Seven West Media
Contents
Our Strategy
Who We Are
Our Strategic Framework
The Year Ahead
Executive Letter
Letter from the Chairman
Review of Operations
Group Performance –
Key Outcomes and Summary
of Financial Performance
Group
Seven Network
Seven Studios
Digital Platforms
Publishing
Other Businesses &
New Ventures
2
4
6
8
10
12
16
18
20
22
24
Corporate Social
Responsibility
Risk, Environment & People
Seven in the Community
Governance
Board of Directors
Corporate Governance
Statement
Directors’ Report
Remuneration Report
Auditor’s Independence
Declaration
Financial Statements
Financial Statements
Directors’ Declaration
25
31
35
39
53
57
83
84
137
Independent Auditor’s Report 138
Company Information
Investor Information
Shareholder Information
142
143
144
1
Seven West Media Limited Annual Report 2019Our Strategy0201030405070806 Who
we are
Create. Engage. Grow.
Our focus is on creating
world-class content that
engages audiences at
scale and drives growth
for our partners and our
own businesses.
We create premium entertainment,
news and lifestyle content for local and
international audiences.
We are Australia’s largest producer
of premium television. The shows we
create are watched in over 190 territories,
and are proving to be worldwide hits on
global streaming platforms.
Our brands
BROADCAST
DIGITAL
2
We engage audiences anytime, anywhere,
on any platform, and every month 19 million
Australians turn to us to be informed, to be
inspired and to be entertained.
We are Australia’s most-watched television
network for a 13th consecutive financial
year, and we are also number one in the
key advertising demographic of P25-54
across the day.
Our digital audiences and revenues
continue to grow rapidly, accelerated by
our data, insights and technology. We are
also investing in new disruptive businesses
where we can leverage the power of our
assets to drive growth.
We continue to evolve our business,
reshaping our operations to position us
for future success.
We are Seven West Media.
We own our future.
PRODUCTION & DISTRIBUTION
PUBLISHING
OTHER
3
Our Strategic Framework
and Performance Dashboard
We are implementing three strategic pillars in our
long-term growth strategy.
Our performance dashboard tracks the accomplishments and progress
against these strategic pillars.
Focus on
the Core.
Transform the
Operating Model.
Improve ratings and revenue performance
Deliver on operating cost
Grow returns on content investment
Create, secure and curate the best local
and international content
Maximise the return on our content
investment through every window and
overseas sale
Milestones Achieved
Grew revenue share to 38.8% and
ratings share to 40.3% across the day
#1 share of primetime viewing
Strengthened 7NEWS’ leadership
position with audience share growth
in every metro market
Sports portfolio outperforming with
AFL audiences up 10% and cricket
exceeding projections
Increased investment in produced
content and digital platforms
saving targets
Drive efficiencies in existing assets
Partner with competitors in
non-competitive areas to
improve profitability
Evolve to a leaner & more agile
operating model while protecting
content quality
Milestones Achieved
Cost out at the top end of guidance
range, leading to $38m net cost
reduction with savings across all
business units
Completed exit from Yahoo7 JV
Ongoing cost savings initiatives
implemented for FY20 realisation
Completed Sydney office
consolidation
Established playout JV with
broadcasting partners
44
Grow new
Revenue Streams.
Drive greater digital adoption
and yield
Introduce new content
monetisation formats
Invest in data, automation and
targeted advertising to maximise
inventory yield
Invest in adjacent verticals
where we can leverage the
power of our assets
Milestones Achieved
Seven’s digital EBIT reached $15.1m
with revenue up 67% YoY
7th consecutive year of EBIT
growth in Seven Studios
New commissions secured from
Netflix and Facebook
Launch of 7NEWS.com.au which
ranked #5 News site within 90 days
of launch
Early stage investment portfolio
grew 24% YoY to $95m
Digital subscriptions launched on
thewest.com.au
5
Seven West Media Limited Annual Report 2019Our Strategy0201030405070806 The year ahead
66
The year
ahead
Seven’s upcoming Summer of Cricket will deliver more primetime
Test and Big Bash coverage, and combined with the 2020 AFL
season, Seven will screen premium sport every week of the
year. The strong performance of the 2019 seasons will support a
significant increase in how we monetise these premium events.
We will build upon the strong programming
foundations delivered by our market-leading core
of news, sport, breakfast and drama shows with a
refreshed slate of bold entertainment programming
to strengthen our prime time performance.
We will capitalise on the growing BVOD market and
invest in our portfolio of direct to consumer digital
products, driving yield using insights from our rapidly
growing data and technology capabilities. These
investments will also enable greater efficiencies in how
we serve and meet our customer needs through real
time programmatic buying and audience targeting.
Seven Studios will invest in its global footprint, growing
audiences and revenue by producing and distributing
its hit shows to broadcasters and digital platforms
around the world.
We will continue the transformation of our company,
ensuring we become even more efficient and
effective at delivering the world class content that our
audiences want, when they want, on their preferred
platform.
We will identify and invest in new disruptive
businesses, while supporting the growth of our existing
portfolio, to create long term value for shareholders.
And we will be gearing up for Tokyo 2020, which will
be the most-watched Olympic Games ever, and the
biggest digital event in Australian history.
We will identify
and invest in
new disruptive
businesses
7
Seven West Media Limited Annual Report 2019Our Strategy0201030405070806 Letter from the
Chairman
Welcome to our annual report for shareholders.
It has been another twelve months of substantial
change for Seven West Media and a challenging
year for the media industry. Political and
economic uncertainty has resulted in decreased
consumer and business confidence, both at
home and around the world, which has affected
advertising expenditure.
Your Board and Executive Team are making
some tough, but necessary, strategic decisions to
change the way we do business in future.
The Board and I thank Tim Worner for the
enormous contribution he made during his
26 years of service to the Group, the last six
as Chief Executive.
We are delighted that James Warburton
has returned to lead the company through
our next chapter of growth, with a sharper
focus on growing revenue and continuing the
transformation of this great company.
Our underlying principles remain the same –
create world-class content and use it to create
deep engagement with audiences and greater
value for our business, our advertisers and you,
our shareholders.
We are confident in the strength of our company,
and thanks to our market-leading broadcast
assets and our investment in growth areas such
as Seven Studios, Seven Digital and Seven West
Ventures, we have much to be optimistic about.
In this environment, our company’s key elements
are more valuable than ever.
The power of world-class brands that people love
and trust.
Creating and owning our own content.
Live event programming, news, sport and water-
cooler entertainment.
Seven West Media is proud to be a leader in
all three areas and we now have a sharp focus
on growing our revenue base across our core
business and through new opportunities.
But, as we forge ahead with our strategy, it is
imperative that we are allowed to compete on a
level playing field.
Last year, the Australian commercial television
networks invested around $2 billion on content,
of which 85 per cent was spent on local content.
Together we employ 15,000 Australians and
contribute $2.8 billion to the local economy. Since
Seven West Media was formed in 2011, we have
paid $420 million in corporate tax.
And we do this while complying with local content
quotas and a Code of Practice that require us to
meet community standards, including ensuring
our news and current affairs programs are
accurate and impartial.
The global digital giants that we compete against
for advertising dollars have no such restrictions,
and have paid a tiny fraction of the tax they owe
Australia. So, the Australian Competition and
Consumer Commission’s Digital Platforms inquiry
was a critical milestone in addressing the effect
that these foreign organisations are having on
local media and advertising, and the impact they
have on the supply of news and journalism in this
country.
The power of
world-class brands that
people love and trust.
8
We welcome the ACCC’s Final Report, which makes a
number of recommendations that, if enacted, will go
some way toward correcting the regulatory disparity,
and supporting the valuable contribution that local
media businesses make to Australian society.
We are encouraged that the Government has accepted
the need for reform, and that these digital platforms
need to be held to account and their activities
made more transparent. We anticipate that the
Government’s response will address the substantial
bargaining imbalance between these digital giants and
local media business, and potentially provide a real
opportunity for our company to better monetise our
content on these platforms.
In December we were delighted to welcome
Colette Garnsey OAM as a new non-executive and
independent Director of Seven West Media. Colette
is a highly-experienced and well-regarded Director
with a long successful executive career in customer-
focused industries. She brings a broad range of
skills and we are confident she will make a great
contribution to Seven West Media as we capitalise on
the opportunities ahead.
On behalf of the Board, I thank you, our shareholders,
for your ongoing support of this great Australian
company. And I also thank the thousands of passionate
and creative people that make up the Seven West
Media team, working so hard every day to deliver for
our audiences and advertisers.
Kerry Stokes AC
Chairman
99
Seven West Media Limited Annual Report 2019Executive Letter0201030405070806 Review of Operations
Group Performance
Seven Key Outcomes
13 years
of consecutive
ratings leadership
Revenue share increased to
38.8%
in FY19 (+0.7% pts)
$38m
Total Group cost savings
from transformation
Digital EBIT growth
> 300%
7th
consecutive year of
EBIT growth in
Seven Studios
Net debt
reduced to
< $565m
portfolio
grew
24%
$129.3m
Underlying net Group Profit
after tax
10
Summary of Financial Performance
Revenue
Other income
Share of net profit of equity accounted investees
FY19
$m
1,552.9
3.6
1.1
FY184
$m
1,620.7
0.4
1.7
Revenue, other income and equity accounted profits
1,557.6
1,622.8
Operating expenses excluding depreciation and amortisation
(1,314.0)
(1,351.9)
EBITDA1
Depreciation and amortisation
EBIT2
Net finance costs
Profit (loss) before significant items and tax
Significant items excluding tax
Profit (loss) before tax
Tax (expense) benefit
Profit (loss) after tax
EBITDA margin
Basic EPS
Basic EPS excluding significant items net of tax
Diluted EPS
Diluted EPS excluding significant items net of tax
243.6
(31.5)
212.1
(34.7)
177.4
(611.0)
(433.6)
(10.8)
(444.4)
270.9
(35.3)
235.6
(38.3)
197.3
(8.5)
188.8
(56.0)
132.8
15.6%
16.7%
(29.5 cents)
8.8 cents
8.6 cents
9.3 cents
(29.5 cents)
8.8 cents
8.6 cents
9.3 cents
Change
%³
(4.2%)
nm5
(33.1%)
(4.0%)
(2.8%)
(10.1%)
(10.6%)
(10.0%)
(9.3%)
(10.1%)
nm
nm
(80.7%)
nm
(1) EBITDA relates to profit before significant items, net finance costs, tax, depreciation and amortisation.
(2) EBIT relates to profit before significant items, net finance costs and tax.
(3) Change percentages are calculated on whole dollars and not the rounded amounts presented.
(4) Prior year figures have been restated for AASB 9 Financial Instruments standard.
(5) “nm” means “not meaningful”
Reconciliation of EBIT to statutory profit before tax
EBIT
Net finance costs
Significant items excluding tax
Profit (loss) before tax
FY19
$m
212.1
(34.7)
(611.0)
(433.6)
FY184
$m
235.6
(38.3)
(8.5)
188.8
Change
%
(10.0%)
(9.3%)
nm
nm
11
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Group
Review of Operations
12
Seven West Media Limited reported a statutory loss before tax of $433.6 million
for the year ended 29 June 2019. This compares to the previous corresponding
year statutory profit before tax of $188.8 million. Excluding significant items, the
current year profit after tax of $129.3 million is down 7.9 per cent on the previous
year profit of $140.4 million.
Seven West Media recorded significant items before
tax of $611.0 million in the period, including the
impairment of intangibles, equity accounted investees,
other assets including fixed assets, restructuring costs,
refinancing costs, onerous contracts and net loss on
sale of asset held for sale.
Advertising Market and Revenue Performance
SMI data reported that the Australian advertising
market declined by 2.3 per cent in the financial year
compared to the previous year, driven by an uncertain
political environment and softer real estate market
conditions.
The Group delivered revenue including share of equity
accounted investees profits of $1,557.6 million, down
4.0 per cent versus the previous year. Profit before
significant items, net finance costs and tax (EBIT) of
$212.1 million was down 10 per cent on the previous
year. The dividend remains temporarily suspended with
a focus on prudent capital management and balance
sheet flexibility post relaxation in media ownership
legislation.
Metropolitan television advertising decreased
5.2 per cent to $2.79 billion in the financial year based
on KPMG Think TV data.
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Seven
Publishing
Other
79%
89%
20%
10%
1%
1%
*EBIT excludes the impact of Corporate costs.
13
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Group
Review of Operations
The Broadcast Video on Demand (BVOD) category
continues to grow rapidly, with advertising revenues
from online catch-up and live TV streaming up 32 per
cent YoY to $124 million. Seven reported a 34.6 per
cent BVOD share among commercial FTA networks for
the financial year and 37 per cent in 2H19.
SMI reported the digital advertising market was
flat year-on-year at -0.2 per cent with growth in
BVOD offsetting the decline in display advertising.
Seven outperformed the market, growing its digital
advertising revenue by 67 per cent YoY.
Seven’s publishing businesses continue to execute their
transformational strategies, restructuring and focusing
on digital growth.
West Australian Newspapers delivered above market
revenue trends in a sector that continues to face
strong headwinds, while operating in a challenging
local economy. Readership of The West Australian
grew by 6 per cent in the 12 months to March 2019,
while readership of The Sunday Times was up 1.8 per
cent in the same period. Digital revenue continues to
grow strongly, which will be further bolstered by The
West Australian’s paywall, which launched at the end
of the financial year.
Pacific continues to execute its transformation
strategy. Digital now represents approximately 30
per cent of all Pacific advertising revenue, and Pacific
commands a 23.4 per cent share of all agency spend in
the category in the financial year.
14
Cost Management
Excluding significant items, total Group costs, including
depreciation and amortisation, reduced $41.7 million
representing a 3 per cent decrease year on year.
EBITDA and Operating Margins
Seven West Media delivered EBITDA of $243.6 million
with an EBITDA margin of 15.6 per cent. Seven’s
EBITDA, which includes its production business, now
accounts for 90.8 per cent of total Group EBITDA.
Balance Sheet
At 29 June 2019 Seven West Media had net assets of
$103.1 million.
Group net debt at the end of the year was $564.4
million and the debt leverage ratio was 2.3x (Dec 2018:
2.3x).
15
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Seven Network
Review of Operations
Seven is Australia’s most-watched television
network for the 13th consecutive financial year.
Thanks to our ‘always on’ strategy, and our commitment to
delivering world-class programming throughout the day,
across the network, in every week of the year, Seven grew its
share of both audience across the day and revenue over the
financial year.
16
Seven continues to evolve at pace. At the heart of our strategy for growth is
a focus on creating and securing the best entertainment, news and lifestyle
content to engage audiences at scale.
Seven is Australia’s most-watched network for a
thirteenth consecutive year, with 40.3 per cent
commercial ratings share for FY19. Seven was also
number one in the key advertising demographic of
P25-54 across the day.
Over the course of the financial year, we grew our
audience share across the day by one percentage
point and our revenue share by 0.7 percentage
points.
This success has come from the consistency and
depth in our broadcast schedule, led by our market-
leading News and Current Affairs programming.
7NEWS, Sunrise and The Morning Show all lead in
their timeslots by a material margin, giving Seven a
number one position for more than 50 per cent of
every week day, through this content alone.
7NEWS had a remarkable year, growing audience
share in all five capital city metro markets. During
the year we also launched a late night news service,
The Latest, and 7NEWS.com.au which quickly
established itself as one of the most-popular online
news services in the country.
Sunrise was not only Australia’s most-watched
breakfast show for a 14th consecutive financial year,
but has also grown its share of viewing year on year.
The Morning Show celebrated its 12th birthday as
the most-watched morning show and grew its share
of viewing.
Our News and Current Affairs combined with our
marquee sports rights, which are locked in until
2022-23, provide us and our advertising partners
certainty on audience delivery for years to come.
Seven’s first Summer of Cricket broke records, with
the network enjoying 39 days with a commercial FTA
viewing share in excess of 40 per cent – the most in
ratings history. Seven’s fresh and innovative coverage
of Test and Big Bash Cricket lifted daily audience
share by 5.2 percentage points across the summer.
The 2019 AFL Season launched with a series
of blockbuster ties, reaffirming its position as
Australia’s number one winter sport. Seven’s AFL
coverage continues to reach over four million
national viewers each round, and after 17 rounds of
the season, viewing was up 10 per cent year on year.
Having dominated summer viewing, we launched
our 2019 entertainment schedule featuring
established favourites: My Kitchen Rules, Better
Homes and Gardens, Andrew Denton’s Interview
and House Rules. Seven is also the home of the
most-watched Australian drama Home and Away,
the most-watched US drama The Good Doctor and
the most-watched UK drama Manhunt.
Our suite of multichannels continue to outperform.
7mate was the most watched multichannel of the
financial year, 7TWO led its target demographics
and this year we launched a new channel, 7FOOD,
building on our already strong position in this key
advertising vertical.
The advertising market began the 2019 financial
year strongly, but softness in the housing sector,
political uncertainty from the leadership spill
and the federal election negatively impacted the
advertising sector for the full financial year.
Seven continues to focus on improving the sales
process and enhancing our customer offering by
investing in technology and platforms to meet
partner objectives and drive greater return on
investment from their advertising spend.
Seven grew its revenue share in the period, partially
offsetting the impact of the television advertising
market decline, resulting in Seven’s revenue
declining 2.9 per cent to $1,227.9 million in the
period.
Cost initiatives implemented in 2018/2019 delivered
an $18.1 million reduction in the 2019 financial year,
more than offsetting cost increases from the new
cricket rights deal and uplift in the AFL.
Seven’s EBITDA of $221.4 million was delivered at an
18.0 per cent margin. EBIT (profit before significant
items, net finance costs and tax) decreased 6.3 per
cent to $202.4 million. This represents 89 per cent
of Group EBIT excluding corporate costs.
17
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Seven Studios
Review of Operations
Seven Studios continues to grow
its global footprint, creating and
distributing premium content to
international broadcasters and
streaming platforms.
This year we’ve seen many of our
shows become worldwide hits,
greenlit several premium dramas,
launched a new venture in the UK
and signed new deals with global
digital giants.
18
Over the year Seven Studios created over 900 hours
of world-class programming, affirming its position as
Australia’s largest producer of premium content with
iconic hits that include Home and Away, My Kitchen
Rules, House Rules and Border Security: Australia’s
Frontline. Our shows are widely distributed in global
markets, many of them available in up to 190 territories.
In January, we announced the launch of Seven Studios
UK, that will develop and create unscripted formats,
complementing our London-based scripted venture
Slim Film + Television. Also part of the Seven Studios
family are Great Southern Film & Television in Auckland,
7Beyond in Los Angeles and Seven Studios Australia,
which has production hubs in Sydney and Melbourne.
In the United States, 7Beyond’s My Lottery Dream
Home’s sixth season is enjoying stellar ratings,
consistently ranking in the top 10 cable programs in its
timeslot among key demographics.
We are capitalising on the strong global demand for
content by streaming services with the sale of finished
programs from our catalogue and co-production
agreements, including a second season of Zumbo’s
Just Desserts with Netflix.
In June we signed a content deal with Facebook, the
first of its kind in Australia. The deal will see the launch
of a slate of original digital series across Facebook,
extending the reach of key Seven-owned brands.
This year Seven Studios Australia announced a raft of
new commissions, including two premium dramas.
Between Two Worlds is a high concept thriller written
by Bevan Lee (Packed To The Rafters, A Place To Call
Home) and starring leading UK actor Hermione Norris
(Cold Feet, Spooks, Luther).
Secret Bridesmaid’s Business is a female-driven
romantic thriller starring Abbie Cornish (Jack Ryan,
Three Billboards Outside Ebbing, Robocop), Katie
McGrath (Supergirl, Merlin, Jurassic World) and
Georgina Haig (Once Upon A Time, The Crossing,
Limitless).
And Slim Film + Television has partnered with
France Télévisions, ZDF Germany, and Italy’s RAI to
commission a new version of the Jules Verne classic
Around the World in 80 Days.
Our catalogue includes Instant Hotel, The Casketeers,
Back With The Ex and Yummy Mummies, which have all
debuted globally to widespread acclaim. Our primetime
reality franchise House Rules has proven to be a huge
hit in the Netherlands, and after four successful local
seasons a brand spin-off Hotel Rules has launched.
Seven Studios’ international footprint strongly positions
it to capitalise on the growing global content market
as major OTT providers increase their spend on quality
content to meet demand of subscribers. As the large
studios reclaim more of their content for their direct
to consumer offerings, these OTT players will need to
source increased content from other external parties
such as Seven Studios.
Seven Studios delivered EBIT of $59.1 million in the
period, representing 5.3 per cent year on year growth.
This is the seventh consecutive year of EBIT growth for
the division. It has a strong pipeline of commissions,
and a number of life of series deals, which underpin
earnings growth for the business.
19
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Digital platforms
Review of Operations
Seven’s strategy to own and operate its direct to
consumer digital products is paying off, with its
platforms reaching record high audiences and
delivering rapid revenue growth. Each digital
asset is now performing significantly stronger
than when part of the Yahoo7 joint venture.
20
Seven’s owned and operated digital products recorded an all-time high
unique audience of over 6.1 million Australians in June after growing
27 per cent year on year.
This was the fifth record audience month in a row,
reaffirming the strong momentum that is setting
new benchmarks for the group, at levels even higher
than previous peaks achieved during major live
events including the 2016 Rio Olympics and 2018
Commonwealth Games.
Having formally launched our Broadcast Video on
Demand (BVOD) streaming platform 7plus at the
beginning of 2018, audience adoption has scaled
rapidly. In the 2019 financial year BVOD consumption
on 7plus grew by 72 per cent, comfortably
outperforming the market.
In June, 7plus’ monthly unique audience reached 1.5
million, having grown 31 per cent over the year.
In March, we launched 7NEWS.com.au. The site
debuted in the Nielsen Digital Content Ratings in
June, with a monthly Unique Audience of 5.5 million
Australians. This represents a 20 per cent improvement
in audience compared to when under Yahoo7’s control.
These digital achievements vindicate our strategy to
take full control of our direct to consumer products.
Having done so, we finalised the sale of our 50 per
cent interest in Yahoo7 to Verizon Media for $20.7
million in April.
Seven continues to improve its digital audience
targeting capabilities, unifying insights and data
analytics across the group, and using third-party
partnerships to further accelerate audience insights.
Seven delivered robust digital revenue growth during
the period, increasing by 67 per cent year on year.
Seven’s commercial BVOD revenue share during the
period was 35 per cent.
21
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Publishing
Review of Operations
Pacific remains Australia’s best-
performing magazine publisher,
commanding 26 per cent of all
readership from just 12 measured
titles and leading in the key
categories of Women’s Fashion,
Home & Lifestyle, Men’s Lifestyle
and Teens.
22
22
Through some of Australia’s best-known brands, such as New Idea, Better
Homes & Gardens and marie claire, Pacific now reaches more than 2.5 million1
Australians every month, an increase of more than 28 per cent year on year.
Pacific has also outperformed the market in both
print circulation and advertising revenue, although the
print advertising market continues to face significant
headwinds and has experienced year on year declines
of 20.5 per cent2. Pacific has performed better than
market at -11.9 per cent, and remains the country’s
number one publisher on a revenue-per-title basis,
and offset these declines with an extended cost-out
program.
The company’s transformation has continued at
pace, with double digit audience growth accelerating
through the period to create what is now one of
Australia’s largest women’s digital networks.
Digital revenue continues to grow with much of the
improvement driven through digital video, which was
up 106 per cent in the period to become the fastest-
growing advertiser product. Original video creation,
integration and distribution remains a focus in the
coming year, meeting market demand, and will fuel
further growth in the space.
Seven’s portfolio of news brands in WA make it the
pre-eminent media company in the state. All together
The West Australian, The Sunday Times and PerthNow.
com.au reach 81 per cent of the population each
month.
The West is a leading digital publisher in WA with
1.1 million Unique Audience per month and an average
of 1.6 million people in WA reading The West, Sunday
Times, thewest.com.au and PerthNow.com.au.
The West continues to evolve its business model in
the context of challenging economic conditions in
Western Australia and structural changes in print
media. WA economic conditions continue to be
difficult, with a pickup in mining activity yet to flow into
the retail sector, resulting in a very short advertising
market. Although this year was more challenging than
expected, WA’s outlook is slowly improving.
The West has several commercial revenue initiatives
underway to further utilise existing business assets,
including the recent launch of digital subscriptions for
thewest.com.au. The business will continue to reduce
its cost base in the coming year and implement further
efficiencies across its newsroom and print centre
through automation, process improvement and asset
utilisation.
1 Nielsen Digital Panel
2
SMI Data – Magazine Media Consumer Magazines FY19
23
Seven West Media Limited Annual Report 2019Review of Operations0201030405070806 Other businesses
& new ventures
Review of Operations
Seven West Ventures holds a
number of growth investments
where we leverage the power of
our assets to unlock maximum
growth potential and drive
long-term value creation.
The portfolio is focused on
disruptive, scalable businesses
with a strong consumer or
media proposition.
Over the last twelve months
the value of our portfolio, which
includes investments in Airtasker,
Health Engine and SocietyOne has
grown by 24 per cent to $95 million.
Key portfolio investments have
displayed strong revenue during
the year and continue to scale well.
The Group continues to focus on
businesses with alignment to its
key verticals: home, health, wealth
and lifestyle.
24
Risk, environment & people
Corporate social responsibility
Risk Management
Seven West Media maintains sound risk management systems in order to protect and enhance shareholder value.
The Board acknowledges that the management of business risk is an integral part of the Company’s operations
and that a sound risk management framework, aligned to its strategy, not only helps to protect established value,
it can also assist in identifying and capitalising on opportunities to create value. The table below sets out the
key risks (in no particular order) which could impact achievement of the Company’s strategic objectives. These
risks are actively monitored under our risk management framework and there are processes in place to identify,
measure, evaluate, monitor and report on each of them and then control or mitigate them, to the extent possible.
For more information on the Company’s risk management framework refer to pages 49 to 51 of the Corporate
Governance Statement of this Annual Report.
Risk Management Framework – Key Risks and Mitigations
Risk Category
Mitigations
Strategic
Objective
Ratings &
Revenue
Structural change
The rapid transformation
of the media industry due
to technological change
represents a material
economic sustainability risk
for the Company.
Regulatory change
The media industry is
subject to regulation such as
television licence conditions
and anti-siphoning.
Content/
Product
Competition for key
entertainment rights
The Company recognises the
value of premium content to
its audiences and advertisers
and the importance of the
Company securing rights or
creating attractive content at
a sustainable cost.
The Company is responding to and participating in this change
under its current strategic framework, including a focus on
rapid digital transformation of the Company and leveraging
growing ‘total video’ television consumption by exploiting key
content across multiple platforms, particularly by targeting
leadership in linear broadcast and Broadcast Video on
Demand (“BVOD”). Notably, in this financial year the Company
enhanced its position in BVOD and participation in digital
growth through the sale of its 50 per cent interest in Yahoo7 to
Verizon Media, such that the Company now owns and operates
all of its ‘direct to consumer’ digital products, creating the
conditions for the Company to scale its 7plus BVOD service
and capture its full revenue return.
Management maintains specialised expertise in regulatory
matters and participates in regulatory reviews through direct
engagement and via representation on a variety of industry
bodies. The Company has participated in the current Digital
Platform Review as the television industry questions the
differential cost of regulatory compliance for online services
in comparison to much higher regulatory costs and required
investment in content for commercial broadcast licence
holders.
The Company’s production and programming expertise
and track record of success is seen as an advantage to the
Company in the competition for, and creation of, content. The
Company ensures a disciplined approach is maintained in
acquiring content rights and production resourcing and that
revenue opportunities through the exploitation of its produced
or acquired content are maximised, including by targeting key
demographics for advertisers and demonstrating the return on
advertising investment through reliable measurement systems.
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Seven West Media Limited Annual Report 2019Corporate Responsibility0201030405070806 Corporate social responsibility
Risk, environment & people
Risk Management Framework – Key Risks and Mitigations
Strategic
Objective
Risk Category
Mitigations
Technology
Strategy execution
There is an ongoing risk that
the Company’s technology
may not be fit for purpose
or that major technology
projects may not be
delivered on plan, impacting
business performance or
requiring new investment.
Cyber security risk
The number of reported
cyber security incidents is
on the rise globally and the
Company recognises that
such incidents, should they
occur, may negatively impact
financial and operational
performance.
The Company has increased its technology capabilities
through enhanced staffing expertise, project delivery
governance and reporting processes to better manage this
risk.
The Company has deepened its technical and personnel
capabilities in this area and continues to improve prevention
measures and educate staff concerning cyber security risks
to appropriately manage the potential adverse effects on the
business.
Environment
Sustainability
Seven West Media monitors and measures the
effectiveness of sustainable business practices across
our businesses and sets internal targets to measure
the impact of the inputs and outputs of our business
activities on the communities and natural systems in
which we operate. These include:
The Group’s magazine and newspaper businesses
have internal controls in place to ensure that the
paper we use is from sustainable sources and not
from illegally logged timber.
Pacific purchases all virgin fibre paper via an
outsourced provider that does so in accordance
with Pacific’s requirements that all material is
PEFC C-o-C or FFC certified which assures that
forests are managed in accordance with stringent
environmental, social and economic requirements.
In FY19 99.5 per cent of newsprint used for The
West Australian and The Sunday Times came from
recycled consumer product and the remaining 0.5
per cent was sourced from certified plantation
forests.
The West Australian and The Sunday Times printed
waste measure is < 5 per cent per year and all
waste was recycled.
In our press, waste ink is collected and reprocessed,
aluminum plates used during the printing process
are recycled and plant wastewater is processed and
used for reticulation on site.
In FY17 SWM recorded an Overall Net Energy
of 194 TJ and forecast that energy consumption
would fall further. Being below 200 TJ Seven West
Media in FY 18 applied for and was successful in
deregistration from Greenhouse gas reporting
scheme due to this sustained reduction.
Self-assessed energy consumption were:
Year
Total Energy
FY18
186 TJ
FY19
178 TJ
Seven West Media is always reviewing its property
portfolio with the aim to consolidate and optimise
usage of space. In November 2018, Seven vacated
its Pyrmont offices (~6,500m2) and relocated to an
existing leasehold at its Media City offices located
in Eveleigh. The increase in staff numbers has been
achieved by optimising the use of all floors in this
Green Star 4 Star rated office.
Seven took the opportunity during the relocation
to modernise its IT infrastructure to more efficient
systems seeing a net reduction in Data Centre
floorspace of 90m2 within its lease holdings. This
had a major contribution to the reduction in energy
consumption by the Sydney operations.
Overall Net Energy (Consumed minus Produced)
across our entire business has reduced by 8 per
cent between FY17 and FY19 whilst maintaining the
same operating conditions. Since FY14, Overall Net
Energy has fallen 22.3 per cent.
FY19 saw Seven West Media donate or recycle 95
per cent of electronic IT assets through certified
eCycling companies which reduces landfill by
encouraging reuse and recycling of equipment. All
three suppliers are certified to AS/NZS 5377:2013.
26
People
At Seven West Media, the commitment, passion and
creativity of our people underpin who we are and
what we do. Seven West Media understands that our
people ensure our success and in return, is committed
to creating a workplace where employees can fulfil
their individual career aspirations and potential and are
inspired by a high-performance culture rewarded for
achievement and results.
Management works to promote a collaborative and
innovative workplace that is safe, flexible, inclusive
and that fosters creativity and excellence. This ensures
that the Company continues to meet the highest
performance standards and serves the evolving needs
of our stakeholders, our customers and our audiences.
People Policies & Practices
We have a comprehensive set of frameworks that
support our culture to build a high-performance
workplace and drive our focus on results, productivity
and safety. Our vision is central to everything we do,
which describes our strategy, values and how we
measure our success.
The intent of our people policies and practices is to
create a workplace where employees are assured that:
Minimum legal requirements are being met;
Best practices appropriate to the Company can be
documented and implemented;
Management decisions and actions are consistent
and predictable;
Employees, as well as the Company are protected
from the pressures of expediency; and
The Company’s values are promoted.
Fundamental to building a high-performance culture
are the Company’s strategic People pillars:
Reward and performance framework and
strategies to attract and retain talented employees
by rewarding high performance and delivering
superior long-term results, while adhering to sound
risk management and governance principles.
Employee and industrial relations transformation
initiatives and reforms which brought about the
implementation of new sustainable enterprise
agreements across the Company; the most
significant workplace reform in the media industry
in 20 years aligning workplace terms and conditions
with community standards.
Workplace health and safety agenda with an
intense focus on safety and mental health
embedding a safety mindset in all areas of the
business.
Talent and development framework to create an
environment where continuous learning is part of
an employee’s development and progression so
that they can reach their full potential. This drives
leadership capability and is an important channel
through which our culture is embedded and
reinforced.
Employee engagement strategies to ensure we are
living up to our commitment to employees. This
includes continued improvements in employee
engagement and refreshing our employee value
proposition including the relaunch of our benefits
program.
Through these policies and practices, we make it clear
that discrimination on any basis is not acceptable.
In instances where employees require support for
disability, we work with them to identify suitable
alternatives to meet their needs.
Employee Engagement
Seven West Media is focused on attracting, rewarding
and retaining ‘best in class’ employees. Commencing
with the employee onboarding and orientation
process, the Company recognises the importance
of early employee engagement. This is reflected
in a series of activities and events from meeting
the Managing Director and Chief Executive Officer
and members of his leadership team to interactive
online learning modules designed to communicate
and embed the Company’s culture and reinforce
the ongoing importance of meeting behavioural
expectations and effective risk management across
our businesses.
To help ensure we are living up to our commitment
to employees, the Company conducts employee
engagement surveys to solicit feedback on everything
from decision-making and professional development to
whether or not we are living the Company’s values. The
survey also provides key insights to drive improvement
programs in culture, leadership, teamwork, reward and
recognition.
Career & Professional Development
Over the past year, we further invested in the growth,
learning and development of our employees. The
Company introduced a leadership development
program to continue building a high-performance
organisation. The program’s focus areas include
building high-performance teams, advanced coaching,
managing performance, resilience, conflict resolution,
change management and emotional intelligence.
Further online courses have been completed by
employees, including compliance-related training for
new and existing employees (focusing on appropriate
workplace behaviour, fraud awareness, anti-bribery
and anti-money laundering, and other compliance
matters).
27
Seven West Media Limited Annual Report 2019Corporate Responsibility0201030405070806 Corporate social responsibility
Risk, environment & people
Mentoring, both internal and external, has become a
key feature of our culture and is playing an important
role in identifying and supporting leadership
development, while increasing engagement and
productivity.
Regular reviews, including goal setting and ongoing
career development, are a key part of performance
measurement and management, and support the
Company’s high-performance ambitions. As well
as encouraging regular and ongoing feedback with
managers, the Company requires all employees to have
at least two formal review sessions with their manager
each year. During these reviews, employees are
encouraged to raise, discuss and respond to matters
relating to performance, training, further education
and development of required skills and capabilities.
With an increasing focus on mental health, the
Company has taken an active focus in building
awareness and support for managing mental health in
our workplace. We have developed and implemented
a comprehensive framework which includes training,
initiatives and events tailored for managers and
employees to support positive mental health.
The Company’s wellness program provides a range
of benefits and initiatives to optimise the physical and
mental health and wellness of employees, including:
Confidential counselling services through our
Employee Assistance Program;
Educational seminars on a variety of health topics;
Fitness classes and flu vaccinations; and
Psychological wellbeing training and events.
The Company has increased its focus on increasing
the pool of management capability where key high-
potential employees are identified and supported
through the organisation. A thorough talent and
succession planning process has resulted in a deeper
review of people and their potential including
opportunities for female talent. A key objective is to
embed gender diversity as an active consideration in
succession planning. Executive level succession plans
were reviewed by the Board and provide a diverse list
of candidates, for whom development plans to ensure
preparedness to take on future opportunities have
been established.
Safety and Wellness
Seven West Media recognises the value of effective
workplace safety and wellness as an integral part
of how we successfully manage our business. We
are committed to building a positive health and
safety culture, with a focus on personal wellness,
injury prevention and the mitigation of risk through
maintaining high workplace safety and wellness
standards and performance. With a comprehensive
mental health framework, strong risk management
processes and engaging wellness initiatives, the
business continues to strive to improve in its safety
outcomes, including the Lost Time Injury Frequency
Rate (LTIFR) which continues to remain significantly
below the industry benchmark of 4.5. The Company
is also committed to supporting employees during
overseas deployments, wherever they might be.
As part of the Company’s ongoing focus to improving
mental health in the workplace, it hosted various
events and fundraising efforts throughout the year
for foundations including Beyond Blue and R U OK.
The events included guest speakers, morning teas
and fitness events to support positive mental health in
the workplace. We also promoted wellbeing initiatives
such as Mental Health Week, Men’s Health Week and
Women’s Health Week.
Our annual wellness program calendar includes
monthly events delivered to employees across the
various locations in which we operate. The calendar is
reviewed regularly to ensure it continues to promote
health as well as meeting the needs of our employees.
Diversity and Inclusion
Seven West Media recognises the benefits of an
inclusive and respectful workplace culture that draws
on the experiences, diversity and perspectives of our
people to ensure that our business remains innovative
and sustainable and continues to meet the needs of
our stakeholders and audiences.
We view diversity through a broad lens of difference in
people across gender, nationality, ethnicity, disability,
sexual orientation, gender identity, generation/age,
socio-economic status, religious belief, professional
and educational background as well as global and
cultural experiences.
Overall Gender Balance
Proportion of Women in Management Positions1
Women
Men
52% 48%
Women
Men
50% 50%
1. “Management positions” refers to positions that are responsible for managing teams and/ or function as defined by the Workplace
28
Gender Equality Act.
Gender Balance
We have achieved an overall gender balance across the
Company as well as achieving female representation in
management positions of 50 per cent.
We will continue to focus our strategy to achieve a
more diverse and inclusive workplace in other areas of
the business by:
Embedding flexibility in the way we work;
Supporting our commitment to inclusion and
diversity;
Uncovering and taking steps to mitigate potential
bias in our behaviours, systems, policies and
processes; and
Ensuring our brand is attractive to a diverse range
of people.
Diversity Commitments and Initiatives
During FY19, the Board reviewed the Company’s
Diversity Policy which is a key part in its overall
talent and culture strategies and guides investment
in the areas of recruiting, staffing, account planning,
succession planning, promotions and many more. The
Company supports an inclusive work environment
where people have genuine access to career
opportunities, training and benefits.
Our diversity and inclusiveness commitments and
initiatives are also focused around having a workforce
that represents the broader community in which we
operate, leveraging differences to achieve better
business results and deliver a better experience for our
employees and our audiences.
Some of the Company’s achievements towards its
diversity commitments and initiatives include:
Established policies to support strategies across
recruitment and attraction, retention, working
flexibly, performance management, remuneration
and learning and development;
Created and implemented processes for
onboarding and orientation, performance and
development, competitive remuneration and
recognition;
Continued to build on ‘Mentor Spark’, an all-
employee mentoring program; and
Launched an external mentoring program, ‘Rare
Birds’ for 30 senior leaders, and launched a skills-
sharing program and platform.
In addition, the Company has been at the forefront
of supporting diversity to increase the visibility and
contribution of women leaders within the media
industry as well as across the broader community.
Some highlights include:
Women in Media – In its second year, the Company
sponsored again the Women in Media conference
in October 2018. This not-for-profit organisation
supports equity, the importance of mentoring and
the power of networking for women in media.
International Women’s Day – The Company was
involved in several IWD initiatives around the
country to help accelerate gender parity.
Footy Means Business Program – The program
is designed for participants to learn about career
options available, especially linked to football. Now
in its 12th year, the program invited a group of 50
young indigenous men from all over the country
to learn about working in media. Representatives
from the AFL attend along with the teams and their
coaches.
LGBTQI+
The Company seeks to provide a safe, inclusive and
supportive workplace for all employees, to bring their
whole self to work. ‘United’ is Seven West Media’s
LGBTQI+ employee inclusion and diversity group that
is dedicated to building a framework, strategy and
initiatives to expand awareness and celebrate the
importance of diversity and inclusiveness across the
business. It also provides employees with opportunities
to exchange ideas, build relationships and support the
Company’s diversity and inclusion strategy.
The purpose of United is to showcase that the
Company is representing a diverse culture in the
workplace and in everything we do. United uses the
Company’s social network platform to engage the
entire Seven Community as well as holding events that
bring together everyone as “One Connected Team.”
Employee Turnover by Gender and Age Statistics
Employee Turnover by Gender
(as a percentage of total women and as a percentage
of total men)
Women
Men
24% 17%
Employee Turnover by Age
(as a percentage of total turnover)
< 25
years
25 years –
34 years
35 years –
44 years
45 years –
54 years
> 55
years
11% 35% 23% 16% 15%
29
Seven West Media Limited Annual Report 2019Corporate Responsibility0201030405070806 Corporate social responsibility
Risk, environment & people
Measurable Objectives
In 2019 and 2020, the Company proposes to build on
the diversity initiatives from the previous year that
enable us to facilitate diversity, inclusion and promote
growth for the Company and for our employees.
Our focus will continue in the four key areas:
Flexible work practices (FWP);
Gender diversity and inclusion (GD);
Career development and performance (CDP); and
Talent and succession planning (TSP).
The Company has posted its Workplace Gender
Equality Act Public Report for 2018–2019 on its
website, which contains the Company’s Gender
Equality Indicators.
The Company’s progress against diversity objectives
were established in 2018, and our commitments
set for the 2019/20 financial year, can be found in
our Corporate Governance Statement at http://
www.sevenwestmedia.com.au/about-us/corporate-
governance/.
Measurable Objective
Link to Diversity Policy
CDP
FWP
GD
TSP
Monitor initiatives that facilitate diversity and inclusion, and promote growth for
the Company and for all employees.
•
•
Annual succession planning to consider diversity initiatives.
Monitor and report on employee turnover by age and gender and parental leave
return rates.
Monitor and report on the proportion of women in the Company, in senior
executive positions, and on the Board.
•
•
•
•
•
growing media in the Australian market in the
last 12 months, as well as promoting commercial
television as a ‘total video’ proposition delivering
Australia’s most-consumed television content
by linear and BVOD, to dramatically change
perceptions of the industry with advertisers
and agencies. In 2019 Think TV’s engagement
with marketers has extended into econometric
modelling projects, using real client data, to
demonstrate the power of television to grow
brands and businesses.
The Future of Television
Think TV
Seven West Media is a founding stakeholder of
the independent industry research, education
and marketing group, Think TV. Think TV leads
a collective effort from television broadcasters
across Seven Network, Nine, Network Ten and
Multi-Channel Network/Foxtel to demonstrate
how television advertising in broadcast quality
content environments remains profoundly
effective and the clear leader among all media
channels in terms of advertising impact,
viewability and return on investment (“ROI”). Think
TV is an initiative of Australia’s leading commercial
television broadcasters
focused on helping the
advertising and marketing
community get the best out of
multi-platform television, by
innovating to make television
inventory easier to buy and
emphasising the measurable
reach and quality of emotional
engagement of the medium
which is essential for building
brands and connecting with
target audiences. Think TV
undertakes and publishes
globally recognised research
on television advertising
ROI with a current focus
on Broadcast Video On
Demand (“BVOD”), the fastest
30
Seven in the
Community
Seven plays an important role in society, with millions of Australians trusting
us as their source of news and information, as well as turning to us for
inspiration and entertainment.
We also take a proactive role in making a positive
contribution to the communities in which we operate,
through numerous initiatives right across Australia.
At Group level, we threw our support behind the
McGrath Foundation who, together with Cricket
Australia, raises awareness of the need for breast
cancer care nursing services in Australia. To help
promote the Pink Test in January, we ran extensive
editorial and promotional on-air support. We even
turned our big red 7 logo pink for the day.
This year we formalised our relationship with
social purpose organisation UnLtd, which supports
charities working with young people. We donated
a large advertising package to UnLtd who will
auction it and benefit from the proceeds, and a
second directly to UnLtd’s partner Whitelion, which
provides a range of services for vulnerable and at
risk children.
In addition, numerous Seven staff took part in UnLtd’s
fundraising events including cricket competitions
in Sydney and Melbourne, and the AdLand Bailout
which gives executives the chance to experience
what it is like to be incarcerated in a youth detention
facility for 24 hours.
We continue to be a proud supporter of the arts.
Over the past year, we gave considerable support
and promotion to two remarkable international
collections visiting Australia.
In the first half of the financial year, Art Exhibitions
Australia (AEA) partnered with the Art Gallery NSW
to exhibit a magnificent selection of works from
the State Hermitage Museum in Saint Petersburg,
Russia. The exhibition featured works from towering
figures of modern art including Monet, Cézanne,
Matisse, Gaugin and Picasso.
In the second half, AEA partnered with the National
Gallery in Canberra to bring Claude Monet’s
pioneering painting ‘Impression, Sunrise’ from which
the Impressionism movement takes its name, to
Australia. In addition, the exhibition featured forty
impressionist and related paintings from the Musée
Marmottan money in Paris, the Tate and Australian
and New Zealand collections.
In both instances, we donated significant editorial
and advertising support across our broadcast,
streaming, digital and publishing platforms.
31
Seven West Media Limited Annual Report 2019Corporate Responsibility0201030405070806 Seven in the Community
New South Wales
This year we became a major
partner of Blacktown Council and
a partner to Parramatta Council
Events. We also supported The
Nelune Foundation and the
Comprehensive Cancer Centre.
Seven continues to be long term
supporters of the Children’s
Hospital at Westmead, Ronald
McDonald House at Westmead,
the NSW Schools Spectacular, the
Sydney Swans, Cancer Council
NSW, Surf Life Saving in Cronulla,
Manly and Narrabeen, the City of
Sydney and the Royal Agricultural
Society.
We also supported many major and
community events, including the
Seven Bridges Walk, the Sydney
Royal Easter Show, Fairfield
Council’s Cabramatta Moon
Festival, and Liverpool and Penrith
Council’s Australia Day and New
Year’s Eve celebrations.
Victoria
For 62 years, Seven Melbourne has been taking the
Good Friday Appeal into the homes of Victorians
with one purpose – to help children and families
who most need our help. In a partnership with the
Royal Children’s Hospital and the Herald Sun that has
spanned 88 years, we have broadcasted 930 hours
of television to help raise $345 million to support
the hospital. The money is used to ensure the Royal
Children’s Hospital remains a world leading centre of
medical excellence in paediatric care.
For five years, Seven Melbourne has supported
Neale Daniher as he has led the fight against
Muscular Neurone Disease (MND). What started
out as one man’s brave battle has become so much
more. We are proud to say that our television
broadcast of the Big Freeze takes the fight against
MND into nearly 2 million homes across Australia
every year and has helped Neale to raise more than
$45 million for the cause.
Our 16 year partnership with the City of Melbourne
is a success story that keeps evolving and growing
as our city embraces the future. Under that
partnership, Seven Melbourne has delivered nine
broadcasts of the Moomba Festival.
In total, Seven Melbourne has more than 40
partnerships including EJ Whitten Legends match,
Cadel Evans Great Ocean Road Race, Herald Sun’s
Run For The Kids, Very Special Kids, Pako Festa and
the Victorian State School Spectacular.
32
South Australia
In May, we announced a major partnership with the
Royal Flying Doctor Service Central Operations,
which provides extensive primary health care and
24-hour emergency service to over 50,000 patients
every year in South Australia and the Northern
Territory. To mark the occasion, our Chairman Kerry
Stokes unveiled a 7NEWS branded aeromedical
plane.
This year Seven signed a multi-year agreement to
support the Santos Tour Down Under. The 2019
event saw a record economic impact of $70.7
million for South Australia, up 11 per cent year on
year.
Seven Adelaide partners with major sporting and
community organisations including the South
Australian Football League (SANFL), Adelaide
Crows Football Club, Port Adelaide Football Club
and Surf Life Saving South Australia. We also
support local arts performances at the Adelaide
Festival Centre, Adelaide Cabaret Festival, the Art
Gallery of South Australia and the largest Fringe
Festival venue, The Garden of Unearthly Delights.
We also proudly support The Flinders Foundation,
Breakthrough Mental Health Research Foundation,
The Advertiser Foundation, Little Heroes
Foundation, and Carols by Candlelight which
benefits Novita Children’s Services. Many of our
Presenters are Patrons of these charities.
In addition, the Channel 7 Children’s Research
Foundation of South Australia was established
in 1976 by Seven Adelaide. It now distributes
approximately $1.5 million in research grants
each year. In total, the Foundation has facilitated
over $28 million in grants to improve the health,
education and welfare of children in South
Australia.
Queensland
Seven Queensland has a long-held tradition of supporting our cities and regional communities. We have
been doing this for decades and are proud to play a role in enhancing the welfare and development of
our local business, sporting, cultural and tourism industries.
In the last 12 months alone, our support has reached the depth and breadth of the Sunshine State.
Events include the Royal Queensland Show and several regional show associations; RSPCA adoption
events; Stanthorpe Apple & Grape Festival; Caloundra Music Festival; several Business Awards; the
Paniyiri Greek Festival and Ronald McDonald House Charities events.
A key strategy has been to secure naming rights of several running events including the 7NEWS Gold
Coast Running Festival, 7Sunshine Coast Marathon, 7Rocky River Run and the newly launched 7Cairns
Marathon. Our support also extends to other sporting entities including the Brisbane Heat, Brisbane
Lions, USC Thunder, Channel 7 Brisbane Racing Carnival; the Cairns Amateurs and the Channel 7
Ipswich Cup to name just a few.
The intent of our partnerships is to work collaboratively with local community groups and sporting
organisations to grow awareness, attendance, fundraising efforts and the overall fan experience.
Our contributions across Queensland ensure we are playing an active part in building sustainable
communities for the future.
33
Seven West Media Limited Annual Report 2019Corporate Responsibility0201030405070806 Seven in the Community
Western Australia
Telethon again broke records in
October 2018, raising $38,000,554 to
make a total of $306 million since 1968
thanks to the generosity of Western
Australia. Telethon is transforming the
lives of children in Western Australia
funding over 40 children’s health
charitable organisations providing
world class medical research, cutting-
edge equipment and vital services and
therapies.
The Channel 7 Telethon Trust, Curtin
University and the Telethon Kids
Institute were proud to announce the
prestigious Kerry M Stokes Chair of
Child Health, named in recognition
of the extraordinary, long-standing
support provided by our Chairman to
changing the lives of children through
Telethon.
The Chair’s mission is to drive a world-
class research program for the benefit
of kids and the adults they will become.
An international search will identify a
candidate with exemplary academic
skills to lead ground breaking work at
Curtin University. The program expects
to deliver paradigm shifting outcomes
in broad areas including chronic and
severe disease, infectious diseases,
mental health, neurodevelopmental
health, rare diseases, disabilities and
preventative healthcare.
Mr Stokes is a trustee and former Chair
of the Telethon Trust, which supports
more than fifty hospitals, medical
facilities and community groups and
organisations throughout the state.
34
Pacific
For over a decade, Pacific has partnered with Ronald
McDonald House, a charity attached to major women’s and
children’s hospitals providing a home away from home for
seriously ill children and their families.
For a second year, marie claire partnered with The Gidget
Foundation to raise funds and awareness of perinatal anxiety
and depression. The Gidget Foundation provides support
services for new families struggling with parenthood.
In September 2018, Pacific partnered with youth mentoring
organisation Raise Foundation for their annual event, The
Sparkle Ball. The event was sponsored by marie claire
and following the evening, a number of Pacific managers
volunteered to provide their services as mentors to young
people in local high schools, giving them the opportunity to
experience a confiding and supportive relationship.
February marked Ovarian Cancer Awareness month and this
year the Pacific community gathered together to support the
cause and raise funds through a morning tea. Guest speakers
and colleagues shared personal experience in their battle
against Ovarian cancer.
Regional Australia was affected by catastrophic drought this
year and as a signal of our support, we hosted a series of
fundraising efforts internally as well as through our brands to
raise much-needed funds for our regional farmers and their
communities.
Christmas is a difficult time for many Australians who are
underprivileged or homeless. This year Pacific hosted an
internal Salvation Army Drive Appeal with staff donating toys
and gifts to those less fortunate.
As part of Pacific and SWM’s ongoing focus to improving
mental health awareness in the workplace, we hosted various
events and fundraising efforts throughout the year for
foundations including Beyond Blue and R U OK. The events
included guest speakers, morning teas and fitness events to
support positive mental health in the workplace.
InStyle marked 11 years of innovation and style in May with
the annual Women of Style Awards. The Awards honoured
Australia’s most inspirational and innovative women who are
the future shapers in their respective fields – from science and
community, to philanthropy and environment.
We have also been members of the Environmental Advisory
Group of the Newspaper Works since 2004. The Group
endeavours to make a significant contribution to waste
publication paper recovery, recycling and environment.
James Warburton
Managing Director & Chief Executive Officer
Mr Warburton is Managing Director & Chief Executive
Officer of Seven West Media Limited.
Prior to his appointment as MD & CEO of Seven
West Media, Mr Warburton was Managing Director
and Chief Executive Officer of APN Outdoor where
he led a significant transformation and turnaround
at the company before departing in late 2018 when
APN Outdoor was acquired by JCDecaux for a record
valuation. Before his appointment to APN Outdoor,
Mr Warburton was the Chief Executive Officer of
Supercars for five years.
In this position, Mr Warburton drove significant growth
in the sport and delivered unprecedented broadcast,
sponsorship and funding deals. Mr Warburton has
also held senior leadership roles at media buying
company Universal McCann, he was Chief Digital and
Sales Officer of the Seven Media Group, and he was
the Managing Director and Chief Executive Officer of
Network 10.
Mr Warburton was appointed to the Board on 16
August 2019.
Board of
Directors
Kerry Stokes AC
Chairman – Non-executive Director
Mr Stokes is the Executive Chairman of Seven Group
Holdings Limited, a company with a market-leading
presence in the resources services sector in Australia
and formerly in north east China and a significant
investment in energy and also in media in Australia
through Seven West Media. Mr Stokes has held this
position since April 2010. He is also Chairman of
Australian Capital Equity Pty Limited, which has
substantial interests in media and entertainment,
resources, energy, property, pastoral and industrial
activities.
Mr Stokes’ board memberships include Council
Member for the Paley Group (formerly the International
Council for Museum & Television); Chairman and
Fellow (since November 2015) for the Australian
War Memorial (previously a Council Member); and a
former Chairman of the National Gallery of Australia.
Mr Stokes holds professional recognitions which
include an Honorary Doctorate in Commerce at Edith
Cowan University and an Honorary Fellow of Murdoch
University.
Mr Stokes has, throughout his career, been the
recipient of awards, including Life Membership of
the Returned Services League of Australia; 1994 Paul
Harris Rotary Fellow Award; 1994 Citizen of Western
Australia for Industry & Commerce; 2002 Gold
Medal award from the AIDC for Western Australian
Director of the Year; 2007 Fiona Stanley Award for
outstanding contribution to Child Health Research;
2009 Richard Pratt Business Arts Leadership Award
from the Australian Business Arts Foundation; and
2011 Charles Court Inspiring Leadership Award; 2013
West Australian of the Year; 2014 Awarded Keys to the
City of Perth and 2014 Awarded Keys to the City of
Melbourne.
Mr Stokes was awarded Australia’s highest honour,
the Companion in the General Division in the Order of
Australia (AC) in 2008. In 1995, he was recognised as
Officer in the General Division of the Order of Australia
(AO).
Mr Stokes was appointed to the Board on 25
September 2008, and became Chairman of Seven
West Media Limited (formerly West Australian
Newspaper Holdings Ltd) on 11 December 2008.
35
Seven West Media Limited Annual Report 2019Governance0201030405070806 Board of Directors
Governance
.John Alexander
Non-executive Director
Teresa Dyson
Non-executive Director
Mr Alexander was the Executive Chairman of
Consolidated Media Holdings Limited (CMH) from 2007
to November 2012, when CMH was acquired by News
Corporation. Prior to 2007, Mr Alexander was the Chief
Executive Officer and Managing Director of Publishing
and Broadcasting Limited (PBL) from 2004, the Chief
Executive of ACP Magazines Limited from 1999 and
PBL’s group media division comprising ACP Magazines
Limited and the Nine Network from 2002. Before joining
the PBL Group, Mr Alexander was the Editor-in-Chief,
Publisher & Editor of The Sydney Morning Herald and
Editor-in-Chief of The Australian Financial Review.
Mr Alexander has previously acted as a director of a
number of companies including Foxtel Management
Pty Limited, Fox Sports Australia Pty Limited, SEEK
Limited, Carsales.com Limited, Ninemsn Pty Limited &
CrownBet. Mr Alexander is the Executive Chairman of
listed company Crown Resorts Limited. He is also the
Chairman of Crown Melbourne Limited and Burswood
Limited Boards.
Ms Dyson is an experienced company director,
with a broad range of experience across public
and private sectors. Ms Dyson has been closely
involved in strategic decision making in business
and organisational structuring, covering the financial
services, transport, energy and resources sectors, as
well as infrastructure projects.
Ms Dyson is currently a director of Power & Water
Corporation (NT), Energy Queensland, Genex Power
Limited, Gold Coast Hospital and Health Board,
Consolidated Tin Mines Limited, Energy Super, Fare
Limited, and is a member of the Foreign Investment
Review Board and the Takeovers Panel. She is a former
director of UN Women National Committee Australia
Ltd and Opera Queensland.
Ms Dyson holds a Masters of Applied Finance from
Macquarie University. She graduated with a Bachelor
of Laws (Honours), a Bachelor of Arts and Masters of
Taxation from the University of Queensland and is a
graduate of the Australian Institute of Company Directors.
Mr Alexander is Chairman of the Remuneration &
Nomination Committee.
Ms Dyson is Chairman of the Audit and Risk
Committee.
Mr Alexander was appointed to the Board on
2 May 2013.
Ms Dyson was appointed to the Board on
2 November 2017.
David Evans
Non-executive Director
Mr Evans is the Executive Chairman of Evans Dixon Pty
Ltd. Mr Evans established Evans and Partners Pty Ltd,
the investment advisory company in June 2007.
Since 1990, he has worked in a variety of roles within
JB Were & Son, and then the merged entity Goldman
Sachs JBWere Pty Ltd (GSJBW). Prior to establishing
Evans and Partners Mr Evans ran Goldman Sachs
JBWere’s Private Wealth business and the Institutional
Equities business. His most recent role at GSJBW was
as Managing Director and Chief of Staff. Mr Evans is
a member of the Victorian Police Corporate Advisory
Group and Chairman of Cricket Australia’s Investment
Committee.
Mr Evans is a member of the Audit & Risk Committee
and a member of the Remuneration & Nomination
Committee.
Mr Evans was appointed to the Board on
21 August 2012.
36
Peter Gammell
Non-executive Director
Mr Gammell was the Deputy Chairman of Australian
Capital Equity Pty Limited, the investment holding
company associated with Mr Kerry Stokes AC, and was
on the Board of Seven Group Holdings Limited from
February 2010 until 28 June 2013 and was Managing
Director and Group Chief Executive Officer from April
2010 until 28 June 2013.
Prior to the formation of Seven West Media Limited, Mr
Gammell served as a Director of Seven Network Limited
for 14 years. He was Chairman of the Seven Network
Limited Finance Committee and was a member of the
Audit Committee. He was the Chairman of Coates Hire,
Australia’s largest equipment hire company.
Mr Gammell is a former Director of Federal Capital Press
Pty Ltd, the publisher of the Canberra Times (1989
to 1998) and is a former Director of the Community
Newspaper Group (1996 to 1998). Between 10
September 2009 and 19 November 2012, Mr Gammell
was a Director of Consolidated Media Holdings Limited.
Mr Gammell is a member of the Institute of Chartered
Accountants of Scotland and holds a Bachelor of
Science degree from the University of Edinburgh.
Mr Gammell is a member of the Audit & Risk Committee.
The Hon. Jeffrey Kennett AC
Non–executive Director
Mr Kennett AC is the founding Chairman of
Beyond Blue: the national depression initiative
and was Chairman from 2000 until 30 June 2017.
He is Chairman of The Torch, a program assisting
incarcerated indigenous men and women.
Mr Kennett was an Officer in the Royal Australian
Regiment, serving at home and overseas. He was a
Member of the Victorian Parliament for 23 years, and
was Premier of the State from 1992 to 1999. Prior to
that, he was Leader of the Opposition 1982-1989;
1991-1992.
Mr Kennett is currently the Chairman of EQT Holdings
Limited, Chairman of Open Windows Australia
Proprietary Limited, Chairman of CT Management
Group Pty Ltd and a director of Amtek Corporation
Pty Ltd.
In 2005 Mr Kennett was awarded the Companion
of the Order of Australia.
Mr Kennett is a member of the Remuneration &
Nomination Committee.
Mr Kennett was appointed to the Board on
24 June 2015.
Mr Gammell was appointed to the Board on
25 September 2008.
Michael Malone
Non–executive Director
Colette Garnsey OAM
Non-executive Director
Ms Garnsey is currently a non-executive Director of
Flight Centre Travel Group, and non-executive Director
and Chair of Australian Wool Innovation Limited.
She has over 30 years’ executive experience,
having held senior management positions at David
Jones, Pacific Brands, and Premier Investments,
encompassing strategy, operations, marketing,
business planning and business transformation. She
spent over 20 years with David Jones Limited rising to
become Group General Manager.
Ms Garnsey has served on the board of the Melbourne
Fashion Festival. She has also advised the CSIRO, The
Federal Innovation Council, and the business advisory
boards of various Federal Trade and Investment
Ministers and Australian Fashion Week.
Ms Garnsey was appointed to the Board on
12 December 2018.
Mr Malone founded iiNet Limited in 1993 and continued
as CEO until retiring in 2014. During his tenure, iiNet
grew to service one million households and businesses,
with revenues of one billion dollars and a market cap of
over one billion dollars.
Mr Malone has been recognised with a raft of industry
accolades, including 2012 Australian Entrepreneur of the
Year, CEO of the Year in the Australian Telecom Awards
and National Customer Service CEO of the Year in the
CSIA’s Australian Service Excellence Awards.
He presently sits on the board as a non-executive
Director of NBN Co and ASX listed SpeedCast Limited
and is the Chairman on Superloop Limited. Mr Malone
is a founder of Diamond Cyber, an IT security firm in
Perth. He is also a Director of Axicom Pty Limited and
a member of the Advisory Committee of the Regional
and Small Publishers Innovation Fund.
Mr Malone is a member of the Audit & Risk Committee.
Mr Malone was appointed to the Board on
24 June 2015.
37
Seven West Media Limited Annual Report 2019Governance0201030405070806 Board of Directors
Governance
Ryan Stokes
Non–executive Director
Michael Ziegelaar
Non-executive Director
Mr Ziegelaar is a senior partner of global law firm
Herbert Smith Freehills, where he is the Co-Head
of Australian Equity Capital Markets. He specialises
in corporate, equity capital markets and M&A
transactions and has acted for a wide range of clients
across various industries.
Mr Ziegelaar is also a non-executive director of the
Burnet Institute.
He holds a Bachelor of Laws (Hons), a Bachelor of
Economics (majoring in Accounting and Corporate
Finance) and a Master of Laws (majoring in
Commercial Law) from Monash University.
Mr Ziegelaar is a member of the Audit & Risk
Committee
Mr Ziegelaar was appointed to the Board on
2 November 2017.
Mr Stokes is Managing Director & Chief Executive
Officer of Seven Group Holdings Limited (SGH).
SGH owns approximately 41 per cent of SWM.
Mr Stokes has been a Director of Seven West Media
Limited (SWM) since 2012 and was an Executive
Director and then Chairman of Pacific Magazines from
2004 to 2008 and a Director of Yahoo7 from 2005 to
2013. Mr Stokes is a Director of WesTrac, Chairman of
Coates Hire, and a Director of Beach Energy.
Mr Stokes is Chief Executive Officer of Australian
Capital Equity Pty Limited (ACE). ACE is a private
company with its primary investment being an interest
in SGH. Mr Stokes was appointed Chairman of the
National Gallery of Australia on 9 July 2018.
Mr Stokes is the former Chairman of the National
Library of Australia. He is also a member of the Prime
Ministerial Advisory Council on Veterans Mental Health
established in 2014.
In 2015, he became a Committee member of
innovationXchange (within the Department of Foreign
Affairs and Trade), which provides strategic guidance
on innovation in aid programs. He is also a member of
the IOC Olympic Education Commission.
Mr Stokes holds a BComm from Curtin University and
is a Fellow of the Australian Institute of Management
(FAIM).
Mr Stokes is a member of the Remuneration
& Nomination Committee.
Mr Stokes was appointed to the Board on
21 August 2012.
38
Corporate
Governance Statement
For the year ended 29 June 2019
This statement outlines the Company’s main corporate
governance practices that were in place throughout
the financial year and, unless otherwise stated, its
compliance with the 3rd edition of the ASX Corporate
Governance Council Corporate Governance Principles
and Recommendations (“ASX Recommendations”).
As part of the periodic review of its Board and
Committee Charters during the financial year, the
Company proactively took account of emerging
developments in corporate governance, as raised
in the 4th edition ASX Corporate Governance
Council Corporate Governance Principles and
Recommendations released on 27 February 2019
(“4th Edition ASX Recommendations”). The resulting
amendments to the Board and Committee Charters
are aligned with emerging market expectations,
reflect many of the responsibilities and processes
that the Board and its Committees were already
undertaking and prepares the Company for its
transition to reporting against the 4th Edition ASX
Recommendations in the Company’s next Corporate
Governance Statement.
Accordingly, reporting of compliance within this
Corporate Governance Statement remains against the
3rd edition of the ASX Recommendations, however
reference is also made herein to corporate governance
enhancements which relate to the 4th Edition ASX
Recommendations. The Board will continue to review
developments in corporate governance as part of its
periodic review of governance at the Company.
The documents marked with an * below have been
posted in the ‘Corporate Governance’ section on the
Company’s website at www.sevenwestmedia.com.au/
about-us/corporate-governance.
Principle 1 – Lay Solid Foundations for
Management and Oversight
Role and responsibilities of the Board
The Board is empowered to manage the business of
the Company subject to the Corporations Act and the
Company’s Constitution*. The Board is responsible for
the overall corporate governance of the Company and
has adopted a Board Charter* setting out the role and
responsibilities of the Board.
The Board Charter provides that the Board’s role
includes:
representing and serving the interests of
shareholders by overseeing, reviewing and
appraising the Company’s strategies, policies and
performance in accordance with any duties and
obligations imposed on the Board by law and the
Company’s Constitution;
demonstrating leadership by approving the
Company’s purpose, statement of values, strategic
objectives and code of conduct for directors,
senior executives and employees and monitoring
corporate culture;
contributing to and approving management’s
development of corporate strategy including
approving strategic objectives;
monitoring corporate performance and
management’s performance and implementation
of Company strategy and promotion of the
Company’s values;
reviewing and monitoring systems of risk
management and internal control and ethical and
legal compliance, including reviewing procedures
to identify the main financial and non-financial risks
associated with the Company’s businesses and the
implementation of appropriate systems to manage
these risks;
39
Seven West Media Limited Annual Report 2019Governance0201030405070806 Corporate Governance Statement
For the year ended 29 June 2019
monitoring and reviewing management processes
aimed at ensuring the integrity of financial
reporting, financial controls and other reporting;
developing a Board skills matrix setting out the mix
of skills that the Board currently has or is looking to
achieve in its membership;
developing and reviewing corporate governance
principles and policies and monitoring compliance
with those principles and policies to underpin and
instil the desired culture within the Company and
reinforce a culture across the Company of acting
lawfully, ethically and responsibly;
monitoring that management has formal and
rigorous processes in place to validate the quality
and integrity of the Company’s corporate reporting;
satisfying itself that the Company’s remuneration
framework is aligned with the Company’s purpose,
its strategic objectives, values and risk appetite;
and
in accordance with the Company’s Diversity Policy,
reviewing, on an annual basis, the report prepared
by the Remuneration & Nomination Committee
outlining the relative proportion of women and men
on the Board, in senior management positions and
in the workforce at all levels of the Group.
The Board Charter provides that matters which are
specifically reserved for the Board or its Committees
include:
appointment and removal of the Group Chief
Executive Officer;
approval of dividends;
approval of annual budget;
monitoring capital management and approval of
capital expenditure, acquisitions and divestitures
in excess of authority levels delegated to
management;
the establishment of Board Committees, their
membership and delegated authorities; and
calling of meetings of shareholders.
Board Committees
The Board is assisted in carrying out its responsibilities
by the Audit & Risk Committee and the Remuneration
& Nomination Committee.
Each Committee has its own written Charter*, which
is reviewed on an annual basis and is available on the
Company’s website. Further details regarding the Audit
& Risk Committee and the Remuneration & Nomination
Committee are set out under “Principle 4 – Safeguard
the Integrity of Corporate Reports” and “Principle 2 –
Structure the Board to be Effective and Add Value”,
respectively, in this Corporate Governance Statement.
The Directors’ Report at page 54 sets out the number
of Board and Committee meetings held during the
2019 financial year under the heading “Directors’
Meetings”, as well as the attendance of Directors at
those meetings.
Delegation to Management
Subject to oversight by the Board and the exercise
by the Board of functions which it is required to carry
out under the Company’s Constitution, Board Charter
and the law, it is the role of management to carry out
functions that are expressly delegated to management
by the Board, as well as those functions not specifically
reserved to the Board, as it considers appropriate,
including those functions and affairs which pertain to
the day-to-day management of the operations and
administration of the Company.
Management is charged with promulgating the
Company’s values across the organisation and is
responsible for implementing the policies, business
model and strategic objectives approved by the Board.
Management must supply the Board with information
in a form, timeframe and quality that will enable the
Board to discharge its duties effectively, including
concerning the Company’s compliance with material
legal and regulatory requirements and any conduct
that is materially inconsistent with the values or code of
conduct of the Company. The Company has adopted
a Delegated Authority Policy, which delegates to
management the authority to carry out expenditure in
relation to specified areas of the Company’s operations,
subject to the Company’s policies and procedures in
respect of the authorisation and signing of Company
contracts, which includes a system of legal review.
The functions exercised by the Board and those
delegated to management are subject to ongoing
review to ensure that the division of functions remains
appropriate.
40
Employment of Executives
Company executives are each employed under written
employment agreements, which set out the terms of
their employment.
Prior to the commencement of employment, the
Company undertakes appropriate background checks
on new senior executives.
Appointment of Directors
The Board has established a Remuneration &
Nomination Committee to assist in the appointment of
new Directors.
Further information concerning this Committee is
set out under “Principle 2 – Structure the Board to
be Effective and Add Value” in this statement. The
Remuneration & Nomination Committee periodically
review the composition of the Board to ensure that
the Board has an appropriate mix of expertise and
experience. This review includes considering the
appointment of new Directors and the re-election
of incumbent Directors to the Board. An output of
this process is the Board skills matrix set out under
“Principle 2 – Structure the Board to be Effective and
Add Value”.
The policy and procedure for the selection and
appointment of new Directors is set out in an
Annexure to the Board Charter. The factors that will be
considered when reviewing a potential candidate for
Board appointment include:
the skills, experience, expertise and personal
qualities that will best complement Board
effectiveness having regard to the Board skills
matrix, including a deep understanding of the
media industry, corporate management and
operational, safety and financial matters;
the existing composition of the Board, having
regard to the factors outlined in the Company’s
Diversity Policy and the objective of achieving a
Board comprising Directors from a diverse range of
backgrounds;
the capability of the candidate to devote the
necessary time and commitment to the role (this
involves a consideration of matters such as other
board or executive appointments); and
potential conflicts of interest and independence.
The Board believes the management of the Company
benefits from, and it is in the interests of shareholders
for Directors on the Board to have, a mix of tenures
such that some Directors have served on the Board
for a longer period and have a deeper understanding
of the Company and its operations, and new Directors
bring fresh ideas and perspectives.
As part of the selection and appointment process:
the Board, and if so requested the Remuneration &
Nomination Committee, identify potential Director
candidates, with the assistance of external search
organisations as appropriate;
background information in relation to each potential
candidate is provided to all Directors;
appropriate background checks are undertaken
before appointing a Director, or putting forward to
shareholders a Director candidate for election; and
an invitation to be appointed as a Director is
made by the Chairman after having consulted
all Directors, with recommendations from the
Remuneration & Nomination Committee (if any)
having been circulated to all Directors.
Appointed Directors receive a formal letter of
appointment which set out terms of their appointment
and the Company’s Corporate Governance Policies.
The date at which each Director was appointed to the
Board is announced to ASX and is provided in this
Annual Report on pages 35 to 38.
New Director appointments
During the year, the Board undertook a review of
the Board’s structure and composition, and on 12
December 2018 appointed an additional Independent
Director, Ms Colette Garnsey OAM, to the Board.
The Board considers that Ms Garnsey’s appointment
adds further depth and strength to the Board, and
that Ms Garnsey’s skills and experience, particularly
in relation to consumer facing companies and
organisations, are valuable to the Board.
Mr James Warburton was appointed Managing
Director & Chief Executive Officer of the Company on
16 August 2019, following Mr Tim Worner’s resignation
from that role and the Board as of the same date.
The Board approved Mr Warburton’s appointment
and considers he is the appropriate person to lead
the Company’s Management, having regard for Mr
Warburton’s experience within the media industry,
including his previous tenure as Chief Digital and Sales
Officer of Seven Media Group and since that time,
successfully fulfilling the role of Chief Executive Officer
at APN Outdoor and prior to that, Supercars.
Election and re-election of Directors
Directors appointed to fill casual vacancies hold office
until the next Annual General Meeting and are then
eligible for election by shareholders. In addition, each
Director must stand for re-election at the third Annual
General Meeting since they were last elected. Under
the Company’s Constitution, one-third of the Board
(excluding the Managing Director and any Directors
standing for election for the first time) must retire by
rotation at each Annual General Meeting.
The Notice of Meeting for the Annual General Meeting
discloses material information about Directors
seeking election or re-election, including appropriate
biographical details and qualifications, and other key
current directorships.
41
Seven West Media Limited Annual Report 2019Governance0201030405070806 Corporate Governance Statement
For the year ended 29 June 2019
Company Secretary
The Company Secretary’s role is to support the
Board’s effectiveness by:
helping to organise and facilitate the induction and
professional development of directors;
ensuring that the business at Board and Committee
meetings is accurately captured in the minutes;
advising the Board and Committees on governance
matters; and
coordinating the timely distribution of Board and
Committee agendas and briefing materials.
The decision to appoint or remove a Company
Secretary is made or approved by the Board. The
Company Secretary is accountable to the Board
through the Chairman on all matters to do with the
proper functioning of the Board. Each of the Directors
has access to the Company Secretary.
Board, Committee and Director performance
evaluation
The Chairman closely monitors the performance and
actions of the Board and its Committees. During the
financial year, Directors completed a Board Evaluation
questionnaire concerning Board, Committee and
Director, including Chairman, performance from
which aggregated data and responses were provided
to the Chairman and then presented to the Board
for discussion and feedback. The Board Evaluation
questionnaire provides an opportunity for the Board
to benchmark results year-on-year and to identify
Board performance priorities, governance framework
enhancements and improve the effectiveness of
meetings and Company processes.
The aggregated questionnaire results also provide the
basis of individual discussions between Directors and
the Chairman. The Chairman and each Board member
consider the performance of that Board member in
relation to the expectations for that Board member
and consider any opportunities for enhancing future
performance. Matters which may be taken into account
include the expertise and responsibilities of the Board
member and their contribution to the Board and any
relevant Committees and their functions.
Additionally, during the financial year, a report on the
program of work undertaken by the Board and each
of its Committees, assessed against their respective
Charter responsibilities and duties, is provided to the
Board for discussion and for the purposes of reviewing
performance of the Board and the Committees, as
well as their Charters, to ensure that the Board and its
Committees operate effectively and efficiently.
During the reporting period, performance evaluations
of the Board, its Committees and individual Directors
were carried out in accordance with this process.
Assessment of management performance
The performance of the Managing Director & Chief
Executive Officer is formally reviewed by the Board
against the achievement of strategic and budgetary
objectives in respect of the Group’s operations
and investments whilst also having regard for his
personal performance in the leadership of the Group.
The Board’s review is carried out annually in regard
to certain goals against which he is assessed, and
throughout the year in regard to others, and forms
the basis of the determination of the Managing
Director & Chief Executive Officer’s performance-
linked remuneration. The Remuneration Report sets
out further details of the performance criteria against
which the Managing Director’s & Chief Executive
Officer’s performance-linked remuneration in respect
of the financial year ended 29 June 2019 is assessed on
pages 63 to 68.
The performance of senior executives of the
Company is reviewed on an annual basis in a formal
and documented interview process with either the
Managing Director & Chief Executive Officer or the
particular executive’s immediate superior. Performance
is evaluated against agreed performance goals and
assessment criteria in relation to the senior executive’s
duties and material areas of responsibility, including
management of relevant business units within budget,
motivation and development of staff, and achievement
of and contribution to the Company’s objectives.
A performance evaluation of the Managing Director
& Chief Executive Officer and other senior executives
took place during the year in accordance with
this process. For further information about the
performance-related remuneration of senior executives
and staff, please see the discussion set out under
“Principle 8 – Remunerate Fairly and Responsibly”.
Diversity policy
The Board recognises the benefits of a workplace
culture that is inclusive and respectful of diversity.
The Board values diversity, including in relation to
age, gender, cultural background and ethnicity and
recognises the benefits it can bring to the organisation.
The Board has adopted a Diversity Policy* that sets out
the Board’s commitment to working towards achieving
an inclusive and respectful environment. Please refer to
pages 28 to 30 of this Annual Report for reporting on
the Diversity Policy and the measurable objectives and
initiatives relating thereto.
42
Principle 2 – Structure the Board
to be Effective and Add Value
Board composition
The Company’s Constitution provides for a minimum
of three Directors and a maximum of twelve Directors
on the Board. As at the date of this statement, the
Board comprises eleven Directors, including nine
Non-Executive Directors and the Managing Director
& Chief Executive Officer.
The Non-Independent Directors in office are:
Mr Kerry Stokes AC, Chairman
Mr James Warburton, Managing Director &
Chief Executive Officer
Mr Peter Gammell, Director
Mr Ryan Stokes, Director
The Independent Directors in office are:
Mr John Alexander, Director
Ms Colette Garnsey OAM, Director
Ms Teresa Dyson, Director
Mr David Evans, Director
Mr Jeffrey Kennett AC, Director
Mr Michael Malone, Director
Mr Michael Ziegelaar, Director
The qualifications, experience, expertise and period
in office of each Director of the Company at the date
of this Annual Report are disclosed in the Board of
Directors section of this Annual Report on pages
35 to 38.
Board independence
The Board comprises a majority of Independent
Directors, with four Non-Independent Directors
and seven Independent Directors since Ms Colette
Garnsey’s appointment. During the period of the
financial year prior to Ms Garnsey’s appointment, the
Board comprised four Non-Independent Directors and
six Independent Directors.
In determining whether a Director is independent, the
Board conducts regular assessments and has regard to
whether a Director is considered to be one who:
is a substantial shareholder of the Company or an
officer of, or otherwise associated directly with, or
represents or has been within the last three years
an officer or employee of a substantial shareholder
of the Company;
receives performance-based remuneration
(including options or performance rights) from, or
participates in an employee incentive scheme of,
the entity;
is, or has previously been, employed in an executive
capacity by the Company or another Group
member, and there has not been a period of at least
three years between ceasing such employment and
serving on the Board;
has within the last three years been a principal of
a material professional advisor of, or a material
consultant to, the Company or another Group
member, or an employee materially associated with
the service provider;
is a material supplier or customer of the Company
or other group member, or an officer of or
otherwise associated directly or indirectly with a
material supplier or customer; or
has a material contractual relationship with the
Company or another group member other than as
a Director.
has been a director of the entity for such a period
that their independence from management and
substantial holders may have been compromised.
The Board determines the materiality of a relationship
on the basis of fees paid or monies received or paid
to either a Director or an entity which falls within the
independence criteria above. If an amount received
or paid may impact the Earnings Before Interest, Tax,
Depreciation and Amortisation (EBITDA) of the Group
in the previous financial year by more than 5 per cent,
then a relationship will be considered material.
In the Board’s view, the Independent Directors referred
to above are free from any interest, position or other
relationship that might, or reasonably be perceived to,
influence, in material respect the capability to bring an
independent judgement to bear on issues before the
Board and to act in the best interests of the Company
as a whole rather than in the interests of an individual
security holder or other party.
Mr Michael Ziegelaar is a partner at Herbert Smith
Freehills, a law firm which provides certain legal
services to the Company. The legal services provided
by Herbert Smith Freehills are not considered material
having regard to the principles above and Mr Ziegelaar
is not involved in providing the services. The Board is
satisfied that Mr Ziegelaar’s role with Herbert Smith
Freehills does not interfere with the independent
exercise of his judgment as a Non-Executive Director
of the Company.
The Board has assessed that the consultancy
agreement under which Mr Jeff Kennett AC provides
on-air services to the Company is not a material
contractual relationship according to the principles and
threshold for materiality above. The Board is satisfied
that Mr Kennett’s provision of on-air services does not
interfere with the independent exercise of his judgment
as a Non-Executive Director of the Company.
43
Seven West Media Limited Annual Report 2019Governance0201030405070806 Corporate Governance Statement
For the year ended 29 June 2019
Mr Kerry Stokes AC, Mr Peter Gammell and Mr Ryan
Stokes are not regarded as independent within the
framework of the independence guidelines set out
above because of their positions, or in the case of
Mr Gammell, former position, within Seven Group
Holdings Limited, which is a major shareholder of
Seven West Media Limited. Due to his position as
Managing Director & Chief Executive Officer, Mr James
Warburton is not considered to be independent.
Chairman
The roles of the Chairman and Chief Executive Officer
are separate. Mr Kerry Stokes AC is the Chairman of
the Company. The Chairman is responsible for leading
the Board, facilitating the effective contribution of all
Directors and promoting constructive and respectful
relations between Directors and between the Board
and Management.
The Board acknowledges the ASX Recommendation
that the Chairman should be an Independent Director,
however the Board has formed the view that Mr Stokes
is the most appropriate person to lead the Board as its
Chairman given his experience and skills, particularly
with regard to his long term association with various
media businesses of the Group. In addition, the
Company has a clear conflict of interest protocol to
manage the relationships between the Company and
Seven Group Holdings Limited.
Board skills, experience and expertise
Each Director brings a range of personal and
professional experiences and expertise to the Board.
The Board seeks to achieve an appropriate mix of skills,
tenures and diversity, including a deep understanding
of the media industry across multiple channels, as well
as corporate management and operational, financial
and safety matters. Directors devote significant time
and resources to the discharge of their duties.
Company’s Purpose and Strategic Objectives
The Board reviewed the Company’s purpose and
strategic objectives during the year and the Company’s
execution against the strategy disclosed in the 2018
Annual Report in consultation with Management. The
Board determined to continue the velocity of the
Company’s rapid transformation and its pursuit and
resourcing of growth opportunities in production and
digital media by maintaining a consistent approach to
the Company’s strategy. The Board has approved the
Company’s purpose as driving shareholder value by
“delivering engagement and value through powerful
storytelling”. The Board also approved the following
areas as strategic objectives for the Company to
achieve this purpose and underpin the Company’s
economic sustainability:
1. Focus on the Core
Improve ratings and revenue performance.
Grow returns on content investment.
Create, secure and curate the best local and
international content.
Maximise the return on our content investment
through every window and overseas sale.
2. Transform the Operating Model
Deliver on operating cost saving targets.
Drive efficiencies in existing assets.
Partner with competitors in non-competitive areas
to improve profitability.
Evolve to a leaner and more agile operating model
while protecting content quality.
3. Grow New Revenue Streams
Drive greater digital adoption and yield.
Introduce new content monetisation formats.
Invest in data, automation and targeted advertising
to maximise inventory yield.
Invest in adjacent verticals where we can leverage
the power of our assets.
4. Capital Management
Prudent capital and balance sheet management to
sustain future development of the Company.
5. Culture
Enhancing alignment of the Company’s culture to
drive innovation and change through technology
and to continue to reduce the Company’s cost
base.
Board Skills Matrix
The Board has developed a Board Skills Matrix
reflecting the desired skills and experience required
to be able to deliver on the strategic objectives of
the Company. The Board believes that these skills
and experiences are well-represented by its current
composition.
The Board Skills Matrix is set out in two parts. The first
table outlines the desired industry specific skills and
experience, which continues to evolve given the rapid
changes in the media industry, and the second table
outlines the depth of general corporate, executive
and Director experience which are appropriate for
the Company. The tables also outline the percentage
of current directors possessing those skills and
experience.
44
Skills and Experience
Percentage
Skills and Experience
Media industry leadership
73%
Accounting and treasury
Percentage
82%
Senior executive or Board level
experience in the media industry,
including in-depth knowledge of the
legislative and regulatory framework
governing this industry.
Banking, finance, asset and capital
management
82%
Senior executive or Board level
experience and understanding of
banking markets and commercial
financing arrangements as well as
strategic planning and oversight
of asset allocation and capital
management.
Marketing, sales and product
distribution and servicing
Senior executive or Board level
experience in delivering product
offerings to market, including
marketing, branding and optimising
sales processes and product
distribution systems.
Investment, mergers and
acquisitions, venture capital and
entrepreneurship
Senior executive or Board level
experience in analysis and
identification of business and market
opportunities as well as execution in
relation to investment, mergers and
entrepreneurial activities.
Technology, digital media and
transformation
Senior executive or Board level
experience in relation to digital
media and transformation,
information management,
information technology and the
oversight of implementation of
major technology projects.
Senior executive or equivalent
experience in financial accounting
and reporting, corporate finance,
internal financial controls and an
ability to probe the adequacies of
financial risk controls.
Corporate governance and
organisation management
Commitment to the highest
standards of corporate governance,
including experience within an
organisation that is subject to
rigorous governance and regulatory
standards.
100%
82%
Legal, regulation and compliance
91%
Senior executive or Board level
experience in compliance and
knowledge of legal and regulatory
requirements.
Risk management and audit
100%
Senior executive or Board level
experience in identification,
management and oversight of
material corporate risks and audit,
including ability to monitor risk and
compliance.
WHS, human resource management
and remuneration
100%
Board remuneration committee
membership or Senior executive
experience relating to workplace
health and safety, diversity and
inclusion, managing people and
remuneration, including incentive
arrangements and the legislative
framework governing employees
and remuneration.
91%
55%
CEO and Board level experience
100%
Significant business experience and
success at a senior executive level.
45
Seven West Media Limited Annual Report 2019Governance0201030405070806 Corporate Governance Statement
For the year ended 29 June 2019
Remuneration & Nomination Committee
The Board has established a Remuneration &
Nomination Committee comprised of the following
members, all of whom are Independent Directors
except for Mr Ryan Stokes:
Mr John Alexander (Chairman)
Mr David Evans
Mr Jeffrey Kennett AC
Mr Ryan Stokes
The Remuneration & Nomination Charter* provides
that the Committee must consist of a minimum
of three members and must have a majority of
Independent Directors, all of whom must be Non-
Executive Directors.
Attendance at Committee meetings by management
is at the invitation of the Committee. Directors who
are non-Committee members may also attend any
meeting of the Committee by invitation.
The Chairman of the Committee reports to the
Board on the Committee’s considerations and
recommendations. Further details concerning the
Remuneration & Nomination Committee’s role in
relation to Board appointments are set out in this
Corporate Governance Statement under the heading
“Principle 1 – Lay Solid Foundations for Management
and Oversight”, and under “Principle 8 –Remunerate
Fairly and Responsibly” in relation to its role regarding
the Company’s remuneration arrangements.
Director induction and ongoing training
As part of the induction process, Board appointees
attend a briefing with the Chairman, meet with the
Company Secretary about the Company’s corporate
governance framework, visit key business sites and
meet with Company Executives. In addition to an
induction process for new Director appointments,
from time to time, Directors attend external education
seminars and peer group meetings regarding
regulatory and compliance developments. The
Company arranges presentations to the Board by
Executives to update the Directors on the Group’s
business activities, as well as industry and regulatory
developments.
The Director induction and ongoing training programs
are reviewed to consider appropriate opportunities
for Director development having regard to the desired
skills and competencies for Board members as well as
emerging governance issues such as digital disruption,
IT project governance and cyber security. During
the year Directors were briefed on regulatory and
reporting developments, including changes to the
ASX Corporate Governance Principles and accounting
standards, as well as the implementation of risk
management programs and culture and behaviour
reviews and initiatives across the Group.
Effective functioning of the Board
The Board, under the terms of appointment of
Directors and by virtue of their position, is entitled to
access, and is provided with, information concerning
the Group needed to discharge its duties efficiently.
Directors are entitled, and encouraged, to request
additional information if they believe that is necessary
to support informed decision making. Directors
are able to obtain independent professional advice
to assist them in carrying out their duties, at the
Company’s expense.
Principle 3 – Instil a Culture of Acting
Lawfully, Ethically and Responsibly
Core Values
In accordance with its Charter, the Board has approved
the core values of the Company below which function
as guiding principles and expectations for behaviour
and the culture the Board and Management are
seeking to embed across all businesses within the
Group to assist in the achievement of the Company’s
purpose and strategic objectives set out under
Principle 2.
The Company’s core values have been determined
following Management workshops, feedback from
employees and presentation to the Board. The
Company’s core values are represented as motivational
“catch-cries” which are displayed graphically at the
Company’s workplaces and promulgated to staff by
Management, including across the Company’s internal
communications platforms and forums, and serve
as reference points for engagement between staff.
The Company’s values and the behaviours required
to embody these values have been included in the
Company’s performance development and assessments
framework for employees for this financial year. The
Board and Management consider that meaningful
adoption of these values remains a key factor in the
establishment of a high-performance culture across the
Company.
Connection – “One connected team”
Internal connection means a focus on achieving the
best outcome for the Group as a whole. For our people
to work with trust, integrity, positivity and without self-
interest. The external connection that we are seeking
to embed is a focus on the changes that are rapidly
occurring in the media environment. This means
questioning what we do and how we do it to ensure
that it is reflective of our audience’s and customers’
changing needs.
46
Accountability – “Just own it”
Holding ourselves, and each other, accountable for
delivering results and meeting our commitments. As
we work towards the transformation of our business,
our Management team must hold themselves and their
staff accountable for achieving our key goals along the
way.
Creativity/Passion – “Here to inspire”
This value reflects the creativity and passion that is key
to our long-term success but is also about ensuring
that creative effort is focused on our audience and
customers. This is also recognition that we are striving
for excellence and the retention of leadership positions
by each of our core businesses.
Code of Conduct and other Company policies
The Board has adopted a Code of Conduct for
Directors* which establishes guidelines for their
conduct in matters such as ethical standards and the
disclosure and management of conflicts of interests.
The Company has adopted a Code of Conduct for
Employees* which provides a framework of ethical
principles for conducting business and dealing with
customers, employees and other stakeholders. The
Code sets out the responsibilities of employees in
regard to the Company’s commitment to workplace
safety and employees’ fulfilment of their work duties
and compliance with Company policies. The Code
requires employees to maintain confidentiality of
confidential Company information, avoid conflicts of
interest, not misuse Company property or accept or
offer inappropriate gifts.
Material breaches of the Codes of Conduct for
Directors and Employees are reported to the Board.
The Board has implemented a number of other
policies and procedures to maintain confidence in the
Company’s integrity and promote ethical behaviour
and responsible decision making, including the
following:
Continuous Disclosure policy*
Share Trading policy*
Group Editorial policy*
Diversity policy*
Whistleblower policy*
Fraud, Anti-Bribery and Corruption Policy*
The Company’s Share Trading policy establishes the
governing principles for trading in Company shares
by Directors, Executives and staff. The Company’s
Whistleblower policy, which includes an external
reporting ‘hotline’, encourages the reporting and
investigation of unethical and unlawful practices and
matters of concern. The Company’s Fraud, Anti-
Bribery and Corruption policy prohibits all Company
Directors, employees, contractors and business
partners giving bribes or other improper payments or
benefits to public officials and material breaches of the
policy must be reported to the Board and the Audit &
Risk Committee.
The Company requires compliance with Company
policies by staff under the terms of their employment
and carries out training of employees in relation to its
policies and procedures.
Principle 4 – Safeguard the
Integrity of Corporate Reports
Audit & Risk Committee
As at the date of this statement, the Committee
comprised the following members, all of whom are
Independent Directors except for Mr Peter Gammell
and all of whom are non-executives:
Ms Teresa Dyson (Chairman of the Committee)
Mr David Evans
Mr Peter Gammell
Mr Michael Malone
Mr Michael Ziegelaar
Mr Michael Ziegelaar was appointed to the Audit &
Risk Committee effective from 12 December 2018 and
brings further business, legal, regulatory, compliance
and risk management expertise to that Committee.
The Audit & Risk Committee has adopted a formal
Charter* which is available on the Company’s website.
The Committee’s key responsibilities in respect of its
audit function are to assist the Board in fulfilling its
responsibilities in relation to:
the accounting and financial reporting practices of
the Company and its subsidiaries;
the consideration of matters relating to the internal
controls and systems of the Company and its
subsidiaries;
reviewing the process to verify the integrity of any
periodic corporate report the Company releases to
the market that is not audited or reviewed by the
External Auditor;
the identification and management of financial and
non-financial risk; and
the examination of any other matters referred to it
by the Board.
47
Seven West Media Limited Annual Report 2019Governance0201030405070806 Corporate Governance Statement
For the year ended 29 June 2019
The Audit & Risk Committee is also responsible for:
making recommendations to the Board on the
appointment (including procedures for selection),
and where necessary, the replacement of the
External Auditor;
evaluating the overall effectiveness of the external
audit function through the assessment of external
audit reports and meetings with the External
Auditors;
reviewing the External Auditor’s fees in relation
to the quality and scope of the audit with a view
to ensuring that an effective, comprehensive and
complete audit can be conducted for the fee; and
reviewing the External Auditor’s fees for non-
audit work and assessing whether non-audit
services provided by the External Auditor are
consistent with maintaining the External Auditor’s
independence.
Attendance at Committee meetings by management
is at the invitation of the Committee. Directors who
are non-Committee members may also attend any
meeting of the Committee by invitation. The Chairman
of the Committee reports to the Board on the
Committee’s considerations and recommendations.
The Audit & Risk Committee’s key responsibilities in
respect of its risk function are set out below under
“Principle 7 – Recognise and Manage Risk”.
External Audit function
It is the policy of The Audit & Risk Committee meets
periodically with the External Auditors without
management being present.
Each reporting period, the External Auditor provides
an independence declaration in relation to the audit.
Additionally, the Audit & Risk Committee provides
advice to the Board in respect of whether the provision
of non-audit services by the External Auditor are
compatible with the general standard of independence
of auditors imposed by the Corporations Act.
The Company’s External Auditor attends all Annual
General Meetings and is available to answer
shareholders’ questions about the conduct of the
audit and the preparation and content of the Auditor’s
report.
Declarations by the Managing Director & Chief
Executive Officer and Chief Financial Officer
Before the Board approves the financial statements
for each of the half year and full year, it receives from
the Managing Director & Chief Executive Officer and
the Chief Financial Officer a written declaration that,
in their opinion, the financial records of the Company
have been properly maintained and the financial
statements are prepared in accordance with the
relevant accounting standards and present a true and
fair view of the financial position and performance
of the consolidated group. These declarations also
confirm that these opinions have been formed on
the basis of a sound system of risk management and
internal compliance and control which is operating
effectively.
To assist the Managing Director & Chief Executive
Officer and the Chief Financial Officer in making their
declarations to the Board in relation to the for each of
the half-year and full year, and to ensure integrity in
corporate reporting and good governance, a detailed
questionnaire is distributed to senior management
across the Group, including business unit Chief
Executives and business unit Chief Financial Officers as
well as other selected key senior managers, requiring
confirmation from each of them that financial and
accounting controls have been in place and adhered
to, Company codes or policies have not been
breached, risks have been appropriately managed, and
that any matters requiring further consideration by
senior group management are disclosed.
The required declarations from the Managing Director
& Chief Executive Officer and Chief Financial Officer
have been given for the half year ended 29 December
2018 and the financial year ended 29 June 2019.
Verification of Integrity of Periodic
Corporate Reports
Corporate reports which are not audited or reviewed
by the external auditor are prepared by Senior
Executive Management by reference to company
records and systems, with external professional
assistance where appropriate. Such reports, as are
included in the non-audited sections of this Annual
Report, are submitted to a Committee or the Board for
consideration. The detailed questionnaire distributed
to senior management across the Group as part of the
Company’s periodic reporting procedures, referred to
above, is a feature of the verification process in relation
to corporate reporting on the Company’s policies and
compliance.
48
Principle 5 – Make Timely and
Balanced Disclosure
The Company is committed to complying with the
disclosure obligations of the Corporations Act and the
Listing Rules of the ASX and has adopted a Continuous
Disclosure Policy*.
Media releases, half yearly and yearly financial reports
and results presentations are lodged with ASX and
upon confirmation of receipt by ASX, they are posted
to the Company’s website.
In order to protect against inadvertent disclosure of
price sensitive information, the Company imposes
communication ‘blackout’ periods for financial
information between the end of financial reporting
periods and the announcement of results to the
market.
The Board receives copies of all announcements under
Listing Rule 3.1 promptly after they have been made.
The Company’s website
The Company’s website www.sevenwestmedia.com.
au provides various information about the Company,
including:
Overviews of the Company’s operating businesses,
divisions and structure;
Biographical information for each Director;
Copies of the following:
— Board and Committee Charters;
— Corporate Governance Policies;
— Annual Reports and Financial Statements; and
— Announcements to ASX;
— Security price information;
— Contact details for the Company’s Share
Registry; and
— Details concerning the date of the Annual
General Meeting, including the Notice of
Meeting, when available.
Principle 6 – Respect the
Rights of Security Holders
Principle 7 – Recognise
and Manage Risk
Communications with security holders
As disclosed in the Shareholder Communication
Policy*, the Board aims to ensure that security holders
are informed of all major developments affecting
the Company’s state of affairs and that there is an
effective two-way communication with its security
holders facilitated via the Company’s Investor Relations
function. The Company adopted a communications
strategy that promotes effective communication
with security holders principally through ASX
announcements, the Company website, the provision of
the Annual Report, including the financial statements,
and the Annual General Meeting (and any extraordinary
meetings held by the Company) and notices of general
meetings. Shareholders are encouraged to participate in
general meetings and are invited to put questions to the
Chairman of the Board in that forum.
Security holders are given the option to receive
communications from, and to send communications
to, the Company electronically, to the extent
possible. The Board continues to review its channels
of communications with security holders for cost
effectiveness and efficiencies, including using
electronic delivery systems for security holder
communications where appropriate. The Company
continues to implement campaigns to encourage
security holders to elect to receive all security holder
communications electronically to help reduce the
impact on the environment and costs associated with
printing and sending materials by post.
It is the Company’s policy that all substantive
resolutions at a meeting of security holders are
decided by a poll rather than by a show of hands.
Risk oversight and management
The Board recognises that the management of
financial and non-financial risk is an integral part
of its operations and has established policies and
procedures for the oversight and management of
material business risks, including the establishment
of the Audit & Risk Committee. Details regarding the
Committee are set out under “Principle 4 – Safeguard
the Integrity of Corporate Reports”.
The Board also believes a sound risk management
framework should be aimed at identifying and
delivering improved business processes and
procedures across the Group which are consistent with
the Group’s commercial objectives.
Under the Audit & Risk Committee’s Charter*, the
Committee’s key responsibilities in respect of its risk
function are to:
Oversee, evaluate and make recommendations
to the Board in relation to the adequacy and
effectiveness of the risk management framework
and the risk management systems and processes in
place, and be assured and in a position to report to
the Board that all material risks have been identified
and appropriate policies and processes are in place
to manage them;
Review and approve management’s annual report
on the effectiveness of the risk management
systems and internal control framework;
Review reports from management on new and
emerging sources of financial and non-financial risk
and the risk controls and mitigation measures that
management has put in place to deal with those
risks;
49
Seven West Media Limited Annual Report 2019Governance0201030405070806 Internal Control Framework – Risk Assurance
& Internal Audit
The Company has established a Risk Assurance
& Internal Audit function to evaluate and improve
the effectiveness of the Company’s governance,
risk management and internal control processes.
Functional responsibility for Risk Assurance & Internal
Audit resides with the Head of Risk Assurance &
Internal Audit who reports to the Chairman of the
Audit & Risk Committee and has access to the
Company’s records, information systems, properties
and personnel in order to conduct its activities. The
Audit & Risk Committee reviews and approves Risk
Assurance & Internal Audit’s plans and resourcing as
well as monitors its independence, performance and
management’s responsiveness to its findings and
recommendations.
During the year, the Head of Risk Assurance & Internal
Audit presented detailed Internal Audits and Risk
reviews to the Committee regarding the effectiveness
of the Company’s management of its material business
risks, in accordance with the approved Risk Assurance
& Internal Audit plan. Focus areas of the 2019 Risk
Assurance & Internal Audit plan included the review
of deployment of major IT projects, business case
and rights management reviews, and enhancing the
Company’s employee and contractor management
procedures.
Workplace Safety
The Company is committed to providing a safe
workplace for all and maintains comprehensive
workplace safety policies and systems which are
overseen by the Group Safety & Wellness Manager.
These polices are promulgated to staff through
induction, training, the Company’s intranet as well
as through Workplace Health & Safety Committees
at each business premises. Consultative workplace
safety arrangements, ranging from formal quarterly
health and safety committee meetings to other agreed
arrangements, have been put in place at each key
business premises.
Corporate Governance Statement
For the year ended 29 June 2019
Review, at least annually, the Company’s risk
management framework to satisfy itself that it
continues to be sound and effectively identifies all
areas of potential risk, and reports to the Board
regarding any recommended changes to the
Company’s risk management framework;
Review, and make recommendations to the Board
in relation to, the Company’s insurance program
and other risk transfer arrangements having regard
to the Company’s business and the insurable risks
associated with it, and be assured that appropriate
coverage is in place;
Monitor compliance with applicable laws and
regulations, review the procedures the Company
has in place to ensure compliance and be assured
that material compliance risks have been identified;
Establish procedures for the receipt, retention and
treatment of complaints received by the Company
regarding fraud or non-compliance with applicable
laws and regulations and the confidential,
anonymous submission by employees of the
Company of any concerns regarding business
practices; and
Review and make recommendations to the Board
in relation to any incidents involving fraud or other
breakdown of the Company’s internal controls.
The Board requires management to design and
implement a risk management and internal control
system to manage the Company’s material business
risks and report to it on the management of those
risks. During the reporting period, management
reported to the Board as to the effectiveness of the
Company’s management of its material business risks.
During the 2019 financial year, the Committee
conducted periodic as well as the annual review of the
Company’s risk management framework and satisfied
itself that the framework continues to be sound and
effectively identifies potential risks.
Risk Management Policy
The Board has adopted a Risk Management Policy
consistent with Australian Standard ISO 31000:2009
and Principle 7 of the ASX Recommendations.
The group-wide risk profile covers the key revenue,
content, product/technology and people risks of
the Company and is prepared by the Head of Risk
Assurance & Internal Audit in consultation with key
executives across the business. Throughout the year,
the Audit & Risk Committee reviews with management
the group-wide risk profile and the success of the
risk mitigation strategies in order to satisfy itself that
management is operating within the risk appetite
set by the Board. External advice is obtained as
appropriate. The key risks identified by Management
and mitigation actions in place are regularly updated
and reported to the Audit & Risk Committee and
periodically to the Board.
50
Management provide leadership by promoting
a culture of safety and wellness, risk awareness,
mitigation and injury prevention. Regular workplace
safety and wellness updates are provided to
department executives and the Board. Additionally, to
support health and well-being, the Company provides
a calendar of free wellness activities including yoga,
pilates, mediation, bootcamp, flu vaccinations and
confidential external counselling service for employees
and their immediate families.
Environment
Environmental risks are considered as part of the
Company’s risk assessment processes. Environmental
risks relating to the use and storage of any hazardous
materials are identified and managed through
regular inspections of business premises, reviews of
compliance and emergency procedures, and advice
from external consultants on environmental matters.
The Company is mindful of climate change and
managing the environmental impact of its operations.
For more information on the Company’s environmental
practices and the Company’s efforts to minimise the
environmental footprint of its businesses, please refer
to page 26 of this Annual Report.
Material risks
Under the risk framework described above the
Company has identified revenue, content, and
product/technology risks which it manages and
mitigates. Each of the foregoing material business
risks is monitored and managed by appropriate
Senior Management within the Company. Where
appropriate, external advisers are engaged to assist
in managing the risk. More detail concerning these
risks, the Company’s economic sustainability risks
and how it manages those risks is set out under the
headings “Risk Management” and “Risk Management
Framework” on page 25 of this Annual Report.
The Company does not believe it has any material
exposure to environmental or social sustainability
risks. Commentary on the Company’s environmental
and human capital related initiatives as well as its
community engagement is provided on pages 25 to 34
of this Annual Report.
Strategy
The Company has continued its strategic focus on
responding rapidly to the challenges and opportunities
in its marketplace. For more information on the
Company’s strategic framework which underpins the
Company’s economic sustainability please refer to
pages 4 to 5 of this Annual Report.
Principle 8 – Remunerate Fairly and
Responsibly
Remuneration policy
The objective of the remuneration policy for
employees is to ensure that remuneration packages
properly reflect the duties and responsibilities of the
employees and that remuneration is at an appropriate
but competitive market rate which enables the
Company to attract, retain and motivate people of
the highest quality and with the best skills from the
industries in which the Company operates.
Remuneration & Nomination Committee
To assist in the adoption of appropriate remuneration
practices, the Board has delegated specific
responsibilities to the Remuneration & Nomination
Committee. Details regarding the Committee are set
out under “Principle 2 – Structure the Board to be
Effective and Add Value”.
The primary responsibilities of the Committee which
relate to remuneration are:
To review and advise the Board on Directors’ fees
and the remuneration packages, including equity
incentive grants, of the Managing Director & Chief
Executive Officer, Chief Executives and senior
executives of the Group;
To ensure the company has a rigorous
and transparent process for developing its
remuneration policy and for fixing the remuneration
packages of directors and senior executives, in light
of the objective that the company’s remuneration
framework is aligned with the company’s strategic
objectives, values, purpose and risk appetite;
To provide advice and support and serve as a
sounding-board for the Managing Director & Chief
Executive Officer and Board in human resource and
remuneration-related matters;
To advise on succession planning and employee
development policies; and
To review and monitor the implementation of, the
Company’s remuneration framework to confirm it:
— encourages and sustains a culture aligned with
the Company’s values;
— supports the Company’s strategic objectives
and long-term financial soundness; and
— is aligned with the Company risk management
framework and risk appetite.
51
Seven West Media Limited Annual Report 2019Governance0201030405070806 Hedging
It is the Company’s policy that employees (including
KMP) are prohibited from dealing in Seven West
Media securities if the dealing is prohibited under
the Corporations Act. Therefore, in accordance with
this policy, all KMP are prohibited from entering into
arrangements which operate to limit the executives’
economic risk in connection with Seven West Media
securities which are unvested or remain subject to a
holding lock.
This statement has been approved by the Board and is
current as at 20 August 2019.
Corporate Governance Statement
For the year ended 29 June 2019
It is the practice for the Managing Director &
Chief Executive Officer to attend meetings of the
Remuneration & Nomination Committee to report
on, or seek approval of, senior Group Management’s
remuneration, but he is not present during meetings
of the Committee (or the Board) when his own
performance or remuneration are being discussed or
reviewed.
Remuneration of Directors and Senior
Executives
The aggregate remuneration for Non-Executive
Directors is approved by shareholders. Fees for
Directors are set out in the Remuneration Report on
page 78.
The Committee reviews remuneration packages
and policies applicable to the Managing Director &
Chief Executive Officer and senior executives. This
includes share schemes, incentive performance
packages, superannuation entitlements, retirement
and termination entitlements, fringe benefits and
insurance policies. External advice is sought directly
by the Committee, as appropriate. The Committee
also directly obtains independent market information
on the appropriateness of the level of fees payable to
Non-Executive Directors and makes recommendations
to the Board.
The Remuneration & Nomination Committee met after
the end of the financial year to review and recommend
to the Board performance-related remuneration for
Key Management Personnel (“KMP”). This process is
summarised in the Remuneration Report on pages 64
to 67. The Remuneration Report also sets out details of
Directors’ and executives’ remuneration, as well as the
Board’s policy for Non-Executive Directors and senior
executives’ remuneration throughout sections
6 to 7.
52
Directors’ Report
For the year ended 29 June 2019
Principal activities
The principal activities of the Group during the
financial year were free to air television broadcasting,
newspaper and magazine publishing and online and
radio broadcasting.
There were no significant changes in the nature of the
Group’s principal activities during the financial year.
Business strategies, prospects and likely
developments
Information on the Group’s operations and the results
of those operations, financial position, business
strategies and prospects for future financial years has
been included in the “Review of Operations” section
on pages 10 to 24. This section also refers to likely
developments in the Group’s operations in future
financial years and the expected results of those
operations.
Information in the Review of Operations section is
provided to enable shareholders to make an informed
assessment about the operations, financial position,
business strategies and prospects for future financial
years of the Group.
Significant changes in the state of affairs
Significant changes in the state of affairs of the Group
during the financial year were as follows:
On 21 August 2018, the Company announced that
it had reached an agreement with Prime Media
Group to extend its long- standing program supply
agreement for a further five years from 1 July 2018.
The agreement recognises current market terms
and reflects Seven’s ongoing investment in content
and sporting rights.
On 10 April 2019, the Company announced that it
had finalised the sale of its 50% interest in Yahoo7
to Verizon Media. The Company received $20.75
million in cash for its shares this financial year and
the Company now fully owns and operates all of its
‘direct to consumer’ digital products.
In the opinion of the Directors there were no other
significant changes in the state of affairs of the Group
that occurred during the financial year.
The Directors present their report together with
the consolidated financial statements of the Group
consisting of Seven West Media Limited and the
entities it controlled at the end of, or during, the year
ended 29 June 2019 and the auditor’s report thereon.
Board
The following persons were directors of Seven West
Media Limited during the whole of the financial year
and up to the date of this report, unless otherwise
stated:
KM Stokes AC – Chairman
TG Worner – Managing Director & Chief Executive
Officer (resigned 16 August 2019)
JR Warburton – Managing Director & Chief Executive
Officer (appointed 16 August 2019)
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM (appointed 12 December 2018)
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
Particulars of their qualifications, experience, special
responsibilities and any directorships of other listed
companies held at any time in the last three years
are set out in this Annual Report under the headings
“Board of Directors” and “Corporate Governance
Statement” on pages 35 and 39 and form part of this
report.
Warren Coatsworth is the Company Secretary. He was
appointed to the role on 24 April 2013.
Mr Coatsworth is a solicitor holding a current practising
certificate with degrees in Arts and Law (Hons) from
the University of Sydney. He holds a Masters of Law in
Media and Technology Law from the University of New
South Wales as well as a Graduate Diploma in Applied
Corporate Governance. He is a qualified Chartered
Company Secretary and a Fellow and member of the
Governance Institute of Australia.
Mr Coatsworth has been Company Secretary of Seven
Group Holdings Limited since April 2010 and Company
Secretary of Seven Network Limited since July 2005.
He has extensive experience as Legal Counsel at the
Seven Network advising broadly across the company,
and was formerly a solicitor at Clayton Utz. Included
on Doyles Guide’s list of Leading In-House Technology,
Media & Telecommunications Lawyers in Australia for
2016 and 2017.
53
Seven West Media Limited Annual Report 2019Directors’ Report0201030405070806 Directors’ Report
For the year ended 29 June 2019
Matters subsequent to the end of the financial year
Mr James Warburton was appointed Managing Director & Chief Executive Officer of the Company on 16 August
2019, following Mr Tim Worner’s resignation from that role and the Board as of the same date. For further
information, please refer to the announcement lodged by the Company with ASX on 16 August 2019.
Meetings of directors
The number of meetings of the Company’s Board of Directors and of each Board Committee held during the
year ended 29 June 2019, and the numbers of meetings attended by each Director were:
Directors
KM Stokes AC
TG Worner #
JR Warburton ^
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM *
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
Meetings of Directors
Audit and Risk
Remuneration
and Nomination
(a)
(b)
(a)
(b)
(a)
(b)
8
8
-
8
8
8
8
5
8
8
8
8
8
8
-
8
8
6
8
4
8
7
8
8
-
8
-
2
8
8
8
1
8
8
8
8
-
8
-
2
8
7
8
1
8
8
8
8
1
4
-
13
2
13
-
-
13
-
13
4
1
4
-
13
2
12
-
-
13
-
13
4
(a) Number of meetings held during the year while the person was a Director.
(b) Number of meetings attended. Please note Directors may attend meetings of Committees of which they are not a
formal member, and in these instances, their attendance is also included above.
# Resigned as MD & CEO on 16 August 2019.
^ Appointed MD & CEO on 16 August 2019.
* Appointed a Director on 12 December 2018.
Performance rights and options
During the financial year, there were not any rights issued over an equivalent number of unissued fully paid
ordinary shares in the Company.
At the date of this report, the following rights to acquire an equivalent number of ordinary shares in the
Company under the various employee equity schemes are outstanding:
Share Plan
Rights on Issue
Expiry Date
Seven West Media Equity Incentive Plan
Seven West Media Equity Incentive Plan
(2018 LTI)
(2019 LTI)
3,634,401
1 September 2020
1,974,298
1 September 2021
Rights were granted for nil consideration. None of the rights currently on issue entitle the holder to participate in
any share issue.
During the financial year, 814,615 of the 2016 LTI plan rights vested and 2,443,836 rights lapsed.
There are no other unissued shares or interests under options as at the date of this report.
For names of the Directors and Key Management Personnel who currently hold rights through these schemes,
refer to the Remuneration Report.
54
Final ordinary dividend for the year ended 30 June 2018
nil cents (2017 - 2 cents)
Interim ordinary dividend for the year ended 29 June 2019
was nil cents (2018 - nil cents)
2019
$
-
-
-
2018
$
30,161
-
30,161
In addition to the above dividends, since the end of the 2019 financial year the Directors have declared the
payment of a final ordinary dividend of nil cents per share.
Environmental regulation
The Group’s major production facilities do not require
discharge licences under the Environmental Protection
Act 1986 and no formal reporting is required to either
the Environmental Protection Authority or the National
Pollutant Inventory.
Directors’ interests in securities
The relevant interests of each Director in shares and
rights issued by the Company, as notified by the
Directors to the ASX in accordance with S205G(1) of
the Corporations Act 2001, at the date of this report
are as follows:
Performance
Rights
Number of
ordinary
shares
Directors
KM Stokes AC
JR Warburton
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
-
-
-
-
-
-
-
-
-
-
-
619,753,734
-
55,768
38,218
927,803
329,216
250,000
75,000
133,000
240,466
10,000
Remuneration report
A remuneration report is set out on the pages
that follow (pages 57 to 82) and forms part of this
Directors’ Report.
Indemnity and insurance of
directors and officers
The Constitution of the Company provides an indemnity
to any current and former Director, Alternate Director
and Secretary of the Company against any liabilities
incurred by that person arising out of the discharge
of duties as an officer of the Company or the conduct
of the business of the Company, including associated
legal costs defending any proceedings relating to that
person’s position with the Company, except where the
liability arises out of conduct involving a lack of good
faith.
As permitted by the Constitution of the Company, the
Company has entered into deeds of access, insurance
and indemnity with each Director as at the end of the
financial year.
No amounts were paid and no actions were taken
pursuant to these indemnities during the year.
During the financial year, the Company paid a premium
in respect of a contract insuring all Directors and
officers (including employees) of the Company and
of related bodies corporate against certain liabilities
specified in the contract. The contract prohibits
disclosure of the nature of the liabilities insured and the
amount of the premium.
55
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 Rounding of amounts
The Group is of a kind referred to in ASIC Instrument
2016/191 and in accordance with that Instrument,
amounts in the consolidated financial statements and
Directors’ Report have been rounded off to the nearest
one thousand dollars unless otherwise stated.
This report is made in accordance with a resolution of
the Directors.
KM Stokes AC
Chairman
Sydney
20 August 2019
Directors’ Report
For the year ended 29 June 2019
Non-audit services
The Company may decide to employ the auditor on
assignments additional to their statutory audit duties
where the auditor’s expertise and experience with the
Company and/or the Group are important.
There were no amounts paid or payable by the
Group to the auditor, KPMG, for non-audit services
provided during the year. The Board of Directors has
considered the position and, in accordance with the
advice received from the Audit and Risk Committee, is
satisfied that the provision of the non-audit services is
compatible with the general standard of independence
for auditors imposed by the Corporations Act 2001.
The Directors are satisfied that the provision of non-
audit services by the auditor 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;
the non-audit services provided do not undermine
the general principles relating to auditor’s
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 decision making capacity for the
group, acting as an advocate of the group or jointly
sharing the risks and rewards.
The Lead auditor’s independence declaration is set out
on page 83 and forms part of the Directors’ Report for
the financial year ended 29 June 2019.
56
Remuneration Report
For the year ended 29 June 2019
Message from the Remuneration
& Nomination Committee
Dear Shareholder
Seven West Media is pleased to present its
Remuneration Report for the 2019 financial year
(FY19) which sets out remuneration information for
Key Management Personnel (KMP) and Non-Executive
Directors.
Significant changes to the Company’s Executive
Remuneration Framework occurred during the
previous financial year to ensure that our incentive
plans appropriately respond to out-performance and
under-performance in the execution of our business
strategy, align with our share performance and are
structured responsibly. We sought and incorporated
feedback on our approach to remuneration from our
shareholders, proxy advisory firms, remuneration
consultants and our management team and we believe
that our Framework considers the long and short-
term returns of our shareholders. This is achieved by
offering contingent reward, most of which is delivered
in equity, by setting challenging Short-Term Incentive
(STI) targets and by ensuring Long-Term Incentive
(LTI) performance measures encourage the delivery of
value to our shareholders.
Overview of FY19 Remuneration and
Performance Outcomes
STI Outcomes
In determining the STI outcomes for FY19, the
Board considers a range of factors which reflect the
challenges and opportunities of leading the Company
sustainably for today and into the future. In what
continues to be a challenging and competitive business
environment, the Company’s financial results returned
a 10.0 per cent decrease in Underlying Group Earnings
Before Interest and Tax (EBIT) earnings to $212.1
million. Group revenue of $1,557.6 million was 4.0 per
cent lower than the prior year, and Group costs of
$1,314.0 million were 2.8 per cent lower than the prior
year.
During the year, we have made solid progress across
key areas of our business, including:
Most watched Network, Channel and Multi-Channel
in the financial year;
Operating efficiency improvements including Group
cost reductions by $38 million;
35 per cent Broadcast Video On-Demand (BVOD)
market viewing share;
7th consecutive year of EBIT growth in Seven
Studios;
Over 300 per cent increase in Digital EBIT
to $15 million;
Unprecedented industrial relations reforms;
Most watched news, breakfast, morning show,
lifestyle show and drama;
Created more than 1,000 hours of scripted, factual,
children’s and reality programming, growing the
catalogue to nearly 9,000 hours;
An increase of 42 per cent in Pacific’s digital
audience, now contributing 30 per cent of its total
advertising revenue;
10 per cent year-on-year increase in the 2019 AFL
audience;
Successful first season production of Australian
Cricket;
New content commissions from Netflix and
Facebook;
The launch of 7NEWS.com.au, producing an
audience already greater than the Yahoo7 joint
venture;
The launch of West Australian Newspapers digital
subscriptions platform; and
Delivered a comprehensive mental health
framework and initiatives.
Despite solid performance against a majority of
metrics in the FY19 Company Scorecard, the STI
gateway did not open. Hence, the Managing Director
and Chief Executive Officer (MD & CEO), Timothy
Worner will not receive an STI award. However, the
Board resolved that, on balance, one Executive KMP
member would receive an STI award delivered 100 per
cent in deferred equity.
57
Seven West Media Limited Annual Report 2019Directors’ Report0201030405070806 Changes to Non-Executive Director Fees
From 1 July 2018, Non-Executive Director fees were
reinstated to the fees in place prior to the reduction
announced at the 2017 AGM. No other changes were
made to Non-Executive Director fees for 2019.
Other Changes to Key Management Personnel and
Non-Executive Directors
Ms Colette Garnsey OAM, Non-Executive Director,
joined the Company on 12 December 2018; and
Mr Clive Dickens, Chief Digital Officer, resigned
from the Company effective 1 May 2019.
Outlook
Looking ahead to 2020, the Board will continue to
test the remuneration arrangements for executives to
ensure that these remain aligned to the remuneration
principles that underpin our Executive Remuneration
Framework with the aim of remaining fit for purpose,
is clear and appropriately connected with our strategic
intent and the expectations of our stakeholders.
On behalf of the Board, I invite you to consider our
Remuneration Report which will be presented to
shareholders for adoption at the 2019 Annual General
Meeting.
Thank you for your ongoing support of Seven West
Media.
Yours faithfully
John Alexander
Remuneration & Nomination Committee Chairman
LTI Outcomes
In FY19, the 2016 LTI Plan reached its test date which
resulted in a partial vesting of 25 per cent of the total
award. More specifically:
The LTI Plan’s Total Shareholder Return (TSR)
hurdle over the last three years was -28.1 per cent,
which was below the 50th percentile vesting
threshold, so none of these 2016 performance
rights vested; and
The LTI Plan’s Diluted Earnings per Share (DEPS)
growth over the last three years vested at the
minimum threshold of 50 per cent (34.52 cents),
so 50 per cent the 2016 DEPS performance rights
vested.
This outcome resulted in a slight increase in actual
pay for the MD & CEO, notwithstanding that Fixed
Remuneration is unchanged and no STI was awarded
in FY19.
Mr Worner’s 2018 and 2019 remuneration is tabled at
Sections 5 and 7 of the Report.
Appointment of New Managing Director and Chief
Executive Officer
Subsequent to the 2019 financial year, Mr Worner
resigned on 16 August 2019 pursuant to his
employment contract providing 12 months’ notice.
Termination payments in respect of notice and any
unvested equity are yet to be determined and will
be subject to future Remuneration Committee and
Board meetings. Final remuneration payments will be
fully disclosed in the Company’s 2020 Remuneration
Report.
The incoming MD & CEO, James Warburton
commenced on 16 August 2019. His remuneration
arrangements include total fixed remuneration of $1.35
million per annum, target STI of 100 percent of total
fixed remuneration with a maximum STI opportunity
of 150 per cent of target STI for FY20, and an upfront
LTI grant up to a maximum of $4.05 million (equivalent
to three years’ annual LTI grant of 100 per cent of
total fixed remuneration) of performance rights to
acquire shares subject to a relative TSR hurdle plus
an individual measure that vests over a total four
year time horizon. Further details of Mr Warburton’s
remuneration arrangements will be reported in 2020.
58
Remuneration ReportFor the year ended 29 June 2019 Table of contents
Remuneration Report 2019 – Audited
1
Introduction
60
6 Executive Remuneration – The Details:
2 FY19 Key Management Personnel
Covered by this Report
3 Executive Remuneration – The Fast Read
4 Remuneration Governance
4.1
Role of the Remuneration
and Nomination Committee
4.2
Members of the Remuneration and
Nomination Committee During FY19
4.3
Services from External Remuneration
Consultants
4.4 Security Trading Policy
5 Executive Remuneration Outcomes
During the FY19 Performance Year
5.1 Executive Remuneration
Earned and Vested
5.2 Summary of STI Outcomes
5.3 Equity Granted to the MD & CEO
and Executive KMP
5.4 MD & CEO and Executive
KMP STI Outcomes
5.5 Summary of LTI Outcomes
60
61
63
63
Composition of Executive Remuneration and
Application of Remuneration Principles
6.1 Executive Remuneration Framework
6.2 Link Between Remuneration Policy and
Company Performance
6.3 FY19 Executive Remuneration Outcomes
6.4 Executive Service Agreements
63
6.5 Non-Executive Director
Remuneration Framework
7 Statutory Remuneration Disclosures for Key
Management Personnel
7.1 Executive Remuneration in detail
(Statutory Disclosures)
7.2 Non-Executive Remuneration in Detail
7.3 Key Management Personnel Equity
Transactions and Holdings
8 Loans and Other Transactions with Key
Management Personnel
64
64
64
64
65
67
67
68
68
68
73
74
75
75
77
77
78
79
82
59
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
1. Introduction
This Report describes the remuneration arrangements for the Key Management Personnel (KMP) of Seven
West Media Limited as defined in AASB 124 Related Party Disclosures, including Non-Executive Directors, the
Managing Director and Chief Executive Officer (MD & CEO), and other Executives (including Executive Directors)
(hereafter referred to in this Report as Executive KMP) who have authority for planning, directing and controlling
the activities of the Group. The KMP for the financial year are set out below.
The information provided in this Remuneration Report has been audited as required by section 308(3C) of the
Corporations Act 2001. It forms part of the Directors’ Report.
2. FY19 Key Management Personnel Covered by this Report
The KMP whose remuneration is disclosed in this year’s Report are:
KMP
Non-Executive Directors (NEDs)
KM Stokes AC
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
Position
Chairman
Director
Director
Director
Director
Director
Director
Director
Director
Director
Term as KMP
Full Year
Full Year
Full Year
Full Year
Full Year
Part Year – Appointed 12 December 2018
Full Year
Full Year
Full Year
Full Year
Managing Director & Chief Executive Officer (MD & CEO) and Executive KMP
TG Worner
KJ Burnette
WO Lynch
KA McGrath
Managing Director &
Chief Executive Officer
Chief Revenue Officer
Chief Financial Officer
Group Executive, People and
Culture
Full Year
Full Year
Full Year
Full Year
BI McWilliam
Commercial Director
Full Year
Former Executive KMP
CR Dickens
Chief Digital Officer
Part Year – Resigned effective 1 May 2019
60
Remuneration ReportFor the year ended 29 June 2019 3. Executive Remuneration – The Fast Read
Key Features
Details of Seven West Media’s Approach
Executive Remuneration in FY19
Further
Information
1. How is Seven
West Media’s
performance
reflected in this
year’s remuneration
outcomes?
Seven’s remuneration outcomes are strongly linked to the delivery of sustainable
shareholder value over the short and long-term.
Section 5
Pages 64-68
Short Term Incentive (STI): The Company’s underlying Earnings Before Interest and
Tax (EBIT) result of $212.1 million fell below the 90 per cent range of budget, and the
STI gateway did not open.
Section 6
Page 68-74
However, the Board determined that one Executive KMP will receive an STI award
delivered 100 per cent in Restricted Shares and deferred for 12 months.
Long Term Incentive (LTI): The three-year performance period for the FY16 LTI
grant completed on 29 June 2019. The 2016 LTI was divided into two components,
with 50 per cent is tested against relative TSR performance and the other 50 per
cent is tested against DEPS targets, both over a three-year period. The Company’s
DEPS performance met target at the threshold of 50 per cent. However, the
Company’s relative TSR performance fell below the median of the comparator
group. An overall 25 per cent of the 2016 LTI award vested for the MD & CEO and
four Executive KMP.
2. What changes
There were no changes made to the Company’s remuneration framework in FY19.
Fixed remuneration levels for the MD & CEO and Executive KMP remain unchanged.
Section 6
Pages 68-69
have been made to
the remuneration
framework in FY19?
3. Are any changes
planned for FY20?
There are no significant remuneration framework changes planned for FY20.
However, in line with previous years, the Board will review and adjust (if necessary)
the threshold and stretch performance levels for the performance objectives
applicable to the STI and LTI awards.
Section 6
Page 68
Following the appointment of the new MD & CEO on 16 August 2019, full
remuneration disclosure will be reported in 2020.
Executive Remuneration Framework
4. What is Seven
West Media’s
remuneration
strategy relative to
the market?
5. What proportion
of remuneration is
“at risk”?
6. Are there any claw-
back provisions for
incentives?
Fixed and variable remuneration strategy is aimed at the median of the market, with
remuneration opportunities for outstanding performance extending up to the upper
quartile of the market.
Section 6
Page 69
Executive KMP remuneration is broadly evenly distributed between fixed
remuneration and on performance which is therefore at risk. The remuneration
package for the MD & CEO is 50 per cent performance-related pay, and for
Executive KMP the remuneration package is 43 per cent performance-related pay.
Section 6
Page 69
Yes. If there is a material financial misstatement, any unvested LTI or deferred STI
awards can be clawed back.
Section 6
Page 70
Short Term Incentives (STI)
7. Are any STI
payments
deferred?
Yes. Typically, 50 per cent of the STI award for the MD & CEO and Executive KMP is
deferred into Restricted Shares which vest after 12 months. However, for FY19, 100
per cent of any awards granted will be delivered in deferred equity. If the Executive
resigns or their employment is terminated for cause before the vesting period ends,
the shares do not vest and are forfeited.
Section 6
Page 70
8. Are STI
payments capped?
Yes. An Executive’s STI is capped at the STI target, achievable only in circumstances
of both exceptional individual and Company performance.
Section 6
Page 70
61
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 Key Features
Details of Seven West Media’s Approach
Long Term Incentives (LTI)
Further
Information
9. What are the
performance
measures for the
LTI?
10. Are there any
restrictions
imposed on
disposal of
LTI awards?
100 per cent subject to relative TSR with an individual performance condition, with
the Board having discretion to ensure vesting outcomes are appropriately aligned to
performance.
Section 6
Pages 71-73
Yes. There is a restriction imposed on the sale and use of shares after vesting until
the earliest of the following:
Section 6
Page 72
The date the holder ceases employment with Seven West Media (subject to Board
discretion);
The one-year anniversary of the vesting date (or subsequent anniversaries if elected
by the award holder); or
The Board determines that the holding lock should be released.
11. Does the LTI
No. There is no re-testing.
have re-testing?
12. Are dividends
paid on unvested
LTI awards?
No. Dividends are not paid on unvested LTI awards. This ensures that Executives
are only rewarded when performance hurdles have been achieved at the end of the
performance period.
Section 6
Page 72
Section 6
Page 73
13. Is the size of
LTI grants
increased in light
of performance
conditions?
No. There is no adjustment to reflect the performance conditions. The grant price for
allocation purposes is not reduced based on performance conditions. Seven uses a
‘face value methodology’ for allocating Performance Rights to each Executive KMP,
being the average share price for the month leading up to grant, discounted for the
assumed value of dividends not paid during the three-year performance period.
Section 6
Pages 71-73
& 79-80
14. Can LTI
No. This is prohibited.
Section 4
Page 64
Section 6
Page 73
For deferred STI awards, shares are purchased on-market. For LTI awards, the Board
has discretion to issue new shares or buy shares on-market.
Section 6
Pages 70 & 73
No. Seven uses Restricted Shares for the deferred STI awards and Performance
Rights for LTI awards.
Section 6
Pages 70 & 72
participants hedge
their unvested
LTI?
15. Does Seven West
Media buy shares
or issue new
shares for share-
based awards?
16. Does Seven West
Media issue share
options?
Executive Service Agreements
17. What is the
Executive KMP termination entitlements are limited to 12 months’ fixed remuneration Section 6
maximum an
Executive can
receive on
termination?
Page 75
62
Remuneration ReportFor the year ended 29 June 2019 The Committee has a strong focus on the relationship
between business performance, risk management and
remuneration. During the year, the Committee met on
five occasions and reviewed and approved or made
recommendations to the Board on matters including:
Remuneration review for the MD & CEO and other
senior Executives (broader than those disclosed
in the Remuneration Report) covered by the
Company’s Remuneration Policy;
The review of the Seven West Media Employee
Share Plan;
The Company’s performance framework (objectives
setting and assessment) and annual variable
remuneration spend;
Performance and remuneration outcomes for key
senior Executives;
Approval of Executive KMP and other senior
Executive appointments and terminations;
The effectiveness of the Company’s Remuneration
Policy;
Succession plans for senior Executives; and
Diversity, employee engagement, and health, safety
and wellbeing.
The Committee reviews its Charter at least once
in each financial year. The Corporate Governance
Statement on page 39 to 52 provides further
information on the role of the Committee.
4.2 Members of the Remuneration and Nomination
Committee During FY19
During FY19, the members of the Remuneration and
Nomination Committee were:
Mr JH Alexander, Chairman
Mr D Evans
Mr JG Kennett, AC
Mr RK Stokes
4. Remuneration Governance
4.1 Role of the Remuneration
and Nomination Committee
The primary objective of the Remuneration and
Nomination Committee (the Committee) is to assist
the Board to fulfil its corporate governance and
oversight responsibilities in relation to the Group’s
people strategy including remuneration components,
performance measurements and accountability
frameworks, recruitment, engagement, retention,
talent management and succession planning.
The Committee’s duties and responsibilities are:
Undertake an annual review of the Company’s
remuneration strategy and Remuneration Policy
to facilitate understanding of the overall approach
to remuneration, and to confirm alignment with
the Company’s business strategy, high standards
of governance and compliance with regulatory
standards;
Review and recommend to the Board for approval,
remuneration arrangements and conditions of
service for the MD & CEO and Executive KMP. The
Committee reviews the arrangements on an annual
basis against the Remuneration Policy, obtaining
independent external remuneration advice where
appropriate;
Establish the policy for the remuneration
arrangements for Non-Executive Directors,
reviewing remuneration arrangements annually
and obtaining independent external remuneration
advice where appropriate. The Committee
recommends to the Board the Non-Executive
Director remuneration, within the aggregate
approved by shareholders;
Undertake an annual review of the Company’s
performance management practices to confirm the
integrity of its processes from designing executive
incentive plans, approval of awards to making
incentive-based payments under such plans. The
Committee establishes the performance hurdles
associated with the incentive plans, and verifies
compliance with vesting or exercise requirements
for equity-based rewards; and
Review and recommend to the Board for approval
the Remuneration Report and any other report
required to be produced for shareholders to meet
regulatory requirements.
63
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 5. Executive Remuneration Outcomes During
the FY19 Performance Year
5.1 Executive Remuneration Earned and Vested
The purpose of this table is to provide a summary
of the actual remuneration outcomes received by
the MD & CEO and Executive KMP in relation to the
FY19 performance year as cash, or in the case of
prior equity awards, the value which vested in FY19.
The final column shows the value of prior equity
awards which lapsed in 2019 (these awards reflect
the 2016 Performance Rights which partially met the
performance hurdles when tested in September 2018).
Only the cash component of the FY19 STI award
appears in this table, as the other component is
deferred. Due to this, the values in this table will
not reconcile with those provided in the statutory
disclosures in Section 7 For example, the statutory
disclosures table has been prepared in accordance
with Australian Accounting Standards (AAS) and
discloses the value of LTI grants which may or may
not vest in future years, whereas this table discloses
the value of LTI grants from previous years which
vested in FY19.
4.3 Services from External Remuneration Consultants
External consultants and advisors are engaged
as needed to provide independent advice. The
requirements for external consultants’ services are
assessed annually in the context of remuneration
matters that the Committee requires to address.
Recommendations provided by external consultants
are used as a guide.
In early FY19, the Committee retained Ernst & Young
(“EY”), an independent remuneration consultant, to
assess TSR performance for the Company’s FY16 Long
Term Incentive Plan. In the course of providing this
information, the Board is satisfied that EY did not make
any remuneration recommendations relating to KMP as
defined by the Corporations Act.
The Company employs in-house remuneration
professionals who provide recommendations to
the Committee and the Board. The Board made
its decisions independently, using the information
provided and with careful regard to the Company’s
strategic objectives, risk appetite and the Seven West
Media Remuneration Policy and principles.
The Company also participates in and uses both the
Mercer Total Remuneration Survey, administered by
Mercer (Australia) Limited, and Aon Hewitt’s Media &
Publishing Industries (Australia) Remuneration Survey
for the purposes of benchmarking executive and
employee remuneration.
4.4 Security Trading Policy
Hedging Prohibition
All deferred equity must remain ‘at risk’ until it
has fully vested. Accordingly, Executives and their
associated persons must not enter into any schemes
that specifically protect the unvested value of equity
allocated. If they do so, then they forfeit the relevant
equity.
64
Remuneration ReportFor the year ended 29 June 2019 Financial
Year
Fixed
Remuneration1
$
Other
Remuneration2
$
Managing Director & Chief Executive Officer
TG Worner
Executive KMP
KJ Burnette
WO Lynch
KA McGrath
BI McWilliam5
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Former Executive KMP
CR Dickens6
Total
2019
2018
2019
2018
2,497,048
2,441,028
1,176,045
1,192,106
666,541
694,106
429,388
446,488
753,547
753,888
430,198
516,652
5,952,767
6,044,268
64,396
89,282
42,906
49,273
35,050
40,344
27,682
27,159
29,961
35,106
27,018
35,128
227,013
276,292
1. Fixed remuneration is the total cost of salary, salary-sacrificed
benefits (including associated fringe benefits tax (FBT)) and an
accrual for annual leave entitlements. The accounting value may
be negative where an Executive’s annual leave balance decreases
as a result of taking more than the leave accrued during the year.
2. Other remuneration includes the cash value of non-monetary
benefits, superannuation, long service leave entitlements and
any fringe benefits tax payable on non-monetary benefits. The
elements of other remuneration are valued consistently with the
equivalent benefits included in the statutory disclosure table in
Section 7 of the Report.
3. Refers to the total value of remuneration earned during FY19,
being the sum of the prior columns.
4. Refers to equity-based plans from prior years that have vested or
been lapsed/ forfeited in the current year. The value is calculated
using the five-day Volume Weighted Average Price (VWAP) of
Company shares on the vesting lapse/ forfeiture date.
5. Excludes cash salaries and fees charged by Seven West Media
Limited to Seven Group Holdings Limited for the provision of
services to Seven Group Holdings by BI McWilliam in a Company
to Company agreement.
6. No other termination benefits were paid to CR Dickens other than
annual leave and long service leave entitlements.
2019
STI Cash
Payment
$
2019
Total Cash
Payments3
$
Prior Year
Equity Awards
Vested during
20194
$
Prior Year
Equity Awards
Lapsed/
Forfeited
during 20194
$
-
2,561,444
302,148
(906,446)
179,400
2,709,710
-
(412,500)
-
1,218,951
72,632
(217,896)
56,688
1,298,067
-
-
701,591
14,042
71,594
806,044
-
44,888
-
38,878
-
36,850
457,070
518,535
783,508
827,872
457,216
588,630
(95,192)
(42,127)
-
-
-
-
-
-
63,916
(191,748)
-
(87,260)
31,958
-
(95,874)
(19,197)
-
6,179,780
484,696
(1,454,091)
428,298
6,748,858
-
(614,149)
5.2 Summary of STI Outcomes
How the Group’s Performance was Assessed
for the 2019 Financial Year
The FY19 STI pool reflects the overall assessment of
Group performance. The framework provides a set of
Key Performance Indicators (KPIs) which are used to
assess the quality of the outcomes delivered against
the Group’s strategic goals.
The individual KPIs and FY19 achievements as
determined by the Remuneration and Nomination
Committee for the MD & CEO are provided in the
following table.
65
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
Strategic
Objective
Description
of Measure
Weight
Actual
Performance
Range
l
d
o
h
s
e
r
h
T
w
o
l
e
B
l
d
o
h
s
e
r
h
T
t
e
g
r
a
T
o
t
o
t
t
e
g
r
a
T
h
c
t
e
r
t
S
t
e
g
r
a
T
Commentary on Performance
Financial
Group Revenue
40%
Target
Underlying EBIT
Target
Target Net Debt
The key financial outcomes for the 2019 performance
year were all below target:
Group Revenue was $1,557.6 million;
Underlying EBIT was $212.1 million;
June 2019 net debt was $564.4 million resulting in a
leverage ratio of 2.3 times EBITDA.
Audience &
Customer
Content &
Product
Television Ratings
20%
Seven retained position as the Number 1 rating
Leadership
Revenue Share
Target
West Australian
Newspapers
(WAN) and Pacific
Magazines Growth
in Audience
Digital Products
Commercial Share
Network for the 2019 performance year and secured
a 39.3 per cent commercial Free-To-Air (FTA) share in
All People in FY19.
Metro FTA Revenue share increased from the prior
year to 38.8 per cent in FY19.
WAN and Pacific both grew total masthead audiences
YoY.
The 7plus VPM commercial share was consistently over
target during the year.
Target Growth in
10%
Seven content produced by Seven Studios grew by
Content Produced
by Seven
Seven Studios EBIT
Contribution
Launch of New
Main Channel
Original Internally
Developed Titles
7plus Unique
Audience Targets
greater than target YoY;
Three new main channel original internally generated
productions were launched during the year.
International earnings growth delivered record Seven
Studios EBIT of $61.6 million over target and up 12 per
cent during the year.
7plus grew audiences during the year driving over 200
per cent increase in Seven’s digital EBIT to $15 million.
Operational
Risk &
Compliance
Target Cost
Reductions
Delivery of
People &
Leadership
Efficiency Projects
Improvement in
Risk & Compliance
Reporting
Staff Development
and Performance
Improvement in
Key Safety Metrics
Company-
wide Industrial
Relations Strategy
Implementation
20%
Cost-out target exceeded in FY19 leading to Group
cost reductions of $38 million.
Key efficiency projects completed during the year.
The Company’s risk and compliance profile continued
to improve in the financial year.
10%
The Group’s Performance and Development
Framework improved the alignment to the Group’s
strategy
Improvement in key safety metrics year on
year including reduction in LTIFR and Workers’
Compensation costs.
The Company’s Industrial Relations reforms met key
milestones in the performance year.
66
Remuneration ReportFor the year ended 29 June 2019
The STI measures are designed to align individual
performance to the achievement of the Company’s
strategy and the increase of shareholder value.
The financial measures reward Executives on the
Company’s financial performance. Revenue and EBIT
targets were determined to be the most effective
measures of the current year’s operating performance.
Given the Company’s focus on increasing balance
sheet strength and flexibility, it was also appropriate to
include a target net debt outcome.
Other strategic objectives reflected in the performance
measures for the year included audience targets,
continued growth in content production and
monetisation, reduction in operating expenditure and
staff development and performance.
5.3 Equity Granted to the MD & CEO and Executive KMP
For the FY19 STI awards, 100 per cent will be granted as Restricted Shares to Executives under the STI Plan on or
about 1 September 2019. The estimated number and fair value of the Restricted Shares at 29 June 2019 is based
on 100 per cent of the STI awards.
The table below presents the equity granted to the MD & CEO and Executive KMP for FY19.
FY19
Deferred
STI1
$
-
-
-
80,000
FY19
LTI2
$
Estimated
Number of
Restricted
Shares
Total
$
1,300,000
1,300,000
312,500
312,500
181,250
112,500
181,250
192,500
-
275,000
275,000
-
-
-
170,212
-
Estimated
Fair
Value Per
Restricted
Share at
Grant Date
$0.47
$0.47
$0.47
$0.47
$0.47
Number
of Shares
Vested
During FY19
Financial
Year in
which Grant
Vests
-
-
-
-
-
2021
2021
2021
2021
2021
Name
TG Worner
KJ Burnette
WO Lynch
KA McGrath
BI McWilliam
1 The column reflects the number of Restricted Shares that will be granted with respect to the FY19 deferred STI in September 2020. 50 per
cent of the FY19 deferred award is recognised in FY19 and 50 per cent will be recognised in FY20. Restricted Shares are not subject to any
further performance conditions except continued employment. Note that during FY19, Restricted Shares in respect of FY18 STI awards were
allocated.
2 Subject to performance conditions and due to vest 1 July 2021.
5.4 MD & CEO and Executive KMP STI Outcomes
The Board approved the MD & CEO and the Executive
KMP’s FY19 STI outcomes. In doing so, it considered
the performance of the individual, the business and
overall Company performance.
At the start of each year, stretching, yet achievable
performance objectives are set for the MD & CEO
and Executive KMP. When Executives deliver on-
target performance at a Company and individual level
(taking into consideration the Company’s values and
compliance standards), then STI awards are likely to be
around the target.
At year end, each Executive’s performance is assessed
against their objectives for the year, and also taking
into consideration compliance standards and their
demonstration of the Company’s values. The MD &
CEO assesses the performance of the Executive KMP
and makes recommendations to the Remuneration
and Nomination Committee. The Committee assesses
the performance of the MD & CEO and makes
recommendations to the Board on both the MD &
CEO and the Executive KMPs’ performance and
remuneration outcomes.
67
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 5.5 Summary of LTI Outcomes
The vesting outcomes for the FY16 LTI grant to the MD & CEO and other Executive KMP that reached the
completion of the performance period during FY19 are shown below.
Performance
Measure
Performance
Start Date
Test Date
Threshold
Maximum
Outcome
% Vested
% Lapsed
Performance Range
TSR
(50% of
Award)
DEPS
(50% of
Award)
1 July 2015
30 June
2018
51st
Percentile
75th
Percentile
1 July 2015
30 June
2018
50th
Percentile
75th
Percentile
0%
100%
50%
50%
TSR of -28.1%
(ranked
at 13.8th
percentile)
DEPS
(excluding
significant
items) of
34.52 cents
6. Executive Remuneration – The Details
6.1 Executive Remuneration Framework
The approach taken to remuneration is to ensure
remuneration packages appropriately reflect
executives’ duties, responsibilities and performance
against objectives, as well as ensuring that
remuneration appropriately attracts and motivates
people of the highest quality, having particular regard
to the relative scarcity of suitably qualified executive
talent in the Australian media and entertainment
industry, and the complexity of the Seven West Media
business relative to its direct media peers.
In structuring remuneration, the Board aims to find
a balance between fixed remuneration and ‘at risk’
variable remuneration; cash and deferred equity; and
short, medium, and long-term rewards in line with the
Company’s performance cycle.
Composition of Executive Remuneration and
Application of Remuneration Principles
Executive remuneration is determined by the
Remuneration and Nomination Committee and, for
the MD & CEO, is recommended to the Board for
its approval. Executive remuneration comprises
both a fixed component and a variable (or “at risk”)
component which contains separate STI and LTI
elements. These components are explained in detail
below.
The remuneration level for the MD & CEO, Mr
Tim Worner, has not changed since Mr Worner’s
commencement as Chief Executive Officer on 1 July
2013.
The Company’s remuneration is linked to the drivers
of our business strategy, helping to create sustainable
value for shareholders. The Company’s remuneration
approach is designed to support and reinforce
its business strategy. The ‘at-risk’ components of
remuneration are tied to measures that reflect the
successful execution of our business strategy in both
the short and long-term. Our strategic drivers are
reflected in both STI and LTI performance measures
which demonstrates that actual performance directly
influences what Executives are paid.
68
Remuneration ReportFor the year ended 29 June 2019 The Remuneration Framework is outlined in the table below and explained in detail in Section 6 of the Report.
Remuneration Policy and Objectives
Seven West Media’s remuneration framework is designed to:
Provide market
competitive
and responsible
remuneration
Align remuneration
with shareholder
interests
Enable
recruitment
and retention
of talented
employees
Support
appropriate
culture and
employee conduct
Differentiate pay
for performance
and behaviour
in line with our
strategy and vision
Be clear, flexible
and transparent
Component
Determination
Executive Remuneration Structure
Fixed
At Risk
Total Employment Remuneration
(TER)
Short Term
Incentive (STI)
Long Term
Incentive (LTI)
Fixed remuneration is set
based on relevant market data
relativities, reflecting:
Size and complexity of the role;
Individual responsibilities and
performance; and
Experience and qualifications.
STI rewards financial and non-
financial performance consistent
with the Company’s strategy over
the short to medium term.
STI performance criteria are set
by reference to:
Group EBIT and revenue;
Strategic programs, content
and product;
Audience and customers;
People and leadership; and
Individual performance targets
relevant to the specific position.
LTI ensures alignment of
Executive accountability and
remuneration outcomes for
sustainable long-term growth
and shareholder return.
LTI targets are linked to the
relative Total Shareholder Return
(TSR) performance measure
and an individual performance
condition over a three-year
vesting period.
Delivery
Fixed remuneration comprises:
STI is delivered as:
Cash Salary;
Superannuation; and any
Prescribed non-financial
benefits at the Executives’
discretion on a salary sacrifice
basis.
50% cash; and
50% in Restricted Shares,
subject to service conditions.
For FY19, any STI awards will
be 100% deferred in Restricted
Shares.
Equity in Performance Rights.
All equity is held subject to
service and performance over a
three-year performance period.
The equity is at risk until vesting.
Performance is tested once at
the vesting date.
Strategic Intent &
Market Positioning
Fixed remuneration is positioned
around the market median with
reference to relevant market-
based data in the Australian
media and entertainment
industry.
Performance incentive is directed
to achieving Board approved
targets, reflective of market
circumstances. Combined,
fixed remuneration and STI is
intended to be positioned in
the 3rd quartile of the relevant
benchmark comparisons.
LTI is intended to reward
Executive KMP for sustainable
long-term growth aligned to
shareholders’ interests. LTI
allocation values are intended
to be positioned at the top of
the 3rd quartile of the relevant
benchmark comparisons.
Target
Remuneration Mix
MD & CEO: 50%
Executive KMP: 57%
25%
29%
25%
14%
TTR is positioned to achieve the remuneration objectives outlined above. Out-performance generates higher reward. The
remuneration structure is designed to ensure top quartile Executive KMP remuneration is only achieved if the Company out-
performs against stated targets.
Total Target Remuneration (TTR)
6.1.1 Fixed Remuneration
Fixed remuneration is expressed as a total dollar amount which is delivered as cash salary and employer
contributions to superannuation funds as well as any ongoing employee benefits on a salary-sacrificed basis.
It provides a fixed level of income commensurate with the Executive’s role, responsibilities, qualifications, and
experience, and is set by considering peer market data.
69
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 6.1.2 Short-Term Incentive (STI)
Short-Term Incentive Plan
STI rewards the achievement of pre-determined,
individual and Company KPIs over the 12-month
performance period which are aligned to and
supportive of the Company’s annual strategic
objectives. STI awards are delivered in cash and
deferred shares. However, for the FY19 performance
year, any STI awards will be delivered 100 per cent in
deferred shares.
The STI Plan is an award used to provide clear
motivation to focus on strategically-aligned metrics
and goals that can be measured annually. The award
reflects the achievement of specific objectives that are
based on a rigorous bottom-up budgeting process.
The Company’s STI Plan covers employees in executive
and senior management positions, including the MD &
CEO and Executive KMP. It provides participants with
the opportunity to earn an annual incentive, based
on the achievement of Company and individual KPIs.
Further details on the STI Plan are set out below.
Seven West Media STI Plan
STI
Opportunity
Each Executive’s STI opportunity for on-target performance is 50 per cent of fixed remuneration.
‘On-target’ refers to the STI award opportunity for an Executive who achieves successful performance
against all KPIs and where 100 per cent of the Group’s underlying EBIT target is achieved. EBIT is defined
as the Group’s profit before significant items, net finance costs and tax.
Delivery
of Awards
50 per cent is paid in cash at the end of the annual Performance and Remuneration Review (usually in
the September pay cycle). To support an ownership culture and drive retention outcomes, 50 per cent of
the STI award is deferred in the form of Restricted Shares over 12 months.
The number of Restricted Shares allocated to each Executive will be determined by dividing the dollar
amount of the STI award deferred into Restricted Shares by the average cost per share purchased on
market (rounded down to the nearest whole number of shares).
The Restricted Shares are usually allocated in September following the end of the relevant financial
year and are held on trust on behalf of each Executive, and Executives have entitlements to dividends
and voting rights in relation to their Restricted Shares during the vesting period. For disclosure and
expensing purposes, we use the one-day Volume-Weighted Average Price (VWAP) to determine the fair
value.
STI targets for the MD & CEO and Executive KMP are set by the Remuneration and Nomination
Committee and approved by the Board at the start of each performance year, based on a range of
factors including market competitiveness and the responsibilities of each role. The STI targets for the
FY19 performance year did not increase.
Performance is measured against risk-adjusted financial targets and non-financial targets which support
the Company’s strategy. Performance measures are based on performance at Group, divisional and
individual level. The deferred STI awards recognise past performance and are not subject to further
performance hurdles (other than continued service). Refer Section 5 on the MD & CEO’s balanced
scorecard.
STI outcomes are subject to both a quantitative and qualitative assessment. The Board has the capacity
to adjust STI outcomes (and reduce STI outcomes to zero if appropriate) in the assessment process.
Target
Opportunity
Performance
Conditions
Assessment of
Performance
Outcomes
The Board retains discretion to not make an STI
award available to Executives where such payment
is regarded to be inconsistent with the shareholders’
interests over the financial year, even if the gateway
requirement is achieved.
Determination of the STI Pool at Group Level
The Company’s STI pool is based on performance. The
size of the pool available for distribution as STI awards
is based on the achievement of the Group’s underlying
EBIT target set by the Board at the beginning of the
financial year and is based on the following table.
Percentage of Group
Underlying EBIT Achieved
(%)
STI Award Pool Available (%
of On-Target)
<90%
90-94%
95-99%
100%
0%
25%
50%
100%
70
Remuneration ReportFor the year ended 29 June 2019 Determination of STI at an Individual Level
At an individual level, STI is designed to focus Executive KMP on key performance measures supporting the
Company’s business strategy and encourage the delivery of value for shareholders.
Beginning of
Performance
Period
r
a
e
Y
l
i
i
a
c
n
a
n
F
a
d
e
M
i
t
s
e
W
n
e
v
e
S
End of
Performance
Period
Performance Objectives Set
Individual objectives are agreed for the MD & CEO and Executive KMP, using a balanced
scorecard approach under the five categories of (i) Financial, (ii) Audience & Customer, (iii)
Content & Product; (iv) Operational Risk and Compliance; and (v) People and Leadership.
The weighting of measures varies to reflect the responsibilities of an individual’s role.
Many of these measures relate to the contribution towards short to medium term
performance outcomes aligned to the Company’s strategic objectives.
This methodology is replicated across the Company for all employees reflecting the
individual’s responsibilities.
Performance Assessed Against Objectives
The performance of the MD & CEO and each Executive KMP is assessed against their
objectives and compliance standards.
The Remuneration & Nomination Committee seeks input from the MD & CEO and CFO (on
financial performance and internal audit matters).
The Committee reviews (and the Board reviews and approves) the performance outcomes
for the CEO and each Executive KMP.
Determination of Remuneration Outcomes
The Committee considers the performance of the Group, division and individual to
determine remuneration recommendations for the MD & CEO and Executive KMP
respectively.
Where the MD & CEO and Executive KMP deliver on-target performance at a Group
and individual level (taking into consideration the Company’s values and compliance
standards), then incentive award recommendations are likely to be around target
opportunity. Recommendations will be adjusted up or down in line with performance.
The Committee’s recommendations are then reviewed and ultimately approved
by the Board.
Minimum Individual Performance Measure
In addition to the financial targets that must be
achieved for an STI award to be available, achievement
of a minimum individual performance rating is required
for an Executive to be eligible for an award under the
STI Plan.
The Committee assesses the MD & CEO’s performance
and makes a recommendation to the Board for
approval. The Committee may apply an additional
discretionary adjustment based on the MD & CEO’s
individual performance rating that is limited to the
same parameters as for other Executives.
Performance Measurement
The MD & CEO assesses each Executive’s performance
at the end of the financial year relative to agreed
business and individual targets. Based on this
assessment, the MD & CEO makes a recommendation
to the Committee for approval.
Based on each Executive’s individual performance
rating, the MD & CEO may apply a discretionary
adjustment or modifier during the performance
assessment process. Discretionary adjustments are
applicable to individual STI awards and are limited to
a 25 per cent increase to the overall award for each
Executive, provided the total awarded remains within
the incentive pool available based on the achievement
of group underlying EBIT. The level of discretionary
adjustment applied is based on the Executive’s
individual performance rating and represents the
maximum individual award opportunity for significant
out-performance.
6.1.3 Long-Term Incentive (LTI)
LTI rewards performance over the longer term and is
designed to encourage sustained performance, drive
long-term shareholder value creation and ensure
alignment of executive remuneration outcomes to
shareholder interests. LTI awards are delivered in
the form of Performance Rights subject to Company
performance hurdles and individual service conditions
being met.
Long-Term Incentive Plan
The LTI Plan is a means to align incentive pay with
specific corporate results measured over three years.
LTI Plan metrics and peers are approved by the Board
for the beginning of the three-year performance
period and are performance-granted with vesting
following the end of the performance period.
71
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
Key Terms of FY19 LTI Awards
The key features of the FY19 LTI Plan are provided in the following table.
Seven West Media Long-Term Incentive Plan
What is granted?
How many Performance
Rights are granted?
The grant is made in the form of Performance Rights. The Performance Rights are granted at no
cost and each right entitles the participant to one ordinary share in the Company, subject to the
achievement of the performance hurdles and service conditions outlined below. As Performance
Rights are automatically exercised at vesting, no expiry date applies.
The value of LTI granted is allocated annually and, for the MD & CEO is 50 per cent of the MD
& CEO’s fixed remuneration and for other Executives is 25 per cent of the participant’s fixed
remuneration. The number of Performance Rights granted to each Executive is equivalent to
the face value of the LTI grant divided by an amount calculated based on the share price in
accordance with the terms and conditions of the Plan.
What is the
performance hurdle?
Performance Rights are subject to continued employment with Seven West Media, a single
relative Total Shareholder Return (RTSR) and an individual performance condition. The FY19 TSR
hurdle will be measured from 1 July 2018 to 30 June 2021.
Why was the TSR
performance hurdle
chosen, and how is
performance measured?
Relative TSR provides an indicator of shareholder value creation by comparing the Company’s
return to shareholders relative to other companies of similar size. TSR provides an external,
market-based hurdle and creates the alignment of executive remuneration outcomes to
shareholder returns. Participants will not derive any benefit from this portion of the grant unless
the Company’s performance is recorded above the median of the Comparator Index.
The relative TSR of Seven West Media is compared to the performance of the S&P/ASX 200
Consumer Discretionary Accumulation Index (Accumulation Index) over the performance period.
The level of out-performance of Seven West Media, compared with the Accumulation Index, is
used to determine the proportion of awards that are available to vest as per the schedule below.
The TSR of Seven West Media is calculated based on the 60-day trading average share price up
to, but not including, the start and end of the performance period, adjusted for dividends and
capital movements.
The performance of the Accumulation Index is calculated based on the index levels at the start
and end of the performance period.
TSR performance is monitored and assessed by an independent advisor. The percentage of TSR
Performance Rights that vest (if any) at the end of the three-year performance period will be
based on the following schedule:
Company’s TSR Performance Relative to the
Index over the Performance Period
Proportion of
Performance Rights Vesting
Outperform Index by at least 10%
100%
Outperform the Index by up to 10%
Pro-rata from 50% to 100%
Equal to or less than the Index
Nil
How is the Individual
performance condition
determined?
Incorporating an individual performance hurdle, in addition to the relative TSR performance
measure, will further align executive remuneration outcomes and performance. To the extent
that any Performance Rights become available to vest based on the relative TSR hurdle, the
percentage of awards that vest will be determined based on the balanced scorecard of Key
Performance Indicator (KPI) outcomes over the performance period. The minimum percentage of
Performance Rights that can possibly vest, subject to the KPI hurdle, is 0 per cent
The number of Performance Rights that vest will be calculated based on the following formula:
Number of Performance Rights available to vest, based on TSR performance
multiplied by
The average of the Executive’s individual KPI outcomes (expressed as a percentage)
for the relevant three financial years of the performance period
When will performance
be tested?
Awards are subject to a three-year performance period. Shortly after the completion of the
performance period, the performance hurdles are tested to determine whether, and to what
extent, awards vest. The LTI Plan does not permit re-testing. Any Performance Rights that do
not vest following testing of performance hurdles (i.e., at the end of the three-year performance
period) will lapse.
72
Remuneration ReportFor the year ended 29 June 2019 Seven West Media Long-Term Incentive Plan
Disposal restrictions
on vested shares
There is a restriction imposed of the sale of shares acquired after vesting (to the extent the
performance hurdles are achieved) until the earliest of the following:
Do the Performance
Rights carry dividend
or voting rights?
What happens in the
event of a change in
control?
What happens if the
participant ceases
employment?
The date the Executive ceases employment with Seven West Media (subject to approval by the
Board);
The one-year anniversary of the vesting date (or subsequent anniversaries (if elected by the
Executive); or
The Board determines that the restriction should be released.
Performance Rights do not carry any dividend or voting rights prior to vesting.
In the event of a change of control of the Company, unvested Performance Rights may vest to
the extent the performance hurdles are considered to have been achieved to the date of the
transaction. The Board will have discretion to determine whether any additional vesting should
occur.
If the participant ceases employment before the end of the performance period by reason of
death, disablement, retirement, redundancy or for any other reason approved by the Board,
unvested awards remain on-foot, subject to original performance hurdles, although the Board
may determine that some or all of the awards should be forfeited. If the participant ceases
employment before the end of the performance period by reasons other than outlined above,
unvested awards will automatically lapse.
Are participants allowed
to hedge their LTI
award?
Under the Seven West Media Equity Plan Rules, Executives who are granted share-based
payments, such as Performance Rights under the LTI Plan as part of their remuneration, are
prohibited from entering into other arrangements that limit their exposure to losses that would
result from share price decreases.
Grants Under the Previous LTI Plan
The FY16 LTI grant partially vested in September 2018. For further details on the features of the previous Plan,
refer to the Company’s 2017 Remuneration Report.
6.2 Link Between Remuneration Policy and Company Performance
MD & CEO Performance Objectives and Key Highlights
The Remuneration and Nomination Committee reviews and makes recommendations to the Board on individual
performance objectives for the MD & CEO. These objectives are intended to provide a robust link between
remuneration outcomes and the key drivers of long-term shareholder value. The STI objectives are set in the
form of a balanced scorecard with targets and measures aligned to the Company’s strategic priorities cascaded
from the MD & CEO scorecard to the relevant Executive KMP scorecard. The key financial and non-financial
objectives for the MD & CEO in the 2019 financial year, with commentary on key highlights are provided in
Section 5 of the Report.
73
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 Group Financial Performance – Five Year Perspective
In FY19, the Remuneration Policy was linked to profit before significant items, net finance costs and tax (EBIT),
DEPS (excluding significant items) and TSR performance of the Group.
The following table sets out the Group’s performance over the last 5 financial years:
Profit before significant items1, net finance
costs and tax (EBIT) ($’000’s)
212,079
235,636
261,385
318,126
356,333
Statutory NPAT ($’000’s)
(444,448)
132,788
(738,135)
184,289
(1,887,377)
2019
20184
20174
2016
2015
NPAT (excluding significant items) 1,2
($’000’s)
Diluted earnings per share (as reported)
(cents)
Diluted earnings per share (excluding
significant items)1 (cents)
Dividend per share (cents)
Share price as at reporting date3 ($)
Return on capital employed (%)
129,296
140,358
166,809
207,343
209,145
(29.5)
8.6
-
0.47
22.87
8.8
9.3
-
0.84
15.91
(49.0)
11.1
6
0.70
18.58
12.2
13.7
8
1.08
14.44
(181.1)
16
12
1.05
16.2
1
Significant items is a non-IFRS measure. For details of significant items refer note 1.4 to the financial statements.
2 NPAT (excluding significant items) is a non-IFRS measure. This measure is applied consistently year on year and used internally by
management to assess the performance of the business and hence is provided to enable an assessment of remuneration compared to Group
performance. Refer to the Operating and Financial Review for reconciliation to statutory net profit after tax.
3 The opening share price on the first day of trading in FY15 was $1.03.
4 Prior year figures have been restated for AASB 9 Financial Instruments standard.
Company performance is linked to the STI Plan
through the underlying EBIT hurdle, and for the LTI
Plan, Company performance is linked through the
relative TSR target.
The Company continues to operate in intensively
competitive markets. Executive ‘at-risk’ remuneration
outcomes are dependent on the Company and
Group’s financial performance reflecting the Board’s
commitment to maintaining the link between executive
remuneration and Company performance.
6.3 FY19 Executive Remuneration Outcomes
Under the design of the STI Plan, a pool may be
available for distribution where the Group’s underlying
EBIT threshold target is met as set out in Section 6.1.2
of the Report.
For FY19, the Company’s underlying EBIT result of
$212.1 million did not open the financial gateway. This
table shows the STI outcomes for the MD & CEO and
Executive KMP for the year ending 29 June 2019, and
what this represents as a percentage of their target
opportunity.
74
Remuneration ReportFor the year ended 29 June 2019 Name
Target STI
$
FY19 STI
Outcome
$
STI Outcome
as a % of
Target1
$
Actual
Cash STI
(0%)
$
Actual
Deferred STI
(100%)
$
STI Outcome
Forfeited as
a % of Target
$
Managing Director & Chief Executive Officer
TG Worner
Executive KMP
KJ Burnette
WO Lynch
KA McGrath
BI McWilliam
Former Executive KMP
CR Dickens2
Total Executives
1,300,000
625,000
362,500
225,000
412,500
275,000
–
-
-
–
-
-
80,000
36%
-
-
-
-
3,200,000
80,000
1. Target represents an Executive’s maximum STI opportunity for the year.
2. Refer Section 2 of the Report for details on relevant dates.
–
-
-
-
-
-
–
–
-
-
80,000
-
-
80,000
100%
100%
100%
64%
100%
100%
6.4 Executive Service Agreements
The terms of employment for the MD & CEO and other Executive KMP of the Seven West Media Group, are
formalised in their employment agreements, the major provisions of which are set out below.
Name
TG Worner
KJ Burnette
WO Lynch
KA McGrath
BI McWilliam
Duration of Contract
Period of Notice Required
to Terminate the Contract
Contractual
Open-ended
Open-ended
Open-ended
Open-ended
Open-ended
Twelve months’ notice
Six months’ notice
Six months’ notice
Three months’ notice
Three months’ notice
Nil
Nil
Nil
Nil
Nil
6.5 Non-Executive Director Remuneration Framework
Fees and payments to Non-Executive Directors
reflect the demands which are made on, and the
responsibilities of, the Non-Executive Directors. Seven
West Media’s Non-Executive Director remuneration
framework is designed to attract and retain
experienced, qualified Board members and remunerate
them appropriately for their time and expertise.
Fees and payments are reviewed by the Committee
and, where appropriate, changes are recommended
to the Board. The Committee has the discretion to
directly seek the advice of independent remuneration
consultants to ensure Non-Executive Director fees are
appropriate and in line with the market.
In setting Board and Committee fees, consideration is
given to general industry practice; best principles of
corporate governance; the responsibilities and risks
attached to the Non-Executive Director role; the time
commitment expected of Non-Executive Directors on
Company matters; and fees paid to Non-Executive
Directors of comparable companies.
The Board compares Non-Executive Director fees to a
comparator group of Australian listed companies with
a similar market capitalisation, with particular focus
on the major media organisations. This is considered
an appropriate group, given similarity in size, nature
of work and time commitment by Non-Executive
Directors.
75
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
The Chairman’s fees are determined in the same way.
Non-Executive Director remuneration consists of the
following components:
Base Fee – This fee is paid as cash and is for service
as a Non-Executive Director of the Seven West
Media Board. The base fee for the Chairman of the
Board covers all responsibilities, including all Board
Committees.
Committee Fees – These additional fees are also
paid as cash to other Non-Executive Directors for
chairing or participating in Board Committees.
Employer Superannuation Contributions – This
component reflects statutory superannuation
contributions which are capped at the
superannuation maximum contributions base as
prescribed under the Superannuation Guarantee
legislation.
To maintain independence and impartiality, Non-
Executive Director fees are not linked to the
Company’s performance or short-term results.
Likewise, Non-Executive Directors are not eligible to
participate in any of the Company’s performance-
based remuneration arrangements.
6.5.1 Fee Pool
The aggregate of payments each year to Non-
Executive Directors must be no more than the amount
approved by shareholders in the Annual General
Meeting (AGM). The current aggregate fee pool is $1.9
million which is inclusive of employer superannuation
contributions, was approved at the 2013 AGM held
on 13 November 2013. The aggregate of payments to
Non-Executive Directors in FY19 did not exceed the
approved amount. For the year ended 29 June 2019,
$1.63 million (86 per cent) of this fee pool was used.
6.5.2 Non-Executive Director Remuneration in FY19
The fees for the year to 29 June 2019 are provided in the table below:
Base Fee
Chairman
Non-Executive Directors
Committee Chairman Fees
Audit & Risk Committee
Remuneration & Nomination Committee
Committee Membership Fees
Audit & Risk Committee
Remuneration & Nomination Committee
Annual Rate
Effective 1 July 2018
335,000
135,000
40,000
20,000
20,000
10,000
6.5.3 Changes to Board and Committee Composition
The following changes were made to Board and Committee composition:
Colette Garnsey OAM was appointed as a Non-Executive Director to the Seven West Media Board effective
12 December 2018; and
Michael Ziegelaar was appointed as Member of the Audit and Risk Committee effective 12 December 2018.
76
Remuneration ReportFor the year ended 29 June 2019 ,
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77
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
7.2. Non-Executive Remuneration in Detail
Details of the remuneration of the Company’s Non-Executive Directors for the year ended 29 June 2019 are set
out the following table.
Short-Term Benefits
Post-
Employment
Benefits
Seven West Media
Board
Fees1
$
Financial
Year
Non-Monetary
Benefits
$
Superannuation
$
Total
$
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
314,468
270,787
141,553
125,301
159,817
78,768
145,205
143,743
136,073
119,822
68,493
-
132,420
116,169
136,073
119,822
132,420
116,169
130,391
65,374
1,496,913
1,155,955
5,808
21,341
-
-
472
943
-
-
-
-
-
-
-
-
-
-
-
-
361
1,451
6,641
23,735
20,531
20,049
13,447
11,904
15,183
7,483
13,795
13,656
12,927
11,383
6,507
-
12,580
11,036
12,927
11,383
12,580
11,036
12,387
6,211
340,807
312,177
155,000
137,205
175,472
87,194
159,000
157,399
149,000
131,205
75,000
-
145,000
127,205
149,000
131,205
145,000
127,205
143,139
73,036
132,864
104,141
1,636,418
1,283,831
Name
Non-Executive Directors
KM Stokes, AC,
Chairman
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM2
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
Total Non-Executive
Director Fees3
1.
Includes fees paid to the Chairman and members of Board Committees.
2. The information relates to the period Non-Executive Directors held office during the year. Refer Section 2 of the Report for details of
appointment dates.
3. The total fees for 2018 reflect the current year’s remuneration for the 2019 reported Non-Executive Directors.
78
Remuneration ReportFor the year ended 29 June 2019
7.3 Key Management Personnel Equity Transactions and Holdings
7.3.1 Equity Incentive Plan Holdings
Equity grants under the LTI Plan and the STI Plan are made in accordance with the Seven West Media Equity
Incentive Plan Rules.
FY19 LTI Grant and Prior Year LTI Grants
Details of vesting profiles of the Performance Rights granted as remuneration in FY19 to the MD & CEO and
each Executive KMP of the Company under its LTI Plan, including prior years’ Performance Rights that remain
unvested and on-foot, are provided below.
Name
Number of
Performance
Rights
Grant
Date1
TG Worner
1,214,953
01-Feb-19
KJ Burnette
292,056
01-Feb-19
WO Lynch
K McGrath
169,392
01-Feb-19
105,140
01-Feb-19
BI McWilliam
192,757
01-Feb-19
TG Worner
2,037,617
01-Feb-18
KJ Burnette
489,811
01-Feb-18
CR Dickens
215,517
01-Feb-18
WO Lynch
K McGrath
284,090
01-Feb-18
176,332
01-Feb-18
BI McWilliam
431,034
01-Feb-18
TG Worner
2,031,250
04-Apr-16
KJ Burnette
488,281
04-Apr-16
CR Dickens
214,843
04-Apr-16
WO Lynch
94,401
04-Apr-16
BI McWilliam
429,687
04-Apr-16
Fair Value
Per Right
at Grant
Date: TSR
Component
Fair Value
Per Right
at Grant
Date: DEPS
Component
Number
of Rights
Vested
During FY19
Percentage
of Rights
Forfeited in
FY19
Financial
Year in which
Grant
may Vest
$0.24
$0.24
$0.24
$0.24
$0.24
$0.16
$0.16
$0.16
$0.16
$0.16
$0.16
$0.47
$0.47
$0.47
$0.47
$0.47
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
NA
$0.86
$0.86
$0.86
$0.86
$0.86
–
–
–
–
–
–
–
–
–
–
–
507,813
122,070
53,710
23,600
107,422
–
–
–
–
–
–
–
–
–
–
–
75%
75%
75%
75%
75%
2022
2022
2022
2022
2022
2021
2021
2021
2021
2021
2021
2019
2019
2019
2019
2019
1.
LTI awards granted prior to FY18 were subject to performance conditions: 50 per cent DEPS and 50 per cent TSR measured against a
comparator group of 15 S&P/ASX 200 companies above and 15 companies below Seven West Media’s 12-month average market capitalisation
ranking (excluding trusts and companies classified under the Metals and Mining Global Industry Classification System (GICS)). These awards
are subject to a three-year performance period.
With respect to the FY19 LTI grant, the maximum possible total value of each grant assuming all vesting
conditions are met is calculated as the number of Performance Rights times the fair value. This maximum value,
measured under applicable accounting standards, will be recognised as a statutory remuneration on a straight-
line basis equally over the three financial years 2019, 2020 and 2021. If all vesting conditions are met, this will
be received by each Executive in the year of vesting. The minimum possible total value is nil where the vesting
conditions are not met.
79
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706 Prior Year’s Short–Term Incentive Award
The following table shows the number of Restricted Shares that were allocated during FY19 to Executives under
the STI Plan as the deferred component of their FY18 STI award.
Number
of
Shares
Granted
Name
Fair Value
Per Share
at Grant
Date
Grant
Date
Number of
Shares Vested
During FY19
Percentage
Vested
in FY19
Percentage
Forfeited
in FY19
Financial
Year in
which
Grant Vests
TG Worner
179,615
24 September 2018
KJ Burnette
56,755
24 September 2018
CR Dickens1
36,894
24 September 2018
WO Lynch
71,680
24 September 2018
KA McGrath
44,940
24 September 2018
BI McWilliam
38,924
24 September 2018
$0.99
$0.99
$0.99
$0.99
$0.99
$0.99
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
2020
2020
2020
2020
2020
2020
1. The Board exercised its discretion for unvested STI allocations to remain on foot subject to the Plan Rules and existing vesting date, and LTI
allocations will remain on foot subject to the Plan Rules and existing vesting criteria.
The maximum possible total value of the grant assuming all vesting conditions are met is the number of shares
times the fair value based on the share price at 24 September 2018. If all vesting conditions are met, this will
be received by each Executive in the year of vesting. The minimum possible total value is nil where the vesting
conditions are not met.
7.3.2 Total Performance Rights Holdings
The total number of Performance Rights in the Company held during the financial year by the MD & CEO and
each Executive KMP of the Group are set out in the table below.
Performance Rights
Granted as Remuneration
Performance
Rights Vested
Name
Financial
Year
Opening
Balance
Number
Granted1
Value
Granted1
Number
Vested2
Value
Vested2
Number of
Performance
Rights Lapsed
Closing
Balance
Managing Director & Chief Executive Officer
TG Worner
Executive KMP
KJ Burnette
WO Lynch
KA McGrath
BI McWilliam
2019
2018
2019
2018
2019
2018
2019
2018
2019
2018
Former Executive KMP
CR Dickens3
Total
2019
2018
2019
2018
4,068,867
1,214,953
291,589
(507,813)
302,148
(1,523,437) 3,252,570
2,864,583
2,037,617
326,019
-
-
(833,333) 4,068,867
978,092
292,056
70,093
(122,070)
72,632
(366,211)
781,867
680,588
489,811
78,370
-
-
(192,307)
978,092
378,491
169,392
40,654
(23,600)
14,042
(70,801)
453,482
94,401
284,090
45,454
176,332
105,140
25,234
-
176,332
28,213
-
-
-
-
-
-
-
-
-
378,491
281,472
176,332
860,721
192,757
46,262
(107,422)
63,916
(322,265)
623,791
605,969
431,034
68,965
-
-
(176,282)
860,721
430,360
-
-
(53,710)
31,958
(161,132)
215,518
253,625
215,517
34,483
-
-
(38,782)
430,360
6,892,863
1,974,298
473,832
(814,615)
484,696
(2,443,846) 5,608,700
4,499,166
3,634,401
581,504
-
-
(1,240,704) 6,892,863
1. Based on fair value at grant date of $0.24.
2. 25 per cent of hurdled Performance Rights granted in 2016 vested in September 2018 as assessed against the TSR and DEPS hurdles.
3. The information relates to the period CR Dickens held office during the year. Refer Section 2 of the Report for details on relevant dates.
80
Remuneration ReportFor the year ended 29 June 2019
7.3.3 Equity Holdings and Transactions of Executive Key Management Personnel
The table below provides details of equity granted as remuneration and the number of ordinary shares in the
Company held during the financial year by the MD & CEO and each Executive KMP of the Company held directly,
indirectly, beneficially and including their personally-related entities.
MD & CEO and Executive KMP Equity Granted, Vested, Exercised and Lapsed
Type of
Equity-Based
Instrument
Name
Number
Held at
Start of the
Year
Number
Granted During
the Year as
Remuneration1
Managing Director & Chief Executive Officer
Number
Received
on
Exercise
and/or
Exercised
During the
Year2
Number
Lapsed
During the
Year2
Other
Changes
During
the Year
Number
Held at
End of the
Year
Number
Vested and
Exercisable
at End of
the Year2
TG
Worner
Deferred Shares
-
179,615
-
Ordinary Shares
293,810
-
507,813
-
-
Performance
Rights
Executive KMP
4,068,867
1,214,953
(507,813)
(1,523,437)
KJ
Burnette
Deferred Shares
Ordinary Shares
51,539
6,656
56,755
-
-
122,070
-
-
-
-
-
-
179,615
801,623
3,252,570
108,294
(6,656)
122,070
Performance
Rights
978,092
292,056
(122,070)
(366,211)
-
781,867
WO
Lynch
Deferred Shares
59,163
71,680
-
Ordinary Shares
-
-
23,600
-
-
(59,163)
71,680
59,163
82,763
Performance
Rights
378,491
169,392
(23,600)
(70,801)
KA
McGrath
Deferred Shares
Ordinary Shares
-
-
Performance
Rights
176,332
Deferred Shares
63,780
BI
McWilliam
44,940
-
105,140
38,924
-
-
-
-
-
-
-
-
Performance
Rights
Former Executive KMP
860,721
192,757
(107,422)
(322,265)
Ordinary Shares
611,044
-
107,422
- (429,783)
288,683
-
-
-
-
-
453,482
44,940
-
281,472
102,704
-
-
623,791
80,595
53,710
CR
Dickens3
Deferred Shares
Ordinary Shares
43,701
4,000
Performance
Rights
430,360
36,894
-
-
-
-
-
53,710
(4,000)
(53,710)
(161,132)
-
215,518
1. FY18 deferred STI Restricted Shares were allocated in September 2018. The balance of Performance Rights at the end of the year are
unvested rights.
2. 25 per cent of hurdled Performance Rights granted in 2016 vested in September 2018 as assessed against the TSR and DEPS hurdles.
Ordinary shares include vested Performance Rights that are subject to the 12-month holding lock.
3. The information relates to the period CR Dickens held office during the year. Refer Section 2 of the Report for details on relevant dates.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
81
Seven West Media Limited Annual Report 201908Directors’ Report02010304050706
Non-Executive Directors
The number of ordinary shares in the Company held during the financial year by each Non-Executive Director of
Seven West Media Limited held directly, indirectly, beneficially and including their personally-related entities are
set out in the tables below.
Name
Type of
Equity-Based
Instrument
Number Held
at Start of the
Year
Number
Granted During
the Year as
Remuneration
Number
Lapsed
During the
Year
Other
Changes
During the
Year
Number Held
at End of the
Year
Chairman of the Seven West Media Board
KM Stokes AC
Ordinary Shares
619,753,734
Non-Executive Directors
JH Alexander
Ordinary Shares
55,768
T Dyson
D Evans
PJT Gammell
Ordinary Shares
Ordinary Shares
Ordinary Shares
C Garnsey OAM1
Ordinary Shares
JG Kennett AC
Ordinary Shares
M Malone
RK Stokes
M Ziegelaar
Ordinary Shares
Ordinary Shares
Ordinary Shares
-
927,803
329,216
-
75,000
133,000
240,466
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
38,218
-
-
619,753,734
55,768
38,218
927,803
329,216
250,000
250,000
-
-
-
10,000
75,000
133,000
240,466
10,000
The information relates to the period Non-Executive Directors held office during the year. Refer Section 2 of the Report for details on
appointment dates.
8. Loans and Other Transactions with Key Management Personnel
During FY19, a company associated with a Director, Mr Jeffrey Kennett AC, was party to a consulting agreement
with the Group. The consulting agreement provides for the services of Mr Jeffrey Kennett AC to be supplied to
Seven West Media to perform the role of political commentator, independent of his duties as a Non-Executive
Director with Seven West Media. Total fees paid during the year in relation to this consulting agreement were
$220,000 (2018: $220,000). There were no other transactions with KMP during FY19.
All other transactions involving the Non-Executive Directors, the MD & CEO and Executive KMP and their related
parties are conducted on normal commercial terms and conditions that are no more favourable than those given
to other employees or customers. Any that are on-foot, are trivial or domestic in nature.
There were no loans provided to KMP during FY19.
End of Remuneration Report.
82
Remuneration ReportFor the year ended 29 June 2019 Auditor’s Independence
Declaration
Lead Auditor’s Independence Declaration under Section 307C
of the Corporations Act 2001
To the Directors of Seven West Media Limited
I declare that, to the best of my knowledge and belief, in relation to the audit of Seven West Media Limited for the
financial year ended 29 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.
KPMG
Sydney
20 August 2019
Tracey Driver
Partner
83
Seven West Media Limited Annual Report 2019Directors’ Report0201030405070806
Financial Statements
For the year ended 29 June 2019
Introduction and basis of preparation
Seven West Media (SWM) is a for-profit company
limited by shares and incorporated in Australia whose
shares are publicly traded on the Australian Securities
Exchange. The financial statements are for the
Group consisting of Seven West Media Limited (the
“Company” or “Parent Entity”) and its subsidiaries, all
of which are for-profit entities.
The consolidated general purpose financial report has
been prepared in accordance with the requirements
of the Corporations Act 2001 and the Australian
Accounting Standards and other authoritative
pronouncements of The Australian Accounting
Standards Board and International Financial Reporting
Standards (IFRS).
All new and amended Accounting Standards and
Interpretations issued by the AASB that are relevant
to the Group and effective for the current reporting
period have been adopted. Refer to Note 7.5 for
further details.
The consolidated financial statements were authorised
for issue by the Board of Directors on 20 August 2019.
The financial statements have been prepared using
the historical cost basis except for assets described in
Note 5.5B.
The financial statements are presented in Australian
dollars (AUD) and all values are rounded to the nearest
$1,000 unless otherwise stated under the option
available to the Company under Australian Securities
and Investments Commission (ASIC) Corporations
Instrument 2016/191.
The Group presents reclassified comparative
information where required for consistency with the
current year’s presentation.
84
Table of Contents
Financial Statements
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditor’s Report
ASX Information
Company Information
Investor Information
Shareholder Information
Note Index
86
87
88
89
90
137
138
142
143
144
1. Group Performance
3. Other Key Balance
6. Group Structure
1.1 Segment Information
1.2 Revenue and Other
Income
1.3 Expenses
1.4 Significant Items
1.5 Earnings Per Share
2. Working Capital
2.1 Cash and Cash
Equivalents
2.2 Trade and Other
Receivables
2.3 Program Rights
and Inventories
2.4 Trade and Other Payables
2.5 Commitments
2.6 Contract Assets and
Liabilities
Sheet Items
3.1
Intangible Assets
3.2 Property, Plant
and Equipment
3.3 Provisions
4. Taxation
4.1 Taxes
6.1 Equity Accounted
Investees
6.2 Investments in
Controlled Entities
6.3 Parent Entity
Financial Information
6.4 Business Combinations
6.5 Related Party Transactions
4.2 Deferred Tax Assets
and Liabilities
7. Other
5. Capital Management
5.1 Borrowings
5.2 Share Capital
5.3 Dividends
5.4 Share-Based Payments
5.5 Capital and Financial
Risk Management
7.1 Remuneration of Auditor
7.2 Contingent Liabilities
7.3 Events Occurring After
The Reporting Date
7.4 Summary of Other
Significant Accounting
Policies
7.5 Changes in Accounting
Policies and Disclosures
85
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806
Financial Statements
Consolidated Statement of Profit or Loss
and Other Comprehensive Income
For the year ended 29 June 2019
Revenue
Other income
Revenue and other income
Expenses
Impairment of intangible assets
Impairment of investments and other assets
Write down of asset held for sale
Net loss on sale of asset held for sale
Redundancy and restructure costs
Onerous contracts
Net gain on sale of other assets
Net gain on disposal of investments and controlled entities
Share of net profit of equity accounted investees
Profit (loss) before net finance costs and tax
Finance costs
Write off of unamortised refinancing cost
Finance income
Profit (loss) before tax
Tax expense
Profit (loss) for the year
Other comprehensive income (expense)
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges
Exchange differences on translation of foreign operations
Tax relating to items that may be reclassified subsequently to profit or loss
Other comprehensive income (expense) for the year, net of tax
Notes
1.2
1.2
1.3
1.4
1.4
1.4
1.4
1.4
1.4
1.4
1.4
6.1
1.4
2019
$’000
Restated*
2018
$’000
1,552,810
1,620,618
3,624
474
1,556,434
1,621,092
(1,345,496)
(1,387,160)
(477,972)
(64,507)
-
(16,750)
(22,237)
(20,963)
-
-
1,141
(390,350)
(36,111)
(8,587)
1,419
-
(1,253)
(11,868)
-
(11,311)
-
8,224
7,713
1,704
227,141
(39,813)
-
1,449
(433,629)
188,777
4.1
(10,819)
(55,989)
(444,448)
132,788
(3,536)
158
1,061
(2,317)
3,490
434
(1,047)
2,877
Total comprehensive income (expense) for the year
(446,765)
135,665
Total comprehensive income (expense) attributable to:
Owners of the Company
Non-controlling interests
Total comprehensive income (expense) for the year
(446,798)
136,552
33
(887)
(446,765)
135,665
Earnings per share for profit (loss) attributable to the ordinary equity holders
of the Company
Basic earnings per share
Diluted earnings per share
1.5
1.5
(29.5 cents)
8.8 cents
(29.5 cents)
8.8 cents
*The Group has adopted AASB 9 and AASB 15. Refer Note 7.5 for more detail.
The above consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the accompanying notes.
86
Consolidated Statement of Financial Position
As at 29 June 2019
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Current tax receivable
Program rights and inventories
Contract assets
Asset held for sale
Other assets
Total current assets
Non-current assets
Program rights
Equity accounted investees
Other financial assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Deferred income
Contract liabilities
Borrowings
Current tax liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Provisions
Contract liabilities
Deferred tax liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Non-controlling interests
Accumulated deficit
Total equity
Notes
2019
$’000
Restated*
2018
$’000
2.1
2.2
2.3
2.6
2.3
6.1
3.4
3.2
3.1
4.2
2.4
3.3
2.6
5.1
2.4
3.3
2.6
4.2
5.1
90,455
262,798
-
142,163
276,986
9,119
193,269
205,068
3,566
-
12,454
562,542
15,857
12,850
60,552
126,554
565,478
1,759
7,178
-
35,500
7,070
675,906
2,169
3,445
28,384
141,572
1,033,962
-
6,968
790,228
1,216,500
1,352,770
1,892,406
288,704
105,425
7,192
21,368
1,045
1,575
280,247
104,477
5,395
21,463
-
-
425,309
411,582
10,011
147,681
12,792
-
653,839
824,323
29,785
137,186
-
10,959
769,851
947,781
1,249,632
1,359,363
103,138
533,043
5.2
3,393,546
3,393,546
14,640
398
545
(1,071)
(3,305,446)
(2,859,977)
103,138
533,043
* The Group has adopted AASB 9 and AASB 15. Refer Note 7.5 for more detail.
The above consolidated statement of financial position should be read in conjunction with the accompanying notes.
87
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 Financial Statements
Consolidated Statement of Changes in Equity
For the year ended 29 June 2019
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*
Consolidated Statement of Cash Flows
For the year ended 29 June 2019
Notes
2019
$’000
2018
$’000
Cash flows related to operating activities
Receipts from customers
Payments to suppliers and employees
Dividends received from equity accounted investees
6.1
1,738,354
1,737,591
(1,585,206)
(1,510,690)
880
1,367
(30,082)
(15,207)
1,000
1,226
(33,593)
(43,428)
2.1
110,106
152,106
Interest and other items of similar nature received
Interest and other costs of finance paid
Income taxes paid, net of refunds
Net operating cash flows
Cash flows related to investing activities
Payments for purchases of property, plant and equipment
(26,158)
(10,182)
Proceeds from sale of property, plant and equipment
Payments for intangibles
Payments for equity accounted investees
Proceeds from sale of equity accounted investees
Payments for other investments
Proceeds on sale of subsidiaries
Payment for purchase of controlled entities, net of cash acquired
6.4
Loans issued to investees
Net investing cash flows
Cash flows related to financing activities
Proceeds from borrowings
Repayment of borrowings
Dividends paid
Net financing cash flows
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the year
5.3
2.1
255
(14,689)
(11,564)
20,750
(1,068)
-
1,446
(4,359)
253
(18,889)
–
300
(1,063)
4,945
(2,444)
(2,192)
(35,387)
(29,272)
100,000
115,000
(226,427)
(135,000)
–
(126,427)
(51,708)
142,163
90,455
(30,161)
(50,161)
72,673
69,490
142,163
The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.
89
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 Section 1:
Group performance
1.1. Segment Information
1.1A. Description of Segments
Accounting Policy
For management purposes, the Group is organised into business segments based on its products and services and has four
reportable segments, as follows:
Reportable
segment
Television
The West
Pacific
Other Business
and New
Ventures
Description
of Activities
Production and operation of commercial television programming and stations as well as distribution of
programming content across platforms in Australia and around the world.
Publishers of newspapers and insert magazines in Western Australia; Colourpress; Digital publishing,
West Australian Publishers and Community News.
Publisher of content in magazines (Print and Digital versions) as well as digital (websites and social
media sites).
Made up of equity accounted investees including TX Australia, Oztam, Starts at 60, Radio (radio
stations broadcasting in regional areas of Western Australia) and RED Live.
The chief operating decision makers, responsible for allocating resources and assessing performance of the operating
segments, have been identified as the Chief Executive Officer, the Chief Financial Officer, Business Segment Chief
Executive Officers and other relevant members of the executive team.
Segment performance is evaluated based on a measure of profit / (loss) before significant items, net finance costs and tax.
Revenue from external sales is predominantly to customers in Australia and total segment assets are predominantly held in
Australia.
Total assets and liabilities by segment are not provided regularly to the chief operating decision makers and as such, are
not required to be disclosed.
90
Notes to the Financial StatementsFor the year ended 29 June 2019 1.1B. Segment information
REF
Television
$’000
The West
$’000
Pacific
$’000
Other
Business
and New
Ventures
$’000
Corporate
[B]
$’000
Total
$’000
Year ended 29 June 2019
Advertising revenue
Circulation revenue
Program production and distribution
Affiliate fees
Rendering of services
Other revenue
1,006,248
103,195
34,283
12,011
-
57,040
90,994
92,219
107,091
-
-
-
20,971
-
-
-
-
-
-
102
18,459
4,395
4,145
1,657
Revenue from continuing operations
1,224,017
185,601
129,422
13,770
3,146
667
211
-
9
-
258
474
-
-
-
-
-
-
-
-
-
1,155,737
148,034
92,219
107,091
21,073
28,656
1,552,810
3,624
1,141
1,227,830
185,812
129,431
14,502
-
1,557,575
Other income
Share of net profit of equity accounted
investees
Revenue, other income and share
of net profit of equity accounted
investees
Expenses
(1,006,502)
(158,887)
(121,185)
(13,004)
(14,400)
(1,313,978)
Profit (loss) before significant items,
net finance costs, tax, depreciation
and amortisation
221,328
26,925
8,246
1,498
(14,400)
243,597
Depreciation and amortisation
[A]
(18,884)
(11,198)
(1,070)
(315)
(51)
(31,518)
Profit (loss) before significant items,
202,444
15,727
7,176
1,183
(14,451)
212,079
net finance costs and tax
Year ended 30 June 2018
Advertising revenue
Circulation revenue
Program production and distribution
Affiliate fees
Rendering of services
Other revenue
Other income
Share of net profit of equity accounted
investees
Revenue, other income and share
of net profit of equity accounted
investees
Revenue from continuing operations
1,264,861
204,066
139,474
1,058,011
114,564
37,328
9,225
-
60,886
98,101
89,588
99,961
-
-
-
23,226
-
-
-
17,301
5,390
4,045
109
-
29
-
-
-
-
-
-
96
2,896
12,217
336
1,704
-
-
-
-
-
-
-
-
-
1,219,128
158,987
89,588
99,961
23,322
29,632
1,620,618
474
1,704
1,264,970
204,095
139,474
14,257
–
1,622,796
Expenses
(1,024,642)
(172,753)
(129,619)
(9,571)
(15,325)
(1,351,910)
Profit (loss) before significant items,
net finance costs, tax, depreciation
and amortisation
240,328
31,342
9,855
4,686
(15,325)
270,886
Depreciation and amortisation
[A]
(24,344)
(10,290)
(304)
(312)
-
(35,250)
Profit (loss) before significant items,
215,984
21,052
9,551
4,374
(15,325)
235,636
net finance costs and tax
[A] Excludes program rights amortisation which is included in media content expenses (refer note 1.3).
[B] Corporate is not an operating segment. The amounts presented are unallocated costs.
91
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806
1.1C. Other segment information
The chief operating decision makers assess the performance of the operating segments based on a measure of earnings before
net finance costs and tax. This measurement basis excludes the effects of significant items from the operating segments.
Reconciliation of profit (loss) before significant items, net finance costs and tax
Profit (loss) before significant items, net finance costs and tax
Finance costs
Finance income
Profit (loss) before tax excluding significant items
Significant items before tax (refer note 1.4)
Profit (loss) before tax
1.2. Revenue and Other Income
Accounting Policy
Revenue recognition and measurement
2019
$’000
Restated
2018
$’000
212,079
235,636
(36,111)
(39,813)
1,419
177,387
(611,016)
(433,629)
1,449
197,272
(8,495)
188,777
The Group derives revenue from the transfer of goods and services. Revenue recognition is based on the delivery of
performance obligations and an assessment of when control is transferred to the customer. Revenue is recognised either
when the performance obligation in the contract has been performed (‘point in time’ recognition) or ‘over time’ as control
of the performance obligation is transferred to the customer.
Customer contracts can have a wide variety of performance obligations, from production contracts to format licences
and distribution activities. For these contracts, each performance obligation is identified and evaluated. Under AASB
15 the Group needs to evaluate if a distribution rights is a right to access the content (revenue recognised over time)
or represents a right to use the content (revenue recognised at a point in time). The Group has determined that most
distribution revenues are satisfied at a point in time due to their being limited ongoing involvement in the use of the rights
following its transfer to the customer.
The transaction price, being the amount to which the Group expects to be entitled and has rights to under the contract
is allocated to the identified performance obligations. The transaction price will also include an estimate of any variable
consideration where the Group’s performance may result in additional revenues based on the achievement of agreed
targets such as audience targets. Variable consideration is not recognised until the performance obligations are met.
Revenue is stated exclusive of GST and equivalent sales taxes.
92
Notes to the Financial StatementsFor the year ended 29 June 2019
1.2. Revenue and Other Income (continued)
Accounting Policy
Revenue recognition criteria for the Group’s key classes of revenue are as follows:
Class of revenue
Recognition criteria
[A] Advertising
Television Advertising is generated from selling spot airtime and
is recognised at the point of transmission.
The West and Pacific Advertising is generated from selling
space in the newspaper or magazine and is recognised at the
point of publication.
Timing of
recognition
At the point in
time when the
advertisement
is broadcast or
published
[B] Circulation
Circulation revenue is generated through the distribution and
sale of newspapers and magazines to third party consumers.
Recognised on delivery of the newspaper or magazine to the
customer and the right to be compensated has been obtained.
At the time the
newspapers and
magazines are
distributed
[C] Program sales includes:
(i) Programme production
Revenue generated from the programmes produced for
broadcasters in Australia and internationally and is recognised
at the point of delivery of an episode and acceptance by the
customer.
(ii) distribution royalty
A licence is granted for the transmission of a programme in a
stated territory, media and period and revenue is recognised at
the point when the contract is signed, the content is available for
download and the licence period has started.
At the point
in time when
obligations have
been accepted by
the customers
Recognised on
delivery of rights
to the customer
[D] Affiliate fees
Affiliate fees earned through the transmission of network
channels in a stated territory. Recognised in the period of the
broadcast feed to the affiliates in line with the contract terms
and conditions.
Recognised over
time as conditions
are met over the
contract life.
[E] Rendering of services
The revenue is recognised when the service has been
performed. These services mainly relate to printing and are
generally delivered over a period of time.
At the point in
time the services
are delivered
[F] Other revenue includes:
Government grants
Recognised initially as deferred income when it is highly
probable that the grant will be received. This may include the
following:
(i) cash grants or funding
Recognised when all attaching conditions will be complied with. Recognised at the
point in time the
conditions have
been complied
with
(ii) reimbursement of
expense
Recognised over the periods necessary to match the costs that
it is intended to compensate.
Recognised over
the period
(iii) reimbursement for
Recognised over the lifetime of the asset on a systematic basis.
cost of asset
Rental income
Rental income is derived through the leasing of assets and the
benefits are to be transferred over time.
Dividends
Dividend revenue is recognised when the right to receive
payment is established.
Recognised over
the period
Revenue is
recognised over
the life of the
lease.
At the point in
time the dividend
is declared
93
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 1.2. Revenue and Other Income (continued)
Sales revenue
Advertising revenue
Circulation revenue
Program production and distribution
Affiliate fees
Rendering of services
Other revenue
Total sales revenue
Other income
Sundry income
Net gain on fair value of investments
Net gain on disposal of property, plant and equipment and investments
Total other income
Timing of Revenue Recognition
REF
[A]
[B]
[C]
[D]
[E]
[F]
2019
$’000
2018
$’000
1,155,737
1,219,128
148,034
92,219
107,091
21,073
28,656
158,987
89,588
99,961
23,322
29,632
1,552,810
1,620,618
1,501
1,905
218
3,624
23
-
451
474
The following table includes revenue from contracts per above that have been disaggregated by the timing of recognition:
Products or services transferred at a point in time
Products or services transferred over time
Total External Revenue
1.3. Expenses
Profit (loss) before tax includes the following specific expenses:
Depreciation and amortisation (excluding program rights amortisation)
Advertising and marketing expenses
Printing, selling and distribution (including newsprint and paper)
Media content (including program rights amortisation)
Employee benefits expense (excluding significant items)
Raw materials and consumables used (excluding newsprint and paper)
Repairs and maintenance
Licence fees
Rental expense relating to operating leases
Other expenses from ordinary activities
Total expenses
REF
[A]
[A]
[B]
Included in the expenses above are the specific items [A] to [B] from continuing operations:
[A] Depreciation of property, plant and equipment
Amortisation of intangible assets
Television program rights amortisation
Total depreciation and amortisation
[B] Employee benefits expense
Defined contribution superannuation expense
Total employee benefits expense
94
2019
$’000
1,445,719
107,091
1,552,810
2019
$’000
(31,518)
(36,638)
(76,770)
2018
$’000
(35,250)
(39,392)
(81,727)
(644,185)
(654,306)
(381,255)
(397,056)
(6,462)
(18,457)
(31,981)
(19,551)
(8,102)
(17,828)
(32,710)
(21,832)
(98,679)
(98,957)
(1,345,496)
(1,387,160)
(20,618)
(10,900)
(111,623)
(25,029)
(10,221)
(111,184)
(143,141)
(146,434)
(345,547)
(359,372)
(35,708)
(37,685)
(381,255)
(397,057)
Notes to the Financial StatementsFor the year ended 29 June 2019
1.4. Significant Items
Profit (loss) before tax expense includes the following specific expenses (benefits) for which disclosure is relevant in explaining
the financial performance of the Group:
Impairment of Television goodwill
Impairment of Television licences
Impairment of The West goodwill
Impairment of The West mastheads
Impairment of other intangible assets
Total impairment of intangible assets
Impairment of equity accounted investees
Impairment of fixed assets
Impairment of other assets
Total impairment of investments and other assets
Write down of asset held for sale
Net loss on sale of asset held for sale
Write off of unamortised refinancing cost
Redundancy and restructure costs
Onerous contracts
Net gain on sale of other assets
Net gain on disposal of investments and controlled entities
REF
[A]
[A]
[A]
[A]
[A]
[B]
[A]
[C]
[D]
[E]
[F]
[G]
[H]
[I]
[J]
2019
$’000
(9,749)
(415,000)
(2,513)
(37,913)
(12,797)
(477,972)
2018
$’000
-
-
-
-
-
-
(2,252)
(1,253)
(24,367)
(37,888)
(64,507)
-
(16,750)
(8,587)
(22,237)
(20,963)
-
-
-
-
(1,253)
(11,868)
-
-
(11,311)
-
8,224
7,713
Total significant items before tax
(611,016)
(8,495)
Tax benefit
Net significant items after tax
37,271
926
(573,745)
(7,569)
[A] The impairments were recognised as a result of changes to key
[E] The sales process for the disposal of the Group’s shareholding
assumptions in the Group’s cash flow forecasts, these include:
Television
Short term market conditions for the traditional Free to Air
television metro advertising market.
The West
Further declines in circulation and advertising revenue in print
publishing businesses.
Refer note 3.1 for details.
[B] An impairment review of the Group’s equity accounted investees
was performed, resulting in an impairment of $2.3m (2018: $1.3m).
[C] The recoverable amount of program rights, inventories and
other assets were lower than the carrying value, resulting in an
impairment of $37.9m.
[D] In June 2018, write down of asset held for sale relates to Yahoo!7
Pty Ltd.
of Yahoo7! Pty Ltd was completed on 10 April 2019. The final
consideration received from Verizon Inc was $20.7m cash resulting
in a net loss on disposal of $16.8m.
[F] The amount relates to capitalised refinancing costs written
off following the November 2018 debt refinance. This includes
previously unamortised refinancing costs of $2.8m and benefit
capitalised as a result of transition to AASB 9 of $5.8m.
[G] The redundancy and restructure costs relate to transformation
programs across the Group.
[H] The Group has recognised an increase in onerous contract
provision in relation to its television legacy output deals, US
content, one-off sporting events right and other service contracts.
Refer to note 3.3 for disclosure of the assumptions included in the
calculation of the provision.
[I]
In June 2018, the net gain relates to the sale of sporting rights.
[J] In June 2018, the net gain on disposal relates to the sale of
7Wonder Productions Limited.
95
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806
1.5. Earnings Per Share
Accounting Policy
Basic earnings per share
Basic earnings per share is calculated by dividing the net
profit (loss) attributable to ordinary equity holders of the
Company by the weighted average number of ordinary
shares outstanding during the financial year.
Diluted earnings per share
Diluted earnings per share is calculated by adjusting
the figures used in the determination of basic earnings
per share to take into account the after tax effect of
interest and other financing costs associated with dilutive
potential ordinary shares and the weighted average
number of additional ordinary shares that would have
been outstanding assuming the conversion of all dilutive
potential ordinary shares.
Retrospective adjustments
If the number of ordinary or potential ordinary shares
outstanding increases as a result of a capitalisation, bonus
issue or share split, or decreases as a result of a reverse
share split, the calculation of basic and diluted earnings
per share for all periods presented shall be adjusted
retrospectively. In addition, basic and diluted earnings per
share of all periods presented shall be adjusted for the
effects of errors and adjustments resulting from changes in
accounting policies, accounted for retrospectively.
Basic earnings per share
Profit (loss) attributable to the ordinary equity holders of the Company
(29.5 cents)
8.8 cents
Diluted earnings per share
Profit (loss) attributable to the ordinary equity holders of the Company
(29.5 cents)
8.8 cents
2019
Restated
2018
2019
$’000
Restated
2018
$’000
Earnings used in calculating earnings per share
Profit (loss) attributable to the ordinary equity holders of the Company used in
calculating basic and diluted earnings per share.
(444,481)
133,675
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares outstanding during the year used
in the calculation of basic and diluted earnings per share
1,508,034,368
1,507,840,662
2019
Number
2018
Number
96
Notes to the Financial StatementsFor the year ended 29 June 2019 Section 2:
Working Capital
2.1. Cash and Cash Equivalents
Accounting Policy
Cash and cash equivalents in the statement of financial position and statement of cash flows includes cash on hand and
deposits held at call or with maturities of three months or less with financial institutions.
Cash at bank and on hand
Cash at banks earns interest at floating rates based on daily bank deposit rates.
2019
$’000
2018
$’000
90,455
142,163
The maximum exposure to credit risk at the reporting date is the carrying amount. The exposure to interest rate risk is
discussed in note 5.5.
Reconciliation of operating profit (loss) after tax to net cash provided by operating activities
Profit (loss) for the year:
Non-cash items:
Depreciation and amortisation of property, plant and equipment and
intangible assets
Amortisation of television program rights
Impairment of intangible assets and equity accounted investees
Write down of asset held for sale
Impairment of tangible assets
Net (gain) loss on disposal of property, plant and equipment, computer
software and equity accounted investees
Share based payment expense
Dividend received from equity accounted investees less share of profit of
equity accounted investees
Movement in unamortised finance costs
Other non-cash items
Changes in operating assets and liabilities, net of effect from acquisitions:
(Increase) decrease in:
Trade and other receivables
Inventories
Program rights
Other assets
Increase (decrease) in:
Trade and other payables
Program liabilities
Provisions
Other liabilities
Tax balances
Net cash inflow from operating activities
(444,448)
134,894
31,518
35,250
111,623
480,224
-
24,367
16,531
333
(261)
8,987
(28,884)
111,184
1,253
11,868
-
(8,448)
194
(704)
1,488
(12,108)
21,204
7,176
(3,094)
1,955
(123,425)
(131,563)
(3,475)
(556)
4,314
(1,184)
6,613
4,709
(5,816)
110,106
(14,571)
24,824
(7,665)
(5,559)
13,464
152,106
97
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 2.2. Trade and Other Receivables
Accounting Policy
Trade receivables
Trade receivables are recognised initially at the value of
the invoice sent to the customer and subsequently at the
amounts considered recoverable (amortised costs), less
provision for impairment. Trade receivables are generally
settled within 30-90 days and are non-interest bearing. The
Group provides goods and services to substantially all of its
customers on credit terms.
The collectability of trade receivables is reviewed on an
ongoing basis. The Group has applied the expected credit
loss model to determine the provision for doubtful debts. A
provision for impairment of trade receivables is used when
there is objective evidence that the Group will not be able
to collect all amounts due according to the original terms of
receivables. Debts which are known to be uncollectable are
written off by reducing the carrying amounts directly.
The amount of the impairment loss of receivables is
recognised in profit or loss in other expenses. Subsequent
recoveries of amounts previously written off are credited
against other expenses in profit or loss.
Loans and other receivables
Loans and receivables are non-derivative financial assets
with fixed or determinable payments that are not quoted in
an active market.
They arise when the Group provides money, goods or
services directly to a third party. They are included in
current assets, except for those with maturities greater than
12 months after the reporting period which are classified
as non-current assets. Loans and receivables are carried at
estimated future cash flow and are reviewed for impairment
on an annual basis.
Current
Trade receivables
Provision for doubtful debts
Provision for sales credits and returns
Loans and other receivables
Total trade and other receivables
Movements in the provision for doubtful debts are as follows:
Balance at the beginning of the financial year
Net movement in provision recognised during the year
Amount utilised
Balance at the end of the financial year
2019
$’000
2018
$’000
276,380
289,964
(3,442)
(43,823)
229,115
(4,133)
(35,852)
249,979
33,683
27,007
262,798
276,986
4,133
(437)
(254)
3,442
3,961
291
(119)
4,133
Refer to note 5.5 regarding information on the Group’s exposure to credit and market risks, and impairment losses for trade and other receivables.
Refer to note 6.5 regarding receivables from related parties.
Key Estimates, Judgements and Assumptions
Impairment of receivables
The provision for impairment of receivables assessment requires a degree of estimation and judgement. The level of
provision is assessed by taking into account the recent sales experience, the ageing of receivables, historical collection
rates and specific knowledge of the individual debtor’s financial position.
Estimates are used in determining the level of receivables that will not be collected. These estimates include factors such
as historical experience, the current state of the Australian economy and industry factors.
98
Notes to the Financial StatementsFor the year ended 29 June 2019 2.3. Program Rights and Inventories
Accounting Policy
Program rights
Program rights includes both purchased rights and
produced programs.
The Group’s amortisation policy requires the amortisation
of purchased programs on a straight line basis over the
expected useful life.
Program rights are recognised at the earlier of when cash
payments are made or from the commencement of the
rights period of the contract.
The useful life of purchased programs is assessed at
least annually. Produced programs are expensed when
broadcast.
Television program rights are carried at the lower of
cost less amortisation or net recoverable amount. Cost
comprises acquisition of program rights and, for programs
produced using the Group’s facilities, direct labour and
materials and directly attributable fixed and variable
overheads. Revenue is derived from the broadcast of
advertisement on Seven channels and digital assets, net of
agency commissions, discounts and rebates.
Inventories
Inventories, which includes newsprint, paper, finished
goods, raw material and work in progress, are measured
at acquisition cost, cost of manufacturing or net realisable
value. The net realisable value is the estimated achievable
selling price in the ordinary course of business less the
estimated costs through to completion and the estimated
necessary selling costs.
Current
Television program rights – cost less accumulated amortisation and impairment
182,020
186,643
2019
$’000
2018
$’000
Newsprint and paper – at cost
Work in progress – at cost
Other raw materials – at net realisable value
Finished goods – at cost
Non-current
Prepaid Television program rights
9,021
2,197
-
31
11,632
3,414
3,379
-
193,269
205,068
15,857
15,857
2,169
2,169
Program rights and inventory expense
Program rights and inventories recognised as an expense during the year ended 29 June 2019 amounted to $111,623,000 (2018:
$111,184,000) and $34,847,000 (2018: $39,270,000) respectively.
Key Estimates, Judgements and Assumptions
The Group recognises program rights which are available for use. These are capitalised and amortised over the useful life
of the content. The assessment of the appropriate carrying value of these rights requires estimation by management of
the forecast future cash flows which will be derived from that content. This estimate is based on a combination of market
conditions and the value generated from the broadcast of comparable programs.
99
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 2.4. Trade and Other Payables
Accounting Policy
Trade payables and accruals
Trade and other payables represent liabilities for goods and
services provided to the Group prior to the end of financial
year which are unpaid. The amounts are unsecured and are
usually paid within 30-60 days from the end of the month
in which they are incurred and may be interest bearing.
Derivative financial liabilities
Derivative financial instruments on recognised liabilities
are used in the normal course of business in order to
hedge exposure to fluctuations in interest rates and foreign
currency exchange rates. These derivatives are designated
as cash flow hedges.
Derivatives are initially recognised at fair value on the date
a derivative contract is entered into and are subsequently
remeasured to their fair value at the end of each reporting
period. The Group documents at the inception of the
transaction the relationship between hedging instruments
and hedged items, as well as its risk management objective
and strategy for undertaking various hedge transactions.
The Group also documents its assessment, both at
hedge inception and on an ongoing basis, of whether the
derivatives that are used in hedging transactions have
been and will continue to be highly effective in offsetting
changes in cash flows of hedged items. The fair values of
derivative financial instruments designated as cash flow
hedges are disclosed below. Movements in the hedging
reserve in shareholders’ equity are shown in the statement
of changes in equity. The full fair value of a hedging
derivative is classified as a non-current asset or liability
when the remaining maturity of the hedged item (i.e. cash
flows) is more than 12 months; it is classified as a current
asset or liability when the remaining maturity of the hedged
item is less than 12 months.
The gain or loss from re-measuring the hedging instruments
to fair value is recognised in other comprehensive income
and accumulated in a hedging reserve, to the extent that
the hedge is effective, and is recognised in profit or loss
within finance costs when the hedged interest expense
is recognised. The gain or loss relating to any ineffective
portion is recognised immediately in profit or loss.
When a hedging instrument expires or is sold or terminated,
or when a hedge no longer meets the criteria for hedge
accounting, any cumulative gain or loss existing in equity
at that time remains in equity and is recognised when the
forecast transaction is ultimately recognised in profit or
loss. When a forecast transaction is no longer expected
to occur, the cumulative gain or loss that was reported in
equity is immediately reclassified to profit or loss.
Television program liabilities
Television program liabilities are recognised from the
commencement of the rights period of the contract.
Contract payments made prior to commencement of the
rights period are included in television program rights and
inventories as prepaid program rights.
2019
$’000
2018
$’000
147,362
158,444
475
30
140,867
121,773
288,704
280,247
-
7,607
2,404
10,011
3,822
3,281
22,682
29,785
Current
Trade payables and accruals
Derivative financial liabilities
Television program liabilities
Non-current
Trade payables and accruals
Derivative financial liabilities
Television program liabilities
100
Notes to the Financial StatementsFor the year ended 29 June 2019 2.5. Commitments
Year ended 29 June 2019
< 1 year
$’000
1-5 years
$’000
> 5 Years
$’000
Total
$’000
Capital expenditure commitments
1,813
-
-
1,813
Operating lease commitments
19,218
72,627
64,067
155,912
Contracts for purchase of television programs
and sporting broadcast rights
Contracts for employee services
Contracts for other services
Year ended 30 June 2018
Capital expenditure commitments
Operating lease commitments
Contracts for purchase of television programs
and sporting broadcast rights
Contracts for employee services
Contracts for other services
Types of Commitments
Capital expenditure commitments
Commitments for the acquisition of property, plant and
equipment contracted for at the reporting date but not
recognised as liabilities.
Operating lease commitments
Operating lease commitments relate to minimum lease
payments on non-cancellable leases contracted for at the
reporting date but not recognised as liabilities. Leases
in which a significant portion of the risks and rewards
of ownership are retained by the lessor are classified as
operating leases. Payments made under operating leases
(net of any incentives received from the lessor) are charged
to profit and loss on a straight line basis over the period of
the lease. The Group leases various offices, equipment, sites
and residential premises under non-cancellable operating
leases expiring within 1 to 11 years (2018: 1 to 12 years). The
leases have varying terms, escalation clauses and renewal
rights. On renewal, the terms of the leases are renegotiated.
391,664
859,230
62,720
26,857
29,785
15,036
-
-
21,559
1,250,894
92,505
63,452
502,272
976,678
85,626
1,564,576
4,632
18,221
-
-
4,632
68,718
77,028
163,967
385,737
1,085,735
93,496
1,564,968
39,603
22,939
13,407
21,627
-
22,838
53,010
67,404
471,132
1,189,487
193,362
1,853,981
Contracts for purchase of television programs and sporting
broadcast rights
Commitments for minimum payments in relation to non-
cancellable purchase contracts of television programs and
sporting broadcast rights at the reporting date but not
recognised as liabilities.
Contracts for employee services
Commitments for minimum payments in relation to
non-cancellable contracts for employee services at the
reporting date but not recognised as liabilities.
Contracts for other services
Commitments for minimum payments in relation to non-
cancellable contracts for other services at the reporting
date but not recognised as liabilities.
101
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 2.6. Contract Assets and Liabilities
Accounting Policy
Contract assets and liabilities
Contract assets primarily relate to the Groups rights to consideration for work completed but not billed on programs
commissioned for third party customers. The contract assets are transferred to receivables at the point of delivery of
an episode and acceptance by the customer. This usually occurs when the Group issues an invoice to the customer. The
contract liabilities primarily relate to the advance consideration received from customers for sponsorships, for which
revenue is recognised over time.
The following table provides information about the contract assets and contract liabilities from contracts with customers.
Current
Television Program Sales
Contract assets
Television Program Sales
Pacific Subscription
Other
Contract liabilities
Non-current
Revenue received in advance - affiliation fees
Contract liabilities
Forward Bookings
2019
$’000
2018
$’000
3,566
3,566
13,838
7,114
416
21,368
12,792
12,792
-
-
12,354
8,848
261
21,463
-
-
The following table includes revenue from contracts signed before the reporting date that is to be recognised post the
reporting period (i.e. the performance obligations remain unsatisfied at the reporting date):
Television Program Sales
Total
2020
$’000
4,422
4,422
2021
$’000
Beyond 2021
$’000
-
-
-
-
102
Notes to the Financial StatementsFor the year ended 29 June 2019 Section 3:
Other Key Balance Sheet Items
3.1. Intangible Assets
Accounting Policy
Goodwill
Goodwill acquired in a business combination is initially
measured at cost. Cost is measured as the consideration
and transaction cost of the business combination
minus the net fair value of the acquired and identifiable
assets, liabilities and contingent liabilities. Following
initial recognition, goodwill is measured at cost less any
accumulated impairment losses.
Refer to Note 3.1.1 for further details on impairment.
Intangible Assets
Intangible assets acquired separately are measured on
initial recognition at cost. The cost of intangible assets
acquired in a business combination is their fair value at the
date of acquisition.
Following initial recognition, intangible assets are carried
at cost less amortisation and any impairment losses. The
useful lives of intangible assets are assessed as either finite
or indefinite. Intangible assets with finite lives are amortised
on a straight line basis over their useful life and tested
for impairment whenever there is an indication that they
may be impaired. Intangible assets with indefinite lives are
tested for impairment annually. The amortisation period
and method is reviewed at least annually.
A summary of the policies applied to the Group’s intangible
assets is as follows:
Goodwill
Useful life
Indefinite
Amortisation
method used
No amortisation
Television licences
Indefinite
No amortisation
The West mastheads
Indefinite
No amortisation
Radio licences
Indefinite
No amortisation
Pacific mastheads
Indefinite
No amortisation
Internally generated
or acquired
Acquired
Acquired
Acquired
Acquired
Acquired
Trademark
Finite (10-15 years) Amortised on a straight line basis over its useful life Acquired
Pacific licences
Finite (8 - 25 years) Amortised on a straight line basis over the period
Acquired
of the licence
Computer software
Finite (3 - 15 years) Amortised on a straight line basis over its useful life Internally developed
and acquired
103
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 3.1. Intangible Assets (continued)
REF
Licences
$’000
Mastheads
$’000
Computer
software
$’000
Goodwill
$’000
Trademark
$’000
Total
$’000
Year ended 29 June 2019
Opening net book amount
955,660
37,913
34,317
4,494
1,578
1,033,962
Additions
Disposals
Amortisation charge
Acquisition (disposal)
of controlled entity
-
-
-
-
-
-
-
-
13,593
(93)
(10,891)
-
-
-
13
-
(9)
13,606
(93)
(10,900)
(319)
8,694
(1,500)
6,875
[A]
Impairment
[B]
(415,000)
(37,913)
(12,797)
(12,262)
-
(477,972)
Closing net book amount
540,660
-
23,810
926
82
565,478
Comprised of:
Cost
Accumulated amortisation
and impairment
Year ended 30 June 2018
1,508,008
264,887
55,735
1,237,009
122
3,065,761
(967,348)
(264,887)
(31,925)
(1,236,083)
(40)
(2,500,283)
Opening net book amount
955,660
37,913
25,354
926
Additions
Amortisation charge
Acquisition (disposal)
of controlled entity
Impairment
[C]
-
-
-
-
-
-
-
-
19,923
(10,214)
-
-
49
36
(7)
1,019,902
19,959
(10,221)
30
3,568
1,500
5,098
(776)
-
-
(776)
Closing net book amount
955,660
37,913
34,317
4,494
1,578
1,033,962
Comprised of:
Cost
Accumulated amortisation
and impairment
1,923,008
251,123
108,336
1,228,581
1,598
3,512,646
(967,348)
(213,210)
(74,019)
(1,224,087)
(20)
(2,478,684)
[A] The Group acquired Goodwill relating to 7Beyond Media
Limited and Community Newspaper Group Limited. Trademark
movement relates to the disposal of The Mentor Platform Pty
Limited on 31 July 2018.
[B] The Group assessed the recoverable amount for each of the Cash
Generating Units (‘CGUs’) and groups of CGUs being Television,
The West (Metro and Regional) and Pacific businesses. Refer to
3.1.1A for further details.
The impairments were recognised as a result of the following changes
to key assumptions in the Group’s cash flow forecasts:
Television
Short term market conditions for traditional Free to Air
television metro advertising market
The West
Further declines in circulation and advertising revenue in print
publishing businesses
[C] In 2018, goodwill additions for the year relate to the acquisition
of Great Southern Television Limited on 10 December 2017.
Trademark acquired relates to the acquisition of The Mentor
Platform Pty Limited on 19 January 2018.
104
Notes to the Financial StatementsFor the year ended 29 June 2019
3.1.1 Impairment of non-financial assets
Accounting Policy
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events or
changes in circumstances indicate that they might be
impaired. Assets are grouped at the lowest levels for which
there are separately identifiable cash inflows which are
largely independent of the cash inflows from other assets
or groups of assets (cash generating units or CGUs). Other
assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount
may not be recoverable. An impairment loss is recognised
for the amount by which the asset’s carrying amount
exceeds its recoverable amount. The recoverable amount
is the higher of an asset’s fair value less cost to sell and its
value in use.
In calculating the recoverable value, the cash flows include
projections of cash inflows and outflows from continuing
use of the CGU’s assets. For value-in-use model, the cash
flows are estimated for the assets of the CGU in their
current condition and discounted to their present value
using a pre-tax discount rate that reflects the current
market assessments of the risks specific to the CGU. For
fair value less cost to sell model, the recoverable amount is
calculated by using discounted cash flow projections based
on financial budgets and forecasts covering a five-year
period with a terminal growth rate applied thereafter.
Non-financial assets other than goodwill that suffered
an impairment are reviewed for possible reversal of the
impairment at each reporting date. Impairment losses are
recognised in profit and loss unless the asset has previously
been revalued, in which case the impairment is recognised
as a reversal to the extent of that previous revaluation with
any excess recognised in the profit and loss.
Key Estimates, Judgements and Assumptions
Goodwill and intangible assets with indefinite useful lives are tested annually to determine if they have suffered any
impairment in accordance with the Group accounting policy. The recoverable amounts of cash-generating units have been
determined based on value-in-use approach. These calculations require the use of estimates and assumptions. Refer to
3.1.1B for details on assumptions used.
3.1.1A Allocation of goodwill and indefinite life assets
For the purpose of impairment testing, intangible assets with indefinite lives, including goodwill, are allocated to the Group’s
operating segments which represent the lowest level within the Group at which the assets are monitored for internal
management purposes.
The table below outlines the allocation of goodwill and indefinite life assets:
Allocation of CGU Groups
Year ended 29 June 2019
Television
The West (Metro and Regional)
Pacific
Other Business and New Ventures
Total goodwill and indefinite life assets
Year ended 30 June 2018
Television
The West (Metro and Regional)
Pacific
Other Business and New Ventures
Total goodwill and indefinite life assets
Goodwill
$’000
Licences,
mastheads
$’000
Total
$’000
-
-
-
926
926
523,344
523,344
-
-
-
-
17,316
18,242
540,660
541,586
3,568
938,344
37,913
-
17,316
941,912
37,913
-
18,242
-
-
926
4,494
993,573
998,067
105
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 3.1.1 Impairment of non-financial assets (continued)
3.1.1B Impairment review of cash generating units
(‘CGUs’) including goodwill and indefinite life assets
Key components of the recoverable value calculations and the
basis for each CGU are detailed below:
In accordance with the Group’s accounting policies, the Group
has evaluated whether the carrying amount of a CGU or
group of CGUs exceeds its recoverable amount as at 29 June
2019. The Group has determined the CGUs to be Television,
The West (Metro and Regional) and Pacific businesses.
(i) Cash flows
Year 1 cash flows are based upon budgets for the next
12 months. Future cash flows are based on the following
assumptions:
Valuation Methods
Television and The West
The recoverable amount was determined using a value-in-use
model by discounting the future cash flows expected to be
generated from the continuing use of these CGUs.
Pacific
In prior periods, Pacific mastheads, licences and goodwill
have been fully written down. Management’s assessment has
shown no indicators of impairment reversal in the current
period.
Television
The advertising market growth rates are assumed to be
consistent with industry market participant expectations and
long-term industry growth rates.
The Company’s share of Metro Free to Air advertising takes
into account historical share performance and management’s
expectation of share in forward periods, taking into
consideration the impact of the Cricket agreement and
programming across the schedule.
Expenses are assumed to increase by CPI and known fixed
increases for specific program rights.
The West (Metro and Regional) and Pacific
Publishing revenue forecasts are management’s best
estimates using: current market data, industry forecasts and
historical actual rates.
Digital revenue assumptions are in line with industry
forecasts and management’s expectations of market
development.
Expenses are expected to decrease based on committed
cost reduction initiatives and volume assumptions.
(ii) Terminal growth factor
A terminal growth factor that estimates the long term
growth for that CGU is applied to the year 5 cash flows into
perpetuity. These terminal growth rates do not exceed long
term expected industry growth rates. The terminal growth
factor for each CGU is detailed below.
(iii) Discount rate
The discount rate is an estimate of the pre-tax rate that
reflects current market assessment of the time value of
money and the risks specific to the CGU.
The pre-tax and post-tax discount rates applied to the CGU’s
cash flow projections are detailed below.
Television
The West – Metro
The West – Regional
Terminal growth factor
Discount rate (pre-tax)
Discount rate (post-tax)
Jun-19
0.5%
-0.5%
-0.5%
Jun-18
0.5%
0.0%
0.0%
Jun-19
15.9%
12.2%
14.1%
Jun-18
14.5%
13.4%
16.0%
Jun-19
9.5%
10.5%
10.5%
Jun-18
9.3%
10.5%
10.5%
(iv) Allocation of impairment for The West
In allocating the impairment to individual non-current assets within the CGUs, their recoverable amount was not reduced below
their fair value less cost of disposal; notably for property related assets.
3.1.1C Impact of possible changes in key assumptions
The values assigned to the key assumptions represent management’s assessment of future performance in each CGU based
on historical experience and internal and external sources. The estimated recoverable amounts are highly sensitive to key
assumptions.
Following the impairment analysis performed on the Television CGU, the recoverable amounts are equal to the carrying
amounts. Therefore, any adverse movements in key assumptions would lead to changes in the carrying amount.
106
Notes to the Financial StatementsFor the year ended 29 June 2019 3.2. Property, Plant and Equipment
Accounting Policy
Measurement of cost
All property, plant and equipment is stated at historical cost
less accumulated depreciation and provision of impairment.
Historical cost includes expenditure that is directly
attributable to the acquisition of the items.
Subsequent costs are included in the asset’s carrying
amount or recognised as a separate asset, as appropriate,
only when it is probable that future economic benefits
associated with the item will flow to the Group and the
cost of the item can be measured reliably. The carrying
amount of any component accounted for as a separate
asset is derecognised when replaced. All other repairs
and maintenance are charged to profit or loss during the
reporting period in which they are incurred.
Depreciation
Asset class
Land
Buildings
Leasehold
improvements
Plant and equipment
Printing presses
and publishing
equipment
Other plant and
equipment
Impairment of assets
Useful life
Indefinite
40 years
Finite
Depreciation method used
Not depreciated
Straight line basis
Shorter of the life of the lease of each property or the life of the asset
15 years
Straight line basis to allocate their cost, net of their residual values, over
their estimated useful lives
3-10 years
Straight line basis to allocate their cost, net of their residual values, over
their estimated useful lives
The asset’s residual values and useful lives are reviewed, and adjusted if appropriate, at the end of each reporting period.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is
greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing proceeds with
carrying amount and these are included in profit or loss.
107
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 3.2. Property, Plant and Equipment (continued)
Year ended 29 June 2019
Opening net book value
Additions
Disposals
Depreciation charge
Impairment
Change due to movement in FX rates
Freehold land
and buildings
$’000
Leasehold
improvements
$’000
Plant and
equipment
$’000
79,237
5,172
-
(2,649)
-
-
2,489
9,972
-
(561)
-
-
59,846
14,945
(83)
(17,408)
(24,367)
(39)
Total
$’000
141,572
30,089
(83)
(20,618)
(24,367)
(39)
Closing net book amount
81,760
11,900
32,894
126,554
Comprised of:
Cost
Accumulated depreciation and impairment
Year ended 30 June 2018
Opening net book value
Additions
Disposals
Depreciation charge
Impairment
Change due to movement in FX rates
129,960
(48,200)
46,026
378,840
554,826
(34,126)
(345,946)
(428,272)
81,684
245
-
(2,692)
-
-
2,814
229
-
(554)
-
-
75,061
10,139
(117)
(21,783)
(3,465)
159,559
10,613
(117)
(25,029)
(3,465)
11
11
Closing net book amount
79,237
2,489
59,846
141,572
Comprised of:
Cost
Accumulated depreciation and impairment
125,152
(45,915)
49,112
642,452
816,716
(46,623)
(582,606)
(675,144)
Depreciating property, plant and equipment are removed from cost in the rollforward in the year after they are fully
depreciated.
Key Estimates, Judgements and Assumptions
The estimation of useful life, residual value and depreciation methods require some judgement and are reviewed at
least annually. An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount. Gains and losses on disposals are determined by comparing the
proceeds with carrying amount. These are included in the income statement.
108
Notes to the Financial StatementsFor the year ended 29 June 2019 3.3. Provisions
Accounting Policy
Provisions are:
Recognised when the Group has a present legal or
Measured at the present value of management’s best
constructive obligation as a result of a past event, it is
probable that an outflow of resource will be required to
settle the obligation and the amount can be estimated
reliably.
estimate of the expenditure required to settle the present
obligation at the end of the reporting period. The discount
rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value
of money and the risks specific to the liability. The increase
in the provision due to the passage of time is recognised as
interest expense.
Provision
Description and measurement of provision
[A] Employee
benefits
Short-term
employee
benefits
Long-term
employee
benefits
Short term
incentives and
bonus plans
[B]
Redundancy
and
restructuring
[C] Onerous
Contracts
[D] Other
Make Good
Provision
Provision for employee benefits includes annual leave, long service leave and short term incentives.
Liabilities for wages and salaries, including non-monetary benefits and annual leave expected to be
settled within 12 months after the end of the reporting period in which the employee renders the
service. It is measured at the amounts expected to be paid when the liabilities are settled.
Liability for long service leave which is not expected to be settled within 12 months after the end of
the period.
It is measured as the present value of expected future payments to be made in respect of services
provided by employees up to the end of the reporting period.
Consideration is given to expected future wage and salary levels, experience of employee departures
and periods of service. Expected future payments are discounted using market yields at the end of
the reporting period on corporate bond rates with terms to maturity and currency that match, as
closely as possible, the estimated future cash flows.
A liability is recognised when there is an obligation to settle the liability and at least one of the
following conditions is met:
there are formal terms in the plan for determining the amount of the benefit; or
past practice gives clear evidence of the amount of the obligation.
Redundancy and restructuring provision is recognised when it is demonstrably committed to either
terminating the employment of current employees according to a detailed formal plan without
possibility of withdrawal or providing termination benefits as a result of an offer made to encourage
voluntary redundancy. It is payable when employment is terminated before the normal retirement
date, or when an employee accepts voluntary redundancy in exchange for these benefits.
Provision for onerous contracts represents contracts where, due to changes in market conditions,
the expected benefit is lower than the cost for which the Group is currently committed under the
terms of the contract. The minimum net obligation under the contract is provided for. The provision
is calculated as the net of the estimated economic benefit and the estimate of the committed cost
discounted to present values.
Make good provision to restore the leased premises of its offices, studios and other premises to their
original condition at the end of the respective lease terms. A provision has been recognised for the
present value of the estimated expenditure required to remove any leasehold improvements.
Carrying amount at 30 June 2018
Amounts provided
Amounts utilised
Unwind of discount
Acquisition of controlled entity
Balance as at 29 June 2019
Represented by:
Current
Non-current
Employee
Benefits
[A]
$’000
Redundancy &
Restructuring
[B]
$’000
61,216
30,091
(31,420)
-
1,477
61,364
55,717
5,647
61,364
19,031
22,232
(15,272)
-
2,478
28,469
28,469
-
28,469
Onerous
Contracts
[C]
$’000
153,888
20,963
(25,558)
3,444
874
153,611
21,227
132,384
153,611
Other
[D]
$’000
7,528
2,634
(638)
138
-
Total
$’000
241,663
75,920
(72,888)
3,582
4,829
9,662
253,106
12
9,650
9,662
105,425
147,681
253,106
109
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 3.3. Provisions (continued)
Key Estimates, Judgements and Assumptions
The provision for restructuring and redundancy is in respect
of amounts payable in connection with restructuring and
redundancies, including termination benefits, on-costs,
outplacement and consultancy services.
For onerous provision, key assumptions made concerning
future events are:
The economic benefits expected to be received under the
contracts is based on the historical benefits received on
similar television programming and sports rights, adjusted
to reflect the Group’s expectation of future growth/
decline rates for the advertising market;
3.4. Other Financial Assets
Accounting Policy
The Group classifies its investments in the following
categories: financial assets at fair value through profit or
loss (FVTPL), financial assets at fair value through other
comprehensive income (FVTOCI) and amortised cost
financial assets. The classification depends on the Group’s
business model for managing the financial asset as well as
its contractual cash flow characteristics.
The costs of fulfilling the contract are estimated with
reference to contractual rates and historical incremental
costs of similar programming assumed to increase by CPI;
and
The expected term of the legacy output deals is estimated
based on current US market ratings performance and
historical series life of similar programming.
Management has determined the financial assets relating
to other investments to be classified at FVTOCI. Gains or
losses arising from changes in the value of the financial
asset are taken to the fair value reserve. Accordingly, any
gains or losses realised on the sale of these assets remain
in the fair value reserve rather than being transferred to the
profit or loss. Dividends are recognised as income in profit
or loss unless the dividend clearly represents a recovery of
part of the cost of the investment.
Movements in carrying amounts of other financial assets
Carrying amount at the beginning of the year
Effect of adoption of new AASB 9 accounting standard (1 July 2018)
Acquisitions and other movements
Carrying amount at the end of the year
2019
$’000
2018
$’000
28,384
22,971
9,197
60,552
21,384
-
7,000
28,384
Other financial assets represent equity investments in unlisted entities comprising of Airtasker Pty Limited, SocietyOne
Australia Pty Limited and Open Money Group Pty Ltd. The Group has initially applied AASB 9 at 1 July 2018 for other financial
assets. Under the transition methods chosen, comparative information is not restated.
Key Estimates, Judgements and Assumptions
The fair value of other financial assets is measured through a Level 3 (significant unobservable inputs) approach under
the accounting standard AASB 13 Fair Value Measurement. The valuation technique used was based on the equity price
established in the most recent round of equity financing and consideration of any other key changes in the investment
which requires a level of judgement.
110
Notes to the Financial StatementsFor the year ended 29 June 2019 Section 4:
Taxation
4.1. Taxes
Accounting Policy
Current taxes
Current tax assets and liabilities are measured at the
amount expected to be recovered from or paid to taxation
authorities at the tax rates and tax laws enacted or
substantively enacted by the balance sheet date.
Deferred taxes
Deferred income tax liabilities are recognised for all taxable
temporary differences. Deferred income tax assets are
recognised for all deductible temporary differences, carried
forward unused tax losses, to the extent it is probable that
taxable profit will be available to utilise them.
The carrying amount of deferred income tax assets is
reviewed at balance sheet date and reduced to the extent
that it is no longer probable that sufficient taxable profit will
be available to utilise them.
The measurement of deferred tax reflects the tax
consequences that would follow from the manner in which
the Group expects, at the reporting date, to recover or
settle the carrying amount of its assets and liabilities.
In making this assessment, the Group considers the tax
consequences of recovering assets and liabilities through
sale, use and subsequent sale or through use and then
abandonment or scrapping of the asset.
Deferred income tax assets and liabilities are measured at
the tax rates that are expected to apply to the year when
the asset is realised or the liability is settled, based on tax
rates and tax laws that have been enacted or substantively
enacted at the balance sheet date.
Deferred income tax is provided on temporary differences
at balance sheet date between accounting carrying
amounts and the tax bases of assets and liabilities, other
than for the following:
Where they arise from the initial recognition of an
asset or liability in a transaction that is not a business
combination and at the time of the transaction affects
neither the accounting profit nor taxable profit or loss.
Where taxable temporary differences relate to
investments in subsidiaries, associates and interests in
joint ventures:
i. Deferred tax liabilities are not recognised if the timing
of the reversal of the temporary differences can
be controlled and it is probable that the temporary
differences will not reverse in the foreseeable future.
ii. Deferred tax assets are not recognised if it is not
probable that the temporary differences will reverse
in the foreseeable future and taxable profit will not be
available to utilise the temporary differences.
Deferred tax liabilities are also not recognised on recognition of
goodwill.
Income taxes relating to items recognised directly in equity are
recognised in equity and not in the income statement.
Offsetting deferred tax balances
Deferred tax assets and deferred tax liabilities are offset only
if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets
and liabilities relate to the same taxable entity and the same
taxation authority.
Tax consolidation
The Company and its wholly owned Australian resident
entities are part of a tax consolidated group. As a
consequence, all members of the tax consolidated group
are taxed as a single entity. The head entity within the tax
consolidated group is Seven West Media Limited.
Current tax expense/income, deferred tax liabilities and
deferred tax assets arising from temporary differences of
the members of the tax-consolidated group are recognised
in the separate financial statements of the members of
the tax-consolidated group using the group allocation
approach by reference to the carrying amounts of assets
and liabilities in the separate financial statements of each
entity and the tax values applying under tax consolidation.
Any current tax liabilities (or assets) and deferred tax
assets arising from unused tax losses of the Company or its
subsidiaries are ultimately assumed by the head entity in
the tax consolidated group and are recognised as amounts
payable/(receivable) to/(from) other entities in the tax
consolidated group in conjunction with any tax funding
arrangement amounts (refer below).
Nature of tax funding arrangements
The head entity, in conjunction with other members of the
tax-consolidated group, has entered into a tax funding
arrangement which sets out the funding obligations of
members of the tax-consolidated group in respect of tax
amounts. The tax funding arrangements require payments
to the head entity equal to the current tax liability assumed
by the head entity resulting in a related party payable to
the head entity equal in amount to the current tax liability
assumed. This related party balance is at call.
Contributions to fund the current tax liabilities are payable
as per the tax funding arrangement and reflect the timing
of the head entity’s obligation to make payments for tax
liabilities to the relevant tax authorities.
Any difference between the amounts assumed and
amounts receivable or payable under the tax funding
agreement are recognised as a contribution to (or
distribution from) wholly-owned tax consolidated entities.
111
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 4.1. Taxes (continued)
Accounting Policy (continued)
Goods and Services Tax (GST)
Revenues, expenses and assets are recognised exclusive of
the amount of associated GST, unless the GST incurred is
not recoverable from the taxation authority. In this case it is
recognised as part of the cost of the acquisition of the asset or
as part of the expense.
Receivables and payables are stated inclusive of the amount of
GST receivable or payable. The net amount of GST recoverable
from, or payable to, the taxation authority is included within
other receivables or payables in the balance sheet.
Cash flows are presented on a gross basis. The GST
components of cash flows arising from investing or financing
activities which are recoverable from, or payable to the taxation
authority, are presented as operating cash flows.
Tax expense recognised in profit or loss
Current year tax expense
Adjustments for current tax of prior periods
Current tax expense
Deferred tax benefit (expense)
Adjustment for deferred tax of prior periods
Total tax expense
Reconciliation of tax expense to prima facie tax expense
Profit (loss) before tax
Tax at the Australian tax rate of 30% (2018: 30%)
2019
$’000
Restated
2018
$’000
(30,222)
(32,358)
2,989
(7,106)
(27,233)
(39,464)
19,065
(22,520)
(2,651)
5,995
(10,819)
(55,989)
(433,629)
188,777
130,089
(56,633)
Tax effect of amounts which are not (deductible)/taxable in calculating taxable
income:
Share of net profit of equity accounted investees, net of dividends received
Deferred tax assets not recognised in relation to impairment of equity accounted
investees
275
(676)
Deferred tax assets not recognised in relation to impairment of intangible assets
(139,553)
8
-
-
Deferred tax assets not recognised in relation to impairment of asset held for sale
-
(3,555)
Deferred tax assets not recognised in relation to impairment of assets
Deferred tax assets not recognised in relation to sale of asset held for sale
Non-assessable income
Other non-assessable items
Adjustments for tax of prior periods
Tax expense
Tax recognised in other comprehensive income
Cash flow hedges
Deferred tax asset not recognised
Deductible temporary differences
(905)
(5,025)
4,897
(386)
465
-
-
5,066
236
(1,111)
(10,819)
(55,989)
1,061
(1,047)
1,179,724
1,044,209
Key Estimates, Judgements and Assumptions
In determining the amount of current and deferred tax, the Group takes into account the impact of uncertain tax positions
and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may
involve a series of judgements about future events. New information may become available that causes the Group to
change its judgement regarding the adequacy of existing tax liabilities. Such changes to tax liabilities will impact tax
expense in the period that such a determination is made.
112
Notes to the Financial StatementsFor the year ended 29 June 2019 4.2. Deferred Tax Assets and Liabilities
Deferred tax assets (liabilities)
Effect of
adoption of
new AASB 9
accounting
standard
$’000
Restated
30 June
2018
$’000
Recognised
in profit or
loss
$’000
Recognised in
other compre-
hensive
income
$’000
Increase
due to
acquisition
of controlled
entity
$’000
29 June
2019
$’000
Year ended 29 June 2019
The balance comprises temporary
differences attributable to:
63
7,176
Trade and other receivables
7,278
Program rights and inventories
(127,761)
Investments
Intangible assets
Property, plant and equipment
Deferred expenditure
and prepayments
Trade and other payables
Provisions
Deferred income
Borrowings
Cash flow hedges
Transaction costs
Other
(541)
3,210
17,747
(234)
15,839
70,757
1,880
(325)
462
566
163
-
-
(165)
10,040
(6,891)
201
-
-
-
-
-
-
-
-
-
-
(2,550)
5,634
(17)
839
3,373
472
(2,522)
867
(369)
611
-
-
-
-
-
-
-
-
-
-
1,061
-
-
Net deferred tax (liabilities) assets
(10,959)
(6,891)
16,414
1,061
-
-
-
-
-
91
1,467
-
-
-
-
513
2,134
Effect of
adoption of
new AASB 9
accounting
standard
$’000
Restated
24 June
2017
$’000
Recognised
in profit or
loss
$’000
Recognised in
other compre-
hensive
income
$’000
Increase
due to
acquisition
of controlled
entity
$’000
Restated
Year ended 30 June 2018
The balance comprises temporary
differences attributable to:
Trade and other receivables
7,393
Program rights and inventories
(126,303)
Investments
Intangible assets
Property, plant and equipment
Deferred expenditure
and prepayments
Trade and other payables
Provisions
Deferred income
Borrowings
Cash flow hedges
Transaction costs
Other
(440)
3,945
19,370
(1,066)
19,143
78,194
4,168
(369)
1,509
690
(450)
Net deferred tax (liabilities) assets
5,784
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(115)
(1,458)
(101)
(735)
(1,623)
832
(3,304)
(7,437)
(2,288)
44
-
(124)
613
-
-
-
-
-
-
-
-
-
-
(1,047)
-
-
(15,696)
(1,047)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(117,721)
(7,231)
660
23,381
(251)
16,769
75,597
2,352
(2,847)
2,390
197
1,287
1,759
Restated
30 June
2018
$’000
7,278
(127,761)
(541)
3,210
17,747
(234)
15,839
70,757
1,880
(325)
462
566
163
(10,959)
113
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 Section 5:
Capital Management
5.1. Borrowings
Accounting Policy
Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is
recognised in profit or loss over the period of the borrowings. Any related accrued interest is included in trade payables
and accruals.
Current
Third party loan
Non-current
2019
$’000
Restated
2018
$’000
1,045
-
Bank Loans – unsecured, net of unamortised refinancing costs
653,839
769,851
5.1A Financial arrangement
The Group completed a refinance of its new syndicated debt
facilities in November 2018. These new facilities are split into
Tranche A and Tranche B, with maturity dates of November
2021 and 2022 respectively. Lower rates were negotiated as a
result of this refinance.
As at 29 June 2019, the Group had access to unsecured
bilateral revolving credit facilities to a maximum of
$750,000,000 (2018: $900,000,000). The amount of these
facilities undrawn at reporting date was $95,000,000 (2018:
$120,000,000).
In addition, the Group continues to have access to a
$20,000,000 (2018: $20,000,000) multi-option facility
with Australia and New Zealand Banking Group Limited.
As at reporting date, $10,500,000 of this facility (2018:
$8,000,000) was utilised for the provision of bank
guarantees.
The unsecured bank loans are net of $1,160,000 refinancing
costs (2018: $10,148,000).
The facilities are subject to a weighted average interest rate of
3.32% at 29 June 2019 (2018: 3.86%).
As part of the bilateral facilities, the Group is subject to certain
financial covenants measured on a six monthly basis. The
Group has been in compliance with its financial covenant
requirements to date including the period ending 29 June 2019.
Fair value
The carrying amount and fair value of Group borrowings
at the end of the financial year was $654,884,000 (2018:
$769,851,000).
Risk exposures
Information about the Group’s exposure to interest rate
changes is provided in note 5.5.
5.2. Share Capital
Accounting Policy
Ordinary shares are classified as equity.
Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax,
from the proceeds.
Ordinary shares are fully-paid and have no par value. They carry one vote per share and the right to dividends. They bear
no special terms or conditions affecting income or capital entitlements of the shareholders.
1,508,034,368 (2018: 1,508,034,368) Ordinary shares fully paid
2019
$’000
2018
$’000
3,393,546
3,393,546
Ordinary shares entitle the holder to participate in dividends and the proceeds on winding up 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.
114
Notes to the Financial StatementsFor the year ended 29 June 2019 5.3. Dividends
Accounting Policy
Provision is made for the amount of any dividend declared, being appropriately authorised and no longer at the discretion
of the entity, on or before the end of the reporting period but not distributed at the end of the reporting period.
5.3A Dividends paid during the financial year
No final dividend was declared for the 2018 financial year. Final ordinary
dividend for the year ended 24 June 2017 of 2 cents per share was fully franked
based on tax paid at 30%, paid on 18 October 2017.
No interim dividend was declared in the current or prior year.
5.3B Dividends not recognised at year end
No final dividend has been declared in the current or prior year.
2019
$’000
-
-
-
-
2018
$’000
30,161
-
30,161
-
5.3C Franked dividends
Future franked dividends declared will be franked out of existing franking credits or out of franking credits arising from the
receipt of franked dividends and the payment of tax in the year ending 29 June 2019.
Franking credits available for subsequent financial years based on a tax rate of
30% (2018: 30%)
38,725
19,271
The above amounts represent the balance of the franking account as at the end of the financial year, adjusted for:
a. franking credits that will arise from the payment of the current tax liability or receivable;
b. franking debits that will arise from the payment of dividends recognised as a liability at the reporting date; and
c. franking credits that will arise from the receipt of dividends recognised as receivables at the reporting date.
5.4. Share-Based Payments
Accounting Policy
Employees of the Group receive remuneration in the form
of share based payments, whereby employees render
services as consideration for equity instruments.
Share-based compensation benefits are provided to
executives and employees in accordance with the
Company’s share purchase and loan plans and employment
agreements.
Equity-settled transactions
The fair value of the rights granted is recognised as an
employee benefit expense with a corresponding increase
in equity. The total amount to be expensed is determined
by reference to the fair value of the rights granted, which
includes any market performance conditions but excludes
the impact of any service and non-market performance
vesting conditions and the impact of any non-vesting
conditions.
Non-market vesting conditions are included in assumptions
about the number of rights that are expected to vest.
The total expense is recognised over the vesting period,
which is the period over which all of the specified vesting
conditions are to be satisfied. At the end of each period,
the entity revises its estimate of the number of rights that
are expected to vest based on the non-market vesting
conditions.
It recognises the impact of the revision to original
estimates, if any, in profit or loss, with a corresponding
adjustment to equity.
115
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 5.4. Share-Based Payments (continued)
5.4A Performance and share rights
granted as compensation
The total expense recognised for share-based payments for
all plans during the financial year for the Group was $332,652
(2018: $193,832).
The accounting value of share-based payments may be
negative where an executive’s share-based expense includes
cumulative adjustments for changes in non-market vesting
conditions.
5.4B Valuation models and
key assumptions used
Grant date
Award type
Vesting Conditions
2019 Long
Term Incentive Plan
1 February 2019
Performance Rights
Relative TSR and
KPI outcomes
Long Term Incentive Plans
Performance period
1 July 2018 to 30 June 2021
At 29 June 2019, performance rights that remain outstanding
are from 2018 and 2019 Long Term Incentive Plans.
The 2016 Long Term Incentive Plan was completed on 29
June 2019. The 2016 LTI was divided into two components,
with 50 per cent tested against relative TSR performance and
the other 50 per cent tested against DEPS targets, both over
a three-year period. The Company’s DEPS performance met
target at the 50 per cent threshold. However, the Company’s
relative TSR performance fell below the median of the
comparator group. As a result, 25 per cent of the 2016 LTI
award was vested.
The Group established an additional 2019 long term incentive
plan that entitles key management personnel to performance
rights. Holders of vested rights are entitled to fully paid
ordinary shares in the Company.
A total of 2,114,484 (2018: 4,045,842) performance rights
were granted on 1 February 2019 (2018: 1 February 2018) and
will be awarded when the performance conditions are met.
The performance period commenced on 1 July 2018 and ends
on 30 June 2021 (2018: 1 July 2017 to 30 June 2020). The
performance rights are subject to a total shareholder return
(TSR) hurdle as well as an individual performance condition.
Performance rights do not carry any dividend or voting rights
prior to vesting and are all equity settled. Vesting of the
rights are subject to the condition that the executive remains
employed by the Company at the vesting date. 814,615
performance rights were vested (2018: nil) and 2,443,846
(2018: 1,328,845) were forfeited during the year.
Vesting Date
20 August 2021
Share price at grant date
$0.535
Number of rights granted
2,114,484
Fair value at grant date
$0.24
Volatility - Seven West Media
42%
Volatility - ASX 200
Consumer Discretionary
Accumulation Index
Correlation between Seven
West Media and ASX 200
Consumer Discretionary
Accumulation Index
Risk free interest rate
Dividend yield
14%
43%
1.75%
2.3%
Valuation methodology
Monte-Carlo simulation
Short Term Incentive Plans
The Group granted a 2019 short term incentive plan that
entitles key management personnel to shares based on 100
per cent of the Financial Year’s STI awards.
The restricted shares are subject to the condition that the
executive remains employed by the Company at the vesting
date (as detailed below).
An estimated 170,212 (2018: 509,877) restricted shares will
be granted on or about 1 September 2019 (2018: 1 September
2018). The estimated number and fair value of the restricted
shares as at 29 June 2019 is based on 100 per cent of the STI
pool awarded (2018: 50 per cent). The performance period
commenced on 1 July 2018 and ends on 30 June 2020 (2018:
24 June 2017 and ends on 29 June 2019).
Key Estimates, Judgements and Assumptions
The Group measures the cost of equity transactions with employees by reference to the fair value of equity instruments
at the date at which they are granted. The fair value is determined by an external valuer using a valuation model. The
most appropriate valuation model used is dependent on the terms and conditions of the grant. The estimate also requires
determination of the most appropriate inputs into the valuation model including the expected life of the share options,
volatility and dividend yield and making assumptions about them.
116
Notes to the Financial StatementsFor the year ended 29 June 2019 5.5. Capital and Financial Risk Management
5.5A Accounting classifications and fair values
The following table shows the carrying amounts and fair values of financial assets and financial liabilities. It does not include fair
value information for financial assets and financial liabilities not measured at fair value if the carrying amount is a reasonable
approximation of fair value.
Financial assets (liabilities) measured at fair value
Other financial assets
Interest rate swaps
Interest rate collars
Forward exchange contracts
Financial assets (liabilities) measured at amortised cost
Trade and other receivables
Cash and cash equivalents
Borrowings
Trade payables and accruals
Note
3.4
2.2
2.1
5.1
2.4
2019
$’000
2018
$’000
60,552
(5,455)
818
(78)
28,384
(1,687)
(49)
130
55,837
26,778
262,798
276,986
90,455
654,884
147,362
142,163
769,851
162,266
1,155,499
1,351,266
5.5B Measurement of fair values
Valuation techniques and significant unobservable
inputs
The fair value of financial assets and liabilities must be
estimated for recognition and measurement or for disclosure
purposes.
The carrying amounts of financial instruments disclosed in
the statement of financial position approximate to their fair
values.
AASB 7 Financial Instruments: Disclosures requires disclosure
of fair value measurements by level of the following fair value
measurement hierarchy:
a. quoted prices (unadjusted) in active markets for identical
assets or liabilities (level 1).
b. inputs other than quoted prices included within level 1 that
are observable for the asset or liability, either directly (as
prices) or indirectly (derived from prices) (level 2), and
c. inputs for the asset or liability that are not based on
observable market data (unobservable inputs) (level 3).
The following table shows the valuation techniques and
measurement level inputs used to assess the fair value of
financial assets and financial liabilities at 29 June 2019.
Type
Valuation Technique
Measurement
Level
Amount
Interest Rate
Swaps and
Collars
Forward
Exchange
Contracts
Other Financial
Assets
Business
Combinations
The fair value is calculated as the present value of the estimated future
cash flows. Estimates of future floating-rate cash flows are based
on quoted swap rates, future prices and interbank borrowing rates.
Estimated cash flows are discounted using a yield curve constructed
from similar sources and which reflects the relevant benchmark
interbank rate used by market participants for this purpose when
pricing interest rate swaps. The fair value estimate is subject to a credit
risk adjustment that reflects the credit risk of the Group and of the
counterparty; this is calculated based on credit spreads derived from
current credit default swap or bonds prices.
Level 2
The fair value is determined using quoted forward exchange rates at
the reporting date and present value calculations based on high credit
quality yield curves in the respective currencies
Level 2
The interest
rate cash
flow hedges
and foreign
exchange
cash flow
hedges in
aggregate
amount to
$8,082,000
(June 2018:
$3,311,000).
The fair value is based on the equity price established in the most recent
round of equity financing and consideration of any other key changes in
the investment which requires a level of judgement.
The fair value of 7Beyond Media Rights Limited and Community
Newspaper Group Limited was determined using a value in use model
by discounting the future cash flows expected to be generated by each
company.
Level 3
$60,552,000
Level 3
$5,144,000
117
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 5.5. Capital and Financial Risk Management (continued)
5.5C Risk management framework
The Group’s activities expose it to a variety of financial risks:
market risk (including interest rate risk), credit risk, capital risk
and liquidity risk.
The Group’s overall risk management program focuses on the
unpredictability of financial markets and seeks to minimise
potential adverse effects on the financial performance of the
Group.
The Group uses derivative financial instruments (interest
rate swaps and collars) to hedge certain interest rate risk
exposures and forward foreign exchange contracts to hedge
certain foreign exchange risk exposures. Derivatives are
exclusively used for hedging purposes, i.e. not as trading
or other speculative instruments. The Group uses different
methods to measure different types of risk to which it is
exposed. These methods include sensitivity analysis in the
case of interest rate and foreign exchange and aging analysis
for credit risk.
5.5C(i) Credit risk
Credit risk is the risk of financial loss to the Group if a
customer or counterparty to a financial instrument fails to
meet its contractual obligations, and arises principally from
credit exposures to customers, cash and cash equivalents and
derivative financial instruments.
The carrying amounts of financial assets and contract assets
represent the maximum credit exposure.
Trade receivables and contract assets
The Group’s exposure to credit risk is influenced mainly by
the individual characteristics of each customer. However,
management also considers the factors that may influence
the credit risk of its customer base, including the default risk
associated with the industry in which customers operate.
Each new customer is analysed individually for
creditworthiness before the Group’s standard payment
and delivery terms and conditions are offered. The Group’s
review includes external ratings, if they are available,
financial statements, credit agency information and industry
information. Sale limits are established for each customer and
reviewed on a regular basis.
In monitoring customer credit risk, customers are grouped
according to their credit characteristics, including whether
they are an individual or a legal entity, their industry, trading
history with the Group and existence of previous financial
difficulties.
An impairment analysis is performed at each reporting date
using a provision range matrix to measure expected credit
losses. The percentage used will depend on the risk profile
of the debtors at the time and may vary year on year. The
provision rates are based on days past due for groupings
of various customer segments. The calculation reflects
the probability-weighted outcome and reasonable and
supportable information that is available at the reporting date
about past events, current conditions and forecasts of future
economic conditions.
Set out below is the information about the credit risk
exposure on the Group’s trade receivables and contracts
assets using a provision range matrix.
Past due but not impaired
Not past due
< 30 days
31-90 days
> 90 days
Year ended 29 June 2019
Expected credit loss rate
Estimated total gross carrying amount
Expected credit loss
0.1%
249,192
(271)
6.1%
22,641
(1,373)
Year ended 30 June 2018
Expected credit loss rate
0.1%
1.6%
Estimated total gross carrying amount
169,283
113,275
Expected credit loss
(107)
(1,773)
26.5%
3,655
(970)
14.9%
4,564
(681)
92.8%
892
(828)
55.3%
2,842
(1,572)
Total
$’000
276,380
(3,442)
289,964
(4,133)
5.5C(ii) Liquidity risk
Liquidity risk refers to the risk that the Group is unable to
meet its financial commitments as and when they fall due
The Group’s approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity to
meet its liabilities when due, under both normal and stressed
conditions, without incurring unacceptable losses or risking
damage to the Group’s reputation.
Prudent liquidity risk management implies maintaining
sufficient cash and the availability of funding through an
adequate amount of committed credit facilities. The Group
manages liquidity risk by continuously monitoring forecast
and actual cash flow and monitoring the Group’s liquidity
reserve on the basis of these cash flow forecasts. In addition,
the Group had access to total debt funding under its bilateral
facilities equal to $750,000,000 of which only $655,000,000
is drawn at reporting date.
Maturities of financial liabilities
The table analyses the Group’s financial liabilities including
interest to maturity into relevant groupings based on their
contractual maturities.
The amounts disclosed in the table are the contractual
undiscounted principal and interest cash flows and therefore
may not agree with the carrying amounts in the statement of
financial position. For interest rate swaps the cash flows have
been estimated using forward interest rates applicable at the
end of the reporting period.
118
Notes to the Financial StatementsFor the year ended 29 June 2019 5.5. Capital and Financial Risk Management (continued)
At 29 June 2019
Non-derivative financial liabilities
Trade and other payables
Unsecured loans
Total non-derivatives
Derivative financial liabilities
Less than
one year
$’000
Between
1 and 5 years
$’000
Total
contractual
cash flows
$’000
Carrying
amount -
liabilities
$’000
283,935
4,279
288,214
290,633
21,753
717,298
739,051
654,884
305,688
721,577
1,027,265
945,517
Net settled interest rate swaps and collars
643
318
961
8,004
Gross settled forward foreign exchange contracts – cash
flow hedges:
– (inflow)
– outflow
Total derivatives
Total financial liabilities
At 30 June 2018
Non-derivative financial liabilities
Trade and other payables
Unsecured loans
Total non-derivatives
Derivative financial liabilities
(3,422)
3,477
698
-
-
318
(3,422)
3,477
1,016
-
78
8,082
306,386
721,895
1,028,281
953,599
Less than
one year
$’000
Between
1 and 5 years
$’000
Total
contractual
cash flows
$’000
Restated
Carrying
amount –
liabilities
$’000
280,217
26,504
306,721
30,123
819,118
849,241
306,721
769,851
310,340
845,622
1,155,962
1,076,572
Net settled interest rate swaps and collars
1,340
2,632
3,972
3,441
Gross settled forward foreign exchange contracts – cash
flow hedges:
– (inflow)
– outflow
Total derivatives
Total financial liabilities
(4,875)
4,754
1,219
-
-
2,632
(4,875)
4,754
3,851
(130)
-
3,311
311,559
848,254
1,159,813
1,079,883
5.5C(iii) Market risk
(b) Interest rate risk
Market risk is defined as possible changes in market prices,
such as foreign exchange rates and interest rates that will
affect the fair value or future cash flows of the Group’s
financial instruments. The key components of market risks
are:
(a) Price risk
Price risk refers to the risk of a decline in the value of a
security or a portfolio. The Group is not exposed to significant
price risk.
Interest rate risk refers to the risks that the value of a financial
instrument or its associated cash flows will fluctuate in
response to changes in market interest rates. The Group is
party to derivative financial instruments in the normal course
of business in order to hedge exposure to fluctuations in
interest rates.
The Group’s main interest rate risk arises from long-term
borrowings. Borrowings sourced at variable rates expose the
Group to cash flow interest rate risk. The Group has mitigated
this interest rate risk by entering into derivative transactions,
including interest rate swaps and collars.
119
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 5.5. Capital and Financial Risk Management (continued)
As at the end of the reporting period the Group had the following instruments:
Variable rate instruments
Cash at bank, on hand and at call
Weighted average interest rate
External borrowing facilities
Weighted average interest rate
Net debt (excluding unamortised refinancing costs)
Interest Rate Swaps
Total Hedged
% of net debt hedged
Weighted average interest rate
Expiry date
Interest Rate Collars
Total Hedged
% of net debt hedged
Interest rate cap
Interest rate floor
Expiry date
Total percentage of net debt hedged
Net exposure to cash flow interest rate risk
The changes in fair value of cash flow hedges during the year
amounts to a pre-tax decrease in equity of $3,536,000 (2018:
increase of $3,490,000).
There are no receivables on derivatives at balance date and
the Group’s current receivables generally do not bear interest.
2019
$’000
90,455
1.50%
655,000
3.32%
564,545
2018
$’000
142,163
2.14%
780,000
3.86%
637,837
200,000
200,000
35%
2.78%
31%
2.78%
June 2021
June 2021
100,000
150,000
18%
2.54%
1.85%
24%
2.39%
1.85%
June 20 – June 21
June 19 – June 21
53%
264,545
55%
287,837
Group sensitivity
Based on the Group’s outstanding floating rate borrowings
and interest rate swaps at 29 June 2019, a change in interest
rates of +/-1% per annum with all other variables remaining
constant would impact equity and after tax profit by the
amounts shown below.
This analysis assumes that all other variables remain
constant.
Net Profit/(Loss)
Reserves
Net Equity
2019
$’000
2018
$’000
2019
$’000
2018
$’000
2019
$’000
2018
$’000
If interest rates were 1% higher with all other variables held constant:
(Decrease)/increase
(2,485)
(3,010)
3,106
4,879
621
1,869
If interest rates were 1% lower with all other variables held constant:
Increase/(decrease)
2,485
3,010
(3,344)
(5,068)
(859)
(2,058)
120
Notes to the Financial StatementsFor the year ended 29 June 2019 5.5. Capital and Financial Risk Management (continued)
(c) Foreign exchange risk
Foreign exchange risk refers to the risk that the value of a
financial instrument or its associated cash flows will fluctuate
due to changes in foreign currency rates.
The Group has transactional currency risk; such exposure
arises from sales or purchases by an operating unit in
currencies other than the unit’s measurement currency. It is
the Group’s policy not to enter into forward contracts until
a firm commitment is in place. The terms of the forward
currency contracts have been negotiated to match the terms
of the commitments. The foreign currency contracts are being
used to reduce the exposure to the foreign exchange risk.
As at the end of the reporting period, the Group had the
following exposure to foreign exchange risk:
2019
$’000
2018
$’000
Receivables:
Foreign exchange receivables and forward contracts
3,422
4,875
Payables:
Foreign exchange payables and forward contracts
Net exposure
(3,477)
(55)
(4,754)
121
Based on the Group’s financial instruments held at 29 June 2019, had the Australian dollar weakened/strengthened by 10%
against the US dollar, Euro, UK pound and New Zealand dollar, with all other variables held constant, the Group’s equity and
after tax profit for the year would not have changed significantly. The analysis was performed on the same basis as 2018 and
ignores any impact of forecasted sales and purchases.
121
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 Section 6:
Group Structure
6.1. Equity Accounted Investees
Non-current
Investments in associates and jointly controlled entities
12,850
3,445
2019
$’000
2018
$’000
Accounting Policy
An associate is an entity, other than a subsidiary, over
which the Group has significant influence but not control.
Significant influence is the power to participate in the
financial and operating decisions of the entity with
shareholding generally being between 20 per cent and 50
per cent of the voting rights.
A jointly controlled entity is an entity in which the Group
holds an interest under a contractual arrangement where
the Group and one or more other parties undertake an
economic activity that is subject to joint control.
Measurement
Interests in associates and jointly controlled entities are
accounted for using the equity method. They are initially
recognised at cost plus the investor’s share of retained
post-acquisition profits, impairment and other changes in
net assets, until significant influence or joint control ceases.
Dividends received or receivable from equity accounted
investees are recognised in the consolidated financial
statements as a reduction in the carrying amount of the
investment.
When the Group’s share of losses equals or exceeds its
interest in an equity accounted investee, including any
other unsecured long-term receivables, the Group does not
recognise further losses, unless it has incurred obligations
or made payments on behalf of the investee.
Unrealised gains arising from transactions with equity
accounted investees are eliminated against the investment
to the extent of the Group’s interest in the investee.
Unrealised losses are eliminated in the same way as
unrealised gains, but only to the extent that there is no
evidence of impairment.
Impairment
Equity accounted investees are tested for impairment
annually or when indicators of impairments exist.
122
Notes to the Financial StatementsFor the year ended 29 June 2019 6.1. Equity Accounted Investees (continued)
Information relating to associates and jointly controlled entities is set out in the tables below:
Name of entity
REF
Principal activities
Reporting
date
7Beyond Media Rights Limited
Community Newspaper Group Limited
[A]
[B]
Television production
30 June
Newspaper publishing
30 June
Citizen journalism
30 June
Ownership Interest
2019
%
51.0
100.0
21.9
2018
%
50.0
49.9
21.9
Crowdspark Limited
(formerly Newzulu Limited)
Nabo Community Limited
(formerly Epicfrog Pty Limited)
NPC Media Pty Limited
Oscar Winter Pty Limited
Oztam Pty Limited
Starts at 60 Pty Limited
TX Australia Pty Limited
Yahoo Australia & New Zealand
(Holdings) Pty Limited
Health Engine Pty Limited
Online health directory
30 June
New You Group Pty Limited
(trading as Kochie Money Makeover)
Provider of general
financial advice
[C]
Online social network
30 June
-
23.5
[D]
Playout and content
managements services
Online retail jewellery
business
30 June
30 June
16.3
50.0
50.0
16.3
50.0
-
30 June
33.3
33.3
Ratings service provider
31 December
Online social network for
seniors
30 June
33.3
35.3
33.3
35.3
[E]
Transmitter facilities
provider
30 June
50.0
33.3
[F]
Internet content provider
31 December
-
50.0
[A] Additional shares in 7Beyond Media Rights Limited was purchased
[D] Seven West Media acquired 50.0% shareholding of NPC Media Pty
on 28 March 2019 increasing the shareholding from 50% to
51%. This resulted in control of the investment and has been
consolidated since that date.
[B] The remaining 50.1% of shares of Community Newspaper Group
was acquired by the Group on 24 May 2019 and the company has
been consolidated since that date.
[C] Nabo Community Limited (formerly Epicfrog Pty Limited) has
been deregistered on 7 June 2019.
Limited on 1 July 2018.
[E] Seven West Media acquired additional shares in TX Australia on 27
May 2019.
[F] In June 2018, investment in Yahoo!7 Pty Ltd has been reclassified
as Asset Held for Sale following announcement by the Group to
sell its 50% stake to Oath, a subsidiary of Verizon Inc.
Below is the summarised financial information for the Group’s remaining associates and jointly controlled investments.
Net profit (loss) for the year
Group's share of profit for the year
REF
[A]
2019
$’000
2018
$’000
(16,453)
(12,652)
1,141
716
[A] Share of profit (loss) is based on ownership percentage ranging from 16.3% to 50% for each equity accounted investee.
Movements in carrying amount of equity accounted investees
Carrying amount at the beginning of the financial year
Impairment of equity accounted investees (refer note 1.4)
Share of profit of investees after tax
Dividends received
Acquisitions and other movements
Carrying amount at the end of the financial year
2019
$’000
3,445
(2,252)
1,141
(880)
11,396
12,850
2018
$’000
51,362
(1,254)
1,704
(1,000)
(47,367)
3,445
The carrying amount of each investment is based on the fair
value of investments at acquisition date adjusted for equity
accounted profits, dividends, impairments and any other
movement since acquisition.
The Group has not recognised losses in relation to its interests
in equity accounted investees as the Group has no obligation
in respect of these losses.
123
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 6.2. Investments in Controlled Entities
Accounting Policy
The consolidated financial statements incorporate the
assets and liabilities of all subsidiaries of Seven West Media
Limited as at 29 June 2019 and the results of all subsidiaries
for the year then ended. Seven West Media Limited and its
subsidiaries together are referred to in this financial report
as the “Group.”
The consolidated entity 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. Subsidiaries
are fully consolidated from the date on which control is
transferred to the Group. They are de-consolidated from
the date that control ceases.
Intercompany transactions, balances and unrealised gains
on transactions between Group companies are eliminated.
Unrealised losses are also eliminated unless the transaction
provides evidence of the impairment of the asset
transferred. Accounting policies of subsidiaries have been
changed where necessary to ensure consistency with the
policies adopted by the Group.
Non-controlling interests in the results and equity of
subsidiaries are shown separately in the consolidated
income statement, statement of comprehensive income,
statement of changes in equity and statement of financial
position respectively.
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance
with the accounting policy described above.
Ownership interest
7Beyond Media Rights Limited
Albany Advertiser Pty Ltd
Australian National Television Pty Limited
Australian Regional Broadcasters Pty Ltd
Australian Television International Pty Limited
Australian Television Network Limited
Bluegem Holdings Pty Ltd (Trading as TriEvents)
BTW Productions Pty Limited
Channel Seven Adelaide Pty Limited
Channel Seven Brisbane Pty Limited
Channel Seven Melbourne Pty Limited
Channel Seven Perth Pty Limited
Channel Seven Queensland Pty Limited
Channel Seven Sydney Pty Limited
Coast Australia Production Pty Limited
Cobbittee Publications Pty Limited
Colorpress Australia Pty Ltd
ColourPress Pty Ltd
Community Newspaper Group Limited
ComsNet Pty Ltd
Dansted and McCabe Holdings Pty Ltd
Dodds Street Properties Pty Limited
Edinburgh Military Tattoo Sydney Production Pty Ltd
Notes
Country of
incorporation
[A]
[C]
[A]
[C]
[C]
[K]
[C]
[C]
[C]
[C]
[C]
[C]
[C]
[A]
[A]
[L]
[A]
[A]
[C]
Ireland
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Endurance Media Limited
New Zealand
Fam Time Productions Pty Limited
[M]
Australia
Faxcast Australia Pty Limited
Geraldton FM Pty Ltd
Geraldton Newspapers Pty Ltd
Great Northern Broadcasters Pty Ltd
[C]
[A]
[A]
[A]
Australia
Australia
Australia
Australia
2019
%
51
100
100
100
100
100
-
100
100
100
100
100
100
100
70
100
100
100
100
100
100
100
100
70
100
100
100
100
100
2018
%
50
100
100
100
100
100
80
-
100
100
100
100
100
100
70
100
100
100
49
100
100
100
-
70
-
100
100
100
100
124
Notes to the Financial StatementsFor the year ended 29 June 2019 6.2. Investments in Controlled Entities (continued)
Ownership interest
Great Southern Film and Television Pty Limited
Great Southern Television Limited
Harlesden Investments Pty Ltd
Herdsman Print Centre Pty Ltd
Herdspress Leasing Pty Ltd
Hocking & Co. Pty Ltd
Hybrid Television Services (ANZ) Pty Limited
Impact Merchandising Pty Limited
Jupelly Pty Limited
Kenjins Pty Limited
Media Beach Pte. Limited
North West Radio Pty Ltd
Pacific MM Pty Limited
Pacific Magazines Pty Limited
Pacific Magazines Trust
Notes
Country of
incorporation
Australia
New Zealand
[A]
[A]
[A]
[A]
[I]
[E]
[C]
[C]
[A]
[C]
[C]
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Singapore
Australia
Australia
Australia
Australia
Pacific Magazines (No. 2) Pty Limited
[C]
Australia
Pacific Magazines NZ Limited
Pacific Magazines NZ Merchant Company Limited
New Zealand
New Zealand
Pacific Magazines (PP) Pty Ltd
Pacific Magazines (PP) Holdings Pty Ltd
Pacific Magazines (WHO) Pty Ltd
Quokka Press Pty Ltd
Quokka West Pty Ltd
Red Music Publishing Pty Limited
Red Publishing Pty Limited
Redwave Media Pty Ltd
Riverlaw Holdings Pty Limited
SBB Productions Pty Limited
Seven DS Holdings Pty Ltd
Seven Facilities Pty Ltd
Seven Magazines Pty Limited
Seven Network (Operations) Limited
Seven Network Programming Pty Limited
Seven Productions NZ Limited
Seven Regional Operations Pty Limited
Seven Rights Pty Ltd
Seven Satellite Operations Pty Limited
Seven Satellite Pty Limited
Seven Studios Distribution Pty Ltd
Seven Studios Holdings Pty Ltd
Seven Studios Pty Limited
Seven Television Australia Limited
Seven West Studios Limited
[C]
[C]
[A]
[A]
[D]
[C]
[A]
[A]
[K]
[I]
[H]
[C]
[C]
[C]
[C]
[J]
[G]
[C]
[J]
[I]
[F]
[C]
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
United Kingdom
2019
%
70
70
100
100
100
100
100
100
100
100
50
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
2018
%
70
70
100
100
100
100
100
100
100
100
50
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
-
125
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 6.2. Investments in Controlled Entities (continued)
Seven West Media Investments Pty Limited
[C]
Australia
Notes
Country of
incorporation
Slim Film & TV Limited
SMG H1 Pty Limited
SMG H2 Pty Limited
SWM Finance Pty Limited
SWM Media Holdings Pty Ltd
SMG H4 Pty Limited
SMG H5 Pty Limited
South West Printing and Publishing Company Ltd
Southdown Publications Pty Limited
Spirit Radio Network Pty Ltd
Sunshine Broadcasting Network Limited
The Mentor Platform Pty Limited
The Pacific Plus Company Pty Limited
W.A. Broadcasters Pty Ltd
WAN Cinemas Pty Limited
West Australian Entertainment Pty Ltd
West Australian Newspapers Limited
West Central Seven Limited
Western Mail Pty Ltd
Western Mail Operations Pty Ltd
Westroyal Pty Ltd
Wide Bay - Burnett Television Limited
Zangerside Pty Limited
Zed Holdings Pty Limited
United Kingdom
[B]
[B]
[B]
[I]
[C]
[C]
[A]
[C]
[A]
[C]
[C]
[A]
[A]
[A]
[A]
[C]
[A]
[A]
[A]
[C]
[C]
[C]
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Ownership interest
2019
%
100
25
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
2018
%
100
25
100
100
100
100
100
100
100
100
100
100
50
100
100
100
100
100
100
100
100
100
100
100
100
The class of all shares is ordinary and the entities entered
into the Deed of Cross Guarantee with Seven West Media
Limited under ASIC Corporations (wholly-owned companies)
instrument 2016/785 by Assumption Deed on 8 April 2004.
The dates below show when the deed was amended:
Pursuant to ASIC Corporations (wholly-owned companies)
instrument 2016/785, certain wholly-owned subsidiaries,
as noted above, are relieved from the Corporations Act
2001 requirements for preparation, audit and lodgement of
financial reports and directors’ reports.
It is a condition of the Class Order that the ‘Holding Entity’
and each of the wholly-owned subsidiaries enter into a Deed
of Cross Guarantee under which each company guarantees
the debts of the others.
Seven West Media Limited and its subsidiaries represent a
‘Closed Group’ for the purposes of the Seven West Media
Limited Class Order, and as there are no other parties to its
Deed of Cross Guarantee that are controlled by Seven West
Media Limited, they also represent the ‘Extended Closed
Group.’
[A] Prior to 30 June 2009.
[B] 20 June 2011.
[C] 26 June 2012.
[D] 18 April 2013.
[E] 30 September 2013.
[F] 1 May 2015.
[G] 16 June 2015.
[H] 31 March 2016.
[I]
1 December 2016.
[J] 12 May 2017.
[K] 5 February 2019.
[L] 24 June 2019.
[M] 24 April 2019.
126
Notes to the Financial StatementsFor the year ended 29 June 2019 6.2. Investments in Controlled Entities (continued)
The consolidated statement of profit or loss and other comprehensive income for the year ended 29 June 2019 of the Seven
West Media Limited Closed Group is presented below according to the Class Order:
Statement of profit or loss and other comprehensive income
Revenue
Other income
Revenue and other income
Expenses
Impairment of intangible assets
Impairment of investments and other assets
Write down of asset held for sale
Net loss on sale of asset held for sale
Redundancy and restructure costs
Onerous contracts
Net gain on sale of other assets
Net gain (loss) on disposal of investments and controlled entities
Share of net profit of equity accounted investees
Profit (loss) before net finance costs and tax
Finance costs
Write off of unamortised refinancing cost
Finance income
Profit (loss) before tax
Tax (expense) benefit
Profit (loss) for the year
Other comprehensive income (expense)
Items that may be reclassified subsequently to profit or loss:
Effective portion of changes in fair value of cash flow hedges
Exchange differences on translation of foreign operations
Tax relating to items that may be reclassified subsequently to profit or loss
Other comprehensive income (expense) for the year, net of tax
Total comprehensive income (expense) for the year
2019
$’000
Restated
2018
$’000
1,532,792
1,599,165
3,624
474
1,536,416
1,599,639
(1,323,363)
(1,383,191)
(477,972)
(64,507)
-
(16,750)
(22,237)
(20,963)
-
(1,000)
1,141
(389,235)
(36,255)
(8,587)
1,419
(432,658)
(11,346)
(444,004)
(3,536)
158
1,061
(2,317)
(446,321)
-
(1,253)
(11,868)
-
(11,311)
-
8,224
13,520
1,704
215,464
(39,919)
-
1,444
176,989
(55,723)
121,266
3,490
434
(1,047)
2,877
124,143
127
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 6.2. Investments in Controlled Entities (continued)
The consolidated statement of financial position for the year ended 29 June 2019 of the Seven West Media Limited Closed
Group is presented below according to the Seven West Media Limited Class Order:
ASSETS
Current assets
Cash and cash equivalents
Trade and other receivables
Current tax receivable
Program rights and inventories
Asset held for sale
Other assets
Total current assets
Non-current assets
Program rights
Equity accounted investees
Other financial assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Other assets
Total non-current assets
Total assets
LIABILITIES
Current liabilities
Trade and other payables
Provisions
Deferred Income
Borrowings
Current tax liabilities
Total current liabilities
Non-current liabilities
Trade and other payables
Provisions
Contract liabilities
Deferred tax liabilities
Borrowings
Total non-current liabilities
Total liabilities
Net assets
EQUITY
Share capital
Reserves
Non-controlling interest
Accumulated deficit
Total equity
128
2019
$’000
Restated
2018
$’000
88,446
260,988
-
139,393
274,372
9,754
193,238
204,939
-
12,316
35,500
6,946
554,988
670,904
15,858
12,851
59,604
126,487
2,169
3,446
27,436
141,396
565,395
1,031,972
1,328
8,047
–
6,968
789,570
1,213,387
1,344,558
1,884,291
293,253
105,425
6,463
16,878
2,160
284,729
104,372
22,804
2,001
-
424,179
413,906
10,011
147,681
12,792
-
653,839
824,323
29,785
137,186
-
11,128
769,851
947,950
1,248,502
1,361,856
96,056
522,435
3,337,069
3,335,576
(35,108)
(49,359)
365
(1,071)
(3,206,270)
(2,762,711)
96,056
522,435
Notes to the Financial StatementsFor the year ended 29 June 2019 6.3. Parent Entity Financial Information
Accounting Policy
The financial information for the Parent Entity, Seven West
Media Limited, has been prepared on the same basis as the
consolidated financial statements, except for:
(i) Investments in subsidiaries
Investments in subsidiaries are accounted for at cost less
impairment losses in the financial statements.
(ii) Dividends received
Dividends received from subsidiaries are recognised in
profit and loss.
(iii) Financial guarantees
Where the Parent Entity has provided financial guarantees
in relation to loans and payables of subsidiaries for no
compensation, the fair values of these guarantees are
accounted for as contributions and recognised as part of
the cost of the investment.
6.3A. Summary of financial information
The individual financial statements for the Parent Entity show the following aggregate amounts:
Financial position of parent entity at year end
Current assets
Total assets
Current liabilities
Total liabilities
Total equity of the parent entity comprising of:
Share capital
Reserves
Asset revaluation reserve
Equity compensation reserve
Accumulated deficit
Profits reserve
Result of parent entity
Profit (loss) for the year
Total comprehensive income (expense) for the year
6.3B. Guarantees entered into by the
parent entity
The Parent Entity has provided financial guarantees in respect
of borrowings of a subsidiary amounting to $nil (2018: $nil).
There are cross guarantees given by Seven West Media
Limited and its subsidiaries described in note 6.2.
Parent entity
2019
$’000
2018
$’000
-
9,119
105,840
490,415
2,702
2,702
1,169
1,169
3,393,546
3,393,546
8,352
3,797
8,352
3,465
(3,840,868)
(3,454,428)
538,311
103,138
538,311
489,246
(386,441)
(386,441)
99,172
99,172
6.3C. Contingent liabilities of the parent entity
The Parent Entity did not have any contingent liabilities as at
29 June 2019 or 30 June 2018.
6.3D. Contractual commitments for the
acquisition of property, plant or equipment
The Parent Entity had no contractual commitments for the
acquisition of property, plant or equipment as at 29 June 2019
or 30 June 2018.
129
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806
6.4. Business Combinations
Accounting Policy
Accounting for acquisitions and business combinations
The acquisition method of accounting is used to
account for all business combinations, regardless of
whether equity instruments or other assets are acquired.
The consideration transferred for the acquisition of
a subsidiary comprises the fair values of the assets
transferred, the liabilities incurred and the equity
interests issued by the Group. The consideration
transferred also includes the fair value of any asset
or liability resulting from a contingent consideration
arrangement and the fair value of any pre-existing equity
interest in the subsidiary.
Acquisition related costs are expensed as incurred.
Identifiable assets acquired and liabilities and contingent
liabilities assumed in a business combination are, with
limited exceptions, measured initially at their fair values at
the acquisition date.
On an acquisition-by-acquisition basis, the Group
recognises any non-controlling interest in the acquiree
either at fair value or at the non-controlling interest’s
proportionate share of the acquiree’s net identifiable
assets. The excess of the consideration transferred, the
amount of any non-controlling interest in the acquiree
and the acquisition-date fair value of any previous equity
interest in the acquiree over the fair value of the Group’s
share of the net identifiable assets acquired is recorded
as goodwill. If those amounts are less than the fair value
of the net identifiable assets of the subsidiary acquired
and the measurement of all amounts has been reviewed,
the difference is recognised directly in profit or loss as a
bargain purchase.
Where settlement of any part of cash consideration
is deferred, the amounts payable in the future are
discounted to their present value as at the date of
exchange. The discount rate used is the entity’s
incremental borrowing rate, being the rate at which a
similar borrowing could be obtained from an independent
financier under comparable terms and conditions.
Contingent consideration is classified either as equity
or a financial liability. Amounts classified as a financial
liability are subsequently remeasured to fair value with
changes in fair value recognised in profit or loss.
Acquisitions in 2019
7Beyond Media Rights Limited and Community
Newspaper Group Limited
The Group acquired an additional 1% of the voting shares in
7Beyond Media Rights Limited (7Beyond) on 26 March 2019.
The company is non-listed company domiciled in Ireland. In
addition the Group acquired the remaining 50.1% of the voting
shares in Community Newspaper Group Pty Ltd (CNG) on
24 May 2019, a non-listed company in Australia. This resulted
in control of these investments and have been consolidated
since those dates.
The Group has elected to measure non-controlling interest
in 7Beyond at the proportionate share of the acquiree’s fair
value.
The goodwill of $8,694,000 comprises the value of expected
synergies arising from the acquisitions and intellectual
property, which is not separately recognised in 7Beyond.
Goodwill is allocated between Television ($6,181,000) and
The West segments ($2,513,000). None of the goodwill
recognised is expected to be deductible for income tax
purposes.
Assets acquired and liabilities assumed
The fair value of the identifiable assets and liabilities as at the
date of acquisition were:
Assets
Cash and cash equivalents
Trade and other receivables
Program rights and inventories
Other assets
Property, plant and equipment
Deferred tax assets
Total assets
Liabilities
Trade and other payables
Provisions
Deferred Income
Borrowings
Total liabilities
Total identifiable net liabilities
at fair value
Non-controlling interest
Fair value of previously held interest
Goodwill arising on acquisition
Fair value of consideration (non-cash)
Fair value
recognised on
acquisition
$’000
1,446
6,529
828
228
9
2,133
11,173
(3,254)
(4,891)
(3,258)
(1,785)
(13,188)
(2,015)
(2,521)
(2,572)
8,694
1,586
130
Notes to the Financial StatementsFor the year ended 29 June 2019 6.5. Related Party Transactions
6.5A Transactions with related parties
The following transactions occurred with related parties during the financial year:
Sale of goods, advertising and other services
Equity accounted investees
Other related entities
Purchase of goods, advertising and other services
Equity accounted investees
Other related entities
Shareholder contribution
Equity accounted investees
Other related entities
2019
$’000
4,349
7,998
7,333
2,274
2,000
-
2018
$’000
10,432
3,170
7,455
4,694
966
397
6.5B Outstanding balances arising from sales/purchases of goods, advertising and other
services
The following balances are outstanding at the end of the reporting period in relation to transactions with related parties:
Current receivables (sale of goods, advertising and other services)
Equity accounted investees
Other related entities
Current payables (purchase of goods, advertising and other services)
Equity accounted investees
Other related entities
2019
$’000
33
460
-
-
2018
$’000
658
-
518
180
i. There is no allowance account for impaired receivables in relation to any outstanding balances, and no expense has been
recognised in respect of impaired receivables due from related parties.
6.5C Parent entity
Seven West Media Limited is the ultimate Australian parent
entity within the Group. There are no financial guarantees in
respect of borrowings of a subsidiary, no contingent liabilities
and no contractual commitments.
6.5D Subsidiaries
Interests in subsidiaries are set out in note 6.2.
6.5E Key management personnel
Transactions were entered into during the financial year with
the Directors of Seven West Media Limited and its controlled
entities or with Director-related entities, which:
i. occurred within a normal customer or supplier relationship on
terms and conditions no more favourable than those which it
is reasonable to expect would have been adopted if dealing
with the Director or Director-related entity at arm’s length in
the same circumstances;
ii. do not have the potential to adversely affect decisions
about the allocation of scarce resources or discharge the
responsibility of the Directors; or
iii. are minor or domestic in nature.
131
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 6.5. Related Party Transactions (continued)
The following transactions occurred with Key Management Personnel (KMP) related parties:
Revenues
Expenses
2019
$’000
–
194
2018
$’000
–
103
There were no receivable or payable balances at 29 June 2019 relating to transactions with KMP related parties that have not
already been disclosed in the prior tables.
Terms and conditions
Transactions were made on normal commercial terms and conditions.
Key management personnel compensation
In addition to their salaries, the Group also provides non-cash benefits to Directors and executive officers, and contributes to a
post-employment superannuation fund on their behalf (refer to the remuneration report on pages 77 to 78).
Executive officers also participate in the Group’s Equity Incentive Plan for 2018 and 2019 (refer note 5.4).
Key management personnel compensation
Short-term employee benefits
Post-employment benefits
Superannuation
Termination benefits
Share-based payments
Other long term benefits
2019
$’000
2018
$’000
7,462
7,704
250
-
1,052
105
8,869
225
–
460
104
8,493
Detailed remuneration disclosures in respect of Directors and each member of key management personnel are provided in the
remuneration report on pages 57 to 82.
Other transactions with key management personnel
A number of Directors of Seven West Media Limited also hold directorships with other corporations which provide and receive
goods or services to and from the Group in the ordinary course of business on normal terms and conditions. None of these
Directors derive any direct personal benefit from the transactions between the Group and these corporations.
Apart from the details disclosed in this note, no Director or KMP has entered into a material contract with the Group since the
end of the previous financial year and there were no material contracts involving Directors’ or KMP interests existing at year
end.
132
Notes to the Financial StatementsFor the year ended 29 June 2019 Section 7:
Other
7.1. Remuneration of Auditor
During the year the following fees were paid or payable for services provided by the auditor of the parent entity and its related
practices.
Auditors of the Company – KPMG
(i) Audit and other assurance services
Audit or review of the financial statements
Other audit and assurance services
Total remuneration for audit and other assurance services
(ii) Other services
Other advisory services
Total remuneration of KPMG Australia
7.2. Contingent Liabilities
2019
$
2018
$
510,035
61,610
571,645
511,083
59,384
570,467
-
571,645
219,756
790,223
The Group’s tax liabilities have been calculated based on currently enacted legislation. Any changes to the tax law or
interpretations (including proposed changes already announced) may require changes to the calculation of the tax balances
shown in the financial statements.
Participation in media involves particular risks associated with defamation litigation and litigation to protect media rights. The
nature of the Group’s activities is such that, from time to time, claims are received or made by the Group. The directors are of
the opinion that there are no material claims that require disclosure of such a contingent liability.
7.3. Events Occurring After The Reporting Date
Mr James Warburton was appointed Managing Director & Chief Executive Officer of the Company on 16 August 2019, following
Mr Tim Worner’s resignation from that role and the Board as of the same date. For further information, please refer to the
announcement lodged by the Company with ASX on 16 August 2019.
133
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 7.4. Summary of Other Significant Accounting Policies
Accounting Policy
Foreign currency translation
(i) Functional and 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
(‘the functional currency’). The consolidated financial
statements are presented in Australian dollars (AUD), which
is the Group’s functional and presentation currency.
(ii) Transactions and balances
Foreign currency transactions are translated into the
functional currency using the exchange rates prevailing at
the dates of the transactions.
Foreign exchange gains and losses resulting from the
settlement of such transactions and from the translation at
year-end exchange rates of monetary assets and liabilities
denominated in foreign currencies are recognised in
profit or loss, except when they are deferred in equity as
qualifying cash flow hedges.
Finance income and costs
Interest income is recognised on a time proportion basis
that takes into account the effective yield on the asset. It
comprises income on funds invested and fair value gains on
financial assets at fair value through profit or loss.
Finance costs comprise interest expense on borrowings, the
ineffective portion of cash flow hedges and fair value losses
on financial assets at fair value through profit or loss.
Financial guarantee contracts
Financial guarantee contracts are recognised as a financial
liability at the time the guarantee is issued. The liability
is initially measured at fair value and subsequently at the
higher of the amount determined in accordance with
AASB 137 Provisions, Contingent Liabilities and Contingent
Assets and the amount initially recognised less cumulative
amortisation, where appropriate.
The fair value of financial guarantees is determined as the
present value of the difference in net cash flows between
the contractual payments under the debt instrument
and the payments that would be required without the
guarantee, or the estimated amount that would be payable
to a third party for assuming the obligations.
New accounting standards and interpretations
The following accounting standard have been issued or
amended but is not yet effective during the year ended 29
June 2019. The Group has elected not to early adopt any
of these new standards or amendments in these financial
statements.
AASB 16 Leases
AASB 16 Leases will be effective in the Group financial
statements for the year ended 27 June 2020. The Group
intends to adopt the standard fully retrospectively, with
comparatives restated from a transition date of 30 June 2019.
AASB 16 provides a single lessee accounting model,
requiring lessees to recognise right-of-use assets and lease
liabilities for all applicable leases. Under AASB 16, lessees
will be required to remeasure the lease liability upon the
occurrence of certain events, such as a change in future
lease payments resulting from a change in an index or
rate used to determine those payments. The lessee will
generally recognise the amount of the re-measurement of
the lease liability as an adjustment to the right-of-use asset.
AASB 16 is expected to have a significant impact on
reported assets, liabilities and income statement of the
Group, as well as the classification of cash flows relating to
lease contracts. The standard will impact a number of key
measures such as operating profit and cash generated from
operations, as well as a number of alternative performance
measures used by the Group.
During the year ended 29 June 2019, the Group has
performed a detailed impact assessment of AASB 16. The
estimated impact of AASB 16 adoption (before tax) is
summarised below.
As at 1 July 2018, non-current assets will increase by
$111.0 million to $136.0 million and gross liabilities will
increase by $139.0 million to $170.0 million. This will result
in a decrease in opening retained earnings of between
$28.0 million to $35.0 million.
As at 29 June 2019, closing non-current assets will increase
by $104.0 million to $128.0 million and gross liabilities will
increase by $138.0 million to $169.0 million. This will result
in a decrease in closing net assets of between $34.0 million
to $41.0 million.
For the year ended 29 June 2019, operating costs will
reduce by $17.9 million to $21.9 million, and profit before
after tax will reduce by $5.6 million to $6.9 million.
The Group has elected not to recognise right of use assets
and lease liabilities for short-term leases or low-value
assets. The Group will continue to expense the lease
payments associated with these leases on a straight-line
basis over the lease term.
134
Notes to the Financial StatementsFor the year ended 29 June 2019 7.5. Changes in Accounting Policies and Disclosures
7.5.1 AASB 15 Revenue from Contracts with Customers
AASB 15 establishes a comprehensive framework for determining whether, how much and when revenue is recognised. It
replaces AASB 118 ‘Revenue’, AASB 111 ‘Construction Contracts’ and related interpretations.
The Group has adopted AASB 15 on a modified retrospective basis. The effect of applying this basis is an adjustment to
opening retained earnings of $0.99m in accumulated deficit at 1 July 2018 for the cumulative effect of applying AASB 15 up
to 30 June 2018. Accordingly, the information presented for FY18 has not been restated - i.e. it is presented, as previously
reported, under AASB 118, AASB 111 and related interpretations.
The Group’s revenue recognition policy for program production contracts has changed from percentage of completion to
delivery of performance obligations in accordance with AASB 15. The change in accounting policy resulted in the deferral
of 3rd party commissioned revenue and related costs, where timing of recognition and delivery was not aligned in the prior
comparative period. The July 2018 balance sheet including tax was adjusted for the impact of the timing difference.
Without the adoption of AASB 15, the Group’s reported revenue and cost in its financial report for the year ended 29 June 2019
would have been $12.3m and $11.6m lower respectively. The net impact after tax to the Group’s retained earnings as at 29 June
2019 would have been $0.4m lower.
7.5.2 AASB 9 Financial Instruments
AASB 9 Financial Instruments 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.
The Group has adopted AASB 9 from 1 July 2018 on a fully retrospective basis, adjusting the comparative information for
the period beginning 25 June 2017 except as described in section 7.5.2B below. Accordingly, the information presented in
December 2017 and June 2018 has been restated to include the effect of transition. Refer to section 7.5.2A below.
7.5.2A. Fully retrospective basis
Impact on statement of profit or loss
Finance costs
Profit before tax
Tax benefit (expense)
Profit for the year
Basic earnings per share
Diluted earnings per share
REF
(a)
30-Jun-18
$’000
Reported
(36,804)
191,786
(56,892)
134,894
30-Jun-18
$’000
Adjusted
(3,009)
(3,009)
903
(2,106)
30-Jun-18
$’000
Restated
(39,813)
188,777
(55,989)
132,788
(b)
(b)
8.9 cents
(0.1 cents)
8.9 cents
(0.1 cents)
8.8 cents
8.8 cents
Impact on consolidated statement of financial position
REF
30-Jun-18
$’000
Reported
30-Jun-18
$’000
Adjusted
30-Jun-18
$’000
Restated
Liabilities
Non-current borrowings
Deferred tax liabilities
Equity
Accumulated deficit
(a)
(b)
776,647
8,919
(6,796)
2,040
769,851
10,959
(b)
(2,864,733)
4,756
(2,859,977)
Impact on consolidated statement of financial position
REF
24-Jun-17
$’000
Reported
24-Jun-17
$’000
Adjusted
24-Jun-17
$’000
Restated
Equity
Accumulated deficit
(a)
(2,970,353)
6,862
(2,963,491)
135
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 7.5. Changes in Accounting Policies and Disclosures (continued)
The nature of these adjustments are described below:
7.5.2B. Exception to the retrospective transition basis
(a) Borrowing costs
On adoption of AASB 9, the Group identified a material
adjustment relating to the 2016 refinance of its debt facility.
AASB 9 maintains the assessment criteria for determining
if a debt refinancing is deemed to be substantial or non-
substantial. For debt modifications that are non-substantial,
the difference between the net present value of the expected
future cash flows under the new facility is compared to the
original facility and is capitalised and amortised over the
remainder of the facility term.
As a result of the 2016 refinance being assessed as non-
substantial, a benefit of $6.9m has been recognised as an FY18
opening retained earnings adjustment on transition and interest
expense for the 12 months to June 2018 increased by $3.0m.
In November 2018, the Group completed a further refinance
of its debt facilities. This refinance was assessed to be a
substantial modification, and accordingly, the net amount of the
unamortised borrowing cost and gain capitalised at the time of
modification of $8.6m was written off to the profit or loss.
(b) Other adjustments
On adoption of AASB 9, other items of the primary financial
statements such as earnings per share, deferred taxes and
retained earnings were adjusted as necessary.
On adoption of AASB 9, the Group’s accounting for its
other investments held is now required to be fair valued
at each reporting period. Previously, these investments
were held at cost. The Group has elected to classify these
investments as fair value through other comprehensive
income as these investments are not held for trading. The
transition classification only takes effect from the date of
initial application and therefore the prior year statements are
not adjusted for this change. The effect of applying this is
an increase to Other Financial Assets of $23.0m, Fair Value
Reserves of $16.1m and Deferred Tax Liability of $6.9m at 1
July 2018.
7.5.2C. Other Items
(i) Trade receivables
The standard also introduces a new impairment model
that requires the recognition of impairment provisions
based on the expected credit losses rather than incurred
credit losses as measured under AASB 139. Based on the
Group’s assessment, there are no material changes to the
measurement of trade and other receivables under the new
method.
(ii) Other
There are no other changes to the measurement of the
Group’s financial assets and liabilities.
136
Notes to the Financial StatementsFor the year ended 29 June 2019 Directors’ Declaration
For the year ended 29 June 2019
1.
In the opinion of the Directors of Seven West Media Limited (the Company):
a. the consolidated financial statements and notes that are set out on pages 84 to 136 and the Remuneration
Report on pages 57 to 82 in the Directors’ Report are in accordance with the Corporations Act 2001,
including:
i.
giving a true and fair view of the Group’s financial position as at 29 June 2019 and of its performance
for the financial year ended on that date; and
ii. complying with Australian Accounting Standards 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. As at the date of this declaration, there are reasonable grounds to believe that the Company and the
members of the Extended Closed Group identified in Note 6.2 will be able to meet any obligations or
liabilities to which they are or may become subject by virtue of the Deed of Cross Guarantee, described in
Note 6.2, between the Company and those group entities pursuant to the ASIC Corporations (Wholly-owned
Companies) Instrument 2016/785.
3. The Directors have been given the declarations required by section 295A of the Corporations Act 2001 from
the Chief Executive Officer and the Chief Financial Officer for the financial year ended 29 June 2019.
4. The Directors draw attention to page 84 of the consolidated financial statements, which includes a statement
of compliance with International Financial Reporting Standards.
Signed in accordance with a resolution of the Directors.
KM Stokes AC
Chairman
Sydney
20 August 2019
137
Seven West Media Limited Annual Report 2019Financial Statements0201030405070806 Independent Auditor’s Report
Independent Auditor’s Report
To the shareholders of Seven West Media Limited
Report on the audit of the Financial Report
Opinion
We have audited the Financial Report of Seven West
Media Limited (the Company).
Basis for opinion
We conducted our audit in accordance with Australian
Auditing Standards. We believe that the audit evidence
we have obtained is sufficient and appropriate to
provide a basis for our opinion.
In our opinion, the accompanying Financial Report of
the Company is in accordance with the Corporations
Act 2001, including:
Our responsibilities under those standards are further
described in the Auditor’s responsibilities for the audit
of the Financial Report section of our report.
giving a true and fair view of the Group’s financial
position as at 29 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.
The Financial Report comprises:
Consolidated statement of financial position as at
29 June 2019
Consolidated statement of profit or loss and other
comprehensive income, Consolidated statement of
changes in equity, and Consolidated statement of
cash flows for the year then ended
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 Matters we identified are:
Valuation of Television Licences
Valuation of The West Goodwill, Mastheads and
Notes including a summary of significant
Property, Plant and Equipment (PPE)
accounting policies
Directors’ Declaration.
The Group consists of Seven West Media Limited (the
Company) and the entities it controlled at the year end
or from time to time during the financial year.
.
Key Audit Matters are those matters that, in our
professional judgement, were of most significance in
our audit of the Financial Report of the current period.
These matters were addressed in the context of
our audit of the Financial Report as a whole, and in
forming our opinion thereon, and we do not provide a
separate opinion on these matters.
138
Valuation of Television Licences
Refer to Note 3.1 Intangible Assets to the Financial Report
The key audit matter
Valuation of the Television Licences is a Key Audit
Matter due to:
The size of the asset, being the largest asset of
the Group;
The level of judgement required by us in
evaluating the estimates determined by the
Group and their external valuation expert for
forecast television advertising revenues and
associated costs; and
The $415.0 million current year period
impairment charge resulting from the recent
advertising market declines as well as the
Group’s reassessment of longer term market
growth.
The level of growth in advertising revenue for
commercial television networks continues to be
challenged by changes in consumer viewing habits.
This is driven by the increased use of alternative
viewing platforms.
This ongoing disruption creates uncertainty in the
key estimates used in the Television Licence value in
use model, specifically:
Free To Air (FTA) television advertising market
growth rates – short, medium and long term
(terminal growth factor);
The Group’s share of the Metro FTA advertising
market; and
The discount rate.
How the matter was addressed in our audit
Our procedures included:
Challenging the short, medium and long term
forecast for FTA television advertising market
growth rates and the Group’s share of the
metro FTA advertising market by evaluating the
assumptions against historical actuals, published
forecast growth rates and industry reports. This
procedure was performed with assistance from our
valuation specialist;
Evaluating the key inputs to the discount
rate, including the risk free rate, cost of debt,
market participant gearing levels and industry
beta, against publicly available data of a group
of comparable entities. This procedure was
performed with assistance from our valuation
specialist;
Recalculating the impairment charge against the
recorded amount disclosed; and
Assessing quantitative and qualitative disclosures
in relation to the valuation by comparing
these disclosures to our understanding of the
valuation, the business and accounting standards
requirements.
139
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806 Independent Auditor’s Report
Valuation of The West Goodwill, Mastheads and Property, Plant and Equipment (PPE)
Refer to Note 3.1 Intangible Assets to the Financial Report
The key audit matter
Valuation of The West Goodwill, Mastheads
and PPE is a Key Audit Matter due to the level
of judgement required by us in evaluating the
estimates determined by the Group and their
external valuation expert for forecast advertising
and circulation revenues and associated costs. The
property related assets of the West were valued
during the period with assistance from an external
property valuation expert engaged by the Group
which increased the judgement involved.
The Newspaper sector faces uncertainty as
the demand for print media continues to be
downwardly impacted by real time digitalisation of
content. This creates significant uncertainty in the
following key estimates underpinning the value in
use impairment models:
Future print advertising and circulation
revenue growth rates in the short, medium and
long term;
Future revenue growth of associated and
recently launched digital businesses;
Costs and the impact of committed cost
reduction initiatives; and
The discount rate.
The Group’s reassessment of these estimates
during the current year resulted in impairments of
Goodwill ($2.5 million), Mastheads ($37.9 million),
PPE ($23.3 million) and other intangibles of ($8.4
million), increasing our audit effort.
How the matter was addressed in our audit
Our procedures included:
Challenging management’s short, medium and
long term forecast’s for print and digital revenue
by comparing those assumptions with published
industry growth rates and industry reports. This
procedure was performed with assistance from
our valuation specialist;
Evaluating the key inputs to the discount
rate, including the risk free rate, cost of debt,
market participant gearing levels and industry
beta, against publicly available data of a group
of comparable entities. This procedure was
performed with assistance from our valuation
specialist;
Evaluating the status of print related committed
cost reduction initiatives included in the
forecast cash flows against business plans and
communications to employees;
Assessing the fair value less cost of disposal
of the Newspapers property related assets
determined by the Group and their external
valuation expert by evaluating the key
assumptions against published market data. This
procedure was performed with assistance from
our valuation specialist;
Recalculating the allocation of impairment
charge against the recorded amounts disclosed;
and
Assessing quantitative and qualitative disclosures
in relation to the valuation by comparing
these disclosures to our understanding of the
valuation, the business and accounting standards
requirements.
140
Other Information
Other Information is financial and non-financial
information in Seven West Media 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
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.
Report on the Remuneration Report
Opinion
In our opinion, the Remuneration Report of Seven West
Media Limited for the year ended 29 June 2019, complies
with Section 300A of the Corporations Act 2001.
Directors’ responsibilities
The Directors of the Company are responsible for the
preparation and presentation of the Remuneration
Report in accordance with Section 300A of the
Corporations Act 2001.
Our responsibilities
We have audited the Remuneration Report included
in pages 57 to 82 of the Directors’ report for the year
ended 29 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
Sydney
20 August 2019
Tracey Driver
Partner
141
Seven West Media Limited Annual Report 201908Financial Statements0201030405070806
Company
Information
Directors
KM Stokes AC – Chairman
JR Warburton – Managing Director & Chief Executive Officer
JH Alexander
T Dyson
D Evans
PJT Gammell
C Garnsey OAM
JG Kennett AC
M Malone
RK Stokes
M Ziegelaar
Company Secretary
WW Coatsworth
Registered Office
Newspaper House
50 Hasler Road
Osborne Park WA 6017
Share Registry
Boardroom Pty Limited
Level 12
Grosvenor Place
225 George Street
Sydney NSW 2000
Auditor
KPMG
Tower Three
International Towers Sydney
300 Barangaroo Avenue
Sydney NSW 2000
Stock Exchange Listing
Australian Stock Exchange
ASX code: SWM
Legal Advisors
Herbert Smith Freehills
ANZ Tower
161 Castlereagh Street
Sydney NSW 2000
Clayton Utz
Level 15
1 Bligh Street
Sydney NSW 2000
Addisons
60 Carrington Street
Sydney NSW 2000
142
Investor
Information
Shareholder Inquiries
Investors seeking information regarding their
shareholding or dividends or wishing to advise of a
change of address should contact the Share Registry at:
Boardroom Pty Limited
Level 12
Grosvenor Place
225 George Street
Sydney NSW 2000
Telephone: (02) 9290 9600
Facsimile: (02) 9279 0664 or
Visit the online service at boardroomlimited.com.au
Boardroom Pty Limited has an online service for
investors called InvestorServe. This enables investors
to make online changes, view balances and transaction
history, as well as obtain information about recent
dividend payments and download various forms to
assist in the management of their holding. To use this
service visit the Boardroom Pty Limited website.
Other general inquiries may be directed to Mr W.
Coatsworth, Company Secretary on (02) 8777 7777 or
visit the website at www.sevenwestmedia.com.au.
Tax File Number Information
The company is obliged to record Tax File Numbers
or exemption details provided by shareholders. While
it is not compulsory for shareholders to provide a
Tax File Number or exemption details, Seven West
Media Limited is obliged to deduct tax from unfranked
dividends paid to investors resident in Australia
who have not supplied such information. Forms are
available upon request from the Share Registry or
shareholders can submit their Tax File Number via the
Registry’s website.
The Chess System
Seven West Media Limited operates under CHESS –
Clearing House Electronic Subregister System – an
Australian Securities Exchange system which permits
the electronic transfer and registration of shares.
Under CHESS, the company issues a Statement of
Holdings to investors, instead of share certificates,
and the statement will quote the Holder Identification
Number (HIN). The HIN should be quoted on any
correspondence investors have with the Share
Registry.
The company will maintain investors’ holdings in an
Issuer Sponsored facility, which enables investors to
maintain their holding without the need to be tied to
any particular stockbroker.
143
Seven West Media Limited Annual Report 2019Financial Statements0201030405070806 Shareholder
Information
The shareholder information set out below was applicable at 4 August 2019.
a. Distribution of equity securities
a. Analysis of numbers of equity security holders by size of holding:
Size of holding
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
b. There were 4,778 holders of less than a marketable parcel of ordinary shares.
b. Equity security holders
The names of the twenty largest holders of equity securities are listed below:
Number of shareholders
4,157
6,833
2,302
2,962
316
16,570
Name
Network Investment Holdings Pty Limited
HSBC Custody Nominees (Australia) Limited
JP Morgan Nominees Australia Limited
Citicorp Nominees Pty Limited
National Nominees Limited
3RD Wave Investors Limited
BNP Paribas Nominees Pty Limited
BNP Paribas Nominees Pty Limited
UBS Nominees Pty Limited
Mr Gavin Martin Hancock and Mrs Judith Ann Hancock
Brispot Nominees Pty Limited
Woodross Nominees Limited
Sargon Ct Limited
Sojourn Services Pty Limited
CS Third Nominees Pty Limited
Mr John Rumble and Mrs Sonja Rumble
Waratah Capital Partners Pty Limited
Sojourn Services Pty Limited
UBS Nominees Pty Limited
Ms Sarah Jane Botten
Number of
ordinary shares held
Percentage of
issued shares
611,600,387
209,908,984
166,178,100
164,807,175
53,362,606
20,750,000
20,645,605
18,165,278
7,111,267
3,998,897
3,453,644
3,064,187
2,819,371
2,662,079
2,661,255
2,400,000
2,100,000
1,974,921
1,772,911
1,740,000
40.55
13.91
11.02
10.92
3.53
1.37
1.36
1.20
0.47
0.26
0.22
0.20
0.18
0.17
0.17
0.15
0.13
0.13
0.11
0.11
1,301,176,667
86.28
144
c. Substantial shareholders
Substantial shareholders in the Company are set out below:
Name
Mr Kerry Matthew Stokes AC
Australian Capital Equity Pty Limited
Seven Group Holdings Limited
* Based on issued capital at date of notification.
Substantial
holding*
40.94%
40.88%
40.88%
Number of
ordinary shares in
substantial holding
619,753,734
618,711,654
618,711,654
The above percentages include the relevant interests held pursuant to the Corporations Act 2001 and
accordingly may differ from that disclosed in note b.
d. Voting rights
On a show of hands every member present in person or by proxy shall have one vote and upon a poll each share
shall have one vote.
145
Seven West Media Limited Annual Report 2019Financial Statements0201030405070806 This page has been intentionally left blank
146
SEVEN WEST MEDIA
ABN 91 053 480 845
Newspaper House,
50 Hasler Road, Osborne Park,
Perth WA 6017
T +61 8 9482 3111
F +61 8 9482 9080
sevenwestmedia.com.au