assets, liabilities, income and
expenses. The estimates and associated assumptions are based on historical experience and various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis of making the judgements about
carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these
estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognised in the period in which the estimate is revised and in any future periods if affected. Judgements made by
management in the application of AASBs that have a significant effect on the financial report are discussed in Notes 3.3
(Property, plant and equipment) and 3.5 (Goodwill and other intangible assets).
Measurement of fair values
A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and
non-financial assets and liabilities. When measuring the fair value of an asset or a liability, the Group uses market observable
data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the inputs used in
the valuation techniques as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly
(i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
•
37 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
1.2 – BASIS OF PREPARATION (continued)
If the inputs used to measure the fair value of an asset or a liability might be categorised in different levels of the fair value
hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the
lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair
value hierarchy at the end of the reporting period during which the change has occurred. Further information about the
assumptions made in measuring fair values is included in Notes 3.3 (Property, plant and equipment), 3.4 (Investment
properties) and 4.5 (Financial risk management).
1.3 – FOREIGN CURRENCY
Functional and presentation currency
All amounts are expressed in Australian dollars, which is the Group’s presentation currency. Items included in the financial
statements of each of the Group’s entities are measured using the currency of the primary economic environment in which
the entity operates (“functional currency”). The functional currency of the Company is Australian dollars.
Foreign currency transactions
Transactions in foreign currencies are translated at the foreign exchange rate ruling at the date of the transaction. Monetary
assets and liabilities denominated in foreign currencies at the year end date are translated to Australian dollars at the foreign
exchange rate ruling at that date. Foreign exchange differences arising on translation are recognised in profit or loss, except
for differences arising on retranslation of a financial liability designated as a hedge of the net investment in a foreign
operation that is effective, which are recognised in other comprehensive income. Non-monetary assets and liabilities that are
measured in terms of historical cost in a foreign currency are translated using the exchange rate at the dates of the
transactions. Non-monetary assets and liabilities denominated in foreign currencies that are stated at fair value are
translated to Australian dollars at foreign exchange rates ruling at the dates the fair value was determined.
Financial statements of foreign operations
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are
translated to Australian dollars at foreign exchange rates ruling at the reporting date. The income and expenses of foreign
operations are translated to Australian dollars at rates approximating the foreign exchange rates ruling at the dates of the
transactions. Foreign exchange differences arising on retranslation are recognised in other comprehensive income, and
presented in the foreign currency translation reserve in equity.
When a foreign operation is disposed of in its entirety or partially such that control, significant influence or joint control is
lost, the cumulative amount in the foreign currency translation reserve related to that foreign operation is reclassified to
profit or loss as part of the gain or loss on disposal. If the Group disposes of part of its interest in a subsidiary but retains
control, then the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group
disposes of only part of an associate or joint venture whilst retaining significant influence or joint control, the relevant
proportion of the cumulative amount is reclassified to profit or loss.
Net investment in foreign operations
Exchange differences arising from the translation of the net investment in foreign operations, and the effective portion of
related hedges, are taken to the foreign currency translation reserve. They are released to profit or loss as an adjustment to
profit or loss on disposal. Foreign exchange gains and losses arising from a monetary item receivable from or payable to a
foreign operation, the settlement of which is neither planned nor likely in the foreseeable future, are considered to form part
of a net investment in a foreign operation and are recognised directly in other comprehensive income and presented in the
foreign currency translation reserve in equity.
1.4 – NEW AND AMENDED ACCOUNTING STANDARDS ADOPTED BY THE GROUP
The Group has adopted AASB 15 Revenue from Contracts with Customers and AASB 9 Financial Instruments from 1 July 2018.
A number of other new standards are effective from 1 July 2018 but they do not have a material effect on the Group’s
financial statements.
38 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
1.4 – NEW AND AMENDED ACCOUNTING STANDARDS ADOPTED BY THE GROUP (continued)
AASB 15 Revenue from Contracts with Customers (“AASB 15”)
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It
replaced AASB 118 Revenue, AASB 111 Construction Contracts and related interpretations. Under AASB 15, revenue is
recognised when a customer obtains control of the goods or services. Determining the timing of the transfer of control – at a
point in time or over time – requires judgement.
The Group has adopted AASB 15 using the cumulative effect method (without practical expedients) with the effect of initially
applying this standard recognised at the date of initial application of 1 July 2018. Accordingly, the information presented for
2018 has not been restated i.e. it is presented, as previously reported, under AASB 118, AASB 111 and related
interpretations. Additionally, the disclosure requirements of AASB 15 have not generally been applied to comparative
information.
The following table summarises the impact, net of tax, of transition to AASB 15 on retained earnings at 1 July 2018:
Impact of adopting AASB 15 at 1 July 2018
Retained earnings
1. Breakage on gift card and voucher revenue
2. Deferral of gift card and voucher selling costs
3. Adjustment to fair value of loyalty points
4. Contract acquisition costs for hotel management agreements
Impact at 1 July 2018
$’000
9,260
557
(4,154)
−
5,663
The following tables summarise the impact of adopting AASB 15 on the Group’s statement of financial position as at 30 June
2019 and its income statement and statement of comprehensive income for the year then ended for each of the line items
affected. There was no material impact on the Group’s statement of cash flows for the year ended 30 June 2019.
Impact on the Statement of Financial Position
Statement of Financial Position
As at 30 June 2019
Note
As reported
$’000
Adjustments
$’000
Amounts
without
adoption of
AASB 15
$’000
Total assets
1,786,404
―
1,786,404
LIABILITIES
Deferred revenue (current and non-current)
Deferred tax liabilities
Liabilities held for sale
Other liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained earnings
Total equity
1, 2, 3
1, 2, 3
1, 3
1, 2, 3
64,259
11,988
50,289
528,400
654,936
1,131,468
219,126
73,945
838,397
1,131,468
(861)
258
5,505
―
4,902
(4,902)
―
(153)
(4,749)
(4,902)
63,398
12,246
55,794
528,400
659,838
1,126,566
219,126
73,792
833,648
1,126,566
39 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
1.4 – NEW AND AMENDED ACCOUNTING STANDARDS ADOPTED BY THE GROUP (continued)
Impact on the Income Statement and Statement of Comprehensive Income
Income Statement
For the year ended 30 June 2019
Note
As reported
$’000
Adjustments
$’000
Revenue and other income
Revenue from sale of goods and rendering of services
Other revenue and income
1, 2, 3, 4
Expenses
Depreciation and amortisation
Other expenses
Equity accounted profit
Share of net profit of equity accounted investees
Profit before tax
Income tax expense
Profit after tax from continuing operations
Discontinued operations
Profit after tax from discontinued operations
Profit for the year
Statement of Comprehensive Income
For the year ended 30 June 2019
4
1, 2, 3, 4
1, 3
967,476
41,833
1,009,309
(70,188)
(790,598)
(860,786)
565
149,088
(42,009)
107,079
4,810
111,889
2,429
―
2,429
(1,497)
―
(1,497)
―
932
(280)
652
262
914
Amounts
without
adoption of
AASB 15
$’000
969,905
41,833
1,011,738
(71,685)
(790,598)
(862,283)
565
150,020
(42,289)
107,731
5,072
112,803
Profit for the year
1, 2, 3
111,889
914
112,803
Other comprehensive income for the year – net of tax
1, 2, 3
6,424
(153)
6,271
Total comprehensive income for the year
118,313
761
119,074
1. Breakage on gift card and voucher revenue
Under AASB 15, revenue from gift cards and vouchers that are not redeemed by customers (“breakage”) is required to be
estimated and recognised as revenue based on historical patterns of redemption by customers. The Group previously
recognised breakage only after the gift cards and vouchers had expired. This adjustment has resulted in a decrease in the
revenue recognised in the year ended 30 June 2019 and a decrease in the deferred revenue balance as at that date.
Judgement is required to estimate future gift card and voucher breakage and actual breakage may differ from
management’s estimate.
2. Deferral of gift card and voucher selling costs
The Group incurs commission and other direct expenses in relation to the sale of gift cards and vouchers that were
previously expensed as incurred. AASB 15 requires that the incremental costs of obtaining a contract with a customer be
recognised as an asset if those costs are expected to be recovered, and as a result the Group has recognised an asset in
relation to the selling costs associated with gift cards and vouchers that are not yet redeemed by customers at the balance
sheet date.
40 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
1.4 – NEW AND AMENDED ACCOUNTING STANDARDS ADOPTED BY THE GROUP (continued)
3. Adjustment to fair value of loyalty points
The Group has changed its methodology for calculating the fair value of unredeemed loyalty points on the basis of the
specific guidance in AASB 15 and this has resulted in a decrease in revenue recognised in the year ended 30 June 2019 and
an increase in the deferred revenue balance as at that date.
4. Contract acquisition costs for hotel management agreements
Under AASB 15, contract acquisition costs related to hotel management agreements are recognised over the term of the
contracts as a reduction in revenue instead of as amortisation expense, with no net effect on the Group’s profit or loss or
net asset position.
AASB 15 did not have a significant impact on the Group’s accounting policies with respect to other revenue streams.
AASB 9 Financial Instruments (“AASB 9”)
AASB 9 sets out requirements for recognising and measuring financial assets, financial liabilities and some contracts to buy
or sell non-financial items. This standard replaces AASB 139 Financial Instruments: Recognition and Measurement.
Expected credit loss impairment model
AASB 9 introduces a new expected credit loss impairment model for accounting for the impairment of financial assets,
including trade receivables. This replaces the previous incurred loss model required by AASB 139. The Group has revised its
methodology and accounting policy for the impairment of trade receivables to reflect the requirements of AASB 9. The
Group’s allowance for trade receivables under the previous incurred loss model and the new expected credit loss
impairment model required by AASB 9 is immaterial and consequently the adoption of this new accounting policy has had no
impact on the Group’s financial statements.
Hedge accounting
AASB 9 introduces a new hedge accounting model, replacing the previous model in AASB 139. AASB 9’s hedge accounting
model requires the Group to ensure that hedge accounting relationships are aligned with its risk management objectives
and strategy and to apply a more qualitative and forward-looking approach to assessing hedge effectiveness.
The Group’s New Zealand dollar denominated bank loan is designated as a hedge of the foreign currency exposure to the
Group’s net investment in its subsidiaries in New Zealand. This hedge relationship met the requirements of the AASB 139
hedge accounting model and continues to meet the requirements of the new AASB 9 hedge accounting model and
consequently the adoption of AASB 9 has not had an impact on how this hedge relationship is accounted for in the Group’s
financial statements.
Classification and measurement of financial assets and financial liabilities
AASB 9 contains three principal categories for financial assets: measured at amortised cost, fair value through other
comprehensive income (“FVOCI”) or fair value through profit or loss. The classification of financial assets under AASB 9 is
generally based on the business model in which a financial asset is managed and its contractual cash flow characteristics.
AASB 9 eliminates the previous AASB 139 categories of held to maturity, loans and receivables and available for sale.
AASB 9 largely retains the existing requirements in AASB 139 for the classification and measurement of financial liabilities.
The Group holds equity investments in a company listed on the ASX that under AASB 139 was classified as an available-for-
sale financial asset. AASB 9 allows entities to make an irrevocable election to measure equity investments not held for
trading as FVOCI, and the Group has made this election in respect of this investment. The accounting requirements of AASB
9 for financial assets classified as FVOCI are similar to those of AASB 139 for available-for-sale financial assets and
consequently there is no significant impact on the Group’s financial statements of the classification of this investment as
FVOCI under AASB 9.
The adoption of AASB 9 has not had a significant effect on the Group’s accounting policies related to financial liabilities and
derivative financial instruments.
41 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 1 – B A S I S O F P R E P A R A T I O N
1.5 – NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED BY THE GROUP
AASB 16 Leases (“AASB 16”)
This standard will have a material impact on the Group’s accounting for operating leases. The Group has extensive operating
lease arrangements, details of which are disclosed in Notes 5.3 and 7.1 in accordance with AASB 117 Leases. The new
standard requires the recognition of a right-of-use (“ROU”) asset and lease liability for each operating lease, with certain
limited exceptions. Rental expense will no longer be recognised in respect of operating leases. Instead, the ROU asset will be
depreciated over the lease term, whilst interest expense will be incurred in respect of the lease liability. These changes will
have the effect of materially increasing the Group’s EBITDA, and materially increasing the Group’s depreciation and interest
expenditure, whilst also potentially having a material impact on net profit after tax, which will vary from year to year, and has
yet to be quantified by the Group.
AASB 16 allows entities to apply certain transitional provisions on initial adoption of the standard. The Group has determined
to apply the modified retrospective transition approach to adoption of the standard and consequently the date of initial
application will be 1 July 2019. Under the transitional provisions, the Group is required to determine the discount rate for
each lease at 1 July 2019.
Estimated impact of AASB 16 Leases at 1 July 2019 – as lessee
The Group has assessed the estimated impact that AASB 16 will have on its consolidated statement of financial position at 1
July 2019 (excluding discontinued operations) in relation to operating leases for which it is the lessee.
Estimated impact of AASB 16 – as lessee (continuing operations)
New ROU assets
New lease liabilities
$526 million to $582 million
$577 million to $638 million
The net effect of the new lease liabilities and right-of-use assets, adjusted for deferred tax, will be recognised against
retained earnings.
The impact predominately relates to the Group’s cinema lease arrangements.
The estimated impact in the table above includes option periods for certain leases for which management has formed a
preliminary view that exercise of the option is ‘reasonably certain’, as defined in AASB 16. The assessment of the likelihood of
exercise, or otherwise, of future option periods is complex and judgemental and may be revised when this initial assessment
is finalised, resulting in an increase or decrease in the lease liabilities and ROU assets at 1 July 2019.
Estimated impact of AASB 16 at 1 July 2019 – as lessor
AASB 16 does not generally impact on previous accounting policies in respect of arrangements in which the Group is the
lessor. However, sub-lease arrangements may be impacted by the adoption of AASB 16, as the determination of whether a
sub-lease should be treated as an operating lease or finance lease is made with reference to the ROU asset recognised for
the head lease under AASB 16.
As disclosed in Note 7.1, there are approximately 700 sub-leases under the Thredbo head lease. Thredbo sub-leases consist
of long term accommodation sub-leases for holiday apartments, chalets and lodges and also retail premises. Long term
accommodation sub-leases are typically for periods mirroring the head lease, which was renewed for a further 50 year period
from 29 June 2007. Under AASB 117, these sub-lease arrangements were accounted for as operating leases. The classification
of these sub-leases as operating or finance leases under AASB 16 is currently under review.
42 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
This section focuses on the results and performance of the Group. On the following pages are disclosures
explaining the Group’s revenue, segment reporting, individually significant items, taxation and earnings per
share.
2.1 – REVENUE
Accounting policy
The Group has adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. The effect of applying AASB 15
has been disclosed in Note 1.4. The Group’s revenue recognition accounting policies under AASB 15 in comparison with the
policies under the previous standard (AASB 118) are summarised in the table below:
Type of
product/
service
Box office
Nature and timing of
satisfaction of
performance obligations,
including significant
payment terms
Customers purchase a
ticket to see a film and
the customer obtains
control of the service
when they see the film.
Tickets may be purchased
by customers in advance
or on the day of the film
screening.
Customers that are
members of the Group’s
cinema loyalty program
(Cinebuzz) earn points
when purchasing tickets
which can be used to
purchase services from
the Group in the future.
Revenue recognition under
AASB 118 (applicable before 1
July 2018)
Box office ticket revenue was
recognised on the date the
customer viewed the relevant
film.
When tickets were sold in
advance or gift cards and
vouchers were sold to customers,
the revenue was recorded as
deferred revenue in the
Statement of Financial Position
until the date the customer
viewed the relevant film or
expiry, whichever was earlier.
When customers earned loyalty
points, a component of box office
revenue was allocated to loyalty
points based on the residual
method and recognised as
deferred revenue until the points
were redeemed or expired.
Commission and other direct
expenses in relation to the sale of
gift cards and vouchers were
expensed as incurred.
Revenue recognition under AASB 15
(applicable from 1 July 2018)
Box office ticket revenue is recognised on
the date the customer views the relevant
film.
When tickets are sold in advance, the
revenue is recorded as deferred revenue in
the Statement of Financial Position until the
date of the film screening.
When gift cards and vouchers are sold to
customers, the revenue is recognised as
deferred revenue in the Statement of
Financial Position until the customer uses
the gift card or voucher to purchase goods
or services from the Group. Revenue from
gift cards and vouchers that will not be
redeemed by customers (“breakage”) is
estimated and recognised as revenue based
on historical patterns of redemption by
customers.
When customers earn loyalty points, box
office revenue is allocated proportionally
based on the relative stand-alone selling
prices of the ticket and the loyalty points
earned. The stand-alone selling price of the
loyalty points is determined with reference
to the average admission price and
expected loyalty point breakage. Loyalty
point revenue is recognised as deferred
revenue in the Statement of Financial
Position until the points are redeemed or
expire. Breakage is estimated based on
historical patterns of redemptions by
customers.
Commission and other direct expenses
incurred in relation to the sale of gift cards
are recognised as an asset until the gift
cards are redeemed or expire.
43 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.1 – REVENUE (continued)
Performance obligations and revenue recognition policies (continued)
Type of
product/
service
Food and
beverage
Hotel rooms
Hotel
management
and service
agreements
Thredbo lift
tickets
Nature and timing of
satisfaction of
performance
obligations, including
significant payment
terms
Customers obtain
control of food and
beverage at the point of
sale.
Customers obtain
control of the
accommodation service
when they occupy the
room.
Customers, being hotel
owners, obtain control
of the management
service as it is provided
over the life of the
management or service
agreement.
Customers obtain
control of the lift service
on the day or other
period when the lift
ticket is valid for use.
Revenue recognition under AASB 15
(applicable from 1 July 2018)
Revenue is recognised at the point of sale.
Revenue recognition under
AASB 118 (applicable before 1
July 2018)
Revenue was recognised at the
point of sale.
Revenue is recognised when the room is
occupied.
Revenue was recognised when
the room was occupied.
Revenue is recognised as the fees are
earned over the life of the contract.
Contract acquisition costs are recognised
over the life of the control as a reduction in
revenue.
Revenue was recognised as the
fees were earned over the life of
the contract. Contract acquisition
costs were amortised over the
life the contract.
Revenue is recognised as customers use the
service. For season and other passes,
revenue is recorded as deferred revenue in
the Statement of Financial Position initially
and is then recognised over the period that
the pass is valid.
Revenue was customers used the
service. For season and other
passes, revenue was recorded as
deferred revenue in the
Statement of Financial Position
initially and was then recognised
over the period that the pass was
valid.
Revenue was recognised at the
time of the lesson or other
activity.
Thredbo ski
school
Customers obtain
control of the ski school
service when the lesson
is attended.
Revenue is recognised at the time of the
lesson or other activity.
44 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.1 – REVENUE (continued)
The Group has adopted AASB 15 Revenue from Contracts with Customers from 1 July 2018. The effect of applying AASB 15
has been disclosed in Note 1.4. Due to the transition method chosen in applying AASB 15, comparative information has not
been restated to reflect the new requirements.
Revenue from contracts with customers (see below)
Other revenue
Rental revenue
Finance revenue
Dividends
Sundry
Other income
Reversal of impairment charges booked in previous years
Insurance proceeds
Increase in fair value of investment properties
Profit on sale of property, plant and equipment
2019
$’000
2018
$’000
967,476
944,280
26,204
527
805
867
28,403
9,809
1,601
1,931
89
13,430
1,009,309
24,698
528
771
1,121
27,118
–
5,041
5,750
94
10,885
982,283
45 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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4
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.2 – SEGMENT REPORTING
Accounting policy
An operating segment is a component of the Group that engages in business activities from which it earns revenues and
incurs expenses, including revenues and expenses from transactions with other Group segments. All segments’ operating
results are regularly reviewed by the Group’s CEO to make decisions about resources to be allocated to a segment and to
assess its performance, and for which discrete financial information is available.
Segment results that are reported to the CEO include items directly attributable to a segment, before individually significant
items, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly corporate head office
assets, head office expenses, and income tax assets and liabilities.
Additions to non-current segment assets are the total cost incurred during the period to acquire assets that include amounts
expected to be recovered over more than 12 months after the year end date. Amounts include property, plant and
equipment, but exclude financial instruments and deferred tax assets.
Segment information is presented in respect of the Group’s reporting segments. These are the Group’s main strategic
business segments and have differing risks and rewards associated with the business due to their different product or service
and geographic markets. For each of these operating segments, the Group’s CEO regularly reviews internal management
reports.
Information regarding the results of each reportable segment is included below. Performance is measured based on segment
profit before income tax as included in the internal management reports. Segment profit is used to measure performance as
management believes that such information is the most relevant in evaluating the results of segments relative to those of
other businesses. Inter-segment pricing is determined on an arm’s length basis.
Segment results, assets and liabilities include items directly attributable to a segment as well as those that can be allocated
on a reasonable basis. Unallocated items mainly comprise interest bearing loans and borrowings and borrowing costs,
interest income and corporate head office assets and expenses.
Operating segments
The Group comprises the following main operating segments:
Entertainment Australia
Includes the cinema exhibition operations in Australia, technology equipment supply and servicing, and the State Theatre.
Entertainment New Zealand
Includes cinema exhibition operations in New Zealand.
Entertainment Germany
Includes the cinema exhibition operations in Germany. The Group entered into an agreement for the sale of this division on
22 October 2018 and as a result this segment has been reclassified to discontinued operations. See Note 2.4 for further
information.
Hotels and Resorts
Includes the ownership, operation and management of hotels in Australia and overseas.
Thredbo Alpine Resort
Includes all the operations of the resort including property development activities.
Property and Other Investments
Includes property rental, investment properties and investments designated as at FVOCI.
Geographical information
Also presented is information on the Group’s split of revenue and non-current assets by geographic location. Geographic
revenue is based on the geographical location of customers. Segment assets are based on the geographical location of the
assets. The Group operates in Australia, New Zealand and Germany.
48 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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2
5
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.3 – INDIVIDUALLY SIGNIFICANT ITEMS
Individually significant items comprised the following:
Reversal of impairment charges booked in previous years
Impairment charges
Redundancies and restructure costs
Hotel and cinema pre-opening costs
Legal and other costs associated with the sale of a business segment
Other (expense)/income
Individually significant items expense before income tax
Income tax benefit
Individually significant items income/(expense) after income tax
2.4 – DISCONTINUED OPERATIONS
2019
$’000
2018
$’000
9,809
–
(3,869)
(3,473)
(1,775)
(1,194)
(502)
3,310
2,808
–
(15,454)
(1,698)
(1,293)
–
3,877
(14,568)
4,370
(10,198)
On 22 October 2018, the sale of the German cinema exhibition operation to Vue International Bidco plc, subject to Federal Cartel
Office (“FCO”) approval, was announced. As a result, the Entertainment Germany result has been reported as a discontinued
operation. The sale includes an upfront payment of €130 million (A$206 million) and variable consideration of up to €81.8 million
(A$130 million) depending on German market admissions for the 2019 calendar year and up to a further €10 million (A$16 million)
subject to the satisfaction of other agreed conditions. The variable consideration is based on German market admissions in the
2019 calendar year reaching a minimum of 105 million admissions with the full consideration paid at 115 million admissions. The
FCO review is in progress. This operation was not a discontinued operation at the end of the prior year (30 June 2018) and the
comparative Income Statement for the year to 30 June 2018 has been re-presented to show the discontinued operation separately
from continuing operations.
Profit attributable to discontinued operations was as follows:
Revenue and other income
Revenue from sale of goods and rendering of services
Other revenue and income
Total revenue and other income
Expenses
Occupancy expenses
Film hire and other film expenses
Employee expenses
Purchases and other direct expenses
Depreciation, amortisation and impairments
Other operating expenses
Advertising, commissions and marketing expenses
Finance costs
Equity accounted profit
Share of net profit of equity accounted investees
Profit before tax
Income tax expense
Profit after tax from discontinued operations
53 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2019
$’000
2018
$’000
289,971
5,008
294,979
301,876
5,579
307,455
(117,920)
(78,757)
(58,841)
(16,465)
(3,156)
(6,259)
(5,234)
(541)
(287,173)
(109,593)
(84,449)
(54,890)
(16,948)
(14,059)
(5,880)
(6,242)
(1,253)
(293,314)
1,128
1,490
8,934
(4,124)
4,810
15,631
(5,180)
10,451
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.4 – DISCONTINUED OPERATIONS (continued)
Cash flows from discontinued operations were as follows:
Net cash provided by operating activities
Net cash used in investing activities
Net cash used in financing activities
Net cash flows for the period
2019
$’000
2018
$’000
13,929
(11,090)
(39,075)
(36,534)
21,467
(12,052)
(1,609)
7,806
Assets and liabilities of disposal group held for sale
At 30 June 2019, the disposal group was stated at its carrying amount, which is lower than the fair value less costs to sell, and
comprised the following assets and liabilities:
ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments and other current assets
Investments accounted for using the equity method
Property, plant and equipment
Goodwill and other intangible assets
Deferred tax assets
Total assets held for sale
LIABILITIES
Trade and other payables
Loans and borrowings
Provisions
Deferred revenue
Total liabilities held for sale
Net assets held for sale
$’000
21,836
12,428
3,265
1,157
2,830
96,413
6,665
71
144,665
13,622
2,055
8,083
26,529
50,289
94,376
54 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.5 – TAXATION
Accounting policy
Income tax expense in the Income Statement for the periods presented comprises current and deferred tax. Income tax is
recognised in profit or loss except to the extent that it relates to a business combination, or items recognised directly in equity or
in other comprehensive income.
Current tax
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the
balance sheet date, and any adjustment to tax payable in respect of previous years.
The Company and its Australian wholly-owned subsidiaries are part of a tax consolidated group. As a consequence, all members of
the tax consolidated group are taxed as a single entity. EVENT Hospitality & Entertainment Limited is the head entity within the tax
consolidated group.
Deferred tax
Deferred tax arises due to certain temporary differences between the carrying amounts of assets and liabilities for financial
reporting purposes and those for taxation purposes. The following temporary differences are not provided for:
•
•
taxable temporary differences on the initial recognition of goodwill;
the initial recognition of assets or liabilities that affect neither accounting nor taxable profit other than in a business
combination; and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
•
Deferred tax assets and liabilities are disclosed net to the extent that they relate to taxes levied by the same authority and the
Group has the right of set off.
The amount of deferred tax provided is based on the expected manner of realisation or settlement of the carrying amount of
assets and liabilities. A deferred tax asset is recognised only to the extent that it is probable that sufficient taxable profit will be
available to utilise the temporary difference.
The Group has unrecognised deferred tax assets in respect of certain foreign tax revenue losses as disclosed on page 57. The
utilisation of the tax revenue losses is dependent upon the generation of sufficient future taxable profits within the applicable
foreign tax entities and a deferred tax asset is only recognised to the extent that it is supported by sufficient forecast taxable
profits. Assumptions regarding the generation of future taxable profits relevant to those foreign tax entities have been based upon
management’s budget estimates and forecasts. Management considers that the forecast of taxable profits for the applicable
foreign tax entities is subject to risk and uncertainty; hence, the Group has not recognised all of the losses as a deferred tax asset.
55 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.5 – TAXATION (continued)
Income tax expense
The major components of income tax expense are:
Income tax recognised in profit or loss
Income tax expense attributable to continuing operations
Income tax expense attributable to discontinued operations
Current income tax
Current income tax expense
Income tax (over)/under provided in prior year
Deferred income tax
Relating to origination and reversal of temporary differences
Income tax expense reported in the Income Statement
Income tax (credited)/charged directly in equity
Deferred income tax related to items (credited)/charged directly in equity:
Relating to other comprehensive income
Effective portion of changes in fair value of cash flow hedges
Unrealised (gain)/loss on investments designated as at FVOCI
Currency translation movements of deferred tax balances of foreign operations
Net gain on hedge of net investment in overseas subsidiaries
AASB15 Adjustment to retained earnings
Income tax benefit reported in equity
Reconciliation between income tax expense and pre-tax profit
A reconciliation between income tax expense and accounting profit before income tax
multiplied by the Group’s applicable income tax rate is as follows:
Profit before tax from continuing operations
Profit before tax from discontinued operations
Accounting profit before income tax expense
Prima facie income tax expense calculated at the Group’s statutory income tax rate of
30% (2018: 30%) on accounting profit
Increase in income tax expense due to:
Impairment write-down of land and non depreciable buildings
Non-deductible items and losses in non-resident controlled entities
Amortisation of management rights and other intangible assets
Depreciation and amortisation of buildings
Non-deductible sale and legal costs
Decrease in income tax expense due to:
Impairment write-back of land and non depreciable buildings
Share of incorporated joint venture net profit
Tax losses from prior year now recognised/utilised
Loss on disposal of non-depreciable properties
Franking credits on dividends received
Other
Income tax (over)/under provided in the prior year
56 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2019
$’000
2018
$’000
42,009
4,124
46,133
65,042
(227)
(18,682)
46,133
(5)
(866)
637
(1,218)
(247)
(1,699)
48,451
5,180
53,631
49,696
780
3,155
53,631
4
299
(727)
(1,622)
–
(2,046)
149,088
8,934
158,022
149,910
15,631
165,541
47,406
49,662
–
3,259
725
475
700
5,159
921
672
553
2,696
983
380
6,205
(227)
46,133
1,632
1,421
914
472
104
4,543
–
842
–
–
324
188
1,354
780
53,631
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.5 – TAXATION (continued)
Unrecognised deferred tax assets
Revenue losses – foreign
2019
$’000
3,289
3,289
2018
$’000
2,487
2,487
Included in the deferred tax assets not recognised is the gross value of tax revenue losses arising in Germany of $10,965,000
(2018: $8,290,000). The availability of these tax losses is subject to certain utilisation limits and ongoing availability tests under
German tax law. At 30 June 2019, there was no recognised deferred income tax liability (2018: $nil) for taxes that would be
payable on the unremitted earnings of certain of the Group’s subsidiaries, associates or incorporated joint ventures.
Deferred tax liabilities and assets
Deferred tax liabilities
Deferred tax liabilities comprise:
Difference in depreciation and amortisation of property, plant
and equipment for accounting and income tax purposes
Investment properties
Investments designated as at FVOCI
Share of joint arrangement timing differences
Expenditure immediately deductible for tax but capitalised and
amortised for accounting purposes
Accrued revenue
Prepayments
Interest and deferred financing costs
Unrealised foreign exchange gains not currently assessable
Sundry items
Less: deferred tax assets of the tax consolidated group offset
against deferred tax liabilities
Deferred tax assets
Deferred tax assets comprise:
Difference in depreciation and amortisation of property, plant
and equipment and intangible assets for accounting and income
tax purposes
Share of joint arrangement timing differences
Provisions and accrued employee benefits not currently deductible
Deferred revenue
Accrued expenses
Discounted long term lease and non-interest bearing loan liabilities
Share-based payments not currently deductible for tax
Capital losses offsetting unrealised capital gains
Tax losses carried forward
Unrealised foreign exchange losses not currently deductible
Deferred tax recognised on sale of a business segment
Sundry items
Less: deferred tax liabilities of the tax consolidated group offset
against deferred tax assets
Less: amount transferred to assets held for sale
Statement of Financial
Position
2019
$’000
2018
$’000
Income
Statement
2019
$’000
2018
$’000
3,799
805
(3,886)
19
73
2,980
7
(251)
355
319
3,348
1,953
–
(7)
147
(88)
(13)
179
–
(304)
3,381
(842)
2,043
(1,590)
(4)
–
737
286
(1,083)
(35)
(25,371)
(424)
283
(866)
(2,795)
(1,071)
845
–
803
(286)
865
–
–
162
37,346
11,559
8
61
4,569
4,440
73
491
358
894
59,799
32,940
10,754
4,760
42
4,494
188
66
742
68
568
54,622
(47,811)
11,988
(42,891)
11,731
2,755
11,621
9,304
8,956
1,185
34
1,932
–
6,091
4,112
25,371
1,858
73,219
6,102
10,971
11,334
5,927
1,177
34
2,669
286
4,842
2,924
–
1,396
47,662
(47,811)
(71)
25,337
(42,891)
–
4,771
Deferred tax (benefit)/expense
(18,682)
3,155
57 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 2 – P E R F O R M A N C E F O R T H E Y E A R
2.6 – EARNINGS PER SHARE
Basic earnings per share (“EPS”) is calculated by dividing the profit for the period attributable to members of the Company by the
weighted average number of ordinary shares of the Company.
Diluted EPS adjusts the figures used in the determination of basic EPS to take into account the after-income tax effect of interest
and other financing costs associated with dilutive potential ordinary shares and the weighted average number of shares assumed
to have been issued for no consideration in relation to dilutive potential ordinary shares.
2019
$’000
2018
$’000
Profit attributable to ordinary shareholders (basic and diluted)
111,889
111,910
Weighted average number of ordinary shares (basic)
Effect of performance shares and performance rights
Weighted average number of ordinary shares (diluted)
Number
Number
160,780,620
1,203,039
161,983,659
160,195,475
1,368,020
161,563,495
Further details in relation to the Executive Performance Rights Plan and Executive Performance Share Plan are provided in Note
6.1.
58 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
This section shows the assets used to generate the Group’s trading performance and the liabilities incurred as a
result. Liabilities relating to the Group’s financing activities are addressed in section 4. Deferred tax assets and
liabilities are shown in Note 2.5.
On the following pages, there are sections covering working capital balances, property, plant and equipment,
investment properties, intangible assets and provisions.
3.1 – TRADE AND OTHER RECEIVABLES
Trade and other receivables are recognised initially at fair value, and subsequently at the amounts considered recoverable
(amortised cost). Where the payment terms for the sale of an asset are deferred, the receivable is discounted using the
prevailing rate for a similar instrument of an issuer with similar credit terms. The unwinding of the discount is treated as finance
revenue.
Trade receivables are non-interest bearing and are generally on 30 to 90 day terms. The Group’s exposure to credit and foreign
exchange risks related to trade and other receivables is disclosed in Note 4.5.
Estimates are used in determining the level of receivables that will not be collected, and these estimates take into account
factors such as historical experience. Allowances are made for impairment losses when there is sufficient evidence that the
Group will not be able to collect all amounts due. These allowances are made until such time that the Group is satisfied that no
recovery of the amount owing is possible; at that point, the amount considered irrecoverable is written off against the asset
directly.
The carrying value of trade and other receivables is considered to approximate fair value.
Receivables are stated with the amount of goods and services tax (“GST”) or equivalent tax included.
Current
Trade receivables
Less: allowance for trade receivables
Other receivables
Non-current
Other receivables
Receivable from associates
2019
$’000
2018
$’000
19,163
(370)
18,793
34,812
53,605
1,500
42
1,542
23,683
(617)
23,066
32,227
55,293
1,000
42
1,042
As at 30 June 2019, trade receivables with a value of $370,000 (2018: $617,000) were impaired and fully provided for. The
movement in the allowance is not considered material.
As at 30 June 2019, trade receivables for the Group that were past due but not impaired were $6,545,000 (2018: $4,533,000), of
which $5,049,000 (2018: $3,113,000) was less than 30 days overdue. The remainder is not considered material and consequently
an ageing analysis has not been provided.
Current other receivables of $34,812,000 (2018: $32,227,000) do not contain impaired assets and are not past due. Based on the
credit history of these other receivables, it is expected that these amounts will be recovered when due.
59 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
3.2 – INVENTORIES
Inventories are measured at the lower of cost and net realisable value. Work in progress is valued at cost. Cost is based on the
first-in-first-out principle and includes expenditure incurred in bringing inventories to their existing condition and location.
3.3 – PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment
Property, plant and equipment are the physical assets used by the Group to generate revenue and profit. These assets include
land and buildings, and plant and equipment. Property, plant and equipment are recognised at cost (which is the amount initially
paid for them) less accumulated depreciation (the estimate of annual wear and tear) and impairment losses.
The Group leases properties in the normal course of business, principally to conduct its cinema exhibition businesses. On
inception of a lease, the estimated cost of decommissioning any additions to these properties (known as leasehold
improvements) is included within property, plant and equipment and depreciated over the lease term. A corresponding
provision is set up as disclosed in Note 3.7.
Where parts of an item of property, plant and equipment have different useful lives, they are accounted for separately.
Depreciation is charged to the Income Statement on a straight-line basis over the asset’s estimated useful life. The major
categories of property, plant and equipment are depreciated as follows:
• plant and equipment
• buildings and improvements subject to long term leases
•
• resort apartments and share of common property
freehold buildings
3 – 20 years
Shorter of estimated useful life and term of lease
40 – 80 years
40 – 80 years
Freehold land and land subject to long term leases are not depreciated. Similarly, assets under construction (classified as capital
work in progress) are not depreciated until they come into use, when they are transferred to buildings or plant and equipment
as appropriate.
Impairment of property, plant and equipment
Property, plant and equipment that are subject to depreciation are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. Indicators of impairment may include changes in
technology and business performance.
The process of impairment testing is to estimate the recoverable amount of the assets concerned, and recognise an impairment
loss in the Income Statement whenever the carrying amount of those assets exceeds the recoverable amount.
Impairment testing of property, plant and equipment is performed at an individual hotel or cinema site level, with the exception
of cinema sites within a single geographic location, which are tested as one cash-generating unit. Details regarding impairment
testing performed at 30 June 2019 is set out below.
60 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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t
i
p
s
o
H
T
N
E
V
E
1
6
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S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
3.3 – PROPERTY, PLANT AND EQUIPMENT (continued)
Independent valuations of interest in land and buildings
In assessing current values for the Group’s interest in land and buildings and integral plant and equipment, including long term
leasehold land and improvements, the directors have relied in most cases upon independent valuations from registered qualified
valuers or management value in use calculations. Except for investment properties, which are revalued every half year (refer to
Note 3.4), valuations are generally carried out on a progressive three year cycle. The last valuations were completed as at June
2019, June 2018 and June 2016.
Measurement of fair values
Amounts disclosed below represent the fair value of the Group’s interest in land and buildings, excluding investment properties,
as determined at the time of the most recent independent valuation report. Independent registered qualified valuers are
engaged to perform the valuations. The values are determined based on the highest and best use of each property. In most
cases, the existing use is the highest and best use and values are determined on a going concern basis. For certain properties,
the highest and best use may differ from the current use, and consideration may be given to the development of such properties
at an appropriate time in the future in order to realise the full value of the property.
This fair value disclosure has been categorised as a Level 3 fair value based on the inputs to the valuation techniques used. Going
concern value is based on capitalisation and discounted cash flow methodologies, and significant unobservable inputs include
the forecast net income for each property, and the capitalisation and discount rates used in determining fair value. In the most
recent valuations for June 2019 and June 2018, capitalisation rates utilised ranged from 4.75% to 12.25% and pre-tax discount
rates utilised ranged from 6.5% to 13.75% per annum. For certain sites where the going concern value was not the highest and
best use, fair value was determined using a direct comparison methodology with reference to recent sales of similar properties.
The fair values determined by the independent registered qualified valuers are sensitive to changes in these significant
unobservable inputs. However, overall the fair value of the Group’s interest in land and buildings, excluding investment
properties, is significantly higher than the book value of these interests as noted below.
Most recent valuations of interest in land and buildings, excluding investment properties
A summary of recent independent valuations, by year of the last valuation, is set out as
follows:
Existing use is highest and best use
Independent valuation
– 2019
– 2018
– 2016
Alternate use is highest and best use
Independent valuation
– 2018
Land and buildings not independently valued
Book value of land and buildings not independently valued
2019
$’000
2018
$’000
214,000
1,363,582
–
1,577,582
–
1,367,255
206,580
1,573,835
102,296
101,707
267,766
1,947,644
287,758
1,963,300
The book value of the above interests at 30 June 2019 was $1,073,567,000 (2018: $1,118,029,000). The written-down book value
of plant and equipment which is deemed integral to land and buildings, has been determined to total approximately
$163,662,000 as at 30 June 2019 (2018: $134,917,000).
The above valuations do not take into account the potential impact of capital gains tax.
62 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
3.3 – PROPERTY, PLANT AND EQUIPMENT (continued)
Impairment considerations at 30 June 2019
Hotel properties are treated as separate cash-generating units and their recoverable values were based upon the independent
valuations from registered qualified valuers at 30 June 2019, using the valuation parameters outlined above. The independent
valuations were compared to the carrying amount of hotel properties and, as a result of these assessments, no impairment
losses (2018: $nil) were recognised in respect of hotel properties.
For hotels that had been subject to impairments in previous years, the trading performance and recoverable amount were also
reviewed during the year. As a result of the review, there were no impairment charges (2018: $nil) booked in previous years,
that were required to be reversed in the year.
The trading performance of certain cinema sites caused the Group to assess their recoverable amount. Cinema sites are treated
as separate cash-generating units, with the exception of cinema sites within a single geographic location, which are tested as one
cash-generating unit. The recoverable values for each cinema site under review was based upon the independent valuations
from registered qualified valuers at 30 June 2019, using the valuation parameters outlined above. Impairment losses totalling
$nil (2018: $13,112,000) were recorded as a result of this assessment.
Security
The following assets, whose carrying values are listed below, are subject to mortgage security to secure the Group’s bank loan
facilities (refer to Note 4.4):
Freehold land and buildings
Freehold land and buildings classified as investment properties
Capital commitments
2019
$’000
257,741
17,200
274,941
2018
$’000
253,092
16,750
269,842
2019
$’000
2018
$’000
Capital expenditure commitments contracted but not provided for and payable
8,841
46,959
63 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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3.4 – INVESTMENT PROPERTIES
Accounting policy
Investment properties comprise land and buildings which are held for long term rental yields or for capital appreciation or both,
and are not occupied by the Group in the ordinary course of business or for administration purposes. Initially, investment
properties are measured at cost including transaction costs. Subsequent to initial recognition, investment properties are stated
at fair value with any change therein recognised in profit or loss. Property that is being constructed or redeveloped for future
use as an investment property is also measured at fair value (unless a fair value cannot be reliably determined).
When the use of a property changes from owner occupied to investment property, the property is reclassified as an investment
property. Any difference at the date of transfer between the carrying amount of the property immediately prior to transfer and
its fair value is recognised directly to the investment property revaluation reserve if it is an increase and to profit or loss if it is a
decrease. A gain may be recognised to profit on remeasurement only to the extent it reverses a previous impairment loss on the
property. Subsequent transfers from investment property to property, plant and equipment or inventories occur when there is a
change in use of the property, usually evidenced by commencement of redevelopment for own use.
Investment properties are derecognised when they have either been disposed of or when the investment property is
permanently withdrawn from use and no future benefit is expected from its disposal. Any gains or losses on derecognition of an
investment property are recognised in profit or loss in the period of derecognition.
Fair value of investment properties
Investment properties are independently revalued to fair value each reporting period, with any gain or loss arising on
remeasurement being recognised in profit or loss. The fair value of investment property has been categorised as a Level 3 fair
value based on the inputs to the valuation technique used. In assessing the fair value of investment properties, a number of
assumptions are made at the end of each reporting period regarding future cash flows, future property market economic
conditions and other factors including cash flow discount rates, rental capitalisation rates, and recent market transactions for
similar properties.
The carrying amount of investment properties is the fair value of the properties as determined by an independent registered
qualified valuer. The significant unobservable inputs used by the valuer in determining the fair value of the investment
properties held by the Group at 30 June 2019 included capitalisation rates on reversionary rental yields in the range of 6.00% to
7.25% (2018: 6.25% to 7.25%).
Investment properties comprise a number of commercial properties that are leased to third parties and which are held to derive
rental income or capital appreciation or both. Each of the leases for investment properties contains an initial non-cancellable
period of between five and 15 years. Subsequent renewals are negotiated with the lessee. No contingent rents are charged for
these investment properties.
During the year ended 30 June 2019, $6,762,000 (2018: $6,004,000) was recognised as rental income for investment properties
in the Income Statement, with $1,643,000 (2018: $1,645,000) incurred in respect of direct costs, including $154,000 (2018:
$243,000) for repairs and maintenance.
Freehold land and buildings
At fair value (Level 3 fair values)
Summary of movements:
Balance at the beginning of the year
Fair value increment
Balance at the end of the year
2019
$’000
2018
$’000
76,200
74,000
74,000
2,200
76,200
68,250
5,750
74,000
64 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
3.5 – GOODWILL AND OTHER INTANGIBLE ASSETS
Accounting policy
Goodwill
Goodwill arises from business combinations as described in Note 5.1 and represents the future economic benefits that arise
from assets that are not capable of being individually identified and separately recognised.
Following initial recognition, goodwill is measured at cost less any accumulated impairment losses. Goodwill is not amortised,
but instead is reviewed for impairment annually or more frequently if events or changes in circumstances indicate that the
carrying value may be impaired.
Goodwill is allocated to cash-generating units, and 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. An impairment loss recognised in respect of goodwill cannot be reversed.
The carrying amount of goodwill in respect of associates and joint ventures is included in the carrying amount of the investment
in the associate or joint venture.
Construction rights
Construction rights relate to the Group’s ability to develop accommodation in the Thredbo Alpine Resort. Construction rights are
recognised at cost and are derecognised as the rights are either sold or developed. The carrying value of construction rights is
reviewed annually. Any amounts no longer considered recoverable are written off, with the impairment loss recorded in profit or
loss.
Other intangible assets
Other intangible assets, which largely comprise management and leasehold rights and software, are stated at cost less
accumulated amortisation and impairment losses. Management and leasehold rights are amortised over the life of the
agreements, which range from 10 to 20 years, on a straight-line basis. Software for major operating systems is amortised over a
four to five year period on a straight-line basis.
Impairment
The carrying amounts of the Group’s non-financial assets, other than investment properties (see Note 3.4), are reviewed at each
reporting date to determine whether there is any indication of impairment. Where an indicator of impairment exists, the Group
makes a formal estimate of the asset’s recoverable amount. For goodwill, the recoverable amount is estimated each year at the
same time.
The recoverable amount of assets or cash-generating units is the greater of their fair value less costs to sell, and their value in
use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or cash-generating unit.
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.
Where the carrying amount of an asset or its related cash-generating unit exceeds its recoverable amount, the asset is
considered impaired and is written down to its recoverable amount. Impairment losses recognised in respect of cash-generating
units are allocated first to reduce the carrying value of any goodwill allocated to the cash-generating unit, and then to reduce the
carrying amounts of the other assets in the cash-generating unit on a pro-rata basis.
Impairment losses are recognised in profit or loss unless the asset or its cash-generating unit has previously been revalued, in
which case the impairment loss is recognised as a reversal to the extent of the previous revaluation, with any excess recognised
in profit or loss.
An impairment loss in respect of goodwill cannot be reversed. In respect of other assets, impairment losses recognised in prior
periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment
loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined, net of depreciation or amortisation, if no impairment loss had been recognised.
65 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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3.5 – GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
Reconciliations
Summaries of the carrying amount movements of each class of intangible assets between the beginning and end of the year are
set out below:
Goodwill
$’000
Construction
rights
$’000
Liquor
licences
$’000
Management
and leasehold
rights
$’000
Software
$’000
Total
$’000
2019
Gross balance at the beginning of the year
Accumulated amortisation and impairment losses
at the beginning of the year
Net balance at the beginning of the year
Acquisitions and initial contributions
Transfers
Amortisation and impairment
Disposals
Net foreign currency differences on translation of
foreign operations
Transfer to assets held for sale
Net balance at the end of the year
Gross balance at the end of the year
Accumulated amortisation and impairment losses
at the end of the year
Net balance at the end of the year
2018
Gross balance at the beginning of the year
Accumulated amortisation and impairment losses
at the beginning of the year
Net balance at the beginning of the year
Acquisitions and initial contributions
Transfers
Amortisation and impairment
Disposals
Net foreign currency differences on translation of
foreign operations
Net balance at the end of the year
Gross balance at the end of the year
Accumulated amortisation and impairment losses
at the end of the year
Net balance at the end of the year
62,018
–
62,018
–
400
–
–
918
(4,165)
59,171
59,171
–
59,171
63,472
–
63,472
–
–
(954)
–
(500)
62,018
62,018
–
62,018
1,388
–
1,388
–
–
(45)
–
–
–
1,343
1,343
–
1,343
1,388
–
1,388
–
–
–
–
–
1,388
1,388
–
1,388
196
–
196
–
–
–
–
–
–
196
196
–
196
196
–
196
–
–
–
–
–
196
196
–
196
60,340
15,054
138,996
(27,075)
33,265
1,151
–
(3,510)
(531)
313
–
30,688
(10,598)
4,456
1,724
(8)
(1,812)
–
(37,673)
101,323
2,875
392
(5,367)
(531)
66
1,297
(2,500)
1,926
(6,665)
93,324
62,292
12,072
135,074
(31,604)
30,688
(10,146)
1,926
(41,750)
93,324
59,154
14,210
138,420
(19,879)
39,275
2,440
–
(8,164)
–
(286)
33,265
(9,642)
4,568
1,656
137
(2,068)
(2)
(29,521)
108,899
4,096
137
(11,186)
(2)
165
4,456
(621)
101,323
60,340
15,054
138,996
(27,075)
33,265
(10,598)
4,456
(37,673)
101,323
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3.5 – GOODWILL AND OTHER INTANGIBLE ASSETS (continued)
Impairment losses recognised
No impairment losses in relation to goodwill, management and leasehold rights have been recognised during the year ended 30
June 2019 (2018: impairment losses of $5,413,000).
Impairment tests for cash-generating units containing goodwill
The following units have carrying amounts of goodwill:
Entertainment Australia
Entertainment New Zealand
Entertainment Germany
Hotels – New Zealand
Hotels – Australia
Multiple units without significant goodwill
2019
$’000
2018
$’000
33,260
9,640
−
10,237
3,593
2,441
59,171
33,260
9,250
4,051
9,823
3,593
2,041
62,018
The recoverable value of goodwill relating to the exhibition business in Australia and New Zealand, and goodwill relating to the
Group’s share of a cinema joint venture in Germany, has been determined by value in use calculations. This calculation uses cash
flow projections based on operating forecasts and projected five year results, with cash flows beyond the five year period being
projected using a per annum growth rate of 2.5%, which is considered appropriate given economic indicators and the expected
long term increase in revenue and operating costs in these markets. Pre-tax discount rates of 8.18% to 12.0% (2018: 7.86% to
12.0%) per annum have been used in discounting the projected cash flows. In management’s assessment, there are no
reasonable possible changes in assumptions that would give rise to an impairment.
3.6 – TRADE AND OTHER PAYABLES
Trade and other payables are recognised initially at fair value plus any directly attributable transaction costs. Subsequent to
initial recognition, these financial liabilities are measured at amortised cost. Trade payables are normally non-interest bearing
and settled within 30 days. Payables are stated with the amount of GST or equivalent tax included.
The carrying value of trade and other payables is considered to approximate fair value.
Trade payables
Other payables and accruals
3.7 – PROVISIONS
2019
$’000
23,767
60,855
84,622
2018
$’000
30,759
76,188
106,947
Accounting policy
Employee benefits
Provision is made for employee benefits including annual leave and long service leave for employees. The provision is calculated
as the present value of the Group’s net obligation to pay such benefits resulting from the employees’ services provided up to the
reporting date. The provisions due or available to be settled within 12 months have been calculated at undiscounted amounts
based on the remuneration rates the employer expects to pay after the reporting date and includes related on-costs.
The liability for employees’ benefits to long service leave represents the present value of the estimated future cash outflows to
be made by the employer resulting from employees’ services provided up to the reporting date.
Liabilities for employee benefits which are not due to be settled within 12 months are discounted using the rates attaching to
national government securities at reporting date, which most closely match the terms of maturity of the related liabilities.
In determining the liability for employee benefits, consideration has been given to future increases in wage and salary rates, and
the Group’s experience with staff departures. Related on-costs have also been included in the liability.
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S E C T I O N 3 – O P E R A T I N G A S S E T S A N D L I A B I L I T I E S
3.7 – PROVISIONS (continued)
Insurance loss contingencies and other claims
The insurance loss contingencies and other claims provision relates to estimated costs to be incurred in respect of various claims
that are expected to be settled within 12 months of the balance date.
Decommissioning of leasehold improvements
A provision for the estimated cost of decommissioning leasehold improvements is made where a legal or constructive obligation
exists.
In determining the provision for decommissioning costs, an assessment is made for each location of the likelihood and amount
of the decommissioning costs to be incurred in the future. The estimated future liability is discounted to a present value, with
the discount amount unwinding over the life of the leasehold asset as a finance cost in profit or loss. The estimated
decommissioning cost recognised as a provision is included as part of the cost of the leasehold improvements at the time of
installation or during the term of the lease, as the liability for decommissioning is reassessed. This amount capitalised is then
depreciated over the life of the asset.
The decommissioning of leasehold improvements provision has been raised in respect of “make-good” obligations under long
term lease contracts for various cinema sites. In determining the provision, an assessment has been made, for each location, of
the likelihood that a decommissioning cost will be incurred in the future and, where applicable, the level of costs to be incurred.
Uncertainty exists in estimating the level of costs to be incurred in the future because of the long term nature of cinema leases.
The basis of accounting is set out in Note 3.3.
Other
Other provisions are recognised in the Statement of Financial Position when the Group has a present legal or constructive
obligation as a result of a past event, and it is probable that an outflow of economic benefits will be required to settle the
obligation. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability. The unwinding of the discount
is recognised as a finance cost.
Current
Employee benefits
Insurance loss contingencies and other claims
Onerous contract
Non-current
Employee benefits
Onerous contract
Decommissioning of leasehold improvements
Movements in provisions
Movements in the carrying amounts of each class of provisions, except for employee benefits,
are set out below:
Insurance loss contingencies and other claims
Carrying amount at the beginning of the year
Payments
Provided
Carrying amount at the end of the year
Onerous contract
Carrying amount at the beginning of the year
Utilised
Provided
Carrying amount at the end of the year
68 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2019
$’000
20,045
75
215
20,335
3,111
72
7,451
10,634
75
(1)
1
75
491
(204)
−
287
2018
$’000
20,385
75
205
20,665
3,025
286
13,132
16,443
81
(34)
28
75
−
−
491
491
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3.7 – PROVISIONS (continued)
Decommissioning of leasehold improvements
Carrying amount at the beginning of the year
Provided
Reversed
Paid
Notional interest
Net foreign currency differences on translation of foreign operations
Transfer to liabilities held for sale
Carrying amount at the end of the year
3.8 – OTHER LIABILITIES
2019
$’000
2018
$’000
13,132
853
(839)
(51)
398
247
(6,289)
7,451
11,510
1,140
(62)
−
200
344
−
13,132
Other liabilities include contract deposits received in advance and deferred lease incentive balances arising from operating
leases. Refer to Note 7.1 for further details regarding operating lease arrangements.
69 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
This section outlines the Group’s capital structure, including how much is raised from shareholders (equity) and
how much is borrowed from financial institutions (debt).
On the following pages, there are sections on the Group’s share capital, dividends, reserves, loans and borrowings,
and financial risk management.
4.1 – SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a
deduction from equity, net of any tax effects. The Company does not have authorised capital or par value in respect of its issued
shares.
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up of the Company in proportion to
the number of and amounts paid on the shares held. On a show of hands, every holder of ordinary shares present at a meeting
in person or by proxy, is entitled to one vote, and upon a poll each share is entitled to one vote.
2019
Shares
2018
Shares
2019
$’000
2018
$’000
Share capital
Fully paid ordinary shares
160,992,028
160,560,596
219,126
219,126
Movements in share capital
Balance at the beginning of the year
Share capital issued pursuant to the Executive Performance
Rights Plan for nil consideration
Performance shares exercised and withdrawn from the trust
Balance at the end of the year
160,560,596
159,488,932
219,126
219,126
291,625
139,807
160,992,028
343,973
727,691
160,560,596
–
–
219,126
–
–
219,126
Share capital consists of:
Ordinary shares
Tax Exempt Share Plan shares
Treasury shares
Performance shares
160,969,027
23,001
160,992,028
160,536,333
24,263
160,560,596
203,493
161,195,521
343,300
160,903,896
Share buy-back
There is no current on-market buy-back.
Dividend Reinvestment Plan
The Dividend Reinvestment Plan was suspended in August 2010.
Treasury shares
Treasury shares consist of shares held in trust in relation to the Group’s Executive Performance Share Plan. As at 30 June 2019, a
total of 203,493 (2018: 343,300) shares were held in trust and classified as treasury shares. Information relating to the Group’s
share-based payment arrangements is set out in Note 6.1.
Options
Other than the performance rights disclosed in Note 6.1, there were no share options on issue as at 30 June 2019 (2018: nil).
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.1 – SHARE CAPITAL (continued)
Capital management
The Group manages its capital with the objective of maintaining a strong capital base so as to maintain investor, creditor and
market confidence and to have the capacity to take advantage of opportunities that will enhance the existing businesses and
enable future growth and expansion. The Board monitors the return on capital, which the Group defines as operating profit after
income tax divided by shareholders’ equity and long term debt. The Board also monitors the Group’s gearing ratio, being net
debt divided by shareholders’ equity.
It is recognised that the Group operates in business segments in which operating results may be subject to volatility and the
Board continuously reviews the capital structure to ensure sufficient:
•
•
•
surplus funding capacity is available;
funds are available for capital expenditure and to implement longer term business development strategies; and
funds are available to maintain appropriate dividend levels.
There were no changes in the Group’s approach to capital management during the year. No Group entity is subject to externally
imposed capital requirements.
4.2 – DIVIDENDS
Per share
Cents
Total
amount
$’000
Date of payment
Tax rate for
franking credit
Percentage
franked
Dividends on ordinary shares paid during the year were:
2019
Final 2018 dividend
Interim 2019 dividend
2018
Final 2017 dividend
Interim 2018 dividend
31
21
31
21
49,880
33,851
83,731
49,774
33,790
83,564
20 September 2018
21 March 2019
21 September 2017
15 March 2018
30%
30%
30%
30%
100%
100%
100%
100%
Subsequent events
Since the end of the year, the directors declared the following dividends:
Final 2019 dividend
31
49,971
19 September 2019
30%
100%
The financial effect of the final dividend in respect of the year has not been brought to account in the financial statements for
the year ended 30 June 2019 and will be recognised in subsequent financial statements.
Franking credit balance
The amount of franking credits available for future reporting periods
2019
$’000
2018
$’000
167,086
143,183
The impact on the franking account of dividends proposed or declared before the financial report was authorised for issue but
not recognised as a distribution to equity holders during the period is to reduce the balance by $21,416,000 (2018: $21,377,000).
The ability to utilise franking credits is dependent upon the Company being in a sufficient positive net asset position and also
having adequate available cash flow liquidity.
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.3 – RESERVES
Financial assets revaluation reserve
This reserve includes the cumulative net change in the fair value of investments designated as at FVOCI from 1 July 2018, and
the cumulative net change in the fair value of investments previously classified available-for-sale financial assets. Amounts are
recognised in the Income Statement when the associated assets are sold or impaired.
Investment property revaluation reserve
This reserve relates to property that has been reclassified as an investment property and represents the cumulative increase in
the fair value of the property at the date of reclassification.
Hedging reserve
This reserve comprises the effective portion of the cumulative net change in the fair value of cash flow hedging instruments
related to hedged transactions that have not yet occurred.
Share-based payments reserve
This reserve includes the cumulative fair value of the executive performance shares and performance rights which have been
recognised as an employee expense in the Income Statement. See Note 6.1 for further details regarding share-based payment
arrangements.
Foreign currency translation reserve
This reserve records the foreign currency differences arising from the translation of foreign operations, the translation of
transactions that hedge the Group’s net investment in a foreign operation or the translation of foreign currency monetary
items forming part of the net investment in a foreign operation and the Group’s share of associates’ increment or decrement
in their foreign currency translation reserve.
Movements in reserves during the year
At 1 July 2018
Movement in fair value of investments
designated as at FVOCI – net of tax
Movement in fair value of cash flow hedging
instruments – net of tax
Amount recognised in the Income
Statement as an employee expense
Currency translation adjustment on
controlled entities’ financial statements
Financial assets
revaluation
$’000
14,691
(2,155)
–
–
–
Investment
property
revaluation
$’000
5,121
–
–
–
–
Hedging
$’000
Share-based
payments
$’000
Foreign
currency
translation
$’000
Total
$’000
8
–
(19)
–
–
33,877
11,199
64,896
–
–
2,625
–
–
–
(2,155)
(19)
2,625
–
8,598
8,598
At 30 June 2019
12,536
5,121
(11)
36,502
19,797
73,945
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.4 – LOANS, BORROWINGS AND FINANCING ARRANGEMENTS
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and call deposits with an original maturity of three months or less. Bank
overdrafts that are repayable on demand and form an integral part of the Group’s cash management are included as a
component of cash and cash equivalents for the purpose of the Statement of Cash Flows.
Loans and borrowings
Interest bearing and non-interest bearing loans and borrowings are recognised initially at fair value less attributable transaction
costs. Subsequent to initial recognition, loans and borrowings are stated at amortised cost with any difference between cost and
redemption value being recognised in profit or loss over the period of the borrowings using the effective interest method. The
carrying value of loans and borrowings is considered to approximate fair value.
Finance costs
Finance costs include interest, unwinding of discounts or premiums relating to borrowings, amortisation of ancillary costs
incurred in connection with arrangement of borrowings and lease finance charges. Ancillary costs incurred in connection with
the arrangement of loans and borrowings are capitalised and amortised over the life of the borrowings. Finance costs are
expensed as incurred unless they relate to qualifying assets. Qualifying assets are assets which take more than 12 months to get
ready for their intended use or sale. Where funds are borrowed specifically for the acquisition, construction or production of a
qualifying asset, the amount of borrowing costs capitalised is that incurred in relation to that borrowing, net of any interest
earned on those borrowings. Borrowing costs that are not directly attributable to the acquisition, construction or production of
qualifying assets are recognised in profit or loss using the effective interest method.
$545,000,000 revolving multi-currency loan facility; and
$15,000,000 credit support facility (for the issue of letters of credit and bank guarantees).
Bank debt – secured
The Group’s secured bank debt facilities were amended and restated on 15 August 2017 and comprise the following:
•
•
The above facilities mature on 15 August 2020 and are supported by interlocking guarantees from most Group entities and are
secured by specific property mortgages. Debt drawn under these facilities bears interest at the relevant inter-bank benchmark
reference rate plus a margin of between 1.15% and 2.1% per annum. At 30 June 2019, the Group had drawn $376,909,000
(2018: $375,540,000) under the debt facilities, of which $nil (2018: $nil) was subject to interest rate swaps used for hedging,
and had drawn $2,927,000 under the credit support facility (2018: $2,939,000).
Other facility – secured
Certain wholly-owned German subsidiaries have arranged a secured five year guarantee facility of €17,000,000 (A$27,548,000)
(for the issue of letters of credit and bank guarantees).
The facility is supported by interlocking guarantees from certain (non-Australian based) Group entities and is secured against a
specific property in Germany. Debt drawn under the facility bears interest at the relevant inter-bank benchmark rate plus a
margin of between 0.75% and 2.75% per annum. At 30 June 2019, the Group had drawn €14,066,000 (A$22,793,000) under
the facility.
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.4 – LOANS, BORROWINGS AND FINANCING ARRANGEMENTS (continued)
Current
Non-interest bearing loans and borrowings
Loans from other companies – unsecured
Non-current
Interest bearing loans and borrowings
Bank loans – secured
Deferred financing costs
Non-interest bearing loans and borrowings
Loans from other companies – unsecured
4.5 – FINANCIAL RISK MANAGEMENT
2019
$’000
2018
$’000
–
–
1,127
1,127
376,909
(614)
376,295
859
377,154
375,540
(1,173)
374,367
1,988
376,355
Derivative financial instruments
From time to time, the Group uses derivative financial instruments to hedge its exposure to interest rate and foreign exchange
risks arising from operating activities, investing activities and financing activities. In accordance with its treasury policy, the
Group does not hold or issue derivative financial instruments for trading purposes.
Derivative financial instruments are recognised at fair value within prepayments and other current assets. The gain or loss on
remeasurement to fair value is recognised immediately in profit or loss. However, where derivatives qualify for hedge
accounting, recognition of any resultant gain or loss depends on the nature of the item being hedged.
The fair value of interest rate swaps is the estimated amount that the Group would receive or pay to terminate the swap at the
reporting date, taking into account current interest rates and the creditworthiness of the swap counterparties. The fair value of
forward exchange contracts is their quoted market price at the reporting date, being the present value of the quoted forward
price.
Investments designated as at fair value through other comprehensive income (“FVOCI”)
The Group holds equity securities in Carlton Investments Limited, a company listed on the ASX. As at 1 July 2018, the Group
designated these investments as at FVOCI. These investments were previously classified as available-for-sale.
All investments are initially recognised at cost, being the fair value of the consideration given and including acquisition charges
associated with the investment. After initial recognition, investments, which are designated as at FVOCI, are measured at fair
value. Investments designated as at FVOCI comprise marketable equity securities.
For investments that are actively traded in organised financial markets, fair value is determined by reference to securities
exchange quoted market bid prices at the close of business at reporting date.
Dividends are recognised as income in profit or loss unless the dividend clearly represents a recovery of part of the cost of the
investment. Other net gains and losses are recognised in OCI and are never reclassified to profit or loss.
Equity investments as at FVOCI
Investment in a listed company
2019
$’000
2018
$’000
78
20,924
During the year, the Group completed a sale of its ordinary shareholding in Carlton Investments Limited (see Note 6.2). The
Group has retained its preference shareholding in Carlton Investments Limited.
No reasonably possible change in the share price of this company would have a material effect on the investment balance or the
related revaluation reserve at the reporting date.
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.5 – FINANCIAL RISK MANAGEMENT (continued)
Financial risks
The Group’s exposure to financial risks, objectives, policies and processes for managing the risks including methods used to
measure the risks, and the management of capital are presented below.
The Group’s activities expose it to the following financial risks:
•
•
•
credit risk;
liquidity risk; and
market risk, including interest rate and foreign exchange risks.
The Board has overall responsibility for the oversight of the risk management framework. Risk management policies are
established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls, and to monitor risks
and adherence to limits. Risk management policies and systems are reviewed regularly and modified as appropriate to reflect
changes in market conditions and the Group’s activities.
The Audit and Risk Committee oversees how management has established and monitors internal compliance and control
systems and to ensure the appropriate and effective management of the above risks. The Audit and Risk Committee is assisted in
its oversight role by the Internal Audit function. The Internal Audit function undertakes reviews of risk management controls and
procedures in accordance with an annual plan approved by the Audit and Risk Committee. The results of these Internal Audit
reviews are reported to the Audit and Risk Committee.
Credit risk
Credit risk arises from trade and other receivables outstanding, cash and cash equivalents, derivative financial instruments and
deposits with banks and financial institutions. It is the risk of financial loss to the Group if a customer or counterparty to the
financial instrument fails to meet its contractual obligations, and arises principally from the Group’s trade receivables.
Information regarding the Group’s trade receivable balances is disclosed in Note 3.1. The Group’s exposure to credit risk is not
considered material.
The Group’s maximum exposure to credit risk at the reporting date was considered to approximate the carrying value of
receivables at the reporting date.
Investments and derivatives
Investments of surplus cash and deposits and derivative financial instruments are with banks with high credit ratings. Given their
high credit ratings, management does not expect any counterparty to fail to meet its obligations.
At 30 June 2019, there were no significant concentrations of credit risk. The maximum exposure to credit risk is represented by
the carrying amount of each financial asset, including derivative financial instruments, in the Statement of Financial Position.
Guarantees
All guarantees are in respect of obligations of subsidiaries, associates, joint ventures or joint operations in which the Group has
an interest, and principally relate to operating lease arrangements. The Group’s operating lease commitments are disclosed in
Note 7.1, and details of guarantees given by the parent entity are provided in Note 7.5.
Security deposits
Security deposits relate to the Group’s operating lease arrangements. Certain lease agreements require an amount to be placed
on deposit, which should then be returned to the Group at the conclusion of the lease term.
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.5 – FINANCIAL RISK MANAGEMENT (continued)
Liquidity risk
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group manages
liquidity risk by continuously monitoring forecast and actual cash flows. The Group’s treasury function aims to maintain flexibility
in funding by maintaining committed credit lines with a number of counterparties.
The Group’s financial liabilities
The contractual maturities of the Group’s financial liabilities, including interest payments and excluding the impact of netting
agreements, are as follows:
Carrying
amount
$’000
Contractual
cash flows
$’000
6 months
or less
$’000
6 to 12
months
$’000
1 to 2
year(s)
$’000
2 to 5
years
$’000
Over 5
years
$’000
2019
Non-derivative financial
liabilities
Secured bank loans
Unsecured non-interest bearing
loans from other companies
Trade payables
Other payables and accruals
Derivative financial liabilities
Forward exchange contracts
2018
Non-derivative financial
liabilities
Secured bank loans
Unsecured non-interest bearing
loans from other companies
Trade payables
Other payables and accruals
Derivative financial liabilities
Forward exchange contracts
376,909
(386,989)
(4,715)
(4,281)
(377,993)
−
−
859
23,767
60,855
(859)
(23,767)
(60,855)
−
(23,767)
(60,855)
−
−
−
−
−
−
−
−
−
(859)
−
−
16
462,406
(16)
(472,486)
(16)
(89,353)
−
(4,281)
−
(377,993)
−
−
−
(859)
375,540
(401,869)
(6,185)
(5,916)
(12,792)
(376,976)
−
3,115
30,759
76,188
(3,115)
(30,759)
(76,188)
(564)
(30,759)
(76,188)
(564)
−
−
(971)
−
−
(763)
−
−
(253)
−
−
(11)
485,591
11
(511,920)
11
(113,685)
−
(6,480)
−
(13,763)
−
(377,739)
−
(253)
For derivative financial assets and liabilities, maturities detailed in the table above approximate periods that cash flows and the
impact on profit or loss are expected to occur.
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.5 – FINANCIAL RISK MANAGEMENT (continued)
Market risk
Market risk is the risk that changes in market prices, such as interest rates and foreign exchange rates, will affect the Group’s
income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control
market risk exposures within acceptable parameters, whilst optimising the return.
The Group uses derivative financial instruments such as interest rate swaps and forward exchange contracts to hedge exposures
to fluctuations in interest rates and foreign exchange rates. Derivatives are used exclusively for hedging purposes and are not
traded or used as speculative instruments. This is carried out under Board approved treasury policies.
Hedge of net investment in foreign operations
The portion of the gain or loss on an instrument used to hedge a net investment in a foreign operation, that is determined to be
an effective hedge, is recognised in other comprehensive income and presented in equity in the foreign currency translation
reserve. The ineffective portion is recognised immediately in profit or loss.
Interest rate risk
The Group manages interest rate exposures on borrowings in accordance with a Board approved treasury policy that specifies
parameters for hedging including hedging percentages and approved hedging instruments. The policy specifies upper and lower
hedging limits set for specific timeframes out to five years. These limits may be varied with the approval of the Board.
At reporting date, the interest rate profile of the Group’s interest bearing financial instruments was:
Fixed rate instruments
Financial assets
Financial liabilities
Variable rate instruments
Financial assets
Financial liabilities
2019
$’000
2018
$’000
–
–
–
–
–
–
64,869
(376,909)
(312,039)
87,355
(375,540)
(288,185)
The Group manages interest rate risk in accordance with a Board approved treasury policy covering the types of instruments,
range of protection and duration of instruments. The financial instruments cover interest rate swaps and forward rate
agreements. Maturities of these instruments are up to a maximum of five years. Interest rate swaps and forward rate
agreements allow the Group to raise long term borrowings at floating rates and swap a portion of those borrowings into fixed
rates.
The approved range of interest rate cover is based on the projected debt levels for each currency and reduced for each future
year. There were no interest rate hedges at 30 June 2019 (2018: no interest rate hedges).
The Group classifies interest rate swaps as cash flow hedges and recognises them at fair value in the Statement of Financial
Position.
The Group accounts for fixed rate financial assets and liabilities at fair value. The Group had no fixed rate instruments for the
year ended 30 June 2019 (2018: no fixed rate instruments) and accordingly no sensitivity analysis has been prepared in the
current or prior year.
Foreign exchange risk
The Group is exposed to currency risk on purchases, borrowings and surplus funds that are denominated in a currency other
than the respective functional currencies of Group entities, primarily the Australian dollar (“AUD”), but also the New Zealand
dollar (“NZD”), Euro (“EUR”) and Great British pound (“GBP”). Transactions undertaken by Group entities are primarily
denominated in AUD, NZD, EUR and the US dollar (“USD”).
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S E C T I O N 4 – C A P I T A L S T R U C T U R E A N D F I N A N C I N G
4.5 – FINANCIAL RISK MANAGEMENT (continued)
The Group manages foreign currency exposures in accordance with a Board approved treasury policy that specifies parameters
for hedging, including hedging percentages and approved hedging instruments. At any point in time, the Group hedges up to
60% of “highly probable” foreign currency exposures and 100% of confirmed foreign currency exposures. Typically, foreign
currency exposures are hedged with the utilisation of forward exchange contracts.
The Group’s exposure to foreign currency risk in AUD equivalents at the reporting date was as follows, based on notional
amounts:
Cash and cash equivalents
Trade receivables
Secured bank loans
Trade payables
Gross balance sheet exposure
Forward exchange contracts
2019
2018
NZD
$’000
221
631
(66,909)
(1,838)
(67,895)
–
–
EUR
$’000
3,334
–
–
–
3,334
–
–
GBP
$’000
648
–
–
–
648
–
–
USD
$’000
1,104
–
–
–
1,104
(16)
(16)
NZD
$’000
387
126
(71,540)
(298)
(71,325)
–
–
EUR
$’000
4,956
–
–
–
4,956
–
–
GBP
$’000
199
–
–
–
199
–
–
USD
$’000
1,143
–
–
–
1,143
11
11
Net exposure
(67,895)
3,334
648
1,088
(71,325)
4,956
199
1,154
Sensitivity analysis
No reasonably possible change in prevailing foreign exchange rates would have a significant impact on the Income Statement
or hedging reserve in the current or prior year.
Hedging of net investment in foreign subsidiaries
The Group’s NZD denominated bank loan is designated as a hedge of the foreign currency exposure to the Group’s net
investment in its subsidiaries in New Zealand. The carrying amount of the loan at 30 June 2019 was $66,909,000 (2018:
$71,540,000). A foreign exchange loss of $3,016,000 (2018: gain of $2,838,000) was recognised in equity on translation of the
loan to AUD.
Financial instruments fair value determination method grading
Valuation methods for financial instruments carried at fair value are defined as follows:
•
•
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (i.e. as prices) or indirectly (i.e. derived from prices); and
Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
•
Investments designated as at FVOCI are classified as Level 1 financial instruments. Derivative financial instruments are
classified as Level 2 financial instruments.
78 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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S E C T I O N 5 – G R O U P C O M P O S I T I O N
This section explains the composition of the Group.
On the following pages, there are sections on businesses acquired during the year, a list of subsidiaries,
investments in associates and joint ventures, and disclosures regarding interests in other entities including
cinema partnership interests.
5.1 – BUSINESS COMBINATIONS
Accounting policy
Business combinations are accounted for using the acquisition method as at the date when control is transferred to the Group.
Under the acquisition method, consideration transferred in a business combination is generally measured at fair value, as are
the identifiable net assets acquired. Consideration transferred includes the fair value of any contingent consideration, and
share-based payment awards of the acquiree that are required to be replaced in the business combination.
The Group measures goodwill arising from the business combination at the acquisition date as the fair value of the
consideration transferred, including the recognised amount of any non-controlling interest in the acquiree, less the net
recognised amount (generally fair value) of the identifiable assets acquired and liabilities assumed. Any goodwill that arises is
tested annually for impairment (refer to Note 3.5). If the consideration transferred is lower than the fair value of the net
identifiable assets of the subsidiary acquired, the difference is recognised in profit or loss.
A contingent liability of the acquiree is assumed in a business combination only if the liability represents a present obligation
and arises from past events, and its fair value can be measured.
The Group measures any non-controlling interest at its proportionate interest of the fair value of identifiable net assets of the
acquiree.
Transaction costs incurred by the Group in connection with a business combination, such as due diligence fees, legal fees and
other professional costs, are expensed as incurred.
Business combinations in the year ended 30 June 2019
There were no material business combinations in the year ended 30 June 2019.
Business combinations in the year ended 30 June 2018
There were no material business combinations in the year ended 30 June 2018.
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S E C T I O N 5 – G R O U P C O M P O S I T I O N
5.2 – SUBSIDIARIES
Accounting policy
Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable
returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The
financial statements of subsidiaries are included in the consolidated financial statements from the date on which control
commences until the date on which control ceases.
Intra-Group balances and transactions, and any unrealised gains and losses or income and expenses arising from intra-Group
transactions, are eliminated in preparing the consolidated financial report.
Subsidiaries
Albury Hotel Property Unit Trust
Amalgamated Cinema Holdings Limited
Amalgamated Holdings Superannuation Fund Pty Limited
Ancona Investments Pty Limited
Atura Adelaide Airport Unit Trust
Atura Holdings Pty Limited
Atura Hotels and Resorts Pty Limited
Bay City Cinemas Limited
Birch, Carroll & Coyle Limited
BLN Hotels Property Unit Trust
Bryson Centre Unit Trust
Bryson Hotel Property Unit Trust
Bryson Hotel Pty Limited
Canberra Theatres Limited
CMS Cinema Management Services GmbH & Co. KG
CMS Cinema Verwaltungs GmbH
Edge Digital Cinema Pty Limited
Edge Digital Technology Pty Limited
Edge Investments BV
Elsternwick Properties Pty Limited
Event Cinema Entertainment Pty Limited
Event Cinemas (Australia) Pty Limited
Event Cinemas Limited
Event Cinemas Nominees Limited
Event Cinemas (NZ) Limited
Event Cinemas Queen Street Nominees Limited
Event Hotels and Resorts Pty Limited
Event Hotels (NZ) Limited
EVT Administration Pty Limited
Filmpalast am ZKM Karlsruhe Beteiligungs GmbH
Filmpalast Konstanz Beteiligungs GmbH
First Cinema Management BV
2015 First Holding GmbH
Flaggspelt Vermogensverwaltungsgesellschaft mbH
458 to 468 George Street Holding Pty Limited
458 to 468 George Street Holding Trust
458 to 468 George Street Development Pty Limited
458 to 468 George Street Development Trust
Glenelg Theatres Pty Limited
80 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Note
(c)
(c)
(a)(e)
(a)(e)
(a)(d)(f)
(c)
(c)
(c)
(c)
(c)
(a)(e)
(a)(e)
(a)(d)(f)
(a)(e)
(a)(e)
Ownership
interest
2019
%
2018
%
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
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
100
100
100
100
100
100
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S E C T I O N 5 – G R O U P C O M P O S I T I O N
5.2 – SUBSIDIARIES (continued)
Greater Entertainment Pty Limited
Greater Occasions Australia Pty Limited
Greater Union Betriebsmittel GmbH
Greater Union Filmpalast Cubix in Berlin GmbH
Greater Union Filmpalast Dortmund GmbH & Co. KG
Greater Union Filmpalast GmbH
Greater Union Filmpalast in der Kulturbrauerei Berlin GmbH
Greater Union Filmpalast in Hamburg GmbH
Greater Union Filmpalast Rhein-Main GmbH
Greater Union First Cinema BV and Co. KG
Greater Union International BV
Greater Union International GmbH
Greater Union International Holdings Pty Limited
Greater Union Limited
Greater Union Media & Event GmbH
Greater Union Nominees Pty Limited
Greater Union Real Estate 40 GmbH
Greater Union Real Estate Mainz GmbH
Greater Union Screen Entertainment Pty Limited
Greater Union Theaters Beteiligungs GmbH
Greater Union Theaters Dritte GmbH & Co. KG
Greater Union Theaters Dritte Verwaltungs GmbH
Greater Union Theaters GmbH
Greater Union Theaters Management Mainz GmbH
Greater Union Theaters Verwaltungs GmbH
Greater Union Theaters Zweite GmbH & Co. KG
Greater Union Theaters Zweite Verwaltungs GmbH
Greattheatre Pty Limited
GU Real Estate Mainz Management GmbH
GUO Investments (WA) Pty Limited
Gutace Holdings Pty Limited
Haparanda Pty Limited
Haymarket’s Tivoli Theatres Pty Limited
Kidsports Australia Pty Limited
Kosciuszko Thredbo Pty Limited
KTPL Unit Trust
Kvarken Pty Limited
Lakeside Hotel Property Unit Trust
Lakeside Hotel Pty Limited
Lakeside International Hotel Unit Trust
Mamasa Pty Limited
Multiplex Cinemas Magdeburg GmbH
Multiplex Cinemas Oberhausen GmbH
Neue Filmpalast GmbH & Co. KG
Neue Filmpalast Management GmbH
NFP Erste GmbH & Co. KG
NFP Erste Verwaltungs GmbH
Noahs Hotels (NZ) Limited
Noahs Limited
Northside Gardens Hotel Property Unit Trust
Northside Gardens Hotel Pty Limited
Pantami Pty Limited
81 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Ownership
interest
Note
2019
%
2018
%
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(d)
(a)(e)
(a)(b)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(c)
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
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
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
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 5 – G R O U P C O M P O S I T I O N
5.2 – SUBSIDIARIES (continued)
203 Port Hacking Road Pty Limited
QT Gold Coast Pty Limited
QT Hotels and Resorts Pty Limited
QT Resort Port Douglas Pty Limited
RH Hotels Pty Limited
RQ Motels Pty Limited
Rydges Bankstown Pty Limited
Rydges Cronulla Pty Limited
Rydges Gladstone Hotel Property Unit Trust
Rydges Hobart Hotel Property Unit Trust
Rydges Hobart Hotel Pty Limited
Rydges Hotels Limited
Rydges Hotels Property Unit Trust
Rydges HPT Pty Limited
Rydges Property Holdings Pty Limited
Rydges Rotorua Hotel Limited
Rydges Townsville Hotel Property Unit Trust
Sonata Hotels Pty Limited
Southport Cinemas Pty Limited
Sunshine Cinemas Pty Limited
Tannahill Pty Limited
The Geelong Theatre Company Limited
The Greater Union Organisation Pty Limited
Thredbo Resort Centre Pty Limited
Tourism & Leisure Pty Limited
Vierte Kinoabspielstatten GmbH & Co. KG
Vierte Kinoabspielstatten Verwaltungs GmbH
Western Australia Cinemas Pty Limited
Zollverein Pty Limited
Zweite Kinoabspielstatten GmbH & Co. KG
Zweite Kinoabspielstatten Verwaltungs GmbH
Ownership
interest
2019
%
2018
%
Note
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
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)(c)
(a)(e)
(a)(e)
(a)(e)
(a)(e)
(a)
(b)
(c)
(d)
(e)
(f)
These companies are audited by other member firms of KPMG International.
This company was incorporated in and carries on business in the United Kingdom.
These companies were incorporated in and carry on business in New Zealand.
These companies were incorporated in and carry on business in The Netherlands.
These companies were incorporated in and carry on business in Germany and, as disclosed in Note 2.4, the Group has entered into an agreement for the
sale of its German cinema exhibition operation, CineStar, which includes the Group’s German subsidiary companies. This sale is expected to be
completed later in the 2019 calendar year.
Two companies that are incorporated in and carry on business in The Netherlands are included within the agreement for the sale of its German cinema
exhibition, CineStar (refer to Note 2.4).
All companies, except those stated above, were incorporated in Australia. All trusts were established in Australia.
82 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 5 – G R O U P C O M P O S I T I O N
5.3 – INTERESTS IN OTHER ENTITIES
Accounting policy
Interests in equity accounted investees
The Group’s interests in equity accounted investees comprise interests in associates and interests in joint ventures. Associates
are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating
policies. Significant influence is presumed to exist when the Group holds between 20% and 50% of the voting power of another
entity.
Interests in associates and joint ventures (see below) are accounted for using the equity method. They are recognised initially
at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the
Group’s share of the profit or loss and other comprehensive income of equity accounted investees, until the date on which
significant influence or joint control ceases.
Unrealised gains arising from transactions with equity accounted investees are eliminated to the extent of the Group’s interest
in the entity. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no
evidence of impairment.
Joint arrangements
A joint arrangement is an arrangement of which two or more parties have joint control, in which the parties are bound by a
contractual arrangement, and the contractual arrangement gives two or more of those parties joint control of the
arrangement.
The Group classifies its interests in joint arrangements as either joint operations or joint ventures depending on the Group’s
rights to the assets and obligations for the liabilities of the arrangements. When making this assessment, the Group considers
the structure of the arrangements, the legal form of any separate vehicles, the contractual terms of the arrangements and
other facts and circumstances.
The Group’s interests in joint operations, which are arrangements in which the parties have rights to the assets and obligations
for the liabilities, are accounted for on the basis of the Group’s interest in those assets and liabilities. The Group’s interests in
joint ventures, which are arrangements in which the parties have rights to the net assets, are equity accounted.
Investments in associates and joint ventures
Associates
Joint ventures
2019
$’000
116
10,997
11,113
2018
$’000
114
14,254
14,368
83 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
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N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 6 – E M P L O Y E E B E N E F I T S A N D R E L A T E D P A R T Y T R A N S A C T I O N S
This section explains the remuneration of executives and other employees, and transactions with related parties
including directors.
On the following pages, there are sections on share-based payments, director and executive disclosures and
related party transactions.
6.1 – SHARE-BASED PAYMENTS
The Group’s share-based payment arrangements include the Executive Performance Share Plan and the Executive Performance
Rights Plan. Grants were made under the Executive Performance Share Plan from 2007 to 2013 inclusive. The Group conducted
a review of its long term incentive (“LTI”) arrangements in 2013 and resolved that the existing performance share-based LTI
should be replaced with a performance rights-based LTI. Shareholders approved the Executive Performance Rights Plan at the
2013 Annual General Meeting. Grants have subsequently been made under the Executive Performance Rights Plan in February
2014, February 2015, February 2016, February 2017, February 2018 and February 2019.
Accounting policy
The fair value of performance shares and rights granted under the Executive Performance Share Plan and the Executive
Performance Rights Plan is recognised as an employee expense over the period during which the employees become
unconditionally entitled to shares in the Company. There is a corresponding increase in equity, being recognition of a share-
based payments reserve. The fair value of performance shares and rights granted is measured at grant date.
To facilitate the operation of the Executive Performance Share Plan and Executive Performance Rights Plan, a third party
trustee is used to administer the trust which holds shares in the Company allocated under the Executive Performance Share
Plan or otherwise held or acquired on market in order to satisfy the Group’s future obligations under the Executive
Performance Rights Plan. The trust is controlled by the Group and therefore its financial statements are included in the
consolidated financial statements. The shares in the Group held by the trust are therefore shown as treasury shares (see Note
4.1). The Group incurs expenses on behalf of the trust. These expenses are in relation to administration costs of the trust and
are recorded in the Income Statement as incurred.
Performance shares and performance rights are subject to performance hurdles. The performance shares are recognised in the
Statement of Financial Position as restricted ordinary shares. Performance shares are included within the weighted average
number of shares used as the denominator for determining basic earnings per share and net tangible asset backing per share.
Performance rights are not recognised in the Statement of Financial Position, but are included within the weighted average
number of shares issued as the denominator for determining diluted earnings per share.
The Group measures the cost of the Executive Performance Share Plan and Executive Performance Rights Plan by reference to
the fair value of the equity instruments at the date at which the instruments are granted. The fair value of performance rights
granted is determined by an external valuer using a Binomial tree model and a Monte Carlo simulation model and using the
assumptions detailed below.
Executive Performance Rights Plan
The establishment of the Executive Performance Rights Plan was approved by shareholders at the 2013 Annual General
Meeting. Employees receiving awards under the Executive Performance Rights Plan are those of a senior level and above
(including the CEO).
An employee awarded performance rights is not legally entitled to shares in the Company before the performance rights under
the plan vest, and during the vesting period the performance rights do not carry the right to vote or to receive dividends. Once
the rights have vested, which is dependent on the Group achieving its earnings per share (“EPS”) and total shareholder return
(“TSR”) targets, participants are issued one ordinary share in the Company for each vested performance right held. Award,
vesting and the issue of ordinary shares under the plan are made for no consideration. The performance period is three years.
86 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
N O T E S T O T H E F I N A N C I A L S T A T E M E N T S F O R T H E Y E A R E N D E D 3 0 J U N E 2 0 1 9
S E C T I O N 6 – E M P L O Y E E B E N E F I T S A N D R E L A T E D P A R T Y T R A N S A C T I O N S
6.1 – SHARE-BASED PAYMENTS (continued)
Set out below are summaries of performance rights awarded under the plan:
Type of right
Grant date
2019
Balance at
the start of
the year
Granted
Exercised
Forfeited
Performance rights
18 February 2016
467,218
Performance rights
16 February 2017
524,345
Performance rights
15 February 2018
Performance rights
21 February 2019
544,102
−
−
−
−
470,648
(291,625)
−
−
−
(175,593)
(39,336)
(65,878)
(24,740)
Balance at
the end of
the year
−
485,009
478,224
445,908
1,535,665
470,648
(291,625)
(305,547)
1,409,141
2018
Performance rights
19 February 2015
632,560
Performance rights
18 February 2016
515,683
Performance rights
16 February 2017
Performance rights
15 February 2018
578,240
−
−
−
−
567,956
(609,054)
−
−
−
(23,506)
(48,465)
(53,895)
(23,854)
−
467,218
524,345
544,102
1,726,483
567,956
(609,054)
(149,720)
1,535,665
Fair value of performance rights granted
The assessed fair value at grant date of performance rights granted under the Executive Performance Rights Plan during the
year ended 30 June 2019 was $11.21 (2018: $11.82) for those rights that have EPS hurdles and $5.11 (2018: $6.80) for those
rights that have TSR hurdles. The fair value of each performance right is estimated on the date of grant using a Binomial tree
model for those rights that have EPS hurdles, and a Monte Carlo simulation model for those rights that have TSR hurdles with
the following weighted average assumptions used for each grant:
Dividend yield (per annum)
Expected volatility
Risk-free rate (per annum)
Share price
Expected life
Granted
21 February 2019
Granted
15 February 2018
Granted
16 February 2017
4.15%
20%
1.62%
$12.46
3 years
4.0%
20%
2.07%
$13.09
3 years
4.2%
19%
1.92%
$12.38
3 years
The expected life of the performance rights is based on historical data and is not necessarily indicative of exercise patterns that
may occur. The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may
also not necessarily be the actual outcome.
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S E C T I O N 6 – E M P L O Y E E B E N E F I T S A N D R E L A T E D P A R T Y T R A N S A C T I O N S
6.1 – SHARE-BASED PAYMENTS (continued)
Executive Performance Share Plan
Employees who received awards under the Executive Performance Share Plan were those of a senior level and above. An
employee awarded performance shares is not legally entitled to shares in the Company before the performance shares
allocated under the plan vest. However, the employee can vote and receive dividends in respect of shares allocated to them.
Once the shares have vested, which is dependent on the Group achieving its EPS and TSR targets, they remain in the trust until
the earliest of the employee leaving the Group, the seventh anniversary (for grants made from 2010) or the 10th anniversary
(for grants made from 2007 to 2009) of the date the performance shares were awarded, or the date the Board approves an
application for their release. Award, vesting and exercise under the plan are made for no consideration. The performance
period is three years.
Set out below are summaries of performance shares awarded under the plan:
Year
2019
2018
Type of right
Balance at
the start of
the year
Granted
Exercised
Forfeited
shares
reallocated
Balance at
the end of
the year
Performance shares
343,300
Performance shares
1,070,991
–
–
(139,807)
(727,691)
–
–
203,493
343,300
No performance shares were granted during the year ended 30 June 2019 (2018: nil).
Share-based payment expense
Total share-based payment expense included within employee expenses for the year ended 30 June 2019 was $2,625,000
(2018: $2,948,000).
Superannuation
Group entities contribute to several defined contribution superannuation plans. The superannuation contributions recognised
as an employee expense in the Income Statement are detailed below:
2019
$’000
2018
$’000
Superannuation contributions recognised as an employee expense
17,764
16,544
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S E C T I O N 6 – E M P L O Y E E B E N E F I T S A N D R E L A T E D P A R T Y T R A N S A C T I O N S
6.2 – DIRECTOR AND EXECUTIVE DISCLOSURES
Information regarding individual directors’ and executives’ compensation and some equity instruments disclosures, as
permitted by the Corporations Regulations 2001, are provided in the Remuneration Report contained within the Directors’
Report. The relevant sections of the Remuneration Report are outlined below:
Section of Remuneration Report
Non-executive director remuneration
CEO and other executive remuneration
Fixed annual remuneration
Variable remuneration – short term incentive
Variable remuneration – long term incentive
Employment contracts
Directors’ and executives’ position and period of responsibility
Directors’ and executives’ remuneration
Performance rights holdings and transactions
Performance share holdings and transactions
Equity holdings and transactions
Key management personnel remuneration
The key management personnel remuneration included in employee expenses is as follows:
Employee benefits
Short term
Other long term
Termination payments
Equity compensation
Post employment
Directors’ Report page reference
18
19
19
19
20
22
23
24
28
29
30
2019
$
2018
$
7,293,053
82,082
271,660
1,161,613
217,360
9,025,768
5,613,036
50,720
−
985,953
213,740
6,863,449
Other transactions with the Company or its controlled entities
AG Rydge is a director of Carlton Investments Limited. Carlton Investments Limited rents office space from a controlled entity.
Rent is charged to Carlton Investments Limited at a market rate. Rent and office service charges received during the year were
$22,954 (2018: $21,368). The Company previously held ordinary shares in Carlton Investments Limited, and continues to hold
preference shares in Carlton Investments Limited. Dividends received during the year from Carlton Investments Limited
totalled $793,023 (2018: $755,213), comprised of $787,711 (2018: $749,901) from ordinary shares and $5,312 (2018: $5,312)
from preference shares.
Following a strategic review of the Group’s assets, the Board resolved (with AG Rydge absenting) to consider a divestment of
the Group’s shares in Carlton Investments Limited, and on 22 March 2019 the Group completed a sale of its ordinary
shareholding. A total of 630,169 ordinary shares were sold at $28.50 per share, representing a discount of 7.8% to the ASX
closing price on that date. The sale was conducted by a broker on behalf of the Group, and the Board (with AG Rydge
absenting) obtained independent advice regarding the sale process including the acceptable range of discounts to the ASX
share price. Of the ordinary shares sold by the Group, a total of 495,082 shares was acquired by AG Rydge, with the remaining
shares acquired by unrelated third parties.
AG Rydge paid rent, levies and other costs to Group entities during the year amounting to $102,976 (2018: $101,539). Rent is
charged to AG Rydge at market rates.
A controlled entity has entered into a lease agreement for a cinema complex in Townsville with an entity related to KG
Chapman. Rent paid under the lease is at market rates.
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S E C T I O N 6 – E M P L O Y E E B E N E F I T S A N D R E L A T E D P A R T Y T R A N S A C T I O N S
6.3 – RELATED PARTIES
Relationships with associates
Transactions with associates included the receipt of property rental income from an associate of $69,000 (2018: $60,000).
Costs paid on behalf of an associate totalled $89,000 (2018: $92,000) and these costs were not refundable (2018: $nil) by that
associate.
Refer also to Notes 3.1 and 5.3.
Relationships with joint ventures and joint operation partners
Refer to Note 5.3.
Key management personnel
Disclosures relating to directors of the Company and named executives are set out in the Remuneration Report contained
within the Directors’ Report, and in Note 6.2.
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
This section contains other disclosures required by accounting standards and the Corporations Act 2001.
7.1 – COMMITMENTS AND LEASES
The Group leases various properties, including cinema sites, under operating leases. The leases typically run for periods up to
20 years, with varying terms, escalation clauses and renewal or extension options. The head lease in respect of the Thredbo
Village and ski area is for a longer period, being 50 years from 29 June 2007.
A small number of leases have commitments in respect of contingent rental payments which arise when the operating
performance of a site exceeds a pre-determined amount. Also, there are rentals which are determined as the higher of a base
rental and a fixed percentage of a defined amount reflecting the operating performance of a site or a base rental plus a fixed
percentage of the net profit from the site. Contingent rental payments recognised as an expense in the period for the Group
amounted to $6,148,000 (2018: $5,410,000) from continuing operations.
Payments made under operating leases are charged to profit or loss in equal instalments over the accounting periods covered
by the lease term, except where an alternative basis is more representative of the pattern of benefits to be derived from the
leased property. Lease incentives, for example a rent-free period on commencement of a lease, are deferred and recognised
over the lease term on a straight-line basis. Deferred lease incentives are recognised within other liabilities in the Statement of
Financial Position. Operating lease rental expense (including contingent rent) for the year ended 30 June 2019 was
$88,684,000 (2018: $82,791,000) from continuing operations.
The Group does not have finance lease or hire purchase arrangements either as a lessor or a lessee.
Lease commitments for future years are set out below:
Operating lease commitments – as lessee (continuing operations)
Future minimum operating lease rentals not provided for and payable:
Within one year
Later than one year but not later than five years
Later than five years
Operating lease commitments – as lessee (discontinued operations)
Future minimum operating lease rentals not provided for and payable:
Within one year
Later than one year but not later than five years
Later than five years
2019
$’000
2018
$’000
47,793
131,441
192,145
371,379
40,059
110,284
147,579
297,922
60,664
158,186
71,402
290,252
60,689
160,961
81,288
302,938
The Group receives rental income from a number of properties, both leased and owned. With the exception of sub-leases
under the Thredbo head lease, leases are for periods ranging between one to 15 years and have varying terms, escalation
clauses and renewal or extension options. There are approximately 700 sub-leases under the Thredbo head lease. Thredbo
sub-leases consist of long term accommodation sub-leases for holiday apartments, chalets and lodges and also retail premises.
Long term accommodation sub-leases are typically for periods mirroring the head lease, which was renewed for a further 50
year period from 29 June 2007.
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
7.1 – COMMITMENTS AND LEASES (continued)
Operating lease rental income for future years is set out below:
Sub-lease receivables – as lessor (continuing operations)
Future lease receivables in relation to sub-leases of property space under operating
leases not recognised and receivable:
Within one year
Later than one year but not later than five years
Later than five years
Operating leases – as lessor (continuing operations)
Future operating lease rentals for owned properties not recognised and receivable:
Within one year
Later than one year but not later than five years
Later than five years
7.2 – CONTINGENT LIABILITIES
2019
$’000
2018
$’000
7,367
28,706
232,120
268,193
16,746
44,221
11,912
72,879
7,446
29,029
239,164
275,639
16,002
43,067
13,705
72,774
Claims for personal injury
The nature of the Group’s operations results in claims for personal injury being received from time to time. The directors
believe that the outcome of any current claims outstanding, which are not provided against in the financial statements, will not
have a significant impact on the operating result of the Group in future reporting periods.
The directors are of the opinion that provisions are not required in respect of these matters, as it is not probable that a future
sacrifice of economic benefits will be required or the amount is not capable of reliable measurement at balance date.
7.3 – RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH PROVIDED BY OPERATING ACTIVITIES
2019
$’000
2018
$’000
Reconciliation of profit for the year to net cash provided by operating activities
Profit for the year
111,889
111,910
Adjustments for:
Depreciation and amortisation
Loss on disposal of non-current assets
Impairment adjustments
Fair value increment of investment properties
Equity accounted investment dividends
Share of equity accounted investees’ net profit
Share-based payments expense
Receivables impairment adjustment
Unrealised foreign exchange gains
Net cash provided by operating activities before change in assets and liabilities
72,320
580
(8,856)
(1,931)
2,340
(1,692)
2,621
40
(115)
177,196
77,862
820
18,525
(5,750)
2,252
(2,268)
2,948
2
(312)
205,989
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
7.3 – RECONCILIATION OF PROFIT FOR THE YEAR TO NET CASH PROVIDED BY OPERATING ACTIVITIES (continued)
Change in assets and liabilities adjusted for effects of consolidation of controlled
entities acquired/disposed during the year:
(Increase)/decrease in trade and other receivables
Increase in inventories
Decrease/(increase) in prepayments and other current assets
Increase/(decrease) in deferred tax items
Increase in income taxes payable
(Decrease)/increase in trade and other payables
Increase in provisions
Increase in other liabilities
(Decrease)/increase in deferred revenue
(Decrease)/increase in financing costs payable
Net cash provided by operating activities
2019
$’000
2018
$’000
(8,166)
(24)
6,371
(19,944)
24,273
(9,200)
1,518
1,816
(2,434)
(37)
171,369
478
(1,014)
(5,996)
2,018
705
1,397
1,595
1,712
664
201
207,749
Cash flows are included in the Statement of Cash Flows on a gross basis. The GST or equivalent tax components of cash flows
arising from investing and financing activities which are recoverable from, or payable to, taxation authorities are classified as
operating cash flows.
7.4 – AUDITORS’ REMUNERATION
Audit services:
Auditors of the Group – KPMG Australia
Audit and review of financial statements
Other assurance services
Overseas KPMG firms
Audit and review of financial statements
Other assurance services
Other auditors
Audit and review of financial statements
Other services:
Auditors of the Group – KPMG Australia
Tax compliance and advice
Segment disposal – tax advice
Other services
Overseas KPMG firms
Tax compliance and advice
Other auditors
Tax compliance and advice
Other services
93 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2019
$
2018
$
1,211,000
198,030
431,000
130,293
1,970,323
61,841
61,841
2,032,164
233,796
617,102
220,000
1,070,898
1,276,000
337,663
407,000
103,717
2,124,380
58,960
58,960
2,183,340
239,184
–
233,346
472,530
424,732
245,243
–
11,667
11,667
1,507,297
18,507
8,240
26,747
744,520
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
7.5 – PARENT ENTITY DISCLOSURES
As at, and throughout the financial year ended, 30 June 2019, the parent entity of the Group was EVENT Hospitality &
Entertainment Limited.
Results of parent entity
Profit for the year
Other comprehensive income for the year
Total comprehensive income for the year
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Total equity of parent entity comprises:
Share capital
Financial assets revaluation reserve
Share-based payments reserve
Retained earnings
Total equity
Parent entity contingencies
Controlled entities
The Company has guaranteed the obligations of some subsidiary entities in respect of a
number of operating lease commitments. Operating lease commitments of subsidiary
entities that have been guaranteed are due:
Not later than one year
Later than one year but not later than five years
Later than five years
Joint ventures and joint operations
The Company has guaranteed the obligations of some joint ventures and joint operations
in respect of a number of operating lease commitments. Operating lease commitments of
joint ventures and joint operations are due:
Not later than one year
Later than one year but not later than five years
Later than five years
2019
$’000
68,446
(974)
67,472
1,630
396,401
28,576
28,863
367,538
219,126
12,536
36,501
99,375
367,538
2018
$’000
73,309
1,883
75,192
6,055
394,209
6,867
11,856
382,353
219,126
14,691
33,877
114,659
382,353
60,029
99,730
114,087
273,846
51,291
66,535
49,756
167,582
41,212
108,314
162,471
311,997
585,843
37,794
105,990
150,481
294,265
461,847
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
7.5 – PARENT ENTITY DISCLOSURES (continued)
Parent entity guarantees
Subsidiaries
The Company has entered into a Deed of Cross Guarantee with the effect that the Company guarantees debts in respect of
most of its Australian incorporated subsidiaries. Further details of the Deed of Cross Guarantee and the subsidiaries subject to
the deed, are disclosed in Note 7.7.
Bank debt facilities
The Company is a guarantor under the Group’s secured bank debt facilities, as disclosed in Note 4.4.
7.6 – EVENTS SUBSEQUENT TO REPORTING DATE
Dividends
For final dividends declared after 30 June 2019, refer to Note 4.2.
7.7 – DEED OF CROSS GUARANTEE
Pursuant to ASIC Corporations (Wholly-owned Companies) Instrument 2016/785, the wholly-owned subsidiaries listed below
are relieved from the Corporations Act 2001 requirements for preparation, audit and lodgement of financial reports, and
directors’ reports.
It is a condition of the Instrument that the Company and each of the subsidiaries enter into a Deed of Cross Guarantee. The
effect of the deed is that the Company guarantees to each creditor, payment in full of any debt in the event of winding up of
any of the subsidiaries under certain provisions of the Corporations Act 2001. If a winding up occurs under other provisions of
the Act, the Company will only be liable in the event that after six months any creditor has not been paid in full. The
subsidiaries have also given similar guarantees in the event that the Company is wound up.
The subsidiaries subject to the deed are:
Atura Hotels and Resorts Pty Limited
Birch, Carroll & Coyle Limited
Bryson Hotel Pty Limited
Canberra Theatres Limited
Edge Digital Technology Pty Limited
Elsternwick Properties Pty Limited
Event Cinema Entertainment Pty Limited
Event Cinemas (Australia) Pty Limited
Event Hotels and Resorts Pty Limited
Glenelg Theatres Pty Limited
Greater Entertainment Pty Limited
Greater Occasions Australia Pty Limited
Greater Union International Holdings Pty Limited
Greater Union Nominees Pty Limited
Greater Union Screen Entertainment Pty Limited
Greattheatre Pty Limited
GUO Investments (WA) Pty Limited
Gutace Holdings Pty Limited
Haparanda Pty Limited
Haymarket’s Tivoli Theatres Pty Limited
Kidsports Australia Pty Limited
Kosciuszko Thredbo Pty Limited
Kvarken Pty Limited
Lakeside Hotel Pty Limited
Mamasa Pty Limited
Noahs Limited
Northside Gardens Hotel Pty Limited
Pantami Pty Limited
203 Port Hacking Road Pty Limited
QT Hotels and Resorts Pty Limited
QT Resort Port Douglas Pty Limited
RQ Motels Pty Limited
Rydges Bankstown Pty Limited
Rydges Cronulla Pty Limited
Rydges Hotels Limited
Sonata Hotels Pty Limited
Tannahill Pty Limited
The Geelong Theatre Company Limited
The Greater Union Organisation Pty Limited
Thredbo Resort Centre Pty Limited
Tourism & Leisure Pty Limited
Western Australia Cinemas Pty Limited
Zollverein Pty Limited.
A consolidated Statement of Comprehensive Income and a consolidated Statement of Financial Position, comprising the
Company and controlled entities which are a party to the deed, after eliminating all transactions between parties to the deed,
for the year ended, and as at, 30 June 2019 respectively are set out on the following page:
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S E C T I O N 7 – O T H E R I N F O R M A T I O N
7.7 – DEED OF CROSS GUARANTEE (continued)
Statement of Comprehensive Income
Profit before tax
Income tax expense
Profit for the year
Retained earnings at the beginning of the year
Adjustment to opening retained earnings
Dividends paid
Retained earnings at the end of the year
Statement of Financial Position
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Prepayments and other current assets
Total current assets
Non-current assets
Trade and other receivables
Loans to controlled entities
Other financial assets
Other investments
Investments in controlled entities
Investments accounted for using the equity method
Property, plant and equipment
Investment properties
Goodwill and other intangible assets
Deferred tax assets
Other non-current assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Current tax liabilities
Provisions
Deferred revenue
Other current liabilities
Total current liabilities
Non-current liabilities
Loans from controlled entities
Other loans and borrowings
Provisions
Deferred revenue
Other current liabilities
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Retained earnings
Total equity
96 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
2019
$’000
2018
$’000
125,421
(38,511)
86,910
595,238
127
(83,731)
598,544
31,335
32,062
16,338
8,629
88,364
1,542
168,384
1,086
78
71,227
7,220
1,030,665
76,200
65,042
28,850
1,663
1,451,957
1,540,321
57,644
30,528
18,484
50,806
3,403
160,865
113,698
377,154
9,765
8,611
3,900
513,128
673,993
866,328
219,126
48,658
598,544
866,328
130,423
(41,480)
88,943
589,859
−
(83,564)
595,238
32,361
26,740
16,011
14,039
89,151
1,042
161,630
1,393
20,924
71,227
8,706
1,006,656
74,000
67,780
2,525
913
1,416,796
1,505,947
59,663
4,384
16,888
56,161
3,753
140,849
109,981
375,226
8,957
5,519
−
499,683
640,532
865,415
219,126
51,051
595,238
865,415
D I R E C T O R S ’ D E C L A R A T I O N
1.
In the opinion of the directors of EVENT Hospitality & Entertainment Limited:
(a)
the consolidated financial statements and notes that are set out on pages 32 to 96 and the Remuneration Report
in the Directors’ Report set out on pages 18 to 30, are in accordance with the Corporations Act 2001, including:
(i)
(ii)
giving a true and fair view of the Group’s financial position as at 30 June 2019 and of its performance for the
financial year ended on that date; and
complying with Australian Accounting Standards (including the Australian Accounting Interpretations) and
the Corporations Regulations 2001; and
(b)
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they become
due and payable.
2.
There are reasonable grounds to believe that the Company and the Group entities identified in Note 7.7 to the financial
statements will be able to meet any obligations or liabilities to which they are or may become subject to by virtue of the
Deed of Cross Guarantee between the Company and those subsidiaries pursuant to ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785.
3.
The directors have received the declarations required by section 295A of the Corporations Act 2001 from the Chief
Executive Officer and the Director Finance & Accounting for the year ended 30 June 2019.
4.
The directors draw attention to Note 1.2 to the financial statements, which includes a statement of compliance with
International Financial Reporting Standards.
Signed in accordance with a resolution of the directors:
AG Rydge
Director
JM Hastings
Director
Dated at Sydney this 22nd day of August 2019.
97 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
Independent Auditor’s Report
To the shareholders of Event Hospitality & Entertainment Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of
Event Hospitality & Entertainment Limited
(the Company).
In our opinion, the accompanying Financial
Report of the Company is in accordance
with the Corporations Act 2001, including:
• giving a true and fair view of the
Group’s financial position as at 30
June 2019 and of its financial
performance for the year ended on
that date; and
• complying with Australian Accounting
Standards and the Corporations
Regulations 2001.
Basis for opinion
The Financial Report comprises:
• Statement of financial position as at 30 June 2019;
•
Income Statement, Statement of Comprehensive
Income, Statement of Changes in Equity, and
Statement of Cash Flows for the year then ended;
• Notes including a summary of significant accounting
policies; and
• Directors’ Declaration.
The Group consists of the Company and the entities it
controlled at the year-end or from time to time during
the financial year.
We conducted our audit in accordance with Australian Auditing Standards. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Our responsibilities under those standards are further described in the Auditor’s responsibilities for
the audit of the Financial Report section of our report.
We are independent of the Group in accordance with the Corporations Act 2001 and the ethical
requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics
for Professional Accountants (the Code) that are relevant to our audit of the Financial Report in
Australia. We have fulfilled our other ethical responsibilities in accordance with the Code.
Key Audit Matters
The Key Audit Matter we identified is:
• Asset valuation – Hotel and cinema
Property, Plant and Equipment Assets
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
This matter was addressed in the context of our audit of
the Financial Report as a whole, and in forming our
opinion thereon, and we do not provide a separate
opinion on this matter.
98
KPMG, an Australian partnership and a member firm of the KPMG
network of independent member firms affiliated with KPMG
International Cooperative (“KPMG International”), a Swiss entity.
Liability limited by a scheme approved under
Professional Standards Legislation.
Asset Valuation – Hotel and Cinema Property, Plant and Equipment Assets ($1,276m)
Refer to Note 3.3 to the Financial Report
The key audit matter
How the matter was addressed in our audit
•
This is a key audit matter due to:
•
the significant value of property, plant and
equipment (being 72% of total assets); and
the high level of judgement required by us in
assessing the significant judgements used by
the Group to assess the appropriateness of
carrying value of property, plant and
equipment.
•
Our procedures included:
• Assessing the methodology used by the
Group in the context of the requirements of
the Australian Accounting Standards.
• Evaluating the controls over the approval of
the budget and quarterly forecast.
There are a number of judgements made by the
Group and their external independent valuation
experts when estimating the recoverable value of
these assets. Some are more complex as they
are dependent on assumptions about the future,
such as revenue and cost growth rates and
discount rates. These forward-looking
estimations and the current market conditions
increase the range of possible outcomes and the
complexity for the audit.
The Group uses a combination of external
valuation experts who are engaged every three
years to value owned properties and internal
analysis to determine asset valuations. Cinemas
and hotels were last externally valued at 30 June
2018.
Internal analysis was prepared by the Group to
assess for indicators of impairment to cinema
and hotel cash generating units (CGUs). Where
an indicator of impairment was present the
Group calculated its recoverable value and
compared it to its carrying amount.
•
For cinemas we:
• Assessed each cash generating unit (CGU)
for indicators of impairment based on
business performance.
• Analysed the discounted cash flow model
and the recoverable value for CGUs with
indicators of impairment.
• Assessed the mathematical accuracy of the
cash flow model.
• Assessed the basis for the cash flow forecast
including the lease terms and consideration
of the historical accuracy of previous
forecasts.
•
•
Performed sensitivity analysis over the
discount rate and growth rate in the cash
flow model.
Compared amounts in the cash flow model
to Board approved budgets.
For hotels we:
• Assessed each hotel for indicators of
impairment based on its performance
against expected EBITDA results which were
factored into the 30 June 2018 external
valuation and the available headroom.
• Recalculated the 30 June 2018 external
valuation amount using the actual EBITDA
for the year to 30 June 2019 when results
did not meet forecasted EBITDA to assess
for indicators of impairment.
• Evaluating the adequacy of the related
disclosures in the financial report including those
made with respect to judgements and estimates.
99
Other Information
Other Information is financial and non-financial information in Event Hospitality & Entertainment
Limited’s annual reporting which is provided in addition to the Financial Report and the Auditor’s
Report. The Directors are responsible for the Other Information.
Our opinion on the Financial Report does not cover the Other Information and, accordingly, we do not
express an audit opinion or any form of assurance conclusion thereon, with the exception of the
Remuneration Report and our related assurance opinion.
In connection with our audit of the Financial Report, our responsibility is to read the Other
Information. In doing so, we consider whether the Other Information is materially inconsistent with
the Financial Report or our knowledge obtained in the audit, or otherwise appears to be materially
misstated.
We are required to report if we conclude that there is a material misstatement of this Other
Information, and based on the work we have performed on the Other Information that we obtained
prior to the date of this Auditor’s Report we have nothing to report.
Responsibilities of the Directors for the Financial Report
The Directors are responsible for:
•
•
•
preparing the Financial Report that gives a true and fair view in accordance with Australian
Accounting Standards and the Corporations Act 2001;
implementing necessary internal control to enable the preparation of a Financial Report that
gives a true and fair view and is free from material misstatement, whether due to fraud or
error; and
assessing the Group and Company’s ability to continue as a going concern and whether the
use of the going concern basis of accounting is appropriate. This includes disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting
unless they either intend to liquidate the Group and Company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the Financial Report
Our objective is:
•
•
to obtain reasonable assurance about whether the Financial Report as a whole is free from
material misstatement, whether due to fraud or error; and
to issue an Auditor’s Report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in
accordance with Australian Auditing Standards will always detect a material misstatement when it
exists.
Misstatements can arise from fraud or error. They are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the Financial Report.
A further description of our responsibilities for the audit of the Financial Report is located at the
Auditing and Assurance Standards Board website at:
http://www.auasb.gov.au/auditors_responsibilities/ar1.pdf. This description forms part of our Auditor’s
Report.
100
Report on the Remuneration Report
Opinion
Directors’ responsibilities
In our opinion, the Remuneration Report of
Event Hospitality & Entertainment Limited
for the year ended 30 June 2019, complies
with Section 300A of the Corporations Act
2001.
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included in
pages 18 to 30 of the Directors’ report for the year
ended 30 June 2019.
Our responsibility is to express an opinion on the
Remuneration Report, based on our audit conducted
in accordance with Australian Auditing Standards.
KPMG
KPMG
Anthony Travers
Partner
Sydney
22 August 2019
Tracey Driver
Partner
Sydney
22 August 2019
101
S H A R E H O L D E R I N F O R M A T I O N
Additional information required by the ASX Listing Rules and not disclosed elsewhere in the Annual Report is set out
below:
SHAREHOLDINGS (AS AT 23 AUGUST 2019)
SUBSTANTIAL SHAREHOLDERS
The names of substantial shareholders who have notified the Company in accordance with section 671B of the
Corporations Act 2001 are:
Shareholder
Enbeear Pty Limited
Carlton Investments Limited
Perpetual Limited and its related bodies corporate
Investors Mutual Limited
* Includes Carlton Investments Limited holding.
Number of ordinary shares held
56,598,377*--
56,588,377
22,148,948
11,420,540
VOTING RIGHTS
Ordinary shares
There were 6,756 holders of ordinary shares of the Company. The voting rights attaching to the ordinary shares, set out in
clause 7.8(a) of the Company’s Constitution, are:
“Subject to this constitution and to any rights or restrictions attached to any shares or class of shares, at a general
meeting:
(1)
(2)
on a show of hands, every member present has one vote; and
on a poll, every member present has one vote for each share held as at the Record Time by the member entitling
the member to vote, except for partly paid shares, each of which confers on a poll only the fraction of one vote
which the amount paid (not credited) on the shares bears to the total amounts paid and payable (excluding
amounts credited) on the share. An amount paid in advance of a call is disregarded for this purpose.”
Options
There were no outstanding options of the Company as at 23 August 2019.
DISTRIBUTION OF SHAREHOLDERS
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Number of
shareholders
3,468
2,292
480
476
40
Number of
shares held
1,521,912
5,488,230
3,435,340
11,988,555
138,761,484
6,756
161,195,521
The number of shareholders holding less than a marketable parcel is 323.
UNQUOTED ORDINARY SHARES
There were 203,493 unquoted ordinary shares issued pursuant to the employee share plans. The shares were held by 51
holders. The unquoted ordinary shares have been included within the distribution of shareholders table above.
102 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
S H A R E H O L D E R I N F O R M A T I O N
TWENTY LARGEST SHAREHOLDERS
The names of the 20 largest shareholders of the quoted shares are:
Number of
shares held
Percentage of
capital held
Enbeear Pty Limited
HSBC Custody Nominees (Australia) Limited
Eneber Investment Company Limited
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
Alphoeb Pty Limited
The Manly Hotels Pty Limited
Carlton Hotel Limited
Mr Alan Graham Rydge
Argo Investments Limited
BNP Paribas Noms Pty Ltd
National Nominees Limited
BNP Paribas Nominees Pty Ltd
Citicorp Nominees Pty Limited
Australian United Investment Company Limited
TN Phillips Investments Pty Limited
Australian Foundation Investment Company Limited
Milton Corporation Limited
Sandhurst Trustees Ltd
UBS Nominees Pty Ltd
32,134,031
28,584,347
19,777,772
7,697,025
6,030,926
6,027,315
5,732,812
5,276,103
4,431,663
3,262,387
2,918,784
2,836,217
2,038,514
1,852,136
1,500,000
1,346,000
1,030,258
1,010,921
547,000
460,003
19.93%
17.73%
12.27%
4.77%
3.74%
3.74%
3.56%
3.27%
2.75%
2.02%
1.81%
1.76%
1.26%
1.15%
0.93%
0.84%
0.64%
0.63%
0.34%
0.29%
134,494,214
83.43%
ON-MARKET BUY-BACK
There is no current on-market buy-back.
SECURITIES EXCHANGE
EVENT Hospitality & Entertainment Limited, incorporated and domiciled in Australia, is a publicly listed company limited by
shares. Shares are listed on the ASX under the code EVT.
103 EVENT Hospitality & Entertainment Limited – 2019 Annual Report
O T H E R I N F O R M A T I O N
ANNUAL GENERAL MEETING
The Annual General Meeting will be held at 10:00am on Friday 18 October 2019 at:
Event Cinemas
505 – 525 George Street
Sydney NSW 2000.
REGISTERED OFFICE
478 George Street
Sydney NSW 2000
Telephone
Facsimile
+61 2 9373 6600
+61 2 9373 6534
www.evt.com
SHARE REGISTRY
Computershare Investor Services Pty Limited
Level 3
60 Carrington Street
Sydney NSW 2000
GPO Box 2975
Melbourne VIC 3001
Telephone
Facsimile
1300 850 505
+61 3 9473 2555
www.computershare.com
For more information on EVENT Hospitality & Entertainment Limited, please refer to our website at www.evt.com.
104 EVENT Hospitality & Entertainment Limited – 2019 Annual Report