Plain-text annual report
T H E S T A R
E N T E R T A I N M E N T
G R O U P
A N N U A L R E P O R T 2 0 1 6
O U R V I S I O N
I S TO B E A U S T R A L I A’ S
L E A D I N G I N T E G R AT E D
R E S O R T C O M PA N Y
T H E S TA R S Y D N E Y
Q U E E N ’ S W H A R F B R I S B A N E
© DESTINATION BRISBANE CONSORTIUM. ALL RIGHTS RESERVED. ARTIST’S IMPRESSION. SUBJECT TO PLANNING APPROVALS.
H I G H L I G H T S
M E S S A G E S
Chairman’s Message
CEO’s Message
B O A R D A N D E X E C U T I V E
Board of Directors
Executive Team
G R O U P P E R F O R M A N C E
K E Y P R O J E C T S
S U S TA I N A B I L I T Y R E P O R T
Sustainability Strategy
World Class Properties
Leading Company
Guest Wellbeing
Talented Teams
F I N A N C I A L R E P O R T
Directors’ Report
Remuneration Report
Financial Statements
A D D I T I O N A L I N F O R M A T I O N
Shareholder Information
Corporate Governance Statement Details
Annual General Meeting Details
Company Directory
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J U P I T E R S G O L D C O A S T
CONCEPT IMAGE ONLY. SUBJECT TO APPROVALS.
1
HIGHLIGHTS
FINANCIAL
$2,358m
ACTUAL GROSS
REVENUE
$194m
STATUTORY
NPAT
23.6cents
EARNINGS
PER SHARE
13.0cents
DIVIDEND
PER SHARE
Actual Gross
Revenue
($m)
Statutory
NPAT
($m)
2,258
2,358
1,897
194
169
FY16
FY15
FY14
106
Earnings Per
Share (cents)
FY16
FY15
FY14
23.6
20.5
FY14 $106M
12.9
FY15 $169M
FY16 $194M (up 15%)
Dividend
Per Share
(cents)
13.0
11.0
FY16
FY15
FY14
8.0
FY14 12.9c
FY15 20.5c
FY16 23.6c (up 15%)
FY16
FY15
FY14
FY 14 8.0c
FY15 11.0c
FY16 13.0c (up
18%)
FY14
FY15
FY16
FY14
FY15
FY16
FY14
FY15
FY16
FY14
FY15
FY16
BACKGROUND IMAGE IS A CONCEPT IMAGE ONLY. SUBJECT TO APPROVALS.
2
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
FOOTPRINT
3 PROPERTIES
Sydney, Gold Coast,
Brisbane
20 MILLION
Guests per annum
8,000+
Total employees
1,346
Hotel rooms across
three properties
30+
Restaurants and cafes
across three properties
30 YEARS
Of operations at
Jupiters Gold Coast
72%
Of pre-tax profits
paid to all levels of
government
$10m+
Contributed to partnerships,
community groups and
charities
FIRST
Official Partner of
the Gold Coast 2018
Commonwealth Games
PROPERTY DEVELOPMENT
$3b
UP TO
$1b
QUEEN’S WHARF BRISBANE
DEVELOPMENT
THE STAR SYDNEY
EXPANSION
UP TO
$850m
JUPITERS GOLD COAST
TRANSFORMATION
Property capital projects are subject to all approvals. Investments include contributions from joint venture partners.
3
CHAIRMAN’S
MESSAGE
Consistent, strong and stable leadership
across the Board and executive
management team, with a focus
on sustained delivery of financial
performance and strategic priorities,
was a hallmark of the 2016 financial year.
It was another year of earnings
growth, improved performance
and continuing to position the
company for future growth.
This robust approach to
‘more of the same’ ensured
ongoing momentum in the
business while, more broadly,
solid progress on projects at
each of our properties was
intrinsically aligned to the
vision of becoming Australia’s
leading integrated resort
company. We are capitalising
on the opportunities presented
us, by nature of great locations
in Sydney, Brisbane and Gold
Coast for our tourism assets,
and macro conditions that point
to existing rates of inbound
visitation, particularly from
China, continuing long-term.
Turning to the financial
performance for the year,
statutory net profit after tax
(NPAT) for the Group was $194.4
million. This was up 14.9% on
the prior year and represents
a 33% compound annual
growth rate over the last three
years. Normalised NPAT for the
2016 financial year was $241.3
million, up 23.4%.
Statutory earnings before
interest, tax, depreciation
and amortisation (EBITDA)
increased 7.5% on the prior
year to $488.8 million and
normalised EBITDA was
up 14.1% to $556.2 million
(applying the normalised win
rate of 1.35%), with margins
increasing as a result of good
expense management.
The Star Sydney continued
to be a strong performer
for the Group, with good
volume growth across all
lines of business continuing
to validate the company’s
strategic priority to invest in
its properties.
This included the International
VIP Rebate business, which
experienced a 7% increase in
turnover compared with the
2015 financial year and a
five-year compound average
growth rate of 23.4%.
Across the Group, these
results were achieved as
transformational projects,
either underway or planned at
each of the three properties,
continued to progress during
the 2016 financial year.
MESSAGES
4
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 In July 2015, the Queensland
Government selected The Star
Entertainment Group, along
with our Destination Brisbane
Consortium partners, Hong
Kong-based Chow Tai Fook
Enterprises Limited and Far
East Consortium International
Limited, to redevelop the
Queen’s Wharf precinct.
We were pleased to then
achieve contractual close
with the Queensland
Government in November
2015. Detailed planning is
now progressing on this
landmark partnership with
the Queensland Government.
Development of Queen’s
Wharf Brisbane is a critically
important strategic step for
the Group, securing our long-
term position in the Brisbane
market and demonstrating
our commitment to
Queensland and tourism,
both domestically and
internationally.
We are also developing further
opportunities with Chow Tai
Fook Enterprises Limited
and Far East Consortium
International Limited.
Together with our partners,
we are well advanced
in securing additional
joint venture investment
opportunities to expand and
improve the value proposition
of our properties in Sydney and
the Gold Coast.
This underlines the strength
and depth of the relationship,
where leveraging our
respective capabilities has
created a compelling
corporate triumvirate.
In Sydney, new hotel and
tower expansion plans were
announced. The proposal,
involving a further partnership
investment of up to $500
million at The Star Sydney,
is in the planning and
development approval stage.
This is in addition to the
previously announced
$500 million of upgrades
and refurbishments to be
undertaken by The
Star Sydney.
At the Gold Coast, a master
plan for the property was
announced in May 2016.
The first stage is a $400
million hotel and apartment
tower, funded by The Star
Entertainment Group, Chow
Tai Fook Enterprises Limited
and Far East Consortium
International Limited,
which is in the planning and
development approval stage.
The magnitude of these
projects is underpinned
by ongoing growth in the
business, long-term tourism
forecasts and our desire to
deliver world-class integrated
resorts with authentic
local spirit.
At the outset of the 2016
financial year, Matt Bekier
suggested ‘Tourism can be
the next mining boom’,
referring to the economic
impact advantages on offer
if Australia leverages the
tourism opportunity.
Having the potential to be
a key driver and sustainable
economic pillar for decades
to come, there is also a nation-
building element to tourism
– investment in infrastructure,
supporting growth and
creating jobs. The Star
Entertainment Group is proud
to contribute to that outcome.
We operate in competitive
markets and in a highly-
competitive industry. We must
offer world-class tourism and
entertainment destinations
with wide-ranging offerings,
provide a commitment to
excellence in guest service,
support the communities in
which we operate and involve
ourselves in the events that
matter to them.
There is also an imperative to
continue delivering benefit to
shareholders. The Board has
declared a final dividend of 7.5
cents per share (fully franked),
taking total dividends for the
year to 13.0 cents per share
(fully franked), up 18% on
the 2015 financial year and
reflecting a payout ratio of
55% of statutory NPAT. The
strategy of investing in our
integrated resorts continues to
improve shareholder returns.
To further optimise the
property investments and
align to our commitment to
guests and shareholders, the
company changed its name
during the 2016 financial year–
from Echo Entertainment
Group Limited to The Star
Entertainment Group
Limited – and moved to the
implementation stage of a new
single brand architecture.
New branding is in place at
a corporate level and at The
Star Sydney property.
During the 2017 financial
year, the reinvigorated Jupiters
property will become The Star
Gold Coast.
On behalf of the Board,
I would like to again thank
Matt Bekier, his executive team
and all team members across
our properties. Their hard
work, drive and enthusiasm is
reflected in the strength of the
Group’s results.
Also, I want to extend
my gratitude to all our
shareholders for their ongoing
support. The Board and
management of The Star
Entertainment Group continue
to be focused on maintaining
momentum and efficiency
in the business operations
while progressing delivery of
strategic priorities – including
the significant pipeline of
capital projects with our
development partners – for the
benefit of shareholders.
John O’Neill AO
CHAIRMAN
5
CEO’S MESSAGE
Echo Entertainment Group was renamed
The Star Entertainment Group during
the 2016 financial year, over which time
the Group delivered a further year of
solid earnings growth.
This change of corporate identity
will in time lead to a rebranding
of all of our properties under The
Star banner and goes hand in
hand with the articulation of our
vision – to become Australia’s
leading integrated resort
company. To achieve this vision,
we will work tirelessly over
the coming years to continue
delivering shareholder value,
improve our customer service,
develop our properties, energise
our staff and help improve
our communities.
OPERATING PERFORMANCE
The 2016 financial year was a
good year for the company. We
grew revenue in every gaming
segment of our business. Actual
gross revenue across the Group
grew 4.4% to $2,358 million,
with The Star Sydney growing
by 7.5% and the Queensland
properties declining by 2.2% for
the year. The Queensland result
was impacted by disruptions
caused by major capital
investment projects throughout
the year. Normalised gross
revenue grew 6.0% to $2,431
million, with 8.6% growth at The
Star Sydney and a small decline
of 0.2% at our Queensland
properties for the year.
Domestic gaming revenues grew
6.8% to $1,515 million across the
Group in the 2016 financial year,
with a good spread across tables
and electronic gaming. We
attribute the continued growth
to incremental improvements
in our customer service, solid
macro-economic conditions
in our markets and continued
enhancements to our loyalty
program and marketing
strategies. The impact of these
efforts was moderated by the
disruption caused to operations
from construction activities at
our properties in Sydney and
the Gold Coast.
Non-gaming cash revenue
of $240 million was down
0.4% for the year. This
result was impacted again
by refurbishment activities
which reduced hotel room
capacity significantly during
the year. The continued
growth in the popularity
of our loyalty program also
reduced cash takings as more
customers took advantage
of the discounts available to
members of this program.
The International VIP Rebate
business recorded good growth
in the 2016 financial year, with a
record $49.5 billion in turnover
for the year. Actual revenue was
up 1.3% to $596 million for the
year (up 7.2% to $670 million
on a normalised basis). We are
pleased with the performance
of our team as this growth was
achieved despite challenging
global market conditions and
without compromising our tight
credit risk management and
collections processes.
Operating expenses for the 2016
financial year of $961 million
were up 4.2% on last year,
driven primarily by the increase
in domestic and International
VIP Rebate business volumes
across the year, and increased
investments in loyalty and
marketing. This represents a
good result and allowed us to
increase operating margins
on last year while absorbing
an increased gaming tax rate
in NSW.
The Star continues to receive
wide-ranging recognition for the
way we run our businesses. The
Star Sydney received 26 awards
during the 2016 financial year
spanning restaurants, bars, The
Star Event Centre and hotels.
David Chang’s Momofuku
Seiōbo was awarded Two Chef’s
6
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 Hats in the coveted The Sydney
Morning Herald Good Food
Guide, Three Goblets in the
Gourmet Traveller Restaurant
awards, Three Glasses in the
Gourmet Traveller Restaurant
Guide 2015, and was also
included in the Australian
Financial Review’s list of Top
100 restaurants for 2016. Even
more impressively, in August
2016, Momofuku Seiōbo was
crowned Australia’s premier
restaurant by Gourmet Traveller.
Pleasingly, Sydneysiders
and tourists alike are giving
The Star Sydney’s diverse
restaurant, nightlife, five-
star accommodation and
entertainment venue offerings
increased consideration.
The redevelopment and
expansion of Jupiters Hotel &
Casino continued, with the
opening of Garden Kitchen
& Bar, four Executive Floors
and Private Gaming Salons
during the 2016 financial year.
Construction commenced on
the Gold Coast’s first six-star
accommodation offering,
while the refurbishment of the
property’s almost 600 existing
hotel rooms is expected to be
completed during the first
half of the 2016 financial year.
Further testament to Jupiters’
transformation success was
the receipt of several awards
during the 2016 financial year.
One Hat restaurant Kiyomi
received the title of Australia’s
Best New Restaurant and Best
Prestige Restaurant Queensland
for its cutting-edge Japanese
cuisine. Garden Kitchen & Bar
was celebrated for its stylish
design and announced as one
of only seven venues in the
Australia and Pacific region to be
shortlisted for the International
Restaurant & Bar Design Awards.
TEAM AND COMMUNITY
The Star Entertainment Group
supports the communities
in which we operate and we
participate in the events that
matter to the cities where
our properties are located.
This aligns with a business
promise to deliver, through our
integrated resorts, experiences
with authentic local spirit.
Our participation also reflects
the desire of our people to
be involved in their local
communities. We take pride in
our responsibility to guests, and
also our team members, to foster
a safe, diverse and enjoyable
workplace environment.
The Star Entertainment Group
provides widespread support
to events and organisations.
In the 2016 financial year, this
was demonstrated through
the contribution of more than
$10 million to partnerships,
charities and community
groups. During the year, our
partners included Sydney
Festival, Sydney Chinese New
Year Festival, Sydney Swans,
Australian Turf Club, Gold Coast
Airport Marathon, the Jupiters
Pan Pacific Masters Games,
Blues on Broadbeach, Brisbane
Festival and the Asia Pacific
Screen Awards.
Specific initiatives in
Queensland included further
contributions to our pledge
of $3 million over three years
to Ronald McDonald House
South-East Queensland; the
forging of official partnerships
with the Queensland Rugby
League and the Maroons State
of Origin team; and a significant
ongoing commitment to our
Official Partnership of the Gold
Coast 2018 Commonwealth
Games. Importantly, and
proudly, we also extended our
partnership with Surf Life Saving
Queensland into its third decade
and celebrated 14 years of
consecutive support to Cerebral
Palsy League Queensland.
In Sydney, an official partnership
with the NSW Rugby League and
the Blues State of Origin team
stood alongside new three-year
$1.5 million partnerships with
Barnardos Australia, Chris
O’Brien Lifehouse and Taronga
Conservation Society Australia.
One of our other key priorities is
to develop our people, providing
opportunity and pathways for
our almost 9,000 team members.
In support of this, we developed
and launched numerous
initiatives and programs
throughout the 2016 financial
year, including the ‘Star
Quality’ guest service excellence
program that will reach all
team members this year. The
Queensland Hotel & Hospitality
School (a partnership with
TAFE Queensland) delivered its
first tailored training program,
the ‘International Hospitality
Service Program’. The ‘Women
in MBA’ program, which
supports female employees as
they study for their Masters of
Business Administration at the
Macquarie Graduate School of
Management was expanded
in the 2016 financial year.
Currently, five female team
members in leadership positions
are enrolled in the program.
The Star Entertainment
Group is also committed to
environmentally sustainable
practices, including waste
and energy reduction. In
the 2016 financial year, The
Star Entertainment Group
was a finalist in the category
of Excellence in Waste
and Recycling, in the NSW
Government’s Green Globe
Awards. The Star Entertainment
Group was also a finalist in
the Best Environmental
Practices category for
Metropolitan Hotels at the
NSW Tourism Accommodation
Australia awards.
CAPITAL EXPENDITURE
AND PRIORITIES
The Star Entertainment Group
incurred capital expenditure
of $306 million, related
largely to investments and
refurbishment at Jupiters Gold
Coast and The Star Sydney. In
the 2016 financial year, capital
expenditure increased 35.4%,
or $80 million, on the 2015
financial year, and will increase
further in the 2017 financial
year to a range between $375
million and $425 million,
excluding an expected $120
million in capital expenditure
or payments to the Queensland
Government in relation to
Queen’s Wharf. These amounts
relate to:
● Demolition and associated
works expected to commence
at Queen’s Wharf Brisbane
in the second half of the 2017
financial year
● Continued expansion
and redevelopment of
The Star Sydney and Jupiters
Gold Coast.
We are focussed on managing
the disruption from capital
investment works across gaming
and non-gaming businesses as
works continue in Sydney and at
the Gold Coast throughout the
2017 financial year.
The Star Entertainment Group
has the following five priorities
for the 2017 financial year:
● Continue to improve earnings
across the Group
● Deliver on the capital program
for the Jupiters Gold Coast
property expansion and
redevelopment
● Continue execution of the
master plan strategy at
The Star Sydney
● Work with the Queensland
Government and our
consortium partners to
progress the Queen’s Wharf
Brisbane project
● Continue to evolve the brand
and loyalty program.
In light of these priorities,
The Star Entertainment Group
has made key appointments
across the business to ensure
we have the capability to deliver
on both operational and project
delivery priorities.
I would like to extend my
sincere gratitude to the Board,
management team and all team
members for their commitment
and contributions during a
productive and successful 2016
financial year. The achievements
of the Group over the last year
would not have been possible
without their support.
Most importantly, I also want to
thank the more than 20 million
guests who chose to visit our
properties last year. They create
the reason and justification for
our existence. I look forward to
an exciting and challenging 2017
financial year in which we seek
to further develop and improve
our offerings for all customers.
Matt Bekier
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
7
BOARD AND
EXECUTIVE
BOARD OF DIRECTORS
JOHN O’NEILL AO
MATT BEKIER
KATIE LAHEY AM
RICHARD SHEPPARD
CHAIRMAN AND
NON-EXECUTIVE DIRECTOR
MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
NON-EXECUTIVE
DIRECTOR
NON-EXECUTIVE
DIRECTOR
Diploma of Law; Foundation
Fellow of the Australian
Institute of Company Directors
John O’Neill was formerly
Managing Director and Chief
Executive Officer of Australian
Rugby Union Limited,
Chief Executive Officer of
Football Federation Australia,
Managing Director and Chief
Executive Officer of the State
Bank of New South Wales, and
Chairman of the Australian
Wool Exchange Limited.
Mr O’Neill was also formerly
a Director of Tabcorp Holdings
Limited and Rugby World
Cup Limited.
Mr O’Neill was also the
inaugural Chairman of Events
New South Wales, which
flowed from the independent
reviews he conducted into
events strategy, convention
and exhibition space, and
tourism on behalf of the New
South Wales Government.
Master of Economics and
Commerce; PhD in Finance
Matt Bekier was previously
Chief Financial Officer and
Executive Director of the
Company. He was also Chief
Financial Officer of Tabcorp
Holdings Limited from late
2005 until the demerger of the
Company and its controlled
entities in June 2011.
Prior to his role at Tabcorp,
Mr Bekier held various roles
with McKinsey and Company
over 14 years. During that
time, he focused on building
a substantial practice in both
post-merger management and
financial services, working
across four continents.
Mr Bekier is currently
a member of the Board
of the Australasian Gaming
Council and an Honorary
Adjunct Professor at
Macquarie University.
Bachelor of Arts (First Class
Honours), Master of Business
Administration
Katie Lahey has extensive
experience in the retail,
tourism and entertainment
sectors and previously held
chief executive roles in the
public and private sectors.
Ms Lahey is currently the
Chair of Tourism & Transport
Forum and the Executive
Chairman Australasia for
Korn Ferry International.
She is also a member of
the board of the Australian
Brandenburg Orchestra.
Ms Lahey was previously the
Chair of Carnival Australia
and a member of the boards of
David Jones Limited, Australia
Council Major Performing
Arts, Hills Motorway Limited,
Australia Post and Garvan
Research Foundation.
Bachelor of Economics
(First Class Honours),
Fellow of the Australian Institute
of Company Directors
Richard Sheppard has had
an extensive executive career
in the banking and finance
sector including an executive
career with Macquarie Group
Limited spanning more
than 30 years.
Mr Sheppard was previously
the Managing Director
and Chief Executive Officer
of Macquarie Bank Limited
and chaired the boards of
a number of Macquarie’s
listed entities. He has also
served as Chairman of
the Commonwealth
Government’s Financial
Sector Advisory Council.
Mr Sheppard is currently the
Chairman and a Non-Executive
Director of Dexus Property
Group and a Non-Executive
Director of Snowy Hydro
Limited. He is also Treasurer
of the Bradman Foundation.
8
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 GERARD BRADLEY
SALLY PITKIN
NON-EXECUTIVE
DIRECTOR
NON-EXECUTIVE
DIRECTOR
GREG HAYES
NON-EXECUTIVE
DIRECTOR
Bachelor of Commerce; Diploma
of Advanced Accounting; Fellow
of the Institute of Chartered
Accountants; Fellow of
CPA Australia; Fellow of
the Australian Institute of
Company Directors; Fellow of
the Australian Institute
of Management
Gerard Bradley is currently
a Non-Executive Director
of Pinnacle Investment
Management Group Limited.
Mr Bradley is also the
Chairman of Queensland
Treasury Corporation and
related companies, having
served for 14 years as
Under Treasurer and Under
Secretary of the Queensland
Treasury Department.
He has extensive experience
in public sector finance in
both the Queensland and
South Australian Treasury
Departments.
Mr Bradley has previously
served as Chairman of the
Board of Trustees at QSuper.
His previous non-executive
board memberships also
include Funds SA, Queensland
Investment Corporation,
Suncorp (Insurance &
Finance), Queensland Water
Infrastructure Pty Ltd, and
South Bank Corporation.
Doctor of Philosophy
(Governance); Master of Laws;
Bachelor of Laws; Fellow of
the Australian Institute of
Company Directors
Sally Pitkin is a Queensland
based company director
and lawyer with extensive
corporate experience and over
20 years’ experience as a
non-executive director and
board member across a wide
range of industries in the
private and public sectors.
Dr Pitkin currently holds
various board roles, including
as a Non-Executive Director
of Super Retail Group
Limited, IPH Limited
and Link Administration
Holdings Limited.
Dr Pitkin is the President of
the Queensland Division, and
a member of the National
Board of the Australian
Institute of Company
Directors. She is also a
member of the External
Advisory Board of the
Australian Securities and
Investments Commission.
Dr Pitkin was previously a
Non-Executive Director of
Aristocrat Leisure Limited.
Master of Applied Finance;
Graduate Diploma in Accounting;
Bachelor of Arts; Advanced
Management Programme
(Harvard Business School,
Massachusetts); Member
of Institute of Chartered
Accountants
Greg Hayes is an experienced
executive and director having
worked across a range of
industries including energy,
infrastructure and logistics.
Mr Hayes brings to the Board
skills and experience in the
areas of strategy, finance,
mergers and acquisitions, and
strategic risk management, in
particular in listed companies
with global operations. He is
currently a director of Incitec
Pivot Limited, Precision Group
and Aurrum Holdings Pty Ltd.
Mr Hayes was previously Chief
Financial Officer and Executive
Director of Brambles Limited,
Chief Executive Officer &
Group Managing Director of
Tenix Pty Ltd, Chief Financial
Officer and later interim CEO
of the Australian Gaslight
Company (AGL), CFO Australia
and New Zealand of Westfield
Holdings, and Executive
General Manager, Finance
of Southcorp Limited.
9
EXECUTIVE TEAM
The Star Entertainment Group has an experienced and
specialised management team focused on utilising
investments and partnerships to optimise its integrated
resort assets.
10
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 Back row (from left to right):
John De Angelis, Chief Information Officer Paula Martin, Group General Counsel and Company Secretary
Geoff Hogg, Managing Director Queensland Matt Bekier, Managing Director and Chief Executive Officer
Greg Hawkins, Managing Director The Star Sydney Kim Lee, Group Executive Human Resources
John Chong, President International Marketing
Seated (from left to right):
Geoff Parmenter, Group Executive Marketing and Corporate Affairs
Chad Barton, Chief Financial Officer Paul McWilliams, Chief Risk Officer
11
GROUP
PERFORMANCE
GROUP PERFORMANCE
The Star Entertainment Group continued to deliver good
results and enhance shareholder value while progressing on
strategic priorities throughout the 2016 financial year.
Operating expenses at The Star
were up 7.4% to $619.2 million
for the 2016 financial year,
driven primarily by increased
domestic and International
VIP Rebate business volumes
at the property, as well as
investments in the marketing
and loyalty program.
The Group will continue its
focus on investing at The
Star as part of its strategic
priorities for the 2017 financial
year. This includes continued
progress on the $500 million
capital investment to further
enhance the offering at
The Star, as well as seeking
approvals for a proposed $500
million hotel and residential
tower in partnership with
our Destination Brisbane
Consortium partners, Chow
Tai Fook Enterprises Limited
and Far East Consortium
International Limited.
The Star Entertainment
Group plans to work with
The Ritz-Carlton in branding
the hotel component of the
proposed tower.
26
AWARDS
RECEIVED BY
THE STAR SYDNEY
17.4%
INCREASE IN
NORMALISED
EBITDA
9.1%
INCREASE IN
DOMESTIC TABLE
GAMES REVENUE
In February 2016, The Star
launched the newly renovated
Harvest Buffet restaurant,
featuring five food stations
that offer a selection of
international cuisines for
breakfast, lunch and dinner,
seven days a week. In the
2016 financial year, The
Star continued to invest in
sporting, event and cultural
partnerships that fulfil our
brand promise to provide
our guests with thrilling
experiences that reflect the
Sydney local spirit.
The Star’s operating
performance for the 2016
financial year was pleasing,
with both domestic and
International VIP Rebate
businesses contributing
to actual gross revenue
growth to $1.66 billion, a
7.5% improvement on the
previous year (or up 8.6% on
a normalised basis). EBITDA
increased 13.0% to $302.4
million for the year (or up
17.4% on a normalised basis).
Domestic table games
business revenue grew 9.1%
for the year. Revenue from the
slots business increased 8.3%
for the year, with The Star
increasing its market share.
The International VIP Rebate
business delivered a record
$47.4 billion turnover during
the year, a 10.2% increase
on the 2015 financial year.
Revenue from non-gaming
businesses improved 3.2% on
the prior year.
THE STAR SYDNEY
The Star achieved considerable
success in the 2016 financial
year, continuing the
momentum from the prior
year. Our guests continue to
show appreciation for past
investments at The Star, with
increased visitation and spend
helping to deliver normalised
earnings growth of 17.4% to
$381.8 million EBITDA.
The Star is one of Sydney’s
most awarded entertainment
and tourism destinations and
welcomes approximately
11 million guests per year.
In the 2016 financial year,
The Star was the recipient
of 26 awards. Momofuku
Seiōbo and Sokyo were again
named when the Australian
Financial Review published
its list of Australia’s Top
Restaurants for 2016. The
Star Event Centre received
four awards throughout the
year including ‘Specialty
Event Venue of the Year’ at
the prestigious Meetings and
Events Australia Awards for
the second consecutive year.
The Star was also proud to
be nominated for 15 awards
in NSW at the 2016 Tourism
Accommodation Australia
Awards for Excellence.
The new look for The Star
brand was launched in March
2016, featuring a suite of new
imagery and a new logo to
reflect its refreshed market
positioning, attitude and
personality. The Star brand
is reflected under three
key brand pillars: Thrilling
Experiences, Accessible
Luxury and Local Spirit.
12
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 The Darling Hotel at The Star Sydney
13
13
14
Treasury Casino & Hotel Brisbane
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 At Treasury Brisbane, The Lab
Restaurant and Bar reopened in
January 2016 with a refreshed
brand and vision.
At Jupiters Hotel & Casino,
multiple projects were executed
as part of the expansion and
redevelopment program
encompassing both gaming
and non-gaming offerings.
The Group continued to
demonstrate its substantial
long-term commitment to
South East Queensland during
the 2016 financial year.
In February 2016, the
Group announced a proposed
$500 million hotel and
residential apartment tower
at the Gold Coast, to be
developed in partnership
with its Destination Brisbane
Consortium partners, Chow
Tai Fook Enterprises Limited
and Far East Consortium
International Limited.
This is a part of a master plan
concept for the Gold Coast with
the potential for further long-
term growth.
24
AWARDS COLLECTIVELY
RECEIVED BY OUR
QUEENSLAND
PROPERTIES
7.5%
INCREASE IN
NORMALISED
EBITDA
5.2%
INCREASE IN
DOMESTIC TABLE
GAMES REVENUE
QUEENSLAND
PROPERTIES
The Group’s Queensland
properties delivered a
good performance over
the 2016 financial year,
with continuing growth at
Treasury Brisbane balancing
the disruption caused by
significant investment for the
transformation of Jupiters
Hotel & Casino.
Our Queensland properties
collectively received 24 awards
in the 2016 financial year.
Highlights included Treasury
Brisbane’s restaurants
Fat Noodle, The Lab
Restaurant and Bar, and
Kitchen at Treasury receiving
award nominations in the
2016 Restaurant & Catering
Awards. Kiyomi at the Gold
Coast received ‘Best Prestige
Restaurant’ at the Queensland
Hotels Association Awards
for Excellence and ‘Australia’s
Best New Restaurant’ at
the 2015 Savour Australia
Restaurant & Catering National
Awards for Excellence.
Actual gross revenue for
the Queensland properties
declined 2.2% to $700.9
million compared to the 2015
financial year (a 0.2% fall on
a normalised basis). Overall,
EBITDA of $186.4 million
declined 0.3% on an actual
basis, but was up 7.5% on a
normalised basis compared
to the 2015 financial year.
The table games segment of
the business was the strongest
performer across the domestic
segments, continuing its
momentum from the prior year,
with revenue growth of 5.2%.
The Queensland slots business
experienced revenue growth of
2.4% for the 2016 financial year.
Non-gaming business
declined 5.2% for the year.
The primary factor impacting
non-gaming performance was
disruption from expansion and
redevelopment works at Jupiters
Hotel & Casino.
Cost management at the
Queensland properties
remained good, with operating
expenses declining 1.2% to
$341.8 million.
The Group’s Queensland
properties achieved significant
milestones over the course of the
2016 financial year.
In November 2015, The Star
Entertainment Group (as part
of the Destination Brisbane
Consortium) entered into
development agreements with
the Queensland Government
for the delivery of the Queen’s
Wharf Brisbane project.
Upgrades of food and beverage
offerings were undertaken at
both Queensland properties
during the 2016 financial year.
THE STAR ENTERTAINMENT GROUP
THREE YEAR STATUTORY FINANCIAL RESULTS SUMMARY
REPORTED RESULTS
FY2014
FY2015
FY2016
$m
$m
% change
$m
% change
STATUTORY REVENUE
1,805.7
2,140.3
EBITDA
EBIT
NPAT
SIGNIFICANT ITEMS
(AFTER TAX)
NPAT BEFORE SIGNIFICANT
ITEMS
387.1
241.5
106.3
15.5
121.8
450.8
287.1
169.3
2.7
172.0
EARNINGS PER SHARE
12.9 cents
20.5 cents
FULL YEAR DIVIDEND
(FULLY FRANKED)
8.0 cents
11.0 cents
↑18.5
↑16.5
↑18.9
↑59.3
↓82.8
↑41.0
↑58.9
↑37.5
2,268.1
488.8
325.0
194.4
0.0
194.4
23.6 cents
13.0 cents
↑6.0
↑8.4
↑13.2
↑14.9
↓100.0
↑13.0
↑14.9
↑18.2
(For further information please refer to the Financial Report contained in the Annual Report for the relevant financial year.)
15
KEY
PROJECTS
KEY PROJECTS
16
© DESTINATION BRISBANE CONSORTIUM. ALL RIGHTS RESERVED. ARTIST’S IMPRESSION. SUBJECT TO PLANNING APPROVALS.
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 QUEEN’S WHARF BRISBANE
On 20 July 2015, the Queensland Government announced that
The Star Entertainment Group – as part of the Destination
Brisbane Consortium – was the preferred proponent to redevelop
Queen’s Wharf Brisbane.
Hon Dr Anthony Lynham MP, Minister for State Development and Minister for Natural Resources and Mines; Hon Annastacia Palaszczuk MP,
Premier of Queensland and Minister for the Arts; Matt Bekier, Managing Director & CEO The Star Entertainment Group; Hon Grace Grace MP,
Minister for Employment and Industrial Relations, Minister for Racing, Minister for Multicultural Affairs and Member for Brisbane Central
and Geoff Hogg, Managing Director Queensland The Star Entertainment Group.
In November 2015, the
Destination Brisbane
Consortium entered into
development agreements
with the Queensland
Government for the delivery
of the transformational
project. The Destination
Brisbane Consortium is
currently progressing through
the detailed design phase
to deliver its vision for the
integrated resort development.
Key features of the
development include:
● The Star Entertainment
Group will be a 50% equity
owner of the integrated
resort component
● Construction on the site is
expected to commence in
early 2017
● The core integrated resort,
including hotels and all
public realm spaces, is
expected to open in 2022
● The Star Entertainment
Group will continue to
operate the Treasury Casino
& Hotel until the new
integrated resort opens
● The existing Treasury Casino
and Hotel buildings will be
subsequently repurposed
by The Star Entertainment
Group into a hotel, operated
by The Ritz-Carlton, and a
premium retail precinct. The
Star Entertainment Group will
retain these buildings under
a long-dated lease.
The Destination Brisbane
Consortium’s proposal
includes a range of tourism,
infrastructure and residential
developments, including:
● Five premium hotel brands,
including The Ritz-Carlton
and Rosewood brands and
Brisbane’s first six-star hotel,
with collectively more than
1,000 premium hotel rooms
across the precinct
● A feature ‘Sky Deck’ providing
views of the Brisbane River
and skyline
● A residential apartment
precinct of approximately
2,000 apartments
● Fifty restaurants and bars,
retail zones, outdoor lifestyle
opportunities, as well as other
resort facilities and attractions
● Public infrastructure,
including a pedestrian bridge,
and development of public
area spaces.
The Destination Brisbane
Consortium’s proposal
also delivers to the State
of Queensland:
● Creation of around 2,000 jobs
during construction
● Creation of 8,000 jobs in
Queensland once Queen’s
Wharf Brisbane is fully
operational
● $1.69 billion projected
annual increase in
Queensland tourism spend
● $4 billion projected boost to
Gross State Product
● 1.39 million additional tourist
visitors estimated per annum.
2,000
CONSTRUCTION
JOBS CREATED
DURING WORKS
8,000
JOBS ONCE
SITE IS FULLY
OPERATIONAL
1,000+
PREMIUM HOTEL
ROOMS ACROSS
THE PRECINCT
17
JUPITERS HOTEL & CASINO GOLD COAST
A transformational redevelopment and expansion of Jupiters
Hotel & Casino is well underway with an existing hotel
refurbishment, construction of a new six-star all-suite hotel,
and gaming, food and beverage expansions progressing.
1,000
CONSTRUCTION
JOBS CREATED
DURING WORKS
2,300
JOBS ONCE
SITE IS FULLY
OPERATIONAL
700
KEYS FOR
PROPOSED HOTEL AND
RESIDENTIAL TOWER
* The numbers referenced are projected
economic benefits of the $345 million
transformation and the proposed
tower. The proposed tower is subject to
approvals.
Exterior view of Garden Kitchen & Bar which opened in January 2016. The restaurant gained world recognition winning a place on the
shortlist for the prestigious International Restaurant & Bar Design Awards 2016.
The Star Entertainment Group
is currently working with the
City of Gold Coast Council and
the Queensland Government
on necessary approvals for the
proposed new tower.
The broader master plan
concept includes potential
options for up to five hotel and/
or residential towers, a world
class recreational deck with
water features, tropical gardens,
pools and spa facilities, and new
entertainment offerings.
The redevelopment and
expansion of the Jupiters Hotel
& Casino has seen the following
works already delivered:
● A luxury new
poolside experience
● New dining and bar
experiences with the arrival
of Cucina Vivo, Kiyomi and
Garden Kitchen & Bar
● Refurbishment of the
Penthouses, Suites and
Executive Deluxe Rooms
● An exterior refresh of
the existing hotel and a
rejuvenated events lawn.
With these projects now fully
delivered, the next phase of the
redevelopment and expansion is
advancing. Between now and the
Gold Coast 2018 Commonwealth
Games the following works are
scheduled to be completed:
● The new 17 storey six-star
all-suite tower
● A refreshed property arrival
experience and external
lighting upgrades
● Refurbishment of the existing
Superior Hotel Rooms and
Hotel Lobby
● Re-energising and expanding
the gaming facilities
● Expansion of the food and
beverage offering with
additional new restaurants
and bars.
As part of its commitment
to the Gold Coast, The Star
Entertainment Group has also
unveiled a master plan concept
for Jupiters Hotel & Casino
to provide future potential
development opportunities.
The first phase of the master
plan concept includes a new
proposed 200 metre, 700-room
hotel and residential tower,
with proposed construction
to commence in 2017 subject
to obtaining all necessary
approvals. This opportunity has
the potential to take the current
$345 million redevelopment at
Jupiters to a mega-investment
of up to $850 million.
18
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 CONCEPT IMAGE ONLY. SUBJECT TO APPROVALS.
19
19
20
The Star Sydney
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 THE STAR SYDNEY
The previously announced $500 million investment at
The Star Sydney is progressing. The Star is proposing
additional development of the integrated resort.
$500m
INVESTMENT
IN PROPERTY
UPGRADES
$500m
PROPOSAL FOR
ADDITIONAL
DEVELOPMENT
Refurbished room at the Astral Residences. The refurbishment is part of the $500 million investment in property wide upgrades.
500
SEAT CAPACITY
AT NEW HARVEST
BUFFET
The proposed development,
subject to planning approvals,
would include:
● A new hotel and residential
tower with luxury VIP villas
● Expansion of the current
gaming capacity
● Additional food and beverage,
retail, function and event
space, as well as other resort
facilities and attractions.
The investments in The Star
Sydney span a range of works
including the expansion
of food and beverage
and gaming offerings, the
upgrade of the private gaming
rooms, the upgrade of hotel
rooms and facilities, and
improved customer flow
and property access.
The 2016 financial year saw the
commencement and delivery of
the first phase of projects under
this investment. These included:
● The Darling VIP Gaming
Salons launch
● The launch of Harvest Buffet
● The commencement of the
base-tier and mid-tier gaming
works, comprising expansion
and refurbishment of the
main gaming floor and Oasis
gaming levels to include
new gaming areas,
restaurants and bars
● The commencement
of the Astral Tower and
Residences refurbishment,
comprising the upgrade and
refurbishment of
the Astral Tower and
Residences rooms, access
ways and lobbies.
In addition to the previously
announced $500 million
investment at The Star Sydney,
The Star Entertainment Group
is working with its Destination
Brisbane Consortium joint
venture partners, Chow
Tai Fook Enterprises Limited
and Far East Consortium
International Limited, on
further proposed developments
at The Star Sydney. These would
feature a further $500 million
of investment.
21
SUSTAINABILITY
REPORT
SUSTAINABILITY
The Star Entertainment Group believes in a bright
and sustainable future while creating world class
places for our guests to enjoy.
Dany Karam Executive Chef at Black By Ezard in the herb garden at The Star, Sydney.
Maintaining gardens across our properties aligns with our sustainable food and beverage
strategy encouraging the sourcing of local and more sustainable food options.
2222
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 23
23
SUSTAINABILITY STRATEGY
The Star Entertainment Group’s sustainability program
made a significant advancement in late 2016 with the
development of a new five-year Sustainability Strategy.
‘Our Bright Future’ is our new framework for sustainability
at The Star Entertainment Group.
Source: Soap Aid 2016. As part of The Star Entertainment Group’s sustainability program, The Star Sydney partners with Soap Aid. Soap Aid
recycles used soaps from hotel rooms for distribution to disadvantaged communities.
The Star Entertainment Group’s view of sustainability is broad and focuses on building business
capacity and delivering continuous improvement in the management of environmental, social and
governance issues.
Our new Sustainability Strategy groups objectives and our future targets in a four pillar framework
that supports The Star Entertainment Group’s business plan. Our four sustainability strategic
objectives are: we strive to be Australia’s leading integrated resort company; we build and operate
world class properties; we actively support guest wellbeing; and we attract, develop and retain
talented teams.
The Sustainability Strategy is underpinned by a structured materiality assessment process that
was conducted over a three month period to identify potential material environmental, social and
governance issues relevant to our business and industry. Through structured workshops, research,
and stakeholder consultation, identified sustainability issues were then rated based on their
importance to The Star Entertainment Group and its stakeholders. All material issues identified
as important to The Star Entertainment Group and its stakeholders will be addressed in the
Sustainability Strategy, with progress on the strategy reported to the Board’s People, Culture
and Social Responsibility Committee as we pursue implementation.
The Star Entertainment
Group is proud to be
ranked the global leader
of the casino and gaming
industry in the latest
annual assessment for the
Dow Jones Sustainability
Index. Maximum scores
were achieved in the areas
of “Anti-Crime Policy &
Measures” and “Promoting
Responsible Gaming”.
24
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 TRUSTED
COMMUNITY
PARTNERS
Support and contribute
to the communities
in which we operate
ETHICAL
BUSINESS
Be a leader in responsible
gaming and responsible service of
alcohol and in being a transparent
and trusted company
LEADING COMPANY
The Star is an ethical corporate citizen
leading the way on responsible gaming and
maintaining strong relationships with our
stakeholders
DEVELOPED
TEAM
Develop our team
members to enable
them to be their
best at work
FAIR AND
ATTRACTIVE
EMPLOYER
Be an employer
of choice, with a
diverse, safe and
productive team
TALENTED
TEAMS
The Star
attracts,
develops
and retains
a talented,
diverse and
engaged team
OUR
BRIGHT
FUTURE
— Sustainability at The Star
GUEST
WELLBEING
The Star is
committed
to giving our
guests a safe,
secure and
comfortable
experience
ENGAGED
GUESTS
Engage our
guests with our
sustainability
programs,
products and
services
SAFE AND
SECURE
GUESTS
Provide
our guests
with safe
and secure
environments
to enjoy
WORLD CLASS PROPERTIES
The Star develops and operates
world class liveable, environmentally
sustainable and resilient integrated
resorts and precincts
INVITING AND LIVEABLE
PRECINCTS
SUSTAINABLE AND
RESILIENT RESORTS
Provide welcoming and
liveable, precincts,
in and around
our properties
Be world class in
environmentally sustainable
and resilient integrated
resort properties
25
WORLD CLASS PROPERTIES
The Star Entertainment Group develops and operates world
class, liveable, environmentally sustainable and resilient
integrated resorts and precincts.
MANAGING OUR
RESOURCES
With an active development
and refurbishment project
pipeline at our three integrated
resort properties, The Star
Entertainment Group
continuously assesses resource
use and undertakes projects to
retrofit and improve plant
and operational controls.
It is foreseeable that resource
consumption will increase as
development plans proceed,
additional floor space is
utilised and more guests
visit our properties. However,
our ‘Sustainable Design
Guidelines’ are applied in our
development and refurbishment
projects to guide energy and
water efficiency and waste
management outcomes
and we have committed to
benchmarking the impact of
construction projects on our
resource use.
The Star Entertainment Group
reports resource consumption
usage on an absolute basis
and as an intensity metric of
consumption per visitor.
Energy audits conducted in 2015
have enabled a pipeline
of projects over a three-year
period to be implemented,
prioritised in order of their
expected return on investment
and resource savings.
The Star Entertainment Group
as parent company of The
Star Sydney was proud to be
nominated as a finalist in the
NSW Green Globe Awards
in the category of Excellence
in Waste and Recycling. The
awards recognise organisations
who have demonstrated
exceptional environmental and
sustainability leadership in NSW.
26
120000
6
100000
80000
60000
40000
20000
5
0
50
1000000
800000
600000
40
400000
200000
30
0
ENERGY AND CARBON
EMISSIONS
The Star Entertainment Group’s
total emissions in carbon
dioxide equivalents (CO2-e)
from gas and electricity for the
2016 financial year were 104,829
tonnes. This footprint equates
to a decrease of 0.3% from
2015. Carbon emissions have
remained stable from 2014
over a three year horizon.
The Star Entertainment
Group’s total energy
consumption from gas and
electricity for the 2016 financial
year was 612,878 gigajoules (GJ)
which was a 2.2% increase from
the 2015 financial year.
On an intensity basis, The
Star Entertainment Group’s
carbon emissions and energy
consumption per visitor has
decreased consistently each year
achieving our target of a 5%
reduction in carbon emissions
and energy reduction against a
2013 baseline.
In the 2015 financial year, energy
audits were conducted which
assessed over 90% of energy
consumption sources. In the
2016 financial year, 12 energy
efficiency projects have been
implemented, taking the total
number of projects implemented
to 22 over the last two financial
years. The 12 energy efficiency
projects have delivered 1,690
tonnes of carbon savings and
approximately $600,000 in cost
savings per annum.
The projects contributing
to the highest energy saving
include an upgrade to the
airside plant and chiller controls
(nearing completion), and the
replacement of fan coil units and
pumps at The Star Sydney.
CARBON EMISSIONS
ENERGY CONSUMPTION
6.0
5.7
9
9
0
5
0
1
,
,
3
5
9
4
0
1
5.5
,
9
2
8
4
0
1
700000
35
612500
525000
437500
350000
262500
175000
87500
30
0
33.2
,
5
4
4
4
8
5
32.5
3
5
5
9,
9
5
32.1
8
7
8
2
1
6
,
FY14
FY15
FY16
FY14
FY15
FY16
Carbon Emissions (tonnes CO2-e)
Energy Consumption (GJ)
Emissions Intensity
(kg CO2-e/visitor)
Energy Intensity (MJ/visitor)
WATER CONSUMPTION
RECYCLING RATES
44.3
42.0
9
2
2
6
7
7
,
,
1
6
8
5
4
8
38.9
8
9
8
3
8
6
,
35
0.35
30
25
20
0.30
15
10
5
0.25
0
0.34
0.30
%
1
3
0.29
%
3
3
%
0
2
FY14
FY15
FY16
FY14
FY15
FY16
Water Consumption (kL)
Water Intensity (L/visitor)
Recycling Rate (%)
Waste to Landfill Intensity
(kg/visitor)
0.49% of 2016 utility accounts were unbilled at time of reporting. The missing usage has
been estimated as 0.02% (18,266 kWh) for electricity, 0.74% (1,438,076 MJ) for gas, and
6.70% (56,641 kL) for water.
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
1,690
TONNES OF WASTE
CONVERTED TO GREEN
ELECTRICITY
$600,000
COST SAVINGS
PER ANNUM FROM
12 ENERGY EFFICIENCY
PROJECTS
9,900
SOAPS CREATED
VIA SOAP AID FOR
DISADVANTAGED
COMMUNITIES
WATER MANAGEMENT
In the 2016 financial year, The
Star Entertainment Group’s
water consumption increased
by 9.0% from the previous
financial year and by 23.7%
from 2014. The increase is
attributed to increased potable
water demand as a result
of reduced recycled water
volumes being made available
for on-site use at Jupiters Hotel
& Casino and an increase in
visitation at all properties.
The installation of water
saving devices across
The Star Entertainment
Group’s properties resulted
in savings of approximately
52,282 kL to offset increasing
water usage. Commencement
of the hotel room upgrade at
Jupiters Hotel & Casino has
led to 22,000 kL of additional
water savings that has assisted
in offsetting a reduction
in grey water through the
recycled water plant in the
2016 financial year.
Water consumption on
an intensity basis has
increased across a three-year
horizon and remains a strong
focus for the group in the
2017 financial year.
IMPROVING
RECYCLING AND
WASTE DIVERSION
The Star Entertainment
Group has focused strongly on
waste reduction and recycling
programs since 2013 and the
recycling rate has increased
significantly over the last
three years from 20% to 33%,
exceeding our waste reduction
target of 10% by 2016 (based
on 2013 levels).
The Star Sydney has achieved
a recycling rate of 41% in 2016
across all operations, up from
8% in 2013. Success is attributed
to the implementation of The
Star Entertainment Group’s
Waste Strategy which includes
the following initiatives:
● The rollout of new dual
recycling bins for guest
use at The Star Sydney
● Dedicated Waste Strategy
Groups at each property,
focusing on waste
minimisation and expanding
recycling streams
● New signage and bin systems
● Trialing new recycling
initiatives, including
collecting oyster shells
for OceanWatch to assist
local marine projects, and
supporting Fungimental
which diverts coffee grounds
from landfill for use
in growing gourmet
mushrooms in Sydney
● Recycled used soaps from
hotel rooms with Soap Aid to
generate over 9,900 bars of
new soap for distribution to
disadvantaged communities.
SUSTAINABLE
PROCUREMENT
As part of its supply chain
management, The Star
Entertainment Group has a
Sustainable Procurement Policy
in place to ensure all suppliers
comply with standards to
reduce the demand on natural
resources, reduce carbon
emissions, and consider ethical,
environmental, social and
sustainability impacts.
The Star Entertainment Group
seeks to encourage suppliers
to innovate by making
sustainable decisions when
procuring goods and services.
As a result of working closely
with suppliers in 2016, we have
achieved the following:
● Expanded the product
range and increased the
use of biodegradable and
plant based packaging in
food outlets across our
properties by 21%
● By working closely with our
cooking oil supplier, our new
oil management program
resulted in saving over
50,000 litres of used cooking
oil annually, and delivered
business savings of $190,000
in the program’s first year
● Herb gardens are being
actively managed at each
property by chefs, to utilise
fresh produce and encourage
the sourcing of local and
more sustainable food
options where possible.
27
OUR PERFORMANCE AGAINST FY2016 ENVIRONMENTAL AND SUSTAINABILITY OBJECTIVES
STRATEGY AREA
OBJECTIVES
PROJECTS AND PROGRAMS DELIVERED
STATUS
OUR GOVERNANCE
AND REPORTING
● Identify reportable benefits against
the Sustainable Procurement Policy
● Improve environmental, social and
governance (ESG) disclosures and
performance reporting by establishing
industry appropriate sustainability metrics,
considering business activities’ expansion
and development pipelines
● Established efficiency programs with Cooker’s
Oil and increased spend on biodegradable
packaging, delivering waste and cost savings
● Enhanced sustainability content
on corporate website
● Resource consumption data reported and
intensity metrics established for benchmarking
● Qualified for inclusion in RobecoSAM’s
‘The Sustainability Yearbook’, the world’s
most comprehensive publication on
corporate sustainability determined by our
score in RobecoSAM’s annual Corporate
Sustainability Assessment
● Continued voluntary reporting under the
Dow Jones Sustainability Index and
membership in the FTSE4GOOD Index Series
OUR STAKEHOLDERS
● Incorporate green criteria into
● Green lease clauses drafted into retail leases
tenant lease renewals across our
casino properties
● Develop an external stakeholder
communications plan
● Communications plan developed
as part of new Sustainability Strategy
OUR TEAM MEMBERS
● Integrate adherence with the Sustainability
● Sustainability requirements included in all new
Strategy into all position descriptions
position descriptions
● Actively support the implementation of
ideas generated through the Group
innovation program
● Sustainability ideas have been implemented as
part of the ‘Bigger, Brighter, Better’ innovation
program, delivering energy and cost savings of
$36,000 per annum
OUR SUPPLIERS
● Introduce an environmental sustainable
● ESD considerations have been built into
design (ESD) scorecard for capital projects to
prioritise sustainable outcomes and
asset performance
business case templates
● Expanded use of biodegradable packaging
throughout food and beverage operations
● Reduce packaging of key food
and beverage product lines and promote
product stewardship in the supply chain
OUR ENVIRONMENT
● Implement a minimum of five energy and
water savings opportunities identified in
building audits across all properties
● 12 energy efficiency projects implemented,
delivering cost savings of approximately
$600,000 per annum
● Assess viability of organics or food waste
recycling in Queensland and implement
where commercially viable
● Obtain a National Australian Built
Environment Rating System (NABERS)
tenancy rating for The Star Entertainment
Group’s Sydney office
● Onsite organics processing units are being
assessed as part of new developments
● NABERS tenancy rating conducted
OUR COMMUNITIES
● Increase the number of sustainability
● Members of The Star Sydney’s Facilities team
trained professionals across the business,
leading to green project outcomes
undertook HVAC (heating, ventilation,
air-conditioning) energy efficiency training
● Introduce a giving program for redundant
● Charitable partnerships established, and
amenities to communities in need
furniture, blankets and office fit-out equipment
donated to charitable partners
28
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
SUSTAINABLE DESIGN IN ACTION
Jupiters Hotel & Casino refurbished penthouse designed by Steelman Partners, with the vision delivered by highly respected South-East Queensland architectural practice ML Design.
● Bathroom taps and shower
heads are now 5 star
WELS rated
● In-room lamps and mirror
lighting are replaced with
LED lighting
● Toilets are 4 star WELS rated,
saving over 5,200 kL
of water per annum.
The refurbishment of the
hotel and suite rooms
is estimated to generate
approximately $280,000 per
year in energy and water
savings as a result of the
sustainable design features.
JUPITERS HOTEL & CASINO
The Star Entertainment
Group is committed to
future-proofing property
developments to achieve
more sustainable and
resource efficient outcomes.
To achieve these outcomes,
our ‘Sustainable Design
Guidelines’ are applied in the
design and tender processes
providing best practice
standards and specifications
under a range of categories,
including energy, water, waste
and materials.
Sustainable design has been
applied to the refurbishment
of the existing hotel offering
at Jupiters Hotel & Casino
as part of the $345 million
transformation being
undertaken at the property.
Jupiters Hotel & Casino is
currently refurbishing 600 hotel
and suite rooms. Prior to the
project commencing, a detailed
energy audit was conducted
and identified significant
opportunity to improve room
lighting and controls, bathroom
fittings and fixtures, HVAC
(heating, ventilation, air-
conditioning), and shading to
reduce solar gain.
Applying the ‘Sustainable
Design Guidelines’ and
findings from the energy audit
has led to energy savings of
approximately 1,334 MWh and
22,000 kL of water per annum.
The design elements for the
hotel and suite rooms include:
● 35W halogen downlights
are replaced with 10W
LED lights
● Upgrading room controls
and in-room technology with
C4 Suite control system that
enables the room to go into a
sleep mode to conserve energy
Refurbished Deluxe Executive Room
bathroom at Jupiters Hotel & Casino.
29
29
$10m+
TOTAL CONTRIBUTION
TO PARTNERSHIPS,
COMMUNITY GROUPS
AND CHARITIES
$4.5m
COMMITTED TO
CHARITY PARTNERS BY
THE STAR SYDNEY OVER
THREE YEARS
LEADING COMPANY
The Star Entertainment Group is an ethical corporate citizen
that supports the communities in which it operates and has
a focus on guest wellbeing.
THE STAR SYDNEY
The Star has relationships with
a variety of different charities
and is an active contributor to
the wider community.
During the 2016 financial year,
The Star announced formal
partnerships with the following:
● Barnardos Australia:
As a Principal Partner,
The Star will donate
$1.5 million to Barnardos over
three years, providing ongoing
support for its services to
disadvantaged families
● Taronga Conservation
Society Australia: The Star
has entered into a three-year
partnership with Taronga
Conservation Society,
becoming a Principal Partner
of Taronga Zoo Sydney. The
partnership will see The Star
donate $1.5 million over three
years to support vital wildlife
conservation programs, as
well as key fundraising and
volunteer initiatives
● Chris O’Brien Lifehouse: As
a Premier Partner of Chris
O’Brien Lifehouse, The Star
has committed $1.5 million
over three years.
The Star continued to be
involved in a variety of
event and sporting
partnerships including:
● Official Partner of the NSW
Rugby League and the
Official Home of the NSW
Blues: A highlight was the
announcement of the NSW
Blues State of Origin squad
at The Star
● Leadership Partner of
Sydney Chinese New Year
Festival: The Star offered
Asian themed dining in
The Star’s Fortune Mahjong
Garden. Team members also
participated in Dragon Boat
racing, paddling to first place
in the Sponsor’s race
● Major Sponsor of Christmas
in Pyrmont: An annual
community event supporting
local charities including
Pyrmont Cares
● Foundation Partner and
Official Entertainment
Partner of Australian
Turf Club.
JUPITERS HOTEL & CASINO
Jupiters encourages team
members to contribute to
the local community and it
also maintains long-term
relationships with key charity
partners in Queensland.
In the last financial year,
Jupiters continued its support
of Surf Life Saving Queensland
and donated beach shade
marquees to all Gold Coast
Surf Clubs.
Jupiters is also proud to
continue its relationship
with the Gold Coast Hospital
Foundation, with its support
in the 2016 financial year
including funding of
scholarships to local health
professionals who are
furthering their professional
development. Jupiters also
supported local wildlife
through its partnership with
TRUSTED COMMUNITY
PARTNERS
Partnerships with charities,
community groups and sporting
organisations extend The
Star Entertainment Group’s
commitment to responsible
corporate citizenship beyond
the provision of safe and
compliant entertainment
venues. Fostering local
spirit, by supporting events that
resonate with relevant cities and
regions, is aligned to The Star
Entertainment Group’s objective
of being an engaged and valued
community participant.
During the 2016 financial
year, The Star Entertainment
Group continued to build on
its formal partnerships and
community outreach projects
with a number of fresh
initiatives, including
new charity partnerships
for The Star Sydney.
The Star Entertainment Group
continues to be proud of its
long-term involvement with Surf
Life Saving Queensland through
Jupiters Hotel & Casino
(a partnership which is now
into its third decade), and its
relationship with Cerebral Palsy
League Queensland through
its Treasury Casino & Hotel
property (a partnership now
extending over 14 years).
Each property is also involved
in hosting and supporting
charities via in-kind
contributions, including the
provision of event space
and staff.
30
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 Members of Southport Surf Life Saving Club (Queensland) underneath one of 23 beach marquees donated by Jupiters Hotel & Casino.
the Currumbin Wildlife
Hospital Foundation, and was
a presenting partner of the
Foundation’s ‘Sanctuary
Under the Stars’ Gala Event.
Jupiters team members
nominated and supported
close to 20 local organisations
and charities through the
‘Open Your Hearts’ program
and supported more than
75 organisations through
in-kind donations totalling
close to $50,000.
Jupiters is also involved in
various event and sporting
partnerships including:
● First Official Partner
of the Gold Coast 2018
Commonwealth Games
● Official Partner of Blues
on Broadbeach, an iconic
Australian blues festival
● Official Sponsor of
Jupiters Pan Pacific Masters
Games, which attracted more
than 14,000 athletes from 20
countries
● Official Partner of the
Queensland Rugby League
(QRL) and Home of the
Queensland Maroons,
in conjunction with Treasury
Casino & Hotel.
TREASURY
CASINO & HOTEL
Treasury supported
a range of charitable and
community activities in the
2016 financial year.
Treasury was again the
presenting partner for
Cerebral Palsy League
Queensland’s ‘Picnic in the
Park’, contributing $50,000
towards the event.
In conjunction with Jupiters
Hotel & Casino, Treasury
supports Ronald McDonald
House South East Queensland
(RMHSEQ). Treasury was a
major sponsor of the Brisbane
International tennis tournament
and raised $83,000 for RMHSEQ
through the ‘Aces for Hearts’
initiative (for every ace served,
$100 was donated to the charity).
Treasury team members also
created a mini “Ekka” (Royal
Queensland Show) for sick
children at RMHSEQ who were
unable to attend the show.
The children were treated to a
range of performers and tasty
carnival treats.
In recognition of its
community partnership
and support, Treasury
was awarded a prestigious
Queensland Hotels Association
Awards for Excellence in
September 2015, taking out
the coveted award for ‘Most
Outstanding Community
Service & Achievement –
100+ Employees’.
Treasury was also involved
in event and sporting
partnerships including:
● Principal Partner of
Brisbane Festival: As part
of the Festival, Treasury’s
façade was transformed
through a light and sound
show, ‘Treasury Lights’
● Presenting Partner of
Brisbane Asia Pacific Film
Festival (BAPFF) and Asia
Pacific Screen Awards (APSA):
The awards are Asia Pacific’s
highest accolade in film,
proudly supporting the rich
cultural diversity of the region
● National Trust of
Queensland’s Brisbane Open
House: Treasury hosted a
Stonework Conservation
Workshop that detailed the
processes used to conserve
and repair the stone facades
of the heritage buildings
● Official Partner of the
Queensland Rugby League
(QRL) and Home of the
Queensland Maroons, in
conjunction with Jupiters
Hotel & Casino.
31
The Star Sydney Baccarat team members. The Star Sydney hosted the International Baccarat Tournament in October 2015 with over 80 participants from eight countries.
RESPONSIBLE
GAMBLING
The provision of safe, secure
and supportive gambling and
entertainment environments
for our team members and
guests is an integral part of the
day to day business operations
of The Star Entertainment
Group. The Star Entertainment
Group’s responsible
gambling initiatives extend
beyond the requirements
of regulatory compliance
and include working with
community groups and
involvement in research
projects. Board oversight
of The Star Entertainment
Group’s responsible gambling
program is provided by the
People, Culture and Social
Responsibility Committee.
The majority of The Star
Entertainment Group’s patrons
gamble for enjoyment and
within their financial means.
However, some patrons
experience problems in
controlling their gambling
32
habits, which has the potential
to cause (or to exacerbate)
such things as financial
hardship, emotional distress,
relationship breakdowns,
or addictive behaviours.
The Star Entertainment Group
has in place a responsible
gambling program which
is designed to:
● Identify at an early stage
those patrons who may be
exhibiting signs of having
problems in controlling their
gambling habits; and
● Support those patrons who
have been identified as having
gambling problems while
they seek counselling or other
appropriate treatment.
The objective of the responsible
gambling program is to
minimise the potential for
harm from gambling, and to
provide patrons with the means
to make informed decisions
about managing their gambling
behaviours.
Key operational aspects of
The Star Entertainment Group’s
responsible gambling
program are:
● Providing patrons
with readily accessible
information about problem
gambling, including
symptoms and treatment
options
● Working with third party
support agencies to provide
assistance and information
for patrons experiencing
problems in controlling
their gambling habits
● Providing sensitive and
confidential support to
patrons seeking to exclude
themselves from being able
to attend one or more of
The Star Entertainment
Group’s casinos
● Assisting self-excluded
patrons to also self-exclude
from other gambling venues
● Providing clocks throughout
the casinos so that patrons
are aware of time spent on
gambling activities
● Encouraging patrons to take
regular breaks in play
● Preventing intoxicated
patrons from participating in
gambling activities
● Prohibiting the cashing of
cheques to fund gambling
activities (other than by
prior arrangement)
● Prohibiting betting on
credit terms
● Conducting responsible
advertising and marketing
campaigns in compliance
with applicable regulations
and industry codes
of practice.
The operational aspects of the
responsible gambling program
are implemented and applied
by The Star Entertainment
Group’s Responsible Gambling
Liaison Officers (RGLOs)
who are available at each
property to provide on-the-floor
support to patrons and
their relatives.
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 At each property, all staff are
required to undertake internal
training in RSA policies,
procedures and applicable
legislative requirements before
commencing employment.
All team members directly
involved in the service or supply
of alcohol, including those
supervising or managing these
processes must have current
RSA training certification.
In both Queensland and
New South Wales, additional
licensing is also required for
staff who work in specific areas
within the casinos.
For our guests, RSA awareness
is promoted through brochures
which are available at the
casino entrances.
In addition to strict refusal of
entry policies, each property
has in place processes for:
● Monitoring that patrons
on the premises are not
unduly affected by excess
consumption of alcohol
● Mandatory reporting of all
serious RSA related incidents
(to be documented within the
approved incident reporting
databases and records).
The Star Entertainment Group’s
properties have also taken the
following measures to support
responsible service of alcohol:
● The use of toughened or
tempered glass for many
of the beverages served
in the public areas of the
Gold Coast and Brisbane
casino properties (excluding
restaurants)
● The use of tempered
(polyware) containers
after midnight and the
introduction of the practise
of decanting glass beer bottles
from midnight in all bars
at The Star Sydney.
Funds are allocated through
the relevant State government
to various projects that
benefit the community. This
includes the provision of
grants to community based
organisations, the funding
of research into gambling
behaviours, the provision of
specialist counselling services,
and other initiatives designed
to reduce the effects of
problem gambling behaviours
on communities. Through
its contributions to the
Responsible Gambling Fund
NSW, The Star Entertainment
Group has funded more than
50 gambling research projects
since 1995.
The Star Entertainment Group
engages BetCare, a dedicated
independent counselling
service to provide assistance,
including crisis intervention
(24/7) for distressed patrons.
BetCare also assists with
gambling assessments for
patrons seeking revocation
of self-exclusion agreements
and provides specialised
responsible gambling training
to our Responsible Gambling
Liaison Officers.
Since 2013, The Star
Entertainment Group has
conducted responsible
gambling awareness weeks in
addition to those organised by
community support groups.
RESPONSIBLE
SERVICE OF ALCOHOL
Each of The Star Entertainment
Group’s properties in Sydney, the
Gold Coast and Brisbane operate
in a highly regulated industry in
respect of providing responsible
service of alcohol (RSA).
Each property has
established RSA training
policies, procedures and
management oversight,
including a Responsible
Service of Alcohol Committee
which is responsible for
providing leadership and
direction on the issue of
RSA and related matters.
The following initiatives
also support The Star
Entertainment Group’s
commitment to responsible
gambling:
● All new team members are
introduced to responsible
gambling practices as
part of their orientation
and complete a bi-annual
responsible gambling
refresher training session
● Our Security and Surveillance
staff are trained to prevent
minors and those persons
who have chosen to exclude
(self-ban) from gaining access
to gaming areas
● Each property operates under
a ‘Responsible Gambling
Code of Practice’ which
sets the standards and
requirements to be followed
for the responsible delivery
of gambling products
and services.
The Star Entertainment
Group’s Patron Liaison
Managers are members of
the National Association for
Gambling Studies Inc., which is
a non-profit organisation that
aims to promote discussion
and research into all areas of
gambling activity.
In Queensland, one of The
Star Entertainment Group’s
Patron Liaison Managers
attends meetings of the Gold
Coast Responsible Gambling
Network. The meetings are
conducted by the Gambling
Help service in Queensland
and are attended by industry
participants and the
Queensland Office of Liquor
and Gaming Regulation.
The Gold Coast Responsible
Gambling Network provides
a forum to exchange
information and views about
approaches to responsible
gambling and solutions to
improve the management
of problem gambling.
A percentage of gaming taxes
paid by The Star Entertainment
Group is directed to community
benefit funds in Queensland
and New South Wales.
In the 2016 financial year,
The Star Entertainment Group
contributed $18.8 million
to the Responsible Gambling
Fund (NSW).
$18.8m
TO RESPONSIBLE
GAMBLING FUND
(NSW) IN FY2016
24/7
ON-SITE
RESPONSIBLE
GAMBLING SUPPORT
50+
GAMBLING RESEARCH
PROJECTS FUNDED BY
OUR CASINOS SINCE 1995
33
GUEST WELLBEING
The Star Entertainment Group is committed to giving our guests a safe,
secure and comfortable experience at all our properties.
Poolside view from Cucina Vivo, opened as part of the $345 million transformation of Jupiters Hotel & Casino.
The Star Entertainment Group
also works with police and
casino regulators to ensure
that its properties remain the
safest licensed destinations
available to local and
international guests.
The Star Entertainment
Group takes a zero tolerance
approach to illegal,
undesirable and anti-social
behaviour and each of its
properties follow strict refusal
of entry procedures.
Each property of The Star
Entertainment Group is
supported by 24 hours-a-day,
seven-days-a-week security
and surveillance operations,
and $4.5 million has been
invested to upgrade the
surveillance capabilities
at The Star Sydney to
a digital system.
In addition, each property
operates under established
internal controls, standard
operating procedures, risk
assessments and other
policies to deal with and
respond to any suspected
undesirable conduct.
24/7
SECURITY AND
SURVEILLANCE
OPERATIONS AT
ALL PROPERTIES
$4.5m
INVESTED TO UPGRADE
SURVEILLANCE
CAPABILITIES AT
THE STAR SYDNEY
The Star Entertainment
Group’s properties collectively
welcome around 20 million
guests per year and deliver
a diverse array of offerings
including food and beverage,
accommodation, theatre, live
entertainment and gaming.
Providing a safe and enjoyable
environment for all guests
and staff is of paramount
importance to The Star
Entertainment Group.
Subject to a far greater level of
oversight and regulation than
other licensed operators, The
Star Entertainment Group’s
properties possess industry
best-practice security and
surveillance operations.
34
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 Jupiters Hotel & Casino team members with the official Gold Coast 2018 Commonwealth Games mascot, Borobi.
Jupiters Hotel & Casino was announced as the First Official Partner of the 2018 Commonwealth Games in August 2015.
35
35
TALENTED TEAMS
The Star Entertainment Group is committed to the attraction,
development and retention of a talented and diverse
workforce, equipped with the skills and passion to deliver
thrilling, memorable guest experiences.
Matt Bekier, Managing Director and CEO, and Premier of Queensland and Minister for the Arts Hon Annastacia Palaszczuk MP,
with TAFE Queensland employees and the first TAFE Queensland six-star hospitality training program graduates.
LEARNING AND
DEVELOPMENT
The Star Entertainment Group
is committed to developing
talent through internal
promotion, structured career
opportunities and employee
engagement. The Star
Development Pathway offers a
varied program of learning and
development opportunities for
team members at all stages of
their careers. Relevant team
members were also provided
with the opportunity to train
in accredited programs at their
property including Certificate
III Hospitality, Certificate
III Commercial Cookery
and Certificate IV Frontline
Management, as well as learning
programs in management,
compliance, guest excellence
and role-specific skills.
As part of its learning and
development program,
The Star Entertainment Group
has continued to invest in
partnerships with the following
external tertiary providers:
● The Queensland Hotel
& Hospitality School (a
partnership with TAFE
Queensland) delivered
its first tailored training
program, the ‘International
Hospitality Service Program’.
The program is designed to
develop food and beverage
service skills for work in
luxury five and six-star
properties. At the end of
the three-month course,
graduates receive an
accredited Certificate III
in Hospitality.
36
● The ‘Queensland Tourism
Industry Council’s
Indigenous Employee
Network – North Queensland
Chapter’ was launched. It is
part of a wider partnership
with the Queensland
Tourism Industry Council
to create and promote
Indigenous job and career
opportunities via peer
mentoring and relationship
building across the local
community. The new
network, for existing and
potential Indigenous
employees in Queensland’s
tourism sector, is designed
to support and retain
staff in the industry and
further strengthen the
representation of
Indigenous employees.
● The Macquarie Graduate
School of Management
‘Women in MBA’ (Masters
of Business Administration)
program launched in 2015
with The Star Entertainment
Group as a founding partner.
Five female team members
in leadership positions are
enrolled in the program.
40%
APPROXIMATE LEVEL OF
FRONTLINE WORKFORCE
OF ASIAN BACKGROUND
TOP 40
LGBTI
EMPLOYER IN
THE AUSTRALIAN
WORKPLACE
EQUALITY INDEX (AWEI)
50%
TARGET FEMALE
REPRESENTATION IN
LEADERSHIP BY 2020
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
The Star Sydney team members in front of the The Star’s float at the Mardis Gras parade. The Star was proud to be an official supporter for the 2016 Mardis Gras.
● Age: Internal Mature Age
Workers Expos at each of
our properties and ongoing
implementation of the
outcomes of the Federal
Government program,
‘Corporate Champions’.
Education, awareness and
training form a key part of
The Star Entertainment
Group’s Diversity & Inclusion
strategy. Our senior
leaders have taken part in
Unconscious Bias training,
on-site training programs
are offered to team members
in cultural awareness for all
employees, and LGBTI-specific
training for managers and
employees is conducted by our
partner in LGBTI inclusion,
‘Pride in Diversity’.
DIVERSITY AND
INCLUSION
The Star Entertainment Group
is committed to diversity and
inclusion in the workplace
and recognises the unique
insights, perspectives and
backgrounds of each team
member. Our policies,
practices and behaviours foster
a safe and inclusive workplace
and promote equitable and
collaborative relationships
and talented teams. This is
underpinned by our Diversity
and Inclusion Policy and is
supported by our Diversity
and Inclusion Strategy.
The Star Entertainment Group’s
internal Diversity & Inclusion
Steering Committee continues
to oversee the diversity and
inclusion initiatives at The
Star Entertainment Group,
with input from four Diversity
Working Groups that address
four key diversity areas: gender,
multicultural, age and lesbian,
gay, bisexual, transgender
and intersex (LGBTI).
Team members at each
property have participated
in the following local and
global events to support
diversity and inclusion:
● Gender: International
Women’s Day, White Ribbon
Day (to raise awareness
of and join the national
campaign to end domestic
violence against women),
and internal events to foster
careers for female leaders
● Multicultural: Lunar New
Year, Mid-Autumn Festival,
and Harmony Day (which
celebrates Australia’s
cultural diversity)
● LGBTI: The Star Sydney
was a proud partner of the
Sydney Gay & Lesbian
Mardi Gras Festival, and
The Star’s team members
took part in the parade to
showcase our support for
the LGBTI community,
International Day
Against Homophobia and
Transphobia (IDAHOT)
and Wear it Purple Day
(to support LGBTI youth)
37
37
Malou Magculang, Laundry Attendant
at Treasury Casino & Hotel.
WORK HEALTH
AND SAFETY
The Star Entertainment
Group’s approach to workplace
health and safety (WHS) is
supported by a governance
framework and strategy.
The Board’s People, Culture
and Social Responsibility
Committee monitors WHS
performance and oversees
the identification and
mitigation of workplace risks
and the implementation of
programs to improve injury
prevention and management
opportunities within
the business.
A new WHS strategy was
endorsed by the Board in
December 2015. The key
objective of this strategy is for
all our properties to be safe for
our guests, team members and
contractors. The new strategy
promotes effective safety and
risk management processes
and practices, while enhancing
team member productivity
and wellbeing. Safety targets
are incorporated in the
performance plans of all senior
management team members at
The Star Entertainment Group.
10.4
7.8
5.2
THE FOCUS AREAS FOR THE
WHS STRATEGY ARE:
2.6
LEADERSHIP:
Our leaders have received due
diligence training to reinforce
their legal obligations as
defined in the Work Health and
Safety legislation. A new safety
leadership program will be
designed and implemented to
ensure visible and responsible
safety leadership is exhibited.
0.0
36
27
18
9
0
SAFETY:
A focus on critical risk
controls will be supported
by the redesign of a
contemporary and resilient
safety management system.
This will include the use
of technology solutions to
provide higher visibility of
safety performance.
HEALTH AND WELLBEING:
Wellbeing activities and
awareness programs support
the physical, mental and
overall health culture of
our team members.
SAFETY PERFORMANCE:
The Star Entertainment Group
experienced a workplace
fatality incident in November
2015, when a contractor fell
whilst undertaking work at
the Gold Coast Convention &
Exhibition Centre.
An investigation of the
circumstances that caused
the contractor to fall have
identified opportunities
to increase our level of
critical risk controls. These
improvements included
isolation, engineering and
administrative controls to
prevent reoccurrence. In
addition, changes were made
to the building by the building
owner to further enhance the
level of critical risk controls.
We have introduced new
safety assurance processes
to effectively monitor our
construction partners to give
us confidence that they have in
place safe systems of work to
reduce workplace fatalities and
serious injuries.
PERFORMANCE
INDICATORS:
Our key WHS performance
measures continued to see
reductions in the lost time
injury frequency rate and
the total recordable injury
frequency rate:
5.1
LOST TIME INJURY
FREQUENCY RATE
DECREASED FROM FY15
24.4
TOTAL RECORDABLE INJURY
FREQUENCY RATE
DECREASED FROM FY15
LOST TIME INJURY FREQUENCY RATE (LTIFR)
10.0
5.4
6.0
5.1
FY13
FY14
FY15
FY16
TOTAL RECORDABLE INJURY FREQUENCY RATE (TRIFR)
33.5
31.4
31.3
24.4
FY13
FY14
FY15
FY16
38
38
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 REWARD AND RECOGNITION
In April 2016, The Star Entertainment Group launched a new and consolidated Reward and Recognition program –
‘The Star Awards’. The criteria for the awards are aligned to a new set of qualifying behaviours – the ‘Star Qualities’
for our team members and ‘Values’ for leaders. Our values are City Pride, Ownership, Welcoming and True Teamwork.
STAND OUT TEAM MEMBERS
JEREMY ALLAN
LAUREN CURMI
CHARLIE MEI
Executive Sous Chef
Jupiters Hotel & Casino
Sous Chef
Treasury Casino & Hotel
Director of Customer
Relations – Vietnamese
Jeremy has worked at
Jupiters since October 2011,
commencing as a Sous Chef,
before moving into his senior
role as Executive Sous Chef in
July 2015. Jeremy is well known
within the property for his
ability to deliver exceptional
culinary experiences for
our guests. He took the lead
in changing our banquets
offerings and was also the
driving culinary force in
the opening of two new
restaurants.
Lauren has displayed abundant
abilities and aptitude in her
role as Sous Chef. Lauren
recently stepped up to oversee
the Pastry Kitchen, as well
as running the Lab Kitchen.
Lauren displays her passion
for the business each day,
together with a desire to
undertake challenges and
achieve great results.
Charlie has demonstrated
great leadership in mentoring
and coaching others as well as
providing guidance to the entire
domestic team. Charlie has
established strong relationships
with the Vietnamese community
and understands his guests. An
example of the extra care he takes
in meeting their needs is the
check-in travel mode he and his
teams use to help guests.
COLIN TAYLOR
HACCP Manager
The Star Sydney
Colin has been a loyal
employee of The Star for
20 years. His roles during
those two decades have
included Chef De Partie
Commissary and Hazard
Analysis and Critical Control
Point Manager (HACCP)
as well as Work Health and
Safety (WHS) Committee
member and WHS Safety
Champion. Colin is a
passionate member of the
food and beverage team,
in a role that is crucial in
supporting our venues.
39
39
FINANCIAL
REPORT
DIRECTORS’, REMUNERATION
AND FINANCIAL REPORT
FOR THE YEAR ENDED 30 JUNE 2016
THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES
DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
REMUNERATION REPORT
FINANCIAL REPORT
CONSOLIDATED INCOME STATEMENT
CONSOLIDATED BALANCE SHEET
CONSOLIDATED STATEMENT OF CASH FLOWS
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
NOTES TO THE FINANCIAL STATEMENTS
A. Key income statement disclosures
B. Key balance sheet disclosures
C. Commitments, contingencies and subsequent events
D. Group structure
E. Risk management
F. Other disclosures
G. Accounting policies and corporate information
DIRECTORS’ DECLARATION
INDEPENDENT AUDITOR’S REPORT
41
52
53
73
74
75
76
77
78
79
83
92
93
101
107
116
122
123
40
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 Directors' Report
for the year ended 30 June 2016
The Directors of The Star Entertainment Group Limited (the Company) (previously known as Echo Entertainment
Group Limited) submit their report for the consolidated entity comprising the Group and its controlled entities
(collectively referred to as the Group) in respect of the financial year ended 30 June 2016.
1. Directors
The names and titles of the Company's Directors in office during the financial year ended 30 June 2016 and until the
date of this report are set out below. Directors were in office for this entire period.
Directors
John O'Neill AO
Matt Bekier
Gerard Bradley
Greg Hayes
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Chairman and Non-Executive Director
Managing Director and Chief Executive Officer
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
2. Operating and Financial Review
The Operating and Financial Review for the year ended 30 June 2016 has been designed to provide shareholders with
a clear and concise overview of the Groupʼs operations, financial position, business strategies and prospects. The
review also discusses the impact of key transactions and events that have taken place during the reporting period and
material business risks faced by the business, to allow shareholders to make an informed assessment of the results
and future prospects of the Group. The review complements the Financial Report and has been prepared in
accordance with the guidance set out in ASICʼs Regulatory Guide 247.
2.1. Principal activities
The principal activities of the entities within the Group are gaming, entertainment and hospitality.
The Star Entertainment Group Limited owns and operates The Star Sydney (The Star Sydney), Treasury Casino and
Hotel, Brisbane (Treasury Brisbane) and Jupiters Hotel and Casino, Gold Coast (Gold Coast). The Group also
manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland Government.
2.2. Business strategies
The key strategic priorities for the Group as initially outlined in the Company's 2014 Annual Report are to:
•
Create “world class casino resorts with local spirit”, including the proposed expansion of the South East
Queensland casinos;
Manage planned capital expenditure programs in Queensland and Sydney to deliver value and returns for
shareholders;
Increase volume of high-value visitation from local, domestic and international markets;
Grow domestic and International VIP Rebate business;
Improve customer experience, including providing customers with tailored product and service offerings; and
Maximise value from technology, including further enhancing gaming and loyalty experience and delivering
integrated and new IT platforms.
•
•
•
•
•
The Group has continued to make good progress on all these key strategic priorities during the year, with:
•
•
•
•
•
•
•
Financial performance improved across all properties;
Balance sheet strength maintained;
Overall guest satisfaction scores increased;
Rebranding of the Company and The Star Sydney property, with The Star Gold Coast scheduled for FY2017;
Staff engagement improved across all properties and business segments;
Leadership team in place supported by strengthened functional capability;
Capital projects (refurbishments and growth) progressing slightly slower than managementʼs initial expectations
but within budget; and
New hotel and residential tower expansion plans announced at The Star Sydney and the Gold Coast in
partnership with Queen's Wharf Brisbane project partners, Chow Tai Fook Enterprises Limited (CTF) and Far
East Consortium International Limited (FEC). These are currently in the planning and development approval
stage.
•
41
1
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
Directors' Report
for the year ended 30 June 2016
Looking forward into FY2017, the focus will be on the following key strategic priorities:
•
•
Improve earnings across the Group through continued focus on operations and efficiency;
Deliver on the next stage of the capital program (the Queen's Wharf Brisbane development, the Gold Coast
development and masterplan, and The Star Sydney development);
Secure planning approvals and execute property development plans at the Sydney and Gold Coast properties
in partnership with CTF and FEC; and
Continue the drive to differentiate the value proposition at each of our properties, through brand, loyalty,
customer service, and food and beverage.
•
•
The Directors have excluded from this report any further information on the likely developments in the operations of the
Group and the expected results of those operations in future financial years, as the Directors have reasonable grounds
to believe that to include such information will be likely to result in unreasonable prejudice to the Group.
2.3. Group performance
Gross revenue of $2,357.7 million was up 4.4% on the prior comparable period (pcp). Good domestic gaming revenue
growth offset the disruption impact of capital works on non-gaming revenue and a low win rate in the International VIP
Rebate business in the first half of the year. Normalised1 revenues grew 6.0% for the period to $2,431.0 million, up
from $2,294.0 million in the pcp. Revenue growth was driven by a combination of improved marketing, loyalty program,
sales activity, product offering, and stronger macro-economic conditions in each of the Groupʼs markets. As disclosed
in the results for the first half of the year, normalised EBITDA has been calculated by applying a 1.35% win rate to
actual International VIP Rebate turnover in the period in line with the Group's win rate experience and consistent with
the Australia and New Zealand market practice.
Effective cost control with operating costs up 4.2% on the pcp, including marketing and loyalty investment. There were
no significant items within the period. The prior period results include $3.7 million of significant cost items.
Earnings before interest, tax, depreciation and amortisation (EBITDA) of $488.8 million was up 7.5% on the pcp.
Normalised EBITDA (excluding significant items) of $556.2 million was up 14.1% on the pcp. Normalised EBITDA
margin of 22.9% is up from 21.2% in the pcp as a result of good expense management across the Group, offset by
higher average gaming taxes at The Star Sydney.
Depreciation and Amortisation expense of $163.8 million was flat on the pcp. Finance costs of $45.8 million were down
8.2% on the pcp.
Net profit after tax (NPAT) was $194.4 million, 14.9% up on the pcp. Normalised NPAT, excluding significant items,
was $241.3 million, up 23.4% on the pcp.
Basic and diluted earnings per share (EPS) was 23.6 cents, up 14.9% on the pcp. A final dividend of 7.5 cents fully
franked was declared, totalling 13.0 cents per share for the year, up 18.2% on the pcp and reflecting a payout ratio of
55.2% of statutory NPAT for the year ended 30 June 2016.
2.4. Group financial position
The Groupʼs net assets increased by 3.7% compared with the previous year.
Receivables remain well managed, with receivables past due not impaired less than one year comprising over 95% of
the total. Net receivables past due not impaired greater than 30 days of $33.2 million, up from $16.2 million at 30 June
2015, reflected increased volumes and a high win rate in the second half of the year.
Net debt2 was $473.8 million (30 June 2015: $400.3 million) with $450.0 million in undrawn facilities and an average
drawn debt maturity of 3.5 years. Gearing levels remain conservative at 1.0 times FY2016 net debt to actual EBITDA,
positioning the Group well to execute on its growth projects. Operating cash flow before interest and tax was $477.4
million (30 June 2015: $506.5 million) with an EBITDA to cash conversion ratio of 98% (30 June 2015: 112%).
Trade and other payables of $261.9 million were up 12.0% from June 2015 as a result of higher gaming activity,
representing players' funds deposited and chips in circulation at 30 June 2016.
1 Normalised results reflect the underlying performance of the business as they remove the inherent volatility of the International VIP
Rebate business. Normalised results are adjusted using an average win rate of 1.35% of actual turnover.
2 Net debt is shown as interest bearing liabilities, less cash and cash equivalents, less net position of derivative financial instruments.
Derivative financial instruments reflect the position of currency swaps and interest rate hedges entered into for the USPP debt.
42
2
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT Directors' Report
for the year ended 30 June 2016
2.5. Segment operations
The Group comprises the following three operating segments:
•
•
•
The Star Sydney;
Gold Coast; and
Treasury Brisbane.
Refer to note A1 for more details of the financial performance of the Companyʼs operating segments. The activities and
drivers of the results for these operations are discussed below.
The Star Sydney
Gross revenue was $1,656.8 million, up 7.5% on the pcp and EBITDA was $302.4 million, up 13.0% on the pcp.
Normalised EBITDA was $381.8 million, up 17.4% on the pcp.
Normalised gross revenue at The Star Sydney was $1,743.5 million, up 8.6% on the pcp. Revenue increased with
good volume growth across all lines of business. Domestic gross gaming revenue was up 8.8% on the pcp with growth
across both tables and slots, up 9.1% and 8.3% respectively. Electronic gaming machine market share of 9.1% for Q1-
Q3 FY2016 was steady versus the pcp3. Non-gaming cash revenue was up 3.2% on the pcp despite disruption from
the hotel refurbishments in the period. Taxes, levies, rebates and commissions of $735.2 million were up 5.5% on the
pcp as a result of increased volumes and higher average non-rebate gaming taxes. The Star Sydneyʼs average non-
rebate tax rate was 31.9%, up from 31.4% in the pcp (top marginal tax rate of 50.0% in both years). The higher
average non-rebate tax rate had an impact of $5.2 million in the period. Operating expenses of $619.2 million were up
7.4% on the pcp. Normalised EBITDA margin of 21.9% was up from 20.3% on the pcp.
The Star Sydney is one of the main partners to the Sydney Festival, a Leadership Partner of City of Sydney's Chinese
New Year Festival and a sponsor of the Sydney Swans and New South Wales Rugby League (NSW Blues). The Star
Sydney also contributed to various charities during the period, including Barnardos Australia and Taronga
Conservation Society Australia.
Queensland (Gold Coast and Treasury Brisbane)
Gross revenue was $700.9 million down 2.2% on the pcp and EBITDA was $186.4 million, down 0.3% on the pcp.
Normalised EBITDA was $174.4 million, up 7.5% on the pcp.
Normalised gross revenue in Queensland was $687.5 million, down 0.2% on the pcp. Queensland experienced a small
decline in revenue, as revenue growth in domestic tables and slots was offset by disruption at non-gaming facilities at
the Gold Coast property, inclusion of three months of Jupiters Townsville revenues in the pcp, and lower International
VIP Rebate business volumes in the second half of the year. The domestic gaming business was up 3.6% on the pcp,
with growth across both tables and slots, up 5.2% and 2.4% respectively. Taxes, levies, rebates and commissions
were down 6.0% on the pcp. Operating expenses of $341.8 million across the Queensland properties was down 1.2%
on the pcp. Normalised EBITDA margin of 25.4% was up from 23.6% on the pcp.
Treasury Brisbane was a sponsor of the Brisbane Festival and Queensland Rugby League (Queensland Maroons)
during the year. The Queensland properties also contribute to various charities and not-for-profit organisations
including Ronald McDonald House and Surf Life Saving Queensland.
International VIP Rebate business
The results of the International VIP Rebate business are included in the segment performance overviews above. The
International VIP Rebate business turnover increased 7.0% on the pcp to a record of $49.5 billion in FY2016. The
actual win rate of 1.20% (0.88% in the first half, 1.50% in the second half of the year) was below both the actual win
rate for the pcp of 1.27% and the normalised rate of 1.35%. Normalised International VIP Rebate business revenue
was $669.5 million, up 7.2% on the pcp, compared to actual revenue of $596.3 million (up 1.3% on the pcp).
3 Q4 FY2016 market data not yet available.
43
3
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
Directors' Report
for the year ended 30 June 2016
2.6. Significant changes in the state of affairs and future developments
Other than those stated within this report, there were no significant changes in the state of affairs of the Group during
the financial year. The section below discusses the impact of key transactions and events that have taken place during
the reporting period.
Treasury Brisbane
In November 2015 contractual close was reached between the Queensland Government and Destination Brisbane
Consortium (DBC) on the Queenʼs Wharf Brisbane development. DBCʼs Integrated Resort ownership structure
requires capital to be contributed 50% by the Group and 25% each by CTF and FEC. The Group will act as the
operator under a long dated casino management agreement.
The Group currently holds a perpetual casino licence in Queensland that is attached to the lease of the current
Treasury site that expires in 2070. Upon opening of the Integrated Resort, the Groupʼs casino licence will be
surrendered and DBC will be granted a casino licence for 99 years including an exclusivity period of 25 years.
CTF and FEC will each contribute 50% of the capital to undertake the residential and related components of the
broader Queenʼs Wharf Brisbane development. The Group is not a party to the residential development joint venture.
Gold Coast
The Group currently holds a perpetual casino licence to operate the Jupiters Hotel and Casino on the Gold Coast. The
Group owns Broadbeach Island on which the casino is located. The Group has previously disclosed a major
redevelopment of the property of up to $845 million capital spend (subject to various approvals), including a $400
million new tower with joint venture partners CTF and FEC. The scale of the property is proposed to be expanded to
approximately 1,400 hotel rooms and residences with signature gaming facilities, over 20 restaurants and bars, and
substantial resort facilities and attractions. The Groupʼs share is expected to be approximately $578 million (prior to the
sale of any apartments).
Progress on the redevelopment project includes the completion of the VIP gaming salons, pool and new restaurants.
Capital expenditure in the current year was $132 million, including construction costs for the new 6 star hotel and
refurbishment of the existing main gaming floor, lobby, hotel rooms and food and beverage offerings.
The Group continues to manage the Gold Coast Convention and Exhibition Centre adjacent to the casino.
The Star Sydney
The Star Sydney's casino licence continues until 2093 and includes exclusivity arrangements with the New South
Wales Government that support the operation of a single casino in NSW until November 2019.
The Group has previously disclosed a proposed investment of up to $1 billion (subject to various approvals) which
includes a new tower to be developed with joint venture partners CTF and FEC. The scale of the property is proposed
to be expanded to approximately 1,000 hotel rooms and residences (including Ritz Carlton hotel and luxury
residences), with signature gaming experiences including new and refurbished VIP suites and gaming salons, and
over 50 food and beverage offerings. The Groupʼs share is expected to be approximately $667 million (prior to the sale
of any apartments).
Capital expenditure in the current year was $150 million, including the completion of the Oasis Private Gaming Room
expansion, The Darling VIP Salons and Harvest Buffet. The redevelopment and expansion of the Astral Tower and
Residences, Astral Lobby and Porte Cochere, and Main Gaming Floor continues.
On 8 July 2014, Liquor and Gaming NSW (formerly the Independent Liquor and Gaming Authority) issued a restricted
gaming licence to Crown Resorts Limited (Crown) to operate a restricted gaming facility at Barangaroo South, Crown
Sydney Hotel Resort (Crown Sydney) from November 2019 onwards. On 28 June 2016, Crown announced that
conditional planning approval had been received from the NSW Planning Assessment Commission, and that Crown is
expecting to complete construction and open Crown Sydney in early 2021.
Shareholder Activity – applications to increase shareholding/voting power above 10%
The application made by the Genting group of companies on 27 June 2012 for approval to increase their potential
voting power in the Company up to an effective maximum of 23% (which may be adjusted in certain circumstances)
was approved by the New South Wales Independent Liquor and Gaming Authority and the Queensland Attorney
General and Minister for Justice by 3 December 2015.
44
4
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT Strategic risks
•
Operational risks
•
•
•
•
•
•
Directors' Report
for the year ended 30 June 2016
2.7. Risk management
The Group takes a structured approach to identifying, evaluating and managing those risks which have the potential to
materially affect achievement of strategic objectives. The commentary under Principle 7 of the Companyʼs Corporate
Governance Statement describes the risk management framework in place to underpin the enterprise wide approach
to effective risk management. The Corporate Governance Statement can be viewed on the Companyʼs website.
The major risks facing the Group are set out below. The Group may also face a range of other risks from time to time
in conducting its business activities. While it aims to manage risks in order to avoid adverse impacts on its financial
standing, some risks are outside the control of the Group.
The potential effect of increased competition in the Groupʼs key markets of Sydney, Brisbane and the Gold
Coast;
The failure to realise expected financial benefits from key growth projects;
Loss of key management personnel; and
Geopolitical risks affecting the ability of foreign nationals to travel to, or bring funds to, Australia.
Loss of data security;
Business interruptions, including a failure of core IT systems or other events which limit the ability to operate
from our properties; and
Matters affecting the health, safety and security of our employees and customers.
Regulatory risks
•
•
A failure to comply with applicable laws; and
Changes in law affecting the operation of casinos in New South Wales or Queensland.
Financial risks
•
An inability to access capital on reasonable terms.
2.8. Environmental regulation and performance
The Group is committed to leadership of energy and waste reduction in the entertainment sector and increasing its
sustainability performance in the communities in which it operates. The Groupʼs vision for sustainability is to
demonstrate clear evidence of its environmental values, activities and commitments embedded throughout the
organisation.
A materiality assessment was conducted during the year to identify the key material environmental impacts of energy
consumption, water use, carbon emissions and waste generation from the Groupʼs 24/7 operations. These material
impacts are managed through the Groupʼs Environment and Sustainability Strategy and through its sustainability
policies and programs.
The Groupʼs five year Environment and Sustainability Strategy is aligned to the business strategy, incorporating a
range of objectives, projects and programs to ensure continuous improvement in environmental management.
Management reports annually to the People, Culture and Social Responsibility Committee on the Groupʼs delivery of
its commitments under the five year Environment and Sustainability Strategy. The strategy focuses on six areas
(Governance, Our Team Members, Our Stakeholders, Our Suppliers, Our Environment and Our Communities) and
reports the Groupʼs performance on the Companyʼs website.
The Group identifies and manages sustainability risks across the organisation by focusing efforts on material impacts
and has set targets to manage performance. To support the delivery of these targets, the Group audited over 90% of
its total energy consumption within the year to identify opportunities for energy and water savings. The Group has
implemented twenty projects to achieve cost and carbon savings and has a roadmap to implement further projects.
The Group has also implemented Sustainable Design Guidelines to achieve greener buildings through the
refurbishment and development processes by specifying energy efficient technologies and best practice water and
waste management.
The Company is registered under the National Greenhouse Energy Reporting System (NGERS) and reports all energy
consumption and greenhouse gas emissions to the Federal Government every year. The Companyʼs Environment and
Sustainability Strategy, Objectives and Targets and Sustainable Design Guidelines can be found on the Companyʼs
website.
3. Earnings per share (EPS)
Basic and diluted EPS for the financial year was 23.6 cents (2015: 20.5 cents), 14.9% up on the pcp as a result of the
improved operational performance across the Group. EPS is disclosed in note F3 of the Financial Report.
45
5
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
Directors' Report
for the year ended 30 June 2016
4. Dividends
4.1. Dividend payout
An interim dividend of 5.5 cents per share (fully franked) was paid on 22 March 2016.
A final dividend per share of 7.5 cents fully franked was declared, totalling 13.0 cents per share for the year, up 18.2%
on the pcp and reflecting a payout ratio of 55.2% of statutory NPAT for the year ended 30 June 2016.
4.2. Dividend Reinvestment Plan (DRP)
The Companyʼs DRP is in operation for the final dividend. The last date for receipt of election notices to enable
participation for the final dividend is 2 September 2016. The price at which shares are allocated under the DRP is the
daily volume weighted average market price of the Company's shares sold in the ordinary course of trading on the ASX
over a period of 10 trading days beginning on (and including) the fourth trading day after the Record Date (1
September 2016). Shares allocated under the DRP will rank equally with the Company's existing fully paid ordinary
shares.
5. Significant events after the end of the financial year
Other than those events that have already been disclosed in this report or elsewhere in the Financial Report, there
have been no other significant events occurring after 30 June 2016 and up to the date of this report that have
materially affected or may materially affect the Groupʼs operations, the results of those operations or the Groupʼs state
of affairs.
6. Directors' qualifications, experience and special responsibilities
The details of the Company's Directors in office during the financial year and until the date of this report (except as
otherwise stated) are set out below.
Current Directors
John O'Neill AO
Matt Bekier
Chairman (from 8 June 2012); Non-Executive Director (from 28 March 2011)
Diploma of Law; Foundation Fellow of the Australian Institute of Company Directors
Experience:
John OʼNeill was formerly Managing Director and Chief Executive Officer of Australian
Rugby Union Limited, Chief Executive Officer of Football Federation Australia, Managing
Director and Chief Executive Officer of the State Bank of New South Wales, and Chairman
of the Australian Wool Exchange Limited.
Mr OʼNeill was also formerly a Director of Tabcorp Holdings Limited and Rugby World Cup
Limited.
Mr OʼNeill was also the inaugural Chairman of Events New South Wales, which flowed from
the independent reviews he conducted into events strategy, convention and exhibition
space, and tourism on behalf of the New South Wales Government.
Special Responsibilities:
Mr OʼNeill is chairman of the Board and an ex-officio member of all Board committees.
Directorships of other Australian listed companies held during the last 3 years:
Nil
Managing Director and Chief Executive Officer (from 11 April 2014);
Executive Director (from 2 March 2011)
Master of Economics and Commerce; PhD in Finance
Experience:
Matt Bekier is a member of the Board of the Australasian Gaming Council. Mr Bekier was
previously Chief Financial Officer and Executive Director of the Company and also
previously Chief Financial Officer of Tabcorp Holdings Limited from late 2005 and until the
demerger of the Company and its controlled entities in June 2011.
Prior to his role at Tabcorp, Mr Bekier previously held various roles with McKinsey &
Company.
Special Responsibilities:
Nil
Directorships of other Australian listed companies held during the last 3 years:
Nil
46
6
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT Directors' Report
for the year ended 30 June 2016
Current Directors
Gerard Bradley
Greg Hayes
Non-Executive Director (from 20 May 2013)
Bachelor of Commerce; Diploma of Advanced Accounting; Fellow of the Institute of
Chartered Accountants; Fellow of CPA Australia; Fellow of the Australian Institute of
Company Directors; Fellow of the Australian Institute of Management
Experience:
Gerard Bradley is currently the Chairman of Queensland Treasury Corporation and related
companies, having served for 14 years as Under Treasurer and Under Secretary of the
Queensland Treasury Department. He has extensive experience in public sector finance in
both the Queensland and South Australian Treasury Departments.
Mr Bradley has consented to be a Non-Executive Director of Pinnacle Investment
Management Limited (currently Wilson Group Limited).
Mr Bradley has previously served as Chairman of the Board of Trustees at QSuper. His
include Funds SA, Queensland
previous non-executive board memberships also
Investment Corporation, Suncorp (Insurance & Finance), Queensland Water Infrastructure
Pty Ltd, and South Bank Corporation.
Special Responsibilities:
• Chairman of the Risk and Compliance (1 September 2015 to present)
• Member of the Audit Committee
• Member of the Investment and Capital Expenditure Review Committee
• Member of the Remuneration Committee
Directorships of other Australian listed companies held during the last 3 years:
Nil
Non-Executive Director (from 24 April 2015)
Master of Applied Finance; Graduate Diploma in Accounting; Bachelor of Arts; Advanced
Management Programme (Harvard Business School, Massachusetts); Member of Institute
of Chartered Accountants
Experience:
Greg Hayes is an experienced executive and director having worked across a range of
industries including energy, infrastructure and logistics. Mr Hayes brings to the Board skills
and experience in the areas of strategy, finance, mergers and acquisitions, and strategic
risk management, in particular in listed companies with global operations. He is currently a
director of Incitec Pivot Limited, Precision Group and Aurrum Holdings Pty Ltd.
Mr Hayes was previously Chief Financial Officer and Executive Director of Brambles
Limited, Chief Executive Officer & Group Managing Director of Tenix Pty Ltd, Chief
Financial Officer and later interim CEO of the Australian Gaslight Company (AGL), CFO
Australia and New Zealand of Westfield Holdings, and Executive General Manager,
Finance of Southcorp Limited.
Special Responsibilities:
• Chair of the Audit Committee (1 September 2015 to present)
• Member of the Investment and Capital Expenditure Review Committee
• Member of the People, Culture and Social Responsibility Committee (to 1 March 2016)
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
• Incitec Pivot Limited (1 October 2014 to present)
47
7
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
Directors' Report
for the year ended 30 June 2016
Current Directors
Katie Lahey AM
Sally Pitkin
Non-Executive Director (from 1 March 2013)
Bachelor of Arts (First Class Honours); Master of Business Administration
Experience:
Katie Lahey has extensive experience in the retail, tourism and entertainment sectors and
previously held chief executive roles in the public and private sectors.
Ms Lahey is currently the Chair of Tourism & Transport Forum and the Executive Chairman
Australasia for Korn Ferry International. She is also a member of the Australian
Brandenburg Orchestra Board.
Ms Lahey was previously the Chair of Carnival Australia and a member of the boards of
David Jones Limited, Australia Council Major Performing Arts, Hills Motorway Limited,
Australia Post and Garvan Research Foundation.
Special Responsibilities:
• Chairman of the People, Culture and Social Responsibility Committee
• Member of the Remuneration Committee
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
Nil
Non-Executive Director (from 19 December 2014)
Doctor of Philosophy (Governance); Master of Laws; Bachelor of Laws; Fellow of the
Australian Institute of Company Directors
Experience:
Sally Pitkin is a Queensland based company director and lawyer with extensive corporate
experience and over 20 yearsʼ experience as a non-executive director and board member
across a wide range of industries in the private and public sectors.
Dr Pitkin is the President of the Queensland Division, and a member of the National Board
of the Australian Institute of Company Directors. She is also a member of the External
Advisory Board of the Australian Securities and Investments Commission.
Dr Pitkin was previously a Non-Executive Director of Aristocrat Leisure Limited.
Special Responsibilities:
• Chairman of the Remuneration Committee
• Member of the Audit Committee
• Member of the People, Culture and Social Responsibility Committee
Directorships of other Australian listed companies held during the last 3 years:
• Super Retail Group Limited (1 July 2010 to present)
• Billabong International Limited (28 February 2012 to 15 August 2016)
• IPH Limited (23 September 2014 to present)
• Link Administration Holdings Limited (23 September 2015 to present)
48
8
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT Directors' Report
for the year ended 30 June 2016
Current Directors
Richard
Sheppard
Non-Executive Director (from 1 March 2013)
Bachelor of Economics (First Class Honours); Fellow of the Australian Institute of Company
Directors
Experience:
Richard Sheppard has had an extensive executive career in the banking and finance sector
including an executive career with Macquarie Group Limited spanning more than 30 years.
Mr Sheppard was previously the Managing Director and Chief Executive Officer of
Macquarie Bank Limited and chaired the boards of a number of Macquarieʼs listed entities.
He has also served as Chairman of the Commonwealth Governmentʼs Financial Sector
Advisory Council.
Mr Sheppard is currently the Chairman and a Non-Executive Director of Dexus Property
Group and a Non-Executive Director of Snowy Hydro Limited. He is also Treasurer of the
Bradman Foundation.
Special Responsibilities:
• Chairman of the Investment and Capital Expenditure Review Committee
• Member of the Audit Committee
• Member of the Risk and Compliance Committee
Directorships of other Australian listed companies held during the last 3 years:
• Dexus Property Group (1 January 2012 to present)
7. Directors' interests in securities
At the date of this report (except as otherwise stated), the Directors had the following relevant interests in the
securities of the Company:
Name
Current
John O'Neill AO
Matt Bekier(i)
Gerard Bradley
Greg Hayes
Katie Lahey AM
Sally Pitkin
Richard Sheppard
Ordinary Shares
Performance Rights
51,172
507,873
25,000
10,000
27,080
26,900
50,000
Nil
1,029,690
Nil
Nil
Nil
Nil
Nil
(i)
146,733 Ordinary Shares held by Matt Bekier are subject to a holding lock that ends on 15 September 2016.
8. Company Secretary
Paula Martin holds the position of Group General Counsel and Company Secretary. She holds a Bachelor of Business
(Int. Bus.) and a Bachelor of Laws and a Graduate Diploma in Applied Corporate Governance. She has extensive
commercial legal experience having worked with King & Wood Mallesons (formerly Mallesons Stephen Jaques) prior to
joining the Company. Ms Martin is a member of the Queensland Law Society, Association of Corporate Counsel
(Australia) and the Governance Institute of Australia.
49
9
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
Directors' Report
for the year ended 30 June 2016
9. Board and Committee meeting attendance
During the financial year ended 30 June 2016, the Company held 9 meetings of the Board of Directors (including one
unscheduled meeting which was attended by a majority of Directors). The numbers of Board and Committee meetings
attended by each of the Directors during the year are set out in the table below.
Board of
Directors
Audit
Committee
Risk and
Compliance
Committee
Remuner-
ation
Committee
People,
Culture &
Social
Responsibi-
lity
Committee
Investment &
Capital
Expenditure
Review
Committee
Directors
A B A B A B A B A B A B
John O'Neill AO
Matt Bekier (i)
Gerard Bradley
Greg Hayes
Katie Lahey AM
Sally Pitkin
Richard Sheppard
9
9
9
8
8
8
9
9
9
9
9
9
9
9
5
-
5
4
-
5
4
5
-
5
5
-
5
5
4
-
4
4
4
-
4
4
-
4
4
4
-
4
4
-
4
-
4
4
-
4
-
4
-
4
4
-
4
-
-
2
4
4
-
4
-
-
2
4
4
-
4
-
4
4
-
-
4
4
-
4
4
-
-
4
A - Number of meetings attended as a Director or Committee member
B - Maximum number of meetings available for attendance as a Committee member
(i)
The Managing Director and Chief Executive Officer is not a member of any Board Committee but may attend Board
Committee meetings upon invitation, however this attendance is not recorded here.
Details of the functions and memberships of the Committees of the Board and the terms of reference for each Board
Committee are available from the Corporate Governance section of the Companyʼs website.
10.
Indemnification and insurance of Directors and Officers
The Directors and Officers of the Company are indemnified against liabilities pursuant to agreements with the
Company. The Company has entered into insurance contracts with third party insurance providers, in accordance with
normal commercial practices. Under the terms of the insurance contracts, the nature of the liabilities insured against
and the amount of premiums paid are confidential.
11. Non-audit services
Ernst & Young, the external auditor to the Company and the Group, provided non-audit services to the Company
during the financial year ended 30 June 2016. The Directors are satisfied that the provision of non-audit services
during this period was compatible with the general standard of independence for auditors imposed by the Corporations
Act 2001 (Cth). The nature and scope of each type of non-audit service provided did not compromise auditor
independence. These statements are made in accordance with advice provided by the Audit Committee.
The Audit Committee reviews the activities of the independent external auditor and reviews the auditorʼs performance
on an annual basis. The Chair of the Audit Committee (or authorised delegate) must approve all non-statutory audit
and other work to be undertaken by the auditor. Further details relating to the Audit Committee and the engagement of
auditors are available in the Corporate Governance Statement.
Ernst & Young, acting as the Companyʼs external auditor, received or is due to receive the following amounts in
relation to the provision of non-audit services to the Company:
Description of services
$000
Other assurance related services in relation to the Company and any other entity in the
consolidated group
Other non-audit services including taxation services
Total of all non-audit and other services
-
302.0
302.0
Amounts paid or payable by the Company for audit and non-audit services are disclosed in note F11 of the Financial
Report.
50
10
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT Directors' Report
for the year ended 30 June 2016
12. Rounding of amounts
The Star Entertainment Group Limited is a company of the kind specified in the Australian Securities and Investments
Commissionʼs ASIC Corporations (Rounding in Financial/Directorsʼ Reports) Instrument 2016/191. In accordance with
that Instrument, amounts in the Financial Report and the Directorsʼ Report have been rounded to the nearest hundred
thousand dollars unless specifically stated to be otherwise.
13. Auditor's independence declaration
Attached is a copy of the auditor's independence declaration provided under section 307C of the Corporations Act
2001 (Cth) in relation to the audit of the Financial Report for the year ended 30 June 2016. The auditor's independence
declaration forms part of this Directorsʼ Report.
This report has been signed in accordance with a resolution of directors.
John O'Neill AO
Chairman
Sydney
26 August 2016
51
11
FOR THE YEAR ENDED 30 JUNE 2016DIRECTORS’ REPORT
AUDITOR’S INDEPENDENCE DECLARATION
=jfkl Qgmf_
*((?]gj_]Klj]]l
Kq\f]qFKO*(((9mkljYdaY
?HG:gp*.,.Kq\f]qFKO*(()
L]d2#.)*1*,0----
>Yp2#.)*1*,0-1-1
]q&[ge'Ym
=jfkl Qgmf_
*((?]gj_]Klj]]l
Kq\f]qFKO*(((9mkljYdaY
?HG:gp*.,.Kq\f]qFKO*(()
L]d2#.)*1*,0----
>Yp2#.)*1*,0-1-1
]q&[ge'Ym
9m\algjÌkAf\]h]f\]f[]<][dYjYlagflgl`] 5 years
$m
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
103.4
55.7
130.4
289.5
259.9
6.1
34.3
300.3
-
-
-
-
-
-
-
-
-
209.6
257.5
467.1
-
-
509.5
509.5
96.2
100.4
110.5
307.1
233.9
4.7
33.3
271.9
-
-
-
-
-
-
-
-
-
150.2
256.5
406.7
-
-
521.2
521.2
Net (outflow)/inflow
(10.8)
(467.1)
(509.5)
35.2
(406.7)
(521.2)
102
60
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2016
2015
< 1 year
1 - 5 years
> 5 years
< 1 year
1 - 5 years
> 5 years
$m
$m
$m
$m
$m
$m
299.2
516.0
311.2
535.4
8.7
34.3
9.5
52.5
26.8
22.0
7.7
56.5
(4.0)
30.9
257.5
10.8
95.6
172.4
8.7
276.7
22.5
6.5
509.5
-
-
20.2
352.6
372.8
143.2
9.3
33.3
9.2
51.8
26.8
22.5
7.7
57.0
(5.2)
35.0
256.5
19.7
101.4
179.2
16.4
297.0
14.2
14.2
521.2
-
-
41.4
370.8
412.2
123.2
For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing
date. For foreign currency receipts and payments, the amount disclosed is determined by reference to the AUD/USD
The following sensitivity analysis is based on interest rate risk exposures in existence at year end.
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax
profit and other comprehensive income would have been affected as follows:
Other
comprehensive
income
Net profit after tax
higher/(lower)
higher/(lower)
Notes to the financial statements
For the year ended 30 June 2016
(ii) Derivative financial instruments
Financial assets
Interest rate swaps - receive AUD floating
Cross currency swaps - receive USD fixed
Forward currency contract - receive USD
Financial liabilities
Interest rate swaps - pay AUD fixed
Cross currency swaps - pay AUD floating
Forward currency contract - pay AUD
Net (outflow)/inflow
rate at balance sheet date.
Financial instruments - sensitivity analysis
Interest rates - AUD and USD
fixed
fixed
2016
AUD
USD
2015
AUD
USD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
+ 0.5% (50 basis points)
- 0.25% (25 basis points)
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
+ 0.5% (50 basis points)
- 0.25% (25 basis points)
$m
(0.5)
0.5
(0.3)
0.3
-
-
-
-
$m
6.9
(7.1)
(10.1)
5.2
8.3
(8.5)
(11.8)
6.0
61
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
Credit risk includes liabilities under financial guarantees. For financial guarantee contract liabilities, the fair value at
initial recognition is determined using a probability weighted discounted cash flow approach. The fair value of financial
guarantee contract liabilities has been assessed as nil (2015:nil), as the possibility of an outflow occurring is
considered remote. Details of the financial guarantee contracts in the balance sheet are outlined below.
Fixed and floating charges
The controlled entities denoted (b) in note D1 have provided Liquor and Gaming NSW with a fixed and floating charge
over all of the assets and undertakings of each company to secure payment of all monies and the performance of all
obligations which they have to Liquor and Gaming NSW.
Guarantees and indemnities
The controlled entities denoted (b) in note D1 have entered into a guarantee and indemnity agreement in favour of
Liquor and Gaming NSW whereby all parties to the agreement are jointly and severally liable for the performance of
the obligations and liabilities of each company participating in the agreement with respect to agreements entered into
and guarantees given.
The Star Entertainment Finance Limited and The Star Entertainment International No. 3 Pty Ltd are called upon to give
in the ordinary course of business, guarantees and indemnities in respect of the performance of their contractual and
financial obligations. The maximum amount of these guarantees and indemnities is $117.3 million (2015: $121.2
million).
Liquidity risk
loans and notes.
Liquidity risk arises from the financial liabilities of the Group and the Group's subsequent ability to meet its obligations
to repay its financial liabilities as and when they fall due.
The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of bank
The Group manages liquidity risk by maintaining a forecast of expected cash flow which is monitored and reviewed on
a regular basis. To help reduce liquidity risk, the Group targets a minimum level of cash and cash equivalents to be
maintained, and has revolving facilities in place with sufficient undrawn funds available.
The Group's policy is that not more than 33% of debt facilities should mature in any financial year within the next four
years. At 30 June 2016, the Group's debt facilities that will mature in less than one year is nil (2015: $150 million). The
next debt maturity is the working capital facility of $150 million in January 2018. This represents 18.5% of total debt
and is within the Group's policy.
Refer to notes B7 and E2 for maturity of financial liabilities.
The contractual cash flows including principal and estimated interest receipts or payments of financial assets or
liabilities are as follows:
(i) Non-derivative financial instruments
Financial assets
Cash assets
Short term deposits
Net trade and other receivables
Financial liabilities
Trade creditors and accrued expenses
Bank loans - unsecured
Private placement - US dollar
2016
2015
< 1 year
1 - 5 years
> 5 years
< 1 year
1 - 5 years
> 5 years
$m
$m
$m
$m
$m
$m
103.4
55.7
130.4
289.5
259.9
6.1
34.3
300.3
-
-
-
-
-
-
-
-
-
-
-
96.2
100.4
110.5
307.1
233.9
4.7
33.3
271.9
209.6
257.5
467.1
509.5
509.5
150.2
256.5
406.7
521.2
521.2
-
-
-
-
-
-
-
-
-
-
-
60
Net (outflow)/inflow
(10.8)
(467.1)
(509.5)
35.2
(406.7)
(521.2)
Notes to the financial statements
For the year ended 30 June 2016
(ii) Derivative financial instruments
Financial assets
Interest rate swaps - receive AUD floating
Cross currency swaps - receive USD fixed
Forward currency contract - receive USD
fixed
Financial liabilities
Interest rate swaps - pay AUD fixed
Cross currency swaps - pay AUD floating
Forward currency contract - pay AUD
fixed
Net (outflow)/inflow
2016
2015
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
< 1 year
$m
1 - 5 years
$m
> 5 years
$m
8.7
34.3
9.5
52.5
26.8
22.0
7.7
56.5
(4.0)
30.9
257.5
10.8
6.5
509.5
-
299.2
516.0
95.6
172.4
8.7
276.7
22.5
20.2
352.6
-
372.8
143.2
9.3
33.3
9.2
51.8
26.8
22.5
7.7
57.0
(5.2)
35.0
256.5
19.7
14.2
521.2
-
311.2
535.4
101.4
179.2
16.4
297.0
14.2
41.4
370.8
-
412.2
123.2
For floating rate instruments, the amount disclosed is determined by reference to the interest rate at the last repricing
date. For foreign currency receipts and payments, the amount disclosed is determined by reference to the AUD/USD
rate at balance sheet date.
Financial instruments - sensitivity analysis
Interest rates - AUD and USD
The following sensitivity analysis is based on interest rate risk exposures in existence at year end.
At 30 June, if interest rates had moved, as illustrated in the table below, with all other variables held constant, post tax
profit and other comprehensive income would have been affected as follows:
2016
AUD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
USD
+ 0.5% (50 basis points)
- 0.25% (25 basis points)
2015
AUD
+ 0.5% (50 basis points)
- 0.5% (50 basis points)
USD
+ 0.5% (50 basis points)
- 0.25% (25 basis points)
Net profit after tax
higher/(lower)
$m
Other
comprehensive
income
higher/(lower)
$m
(0.5)
0.5
-
-
(0.3)
0.3
-
-
6.9
(7.1)
(10.1)
5.2
8.3
(8.5)
(11.8)
6.0
61
103
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
The movements in profit are due to higher/lower interest costs from variable rate debt and investments. The movement
in other comprehensive income is due to an increase/decrease in the fair value of financial instruments designated as
cash flow hedges.
The numbers derived in the sensitivity analysis are indicative only.
Significant assumptions used in the interest rate sensitivity analysis include:
− reasonably possible movements in interest rates were determined based on the Group's current credit rating and
mix of debt, relationships with financial institutions and the level of debt that is expected to be renewed, as well as
a review of the last two years' historical movements and economic forecaster's expectations;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
dates; and
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
exposed to in the next twelve months.
Foreign Exchange
The following sensitivity analysis is based on foreign currency risk exposures in existence at the balance sheet date. At
30 June, had the AUD moved, as illustrated in the table below, with all other variables held constant, post tax profit and
other comprehensive income would have been affected as follows:
Judgements of reasonably possible movements:
Net profit after tax
higher/(lower)
Other
comprehensive
income
higher/(lower)
Net profit after tax
higher/(lower)
Other
comprehensive
income
higher/(lower)
2016
$m
-
-
2016
$m
(10.9)
14.3
2015
$m
-
-
2015
$m
(10.1)
13.2
AUD/USD + 10 cents
AUD/USD - 10 cents
There is no movement in net profit after tax as the Group has fully hedged its foreign currency exposure to the US
Private Placement (USPP).
The movement in other comprehensive income is due to an increase/decrease in the fair value of financial instruments
designated as cash flow hedges. Management believes the balance sheet date risk exposures are representative of
the risk exposure inherent in the financial instruments. The numbers derived in the sensitivity analysis are indicative
only.
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
− reasonably possible movements in foreign exchange rates were determined based on a review of the last two
years' historical movements and economic forecaster's expectations;
− the reasonably possible movement of 10 cents was calculated by taking the USD spot rate as at balance sheet
date, moving this spot rate by 10 cents and then re-converting the USD into AUD with the 'new spot-rate'. This
methodology reflects the translation methodology undertaken by the Group;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
dates; and
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
exposed to in the next 12 months.
E2 Additional financial instruments disclosure
(i)
Fair values
The fair value of the Group's financial assets and financial liabilities approximates their carrying value as at the
balance sheet date.
Swaps
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
discount rates are based on market data at the balance sheet date.
Forward currency contracts
Fair value is calculated using forward exchange market rates at the balance sheet date.
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
discount rates are based on market data at the balance sheet date, in combination with restatement to current foreign
The Group had the following classes of financial assets and financial liabilities exposed to floating interest rate risk:
USPP
exchange rates.
(ii)
Interest rate risk
Financial assets
Cash assets
Short term deposits
Total financial assets
Financial liabilities
Bank loans - unsecured a
USPP cross currency swaps
Derivatives b
Total financial liabilities
Less than one year
One to five years
More than five years
Notional Principal
Fixed interest rate range p.a.
Variable interest rate range p.a.
2016
$m
55.7
30.2
85.9
200.0
430.0
(430.0)
200.0
2015
$m
22.6
100.4
123.0
150.0
430.0
(430.0)
150.0
-
94.0
336.0
430.0
-
94.0
336.0
430.0
6.0% - 7.3% 6.0% - 7.3%
2.0%
2.2%
a
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. The floating rates
represent the most recently determined rate applicable to the instrument at the balance sheet date.
b Notional principal amounts.
(iii) Financial instruments - interest rate swaps
Interest rate swaps meet the requirements to qualify for cash flow hedge accounting and are stated at fair value.
These swaps are being used to hedge the exposure to variability in cash flows attributable to movements in the
reference interest rate of the designated debt or instrument and are assessed as highly effective in offsetting changes
in the cash flows attributable to such movements. Hedge effectiveness is measured by comparing the change in the
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
The notional principal amounts and periods of expiry of the interest rate swap contracts are as follows:
Net settlement receipts and payments are recognised as an adjustment to interest expense on an accruals basis over
the term of the swaps, such that the overall interest expense on borrowings reflects the average cost of funds achieved
by entering into the swap agreements.
(iv) Financial instruments - cross currency swaps
Cross currency swap contracts are classified as cash flow hedges and are stated at fair value.
These cross currency swaps, in conjunction with interest rate swaps are being used to hedge the exposure to the cash
flow variability in the value of the USD debt under the USPP and are assessed as highly effective in offsetting changes
in movements in the forward USD exchange rate. Hedge effectiveness is measured by comparing the change in the
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
104
62
63
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
USPP
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
discount rates are based on market data at the balance sheet date, in combination with restatement to current foreign
exchange rates.
(ii)
Interest rate risk
The Group had the following classes of financial assets and financial liabilities exposed to floating interest rate risk:
Financial assets
Cash assets
Short term deposits
Total financial assets
Financial liabilities
Bank loans - unsecured a
USPP cross currency swaps
Derivatives b
Total financial liabilities
2016
$m
55.7
30.2
85.9
200.0
430.0
(430.0)
200.0
2015
$m
22.6
100.4
123.0
150.0
430.0
(430.0)
150.0
a
Interest on financial instruments classified as floating rate is repriced at intervals of less than one year. The floating rates
represent the most recently determined rate applicable to the instrument at the balance sheet date.
b Notional principal amounts.
(iii) Financial instruments - interest rate swaps
Interest rate swaps meet the requirements to qualify for cash flow hedge accounting and are stated at fair value.
These swaps are being used to hedge the exposure to variability in cash flows attributable to movements in the
reference interest rate of the designated debt or instrument and are assessed as highly effective in offsetting changes
in the cash flows attributable to such movements. Hedge effectiveness is measured by comparing the change in the
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
The movements in profit are due to higher/lower interest costs from variable rate debt and investments. The movement
in other comprehensive income is due to an increase/decrease in the fair value of financial instruments designated as
cash flow hedges.
The numbers derived in the sensitivity analysis are indicative only.
Significant assumptions used in the interest rate sensitivity analysis include:
− reasonably possible movements in interest rates were determined based on the Group's current credit rating and
mix of debt, relationships with financial institutions and the level of debt that is expected to be renewed, as well as
a review of the last two years' historical movements and economic forecaster's expectations;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
dates; and
exposed to in the next twelve months.
Foreign Exchange
The following sensitivity analysis is based on foreign currency risk exposures in existence at the balance sheet date. At
30 June, had the AUD moved, as illustrated in the table below, with all other variables held constant, post tax profit and
other comprehensive income would have been affected as follows:
Judgements of reasonably possible movements:
Net profit after tax
income
Net profit after tax
higher/(lower)
higher/(lower)
higher/(lower)
higher/(lower)
Other
comprehensive
2016
$m
-
-
2016
$m
(10.9)
14.3
Other
comprehensive
income
2015
$m
-
-
2015
$m
(10.1)
13.2
AUD/USD + 10 cents
AUD/USD - 10 cents
Private Placement (USPP).
only.
There is no movement in net profit after tax as the Group has fully hedged its foreign currency exposure to the US
The movement in other comprehensive income is due to an increase/decrease in the fair value of financial instruments
designated as cash flow hedges. Management believes the balance sheet date risk exposures are representative of
the risk exposure inherent in the financial instruments. The numbers derived in the sensitivity analysis are indicative
Significant assumptions used in the foreign currency exposure sensitivity analysis include:
− reasonably possible movements in foreign exchange rates were determined based on a review of the last two
years' historical movements and economic forecaster's expectations;
− the reasonably possible movement of 10 cents was calculated by taking the USD spot rate as at balance sheet
date, moving this spot rate by 10 cents and then re-converting the USD into AUD with the 'new spot-rate'. This
methodology reflects the translation methodology undertaken by the Group;
− price sensitivity of derivatives is based on a reasonably possible movement of spot rates at the balance sheet
− the net exposure at the balance sheet date is representative of what the Group was, and is expecting to be,
dates; and
exposed to in the next 12 months.
E2 Additional financial instruments disclosure
(i)
Fair values
balance sheet date.
Swaps
The fair value of the Group's financial assets and financial liabilities approximates their carrying value as at the
Cross currency swap contracts are classified as cash flow hedges and are stated at fair value.
Fair value is calculated using discounted future cash flow techniques, where estimated cash flows and estimated
discount rates are based on market data at the balance sheet date.
Forward currency contracts
Fair value is calculated using forward exchange market rates at the balance sheet date.
These cross currency swaps, in conjunction with interest rate swaps are being used to hedge the exposure to the cash
flow variability in the value of the USD debt under the USPP and are assessed as highly effective in offsetting changes
in movements in the forward USD exchange rate. Hedge effectiveness is measured by comparing the change in the
fair value of the hedged item and the hedging instrument respectively each quarter. Any difference represents
ineffectiveness and is recorded in the income statement.
Net settlement receipts and payments are recognised as an adjustment to interest expense on an accruals basis over
the term of the swaps, such that the overall interest expense on borrowings reflects the average cost of funds achieved
by entering into the swap agreements.
(iv) Financial instruments - cross currency swaps
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
62
63
105
The notional principal amounts and periods of expiry of the interest rate swap contracts are as follows:
-
Less than one year
94.0
One to five years
336.0
More than five years
Notional Principal
Fixed interest rate range p.a.
Variable interest rate range p.a.
6.0% - 7.3% 6.0% - 7.3%
2.2%
2.0%
-
94.0
336.0
430.0
430.0
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
a The transfer related to the foreign exchange spot retranslation of the foreign debt is offset by the retranslation on the cross
currency swaps in the net foreign exchange gain line in the income statement.
F2 Income tax
(i)
Income tax expense
Notes to the financial statements
For the year ended 30 June 2016
The principal amounts and periods of expiry of the cross currency swap contracts are as follows:
One to five years
More than five years
Notional principal
2016
2015
AUD $m
USD $m
AUD $m
USD $m
94.0
336.0
430.0
100.0
360.0
460.0
94.0
336.0
430.0
100.0
360.0
460.0
Fixed interest rate range p.a.
Variable interest rate range p.a.
5.1% - 5.7%
5.1% - 5.7%
4.9% - 5.2%
5.1% - 5.3%
The terms and conditions in relation to interest rate and maturity of the cross currency swaps are similar to the terms
and conditions of the underlying hedged US Private Placement borrowings as set out in note B7.
(v) Financial instruments - forward currency contracts
Forward currency contracts meet the requirements to qualify for cash flow hedge accounting and are stated at fair
value.
These contracts are being used to hedge the exposure to variability in the movement USD exchange rate arising from
the Group's operations and are assessed as highly effective hedges as they are matched against known and
committed payments. Any gain or loss on the hedged risk is taken directly to equity.
The notional amounts and periods of expiry of the foreign currency contracts are as follows:
Buy USD / sell AUD
Less than one year
One to five years
More than five years
Notional principal
Average exchange rate (AUD/USD)
(vi) Financial instruments - fair value hierarchy
2016
$m
7.7
8.7
-
16.4
0.92
2015
$m
7.7
16.4
-
24.1
0.92
There are various methods available in estimating the fair value of a financial instrument. The methods comprise:
Level 1
Level 2
Level 3
the fair value is calculated using quoted prices in active markets.
the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices).
the fair value is estimated using inputs for the asset or liability that are not based on observable market
data.
All of the Group's derivative financial instruments are valued using the Level 2 valuation techniques, being observable
inputs. There have been no transfers between levels during the year.
Notes to the financial statements
For the year ended 30 June 2016
F Other disclosures
F1 Other comprehensive income
Net gain/(loss) on cash flow hedges
Transfer of hedging reserve to the income statement a
Tax on above items recognised in other comprehensive income
The major components of income tax expenses are:
Current tax (expense)
Adjustments in respect of current income tax of previous years
Deferred income tax expense
Income tax expense reported in the income statement
Aggregate of current and deferred tax relating to items charged
or credited to equity:
Current tax (expense)/benefit reported in equity
Deferred tax (expense) reported in equity
Income tax (expense) reported in equity
Income tax expense
is as follows:
A reconciliation between income tax expense and the product of
accounting profit before income tax multiplied by the income tax rate
Accounting profit before income tax expense
At the Group's statutory income tax rate of 30%
- Non assessable gain on sale
- (Recognition)/derecognition of temporary differences
- Research & Development tax offset
- Recognition of tax losses
- Other items
Aggregate income tax expense
Effective tax rate
106
64
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
2016
$m
31.9
(18.2)
(4.1)
9.6
2016
$m
(80.3)
(1.5)
(3.0)
(84.8)
-
(4.1)
(4.1)
279.2
(83.8)
(0.2)
0.7
-
-
(1.5)
(84.8)
%30.4
2015
$m
122.3
(110.8)
(3.5)
8.0
2015
$m
(75.6)
1.1
6.6
(67.9)
-
(3.5)
(3.5)
237.2
(71.2)
2.4
(1.6)
3.1
0.6
(1.2)
(67.9)
%28.6
65
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
The principal amounts and periods of expiry of the cross currency swap contracts are as follows:
One to five years
More than five years
Notional principal
2016
2015
AUD $m
USD $m
AUD $m
USD $m
94.0
336.0
430.0
100.0
360.0
460.0
94.0
336.0
430.0
100.0
360.0
460.0
Fixed interest rate range p.a.
Variable interest rate range p.a.
5.1% - 5.7%
5.1% - 5.7%
4.9% - 5.2%
5.1% - 5.3%
The terms and conditions in relation to interest rate and maturity of the cross currency swaps are similar to the terms
and conditions of the underlying hedged US Private Placement borrowings as set out in note B7.
(v) Financial instruments - forward currency contracts
Forward currency contracts meet the requirements to qualify for cash flow hedge accounting and are stated at fair
value.
These contracts are being used to hedge the exposure to variability in the movement USD exchange rate arising from
the Group's operations and are assessed as highly effective hedges as they are matched against known and
committed payments. Any gain or loss on the hedged risk is taken directly to equity.
The notional amounts and periods of expiry of the foreign currency contracts are as follows:
2016
$m
7.7
8.7
-
16.4
0.92
2015
$m
7.7
16.4
-
24.1
0.92
Buy USD / sell AUD
Less than one year
One to five years
More than five years
Notional principal
Average exchange rate (AUD/USD)
(vi) Financial instruments - fair value hierarchy
There are various methods available in estimating the fair value of a financial instrument. The methods comprise:
the fair value is calculated using quoted prices in active markets.
the fair value is estimated using inputs other than quoted prices included in Level 1 that are observable for
the asset or liability, either directly (as prices) or indirectly (derived from prices).
Level 3
the fair value is estimated using inputs for the asset or liability that are not based on observable market
Level 1
Level 2
data.
All of the Group's derivative financial instruments are valued using the Level 2 valuation techniques, being observable
inputs. There have been no transfers between levels during the year.
Notes to the financial statements
For the year ended 30 June 2016
F Other disclosures
F1 Other comprehensive income
Net gain/(loss) on cash flow hedges
Transfer of hedging reserve to the income statement a
Tax on above items recognised in other comprehensive income
2016
$m
31.9
(18.2)
(4.1)
9.6
2015
$m
122.3
(110.8)
(3.5)
8.0
a The transfer related to the foreign exchange spot retranslation of the foreign debt is offset by the retranslation on the cross
currency swaps in the net foreign exchange gain line in the income statement.
F2 Income tax
(i)
Income tax expense
The major components of income tax expenses are:
Current tax (expense)
Adjustments in respect of current income tax of previous years
Deferred income tax expense
Income tax expense reported in the income statement
Aggregate of current and deferred tax relating to items charged
or credited to equity:
Current tax (expense)/benefit reported in equity
Deferred tax (expense) reported in equity
Income tax (expense) reported in equity
Income tax expense
A reconciliation between income tax expense and the product of
accounting profit before income tax multiplied by the income tax rate
is as follows:
Accounting profit before income tax expense
At the Group's statutory income tax rate of 30%
- Non assessable gain on sale
- (Recognition)/derecognition of temporary differences
- Research & Development tax offset
- Recognition of tax losses
- Other items
Aggregate income tax expense
Effective tax rate
2016
$m
(80.3)
(1.5)
(3.0)
(84.8)
-
(4.1)
(4.1)
279.2
(83.8)
-
(0.2)
0.7
-
(1.5)
(84.8)
2015
$m
(75.6)
1.1
6.6
(67.9)
-
(3.5)
(3.5)
237.2
(71.2)
2.4
(1.6)
3.1
0.6
(1.2)
(67.9)
%30.4
%28.6
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
64
65
107
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
(ii) Deferred tax balances
The balance comprises temporary differences attributable to:
2016
Employee provisions
Other provisions and accruals
Provision for trade impaired debtors
Unrealised financial liabilities
Other
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
Balance
1 July 2015
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2016
$m
17.0
14.7
2.9
72.3
9.6
116.5
(72.7)
(135.1)
(65.8)
(17.7)
(291.3)
1.2
(0.1)
1.0
5.0
(3.0)
4.1
0.3
1.3
(5.4)
(3.3)
(7.1)
-
-
-
1.5
-
1.5
-
-
(5.6)
-
(5.6)
18.2
14.6
3.9
78.8
6.6
122.1
(72.4)
(133.8)
(76.8)
(21.0)
(304.0)
Net deferred tax liabilities
(174.8)
(3.0)
(4.1)
(181.9)
2015
Employee provisions
Other provisions and accruals
Allowance for doubtful debts
Unrealised financial liabilities
Other
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
Balance
1 July 2014
$m
Recognised
in the
income
statement
$m
Recognised
directly in
equity
$m
Balance
30 June 2015
$m
15.3
8.3
5.4
37.3
10.3
76.6
(74.1)
(137.3)
(26.9)
(16.2)
(254.5)
1.7
6.4
(2.5)
32.8
(0.7)
37.7
1.4
2.2
(33.2)
(1.5)
(31.1)
-
-
-
2.2
-
2.2
-
-
(5.7)
-
(5.7)
17.0
14.7
2.9
72.3
9.6
116.5
(72.7)
(135.1)
(65.8)
(17.7)
(291.3)
Net deferred tax liabilities
(177.9)
6.6
(3.5)
(174.8)
a Changes in tax payable relating to amendments to the income tax returns following the application of tax consolidation tax cost
108
66
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
(iii) Tax consolidation
Effective June 2011, The Star Entertainment Group Limited (the Head Company) and its 100% owned subsidiaries
formed an income tax consolidation group. Members of the tax consolidation group entered into a tax sharing
arrangement that provides for the allocation of income tax liabilities between the entities should the Head Company
default on its tax payment obligations. At balance date, the possibility of default is remote.
Tax effect accounting by members of the tax consolidation group
Members of the tax consolidation group have entered into a tax funding agreement effective June 2011. Under the
terms of the tax funding agreement, the Head Company and each of the members in the tax consolidation group have
agreed to make a tax equivalent payment to or from the Head Company, based on the current tax liability or current tax
asset of the member. Deferred taxes are recorded by members of the tax consolidation group in accordance with the
principles of AASB 112 'Income Taxes'. Calculations under the tax funding agreement are undertaken for statutory
reporting purposes.
The allocation of taxes under the tax funding agreement is recognised as either an increase or decrease in the
subsidiaries' intercompany accounts with the Head Company. The Group has chosen to adopt the Group Allocation
method as outlined in Interpretation 1052 'Tax Consolidation Accounting' as the basis to determine each members'
current and deferred taxes. The Group Allocation method as adopted by the Group will not give rise to any contribution
or distribution of the subsidiaries' equity accounts as there will not be any differences between the current tax amount
that is allocated under the tax funding agreement and the amount that is allocated under the Group Allocation method.
(iv)
Income tax payable
paid exceed current tax.
The balance of income tax payable is the net of current tax and tax instalments/refunds during the year. A current tax
liability arises where current tax exceeds tax instalments paid and a current tax receivable arises where tax instalments
The income tax (payable)/receivable balance is attributable to:
(Payable)/
receivable
1 July 2015
(Increase)/
decrease in
tax payable
Tax
instalment
paid/(refund)
(Under)/over
Other
30 June 2016
$m
$m
$m
$m
$m
$m
(Payable)/
receivable
Tax consolidated group - year ended
Tax consolidated group - year ended
2016
30 June 2016
30 June 2015 a
Prior years a
Total Australia
Overseas subsidiaries
Total
2015
Tax consolidated group - year ended
Tax consolidated group - year ended
30 June 2015
30 June 2014 a
Prior years
Total Australia
Overseas subsidiaries
Total
setting process.
(Payable)/
receivable
1 July 2014
(Increase)/
decrease in
tax payable
Tax
instalment
$m
$m
$m
$m
$m
$m
paid/(refund)
(Under)/over
Other
30 June 2015
(Payable)/
receivable
(41.8)
2.0
(39.8)
(39.8)
-
-
-
-
9.1
2.6
11.7
11.7
(80.2)
-
-
(80.2)
(0.1)
(80.3)
(75.6)
1.9
(1.8)
(75.5)
(0.1)
(75.6)
59.4
44.0
(2.7)
100.7
0.1
100.8
33.8
(10.6)
-
23.2
0.1
23.3
(2.2)
1.0
(1.2)
(0.3)
(0.3)
(1.2)
(0.3)
(20.8)
-
-
-
-
-
-
-
-
-
-
1.1
1.1
0.2
(0.5)
(0.3)
1.1
(0.3)
(20.8)
-
-
-
(20.8)
(41.8)
1.7
0.3
(39.8)
-
(39.8)
67
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
(ii) Deferred tax balances
The balance comprises temporary differences attributable to:
Recognised
Balance
in the
income
Recognised
directly in
Balance
1 July 2015
statement
equity
30 June 2016
Net deferred tax liabilities
(174.8)
(3.0)
(4.1)
(181.9)
Recognised
Balance
in the
income
Recognised
directly in
Balance
1 July 2014
statement
equity
30 June 2015
2016
Employee provisions
Other provisions and accruals
Provision for trade impaired debtors
Unrealised financial liabilities
Other
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
2015
Other
Employee provisions
Other provisions and accruals
Allowance for doubtful debts
Unrealised financial liabilities
Deferred tax assets set off
Intangible assets
Property, plant and equipment
Unrealised financial assets
Other
$m
17.0
14.7
2.9
72.3
9.6
116.5
(72.7)
(135.1)
(65.8)
(17.7)
(291.3)
$m
15.3
8.3
5.4
37.3
10.3
76.6
(74.1)
(137.3)
(26.9)
(16.2)
(254.5)
$m
1.2
(0.1)
1.0
5.0
(3.0)
4.1
0.3
1.3
(5.4)
(3.3)
(7.1)
$m
1.7
6.4
(2.5)
32.8
(0.7)
37.7
1.4
2.2
(33.2)
(1.5)
(31.1)
$m
1.5
1.5
(5.6)
(5.6)
$m
2.2
2.2
(5.7)
(5.7)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
$m
18.2
14.6
3.9
78.8
6.6
122.1
(72.4)
(133.8)
(76.8)
(21.0)
(304.0)
$m
17.0
14.7
2.9
72.3
9.6
116.5
(72.7)
(135.1)
(65.8)
(17.7)
(291.3)
66
Net deferred tax liabilities
(177.9)
6.6
(3.5)
(174.8)
Notes to the financial statements
For the year ended 30 June 2016
(iii) Tax consolidation
Effective June 2011, The Star Entertainment Group Limited (the Head Company) and its 100% owned subsidiaries
formed an income tax consolidation group. Members of the tax consolidation group entered into a tax sharing
arrangement that provides for the allocation of income tax liabilities between the entities should the Head Company
default on its tax payment obligations. At balance date, the possibility of default is remote.
Tax effect accounting by members of the tax consolidation group
Members of the tax consolidation group have entered into a tax funding agreement effective June 2011. Under the
terms of the tax funding agreement, the Head Company and each of the members in the tax consolidation group have
agreed to make a tax equivalent payment to or from the Head Company, based on the current tax liability or current tax
asset of the member. Deferred taxes are recorded by members of the tax consolidation group in accordance with the
principles of AASB 112 'Income Taxes'. Calculations under the tax funding agreement are undertaken for statutory
reporting purposes.
The allocation of taxes under the tax funding agreement is recognised as either an increase or decrease in the
subsidiaries' intercompany accounts with the Head Company. The Group has chosen to adopt the Group Allocation
method as outlined in Interpretation 1052 'Tax Consolidation Accounting' as the basis to determine each members'
current and deferred taxes. The Group Allocation method as adopted by the Group will not give rise to any contribution
or distribution of the subsidiaries' equity accounts as there will not be any differences between the current tax amount
that is allocated under the tax funding agreement and the amount that is allocated under the Group Allocation method.
(iv)
Income tax payable
The balance of income tax payable is the net of current tax and tax instalments/refunds during the year. A current tax
liability arises where current tax exceeds tax instalments paid and a current tax receivable arises where tax instalments
paid exceed current tax.
The income tax (payable)/receivable balance is attributable to:
2016
Tax consolidated group - year ended
30 June 2016
Tax consolidated group - year ended
30 June 2015 a
Prior years a
Total Australia
Overseas subsidiaries
Total
2015
Tax consolidated group - year ended
30 June 2015
Tax consolidated group - year ended
30 June 2014 a
Prior years
Total Australia
Overseas subsidiaries
Total
(Payable)/
receivable
1 July 2015
(Increase)/
decrease in
tax payable
Tax
instalment
paid/(refund)
(Under)/over
Other
30 June 2016
(Payable)/
receivable
$m
-
(41.8)
2.0
(39.8)
-
(39.8)
$m
$m
$m
$m
$m
(80.2)
-
-
(80.2)
(0.1)
(80.3)
59.4
44.0
(2.7)
100.7
0.1
100.8
-
(2.2)
1.0
(1.2)
-
-
-
(0.3)
(0.3)
-
(1.2)
(0.3)
(20.8)
-
-
(20.8)
-
(20.8)
(Payable)/
receivable
1 July 2014
$m
(Increase)/
decrease in
tax payable
$m
Tax
instalment
paid/(refund)
$m
(Under)/over
$m
Other
$m
(Payable)/
receivable
30 June 2015
$m
-
9.1
2.6
11.7
-
11.7
(75.6)
1.9
(1.8)
(75.5)
(0.1)
(75.6)
33.8
(10.6)
-
23.2
0.1
23.3
-
1.1
-
1.1
-
1.1
-
(41.8)
0.2
(0.5)
(0.3)
-
(0.3)
1.7
0.3
(39.8)
-
(39.8)
a Changes in tax payable relating to amendments to the income tax returns following the application of tax consolidation tax cost
setting process.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
67
109
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
F3 Earnings per share
Net profit after tax attributable to ordinary shareholders
Basic and diluted earnings per share (cents per share)
2016
$m
194.4
23.6
2015
$m
169.3
20.5
2016
Number
2015
Number
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares issued
825,672,730
825,672,730
F4 Other assets
Current
Prepayments
Other assets
Non current
Rental paid in advance
Other assets
Other assets above are shown net of impairment of nil (2015: nil).
F5 Trade and other payables
Trade creditors and accrued expenses
Interest payable
2016
$m
34.0
4.5
38.5
10.0
5.2
15.2
2015
$m
21.6
4.6
26.2
10.1
7.0
17.1
259.9
2.0
261.9
231.9
2.0
233.9
Trade and other payables of $261.9 million were up 12.0%, predominately relating to higher gaming activity.
Notes to the financial statements
For the year ended 30 June 2016
F6 Provisions
Current
Employee benefits
Workers' compensation
Other
Non-current
Employee benefits
Other
Reconciliation
set out below:
Workers' compensation reconciliation
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
2016
2015
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
Nature and timing of provisions
Workers' compensation
2016
$m
49.5
7.8
1.0
58.3
11.2
3.4
14.6
$m
9.2
0.5
(1.9)
7.8
11.8
-
(2.6)
9.2
2015
$m
46.0
9.2
-
55.2
10.9
3.8
14.7
$m
3.8
-
(0.4)
3.4
3.8
-
-
3.8
Workers'
compensation
Other (non-
(current)
current)
Reconciliations of each class of provision, except for employee benefits and other, at the end of each financial year are
The Group self insures for workers' compensation in both New South Wales and Queensland. A valuation of the
estimated claims liability for workers' compensation is undertaken annually by an independent actuary. The valuations
are prepared in accordance with the relevant legislative requirements of each state and 'Professional Standard 300' of
the Institute of Actuaries. The estimate of claims liability includes a margin over case estimates to allow for the future
development of known claims, the cost of incurred but not reported claims and claims handling expenses, which are
determined using a range of assumptions. The timing of when these costs will be incurred is uncertain.
110
68
69
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
F3 Earnings per share
Net profit after tax attributable to ordinary shareholders
Basic and diluted earnings per share (cents per share)
F4 Other assets
Current
Prepayments
Other assets
Non current
Rental paid in advance
Other assets
Weighted average number of shares used as the denominator
Weighted average number of ordinary shares issued
825,672,730
825,672,730
Other assets above are shown net of impairment of nil (2015: nil).
F5 Trade and other payables
Trade creditors and accrued expenses
Interest payable
Trade and other payables of $261.9 million were up 12.0%, predominately relating to higher gaming activity.
2016
$m
194.4
23.6
2015
$m
169.3
20.5
2016
Number
2015
Number
2016
$m
34.0
4.5
38.5
10.0
5.2
15.2
2015
$m
21.6
4.6
26.2
10.1
7.0
17.1
259.9
2.0
261.9
231.9
2.0
233.9
Notes to the financial statements
For the year ended 30 June 2016
F6 Provisions
Current
Employee benefits
Workers' compensation
Other
Non-current
Employee benefits
Other
2016
$m
49.5
7.8
1.0
58.3
11.2
3.4
14.6
2015
$m
46.0
9.2
-
55.2
10.9
3.8
14.7
Reconciliation
Reconciliations of each class of provision, except for employee benefits and other, at the end of each financial year are
set out below:
Workers' compensation reconciliation
2016
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
2015
Carrying amount at beginning of the year
Provisions made during the year
Provisions utilised during the year
Carrying amount at end of the year
Workers'
compensation
(current)
$m
Other (non-
current)
$m
9.2
0.5
(1.9)
7.8
11.8
-
(2.6)
9.2
3.8
-
(0.4)
3.4
-
3.8
-
3.8
Nature and timing of provisions
Workers' compensation
The Group self insures for workers' compensation in both New South Wales and Queensland. A valuation of the
estimated claims liability for workers' compensation is undertaken annually by an independent actuary. The valuations
are prepared in accordance with the relevant legislative requirements of each state and 'Professional Standard 300' of
the Institute of Actuaries. The estimate of claims liability includes a margin over case estimates to allow for the future
development of known claims, the cost of incurred but not reported claims and claims handling expenses, which are
determined using a range of assumptions. The timing of when these costs will be incurred is uncertain.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
68
69
111
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
F7 Other liabilities (current)
Customer loyalty deferred revenue a
Other deferred revenue
Notes to the financial statements
For the year ended 30 June 2016
2016
$m
18.5
2.4
20.9
2015
$m
18.4
2.8
21.2
Net debt comprises interest bearing liabilities, with US dollar borrowings translated at the 30 June 2016 USD/AUD spot
rate of 1.3421 (2015: 1.3026), after adjusting for cash and cash equivalents and derivative financial instruments.
The Groupʼs capital management also aims to ensure that it meets financial covenants attached to the interest bearing
loans and borrowings that define capital structure requirements. There have been no breaches of the financial
covenants of any interest bearing loans and borrowings in the current period. Other than the banking covenants
referred to in note B7, the Group is not subject to externally imposed capital requirements.
a The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-property
spend. A portion of the spend, equal to the fair value of the award credits earned, is treated as deferred revenue, and recognised
in the income statement when the award is redeemed or expires.
F8 Share capital and reserves
(i) Share capital
Ordinary shares - issued and fully paid a
2016
$m
2015
$m
2,580.5
2,580.5
a Net debt is stated after adjusting for cash and cash equivalents less the net position of derivative financial instruments.
b EBITDA is stated before significant items.
F9 Reconciliation of net profit after tax to net cash inflow from operations
a There is only one class of shares (ordinary shares) on issue. These ordinary shares entitle the holder to participate in dividends
and proceeds on winding up of the Company, in proportion to the number 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. The Company does not have authorised capital nor par value in respect of its issued shares.
Gross Debt
Net Debt a
EBITDA b
Gearing ratio (times)
Movements in ordinary share capital
Balance at beginning and end of year
(ii) Reserves
Hedging reserve a
Share based payments reserve b
2016
Number of
shares
2015
Number of
shares
825,672,730
825,672,730
2016
$m
(0.4)
5.8
5.4
2015
$m
(10.0)
2.6
(7.4)
Nature and purpose of reserves
a The hedging reserve records fair value changes on the portion of the gain or loss on a hedging instrument in a cash flow hedge
that is determined to be an effective hedge.
b The share based payments reserve is used to recognise the value of equity settled share based payment transactions provided
to employees, including Key Management Personnel as part of their remuneration. Refer to note F10 for further details on these
plans.
(iii) Capital management
The Group's objectives when managing capital are to ensure the Group continues as a going concern while providing
optimal returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to
reduce the cost of capital.
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends to be paid to
shareholders, return capital to shareholders or issue new shares. Gearing is managed primarily through the ratio of net
debt to earnings before interest, tax, depreciation, amortisation and impairment (EBITDA).
2016
$m
813.5
473.8
488.8
1.0
x
2016
$m
194.4
163.8
5.6
(0.8)
23.1
47.1
-
-
(48.8)
(1.7)
11.1
(15.9)
377.9
2015
$m
744.2
400.3
454.5
0.9
x
2015
$m
169.3
163.7
0.8
(2.1)
17.9
52.1
(8.0)
0.1
(40.2)
(0.8)
88.1
44.6
485.5
Note
A4
F10
A3
A5
D6
Net profit after tax
- Depreciation and amortisation
- Employee share based payments expense
- Unrealised foreign exchange (gains)/losses
- Bad and doubtful debts expense
- Finance costs
- Gain on sale of Jupiters Townsville
- Other
Working capital changes
- (Increase) in trade and other receivables and other assets
- (Increase)/decrease in inventories
- Increase in trade and other payables, accruals and provisions
- (Decrease)/increase in tax provisions
Net cash inflow from operating activities
Operating cash flow before interest and tax was $477.4 million, down 5.7% on the pcp, with 98% EBITDA to
cash conversion ratio.
112
70
71
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
F7 Other liabilities (current)
Customer loyalty deferred revenue a
Other deferred revenue
F8 Share capital and reserves
(i) Share capital
Ordinary shares - issued and fully paid a
Movements in ordinary share capital
Balance at beginning and end of year
(ii) Reserves
Hedging reserve a
Share based payments reserve b
2016
$m
18.5
2.4
20.9
2015
$m
18.4
2.8
21.2
2016
2015
Number of
Number of
shares
shares
825,672,730
825,672,730
2016
$m
(0.4)
5.8
5.4
2015
$m
(10.0)
2.6
(7.4)
a There is only one class of shares (ordinary shares) on issue. These ordinary shares entitle the holder to participate in dividends
and proceeds on winding up of the Company, in proportion to the number 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. The Company does not have authorised capital nor par value in respect of its issued shares.
Notes to the financial statements
For the year ended 30 June 2016
Net debt comprises interest bearing liabilities, with US dollar borrowings translated at the 30 June 2016 USD/AUD spot
rate of 1.3421 (2015: 1.3026), after adjusting for cash and cash equivalents and derivative financial instruments.
The Groupʼs capital management also aims to ensure that it meets financial covenants attached to the interest bearing
loans and borrowings that define capital structure requirements. There have been no breaches of the financial
covenants of any interest bearing loans and borrowings in the current period. Other than the banking covenants
referred to in note B7, the Group is not subject to externally imposed capital requirements.
a The Group operates customer loyalty programs enabling customers to accumulate award credits for gaming and on-property
spend. A portion of the spend, equal to the fair value of the award credits earned, is treated as deferred revenue, and recognised
in the income statement when the award is redeemed or expires.
Gross Debt
Net Debt a
EBITDA b
Gearing ratio (times)
2016
$m
813.5
473.8
488.8
1.0
x
2016
$m
2015
$m
2,580.5
2,580.5
a Net debt is stated after adjusting for cash and cash equivalents less the net position of derivative financial instruments.
b EBITDA is stated before significant items.
F9 Reconciliation of net profit after tax to net cash inflow from operations
Net profit after tax
- Depreciation and amortisation
- Employee share based payments expense
- Unrealised foreign exchange (gains)/losses
- Bad and doubtful debts expense
- Finance costs
- Gain on sale of Jupiters Townsville
- Other
Working capital changes
- (Increase) in trade and other receivables and other assets
- (Increase)/decrease in inventories
- Increase in trade and other payables, accruals and provisions
- (Decrease)/increase in tax provisions
Net cash inflow from operating activities
Note
A4
F10
A3
A5
D6
2016
$m
194.4
163.8
5.6
(0.8)
23.1
47.1
-
-
(48.8)
(1.7)
11.1
(15.9)
377.9
2015
$m
744.2
400.3
454.5
0.9
x
2015
$m
169.3
163.7
0.8
(2.1)
17.9
52.1
(8.0)
0.1
(40.2)
(0.8)
88.1
44.6
485.5
Nature and purpose of reserves
that is determined to be an effective hedge.
a The hedging reserve records fair value changes on the portion of the gain or loss on a hedging instrument in a cash flow hedge
b The share based payments reserve is used to recognise the value of equity settled share based payment transactions provided
to employees, including Key Management Personnel as part of their remuneration. Refer to note F10 for further details on these
plans.
(iii) Capital management
reduce the cost of capital.
The Group's objectives when managing capital are to ensure the Group continues as a going concern while providing
optimal returns to shareholders and benefits for other stakeholders, and to maintain an optimal capital structure to
In order to maintain or adjust the capital structure, the Group may adjust the amount of dividends to be paid to
shareholders, return capital to shareholders or issue new shares. Gearing is managed primarily through the ratio of net
debt to earnings before interest, tax, depreciation, amortisation and impairment (EBITDA).
Operating cash flow before interest and tax was $477.4 million, down 5.7% on the pcp, with 98% EBITDA to
cash conversion ratio.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
70
71
113
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
F10 Employee share plans
During the current and prior periods, the Group issued Performance Rights under the Long Term Performance Plan to
eligible employees. The share based payment expense of $5.6 million (2015: $0.8 million) in respect of the equity
instruments granted is recognised in the income statement. The movement in the reserves of $3.2 million is shown net
of shares purchased of $2.4 million.
The number of Performance Rights granted to employees and forfeited or lapsed during the year are set out below.
2016
Grant Date
19 September 2012
1 October 2013
26 September 2014
21 September 2015
2015
Grant Date
20 September 2011
19 September 2012
1 October 2013
26 September 2014
Balance at start
of year
Granted during
the year
Forfeited
during the
year
Lapsed
during the
year
Vested during
the year
Balance at end
of year
540,583
461,198
895,208
-
1,896,989
-
-
-
-
-
-
696,893
696,893
34,565
34,565
-
-
-
-
-
-
-
-
-
-
540,583
461,198
895,208
662,328
2,559,317
Balance at start of
year
Granted during
the year
Forfeited
during the
year
Lapsed during
the year a
Vested during
the year
Balance at end
of year
516,573
629,931
532,064
-
-
-
-
895,208
-
516,573
89,348
70,866
-
-
-
-
1,678,568
895,208
160,214
516,573
-
-
-
-
-
-
540,583
461,198
895,208
1,896,989
The grants of 20 September 2011 and 19 September 2012 included market-based hurdles. Grants from 1 October
2013 includes a market based hurdle and an EPS component. The Performance Rights have been independently
valued. For the relative TSR component, valuation was based on assumptions underlying the Black-Scholes
methodology to produce a Monte-Carlo simulation model. For the EPS component, a discounted cash flow technique
was utilised. The total value does not contain any specific discount for forfeiture if the employee leaves the Group
during the vesting period. This adjustment, if required, is based on the number of equity instruments expected to vest
at the end of each reporting period.
a Performance rights granted on 20 September 2011 were tested on 20 September 2014 and did not vest. The TSR percentile rank
for the Company was 20.6% and TSR was -7.36%; as a result these Performance Rights lapsed and no shares were issued to
participants.
The key assumptions underlying the Performance Rights valuations are set out below:
Share price
at date of
grant
Expected
volatility in
share price
Expected
dividend yield
Risk free
interest rate
Value per
Performance
Right
Effective grant date
Test and vesting date
20 September 2011
19 September 2012
1 October 2013
26 September 2014
21 September 2015
20 September 2014
19 September 2016
1 October 2017
26 September 2018
21 September 2019
$
3.61
3.86
2.68
3.31
4.82
%
30.00
%
25.00
%
27.00
%
27.00
%
28.00
%
%
%3.00
%2.18
%1.75
%2.90
%2.70
%
%3.57
%2.70
%3.03
%2.88
%1.98
114
$
2.15
2.20
2.01
2.45
2.72
72
Notes to the financial statements
For the year ended 30 June 2016
F11 Auditor's remuneration
Amounts received or due and receivable by Ernst & Young (Australia) for:
- An audit or review of the Financial Report of the Company and any other
entity in the consolidated group
- Other services in relation to the Company and any other entity in the
consolidated group:
- Assurance related
- Other non-audit services including taxation services
Amounts received or due and receivable by related practices of Ernst &
Young (Australia) for:
- Assurance related services
2016
$
2015
$
827,499
869,000
301,661
40,300
86,000
1,129,160
995,300
-
-
-
The auditor of the Company and its controlled entities is Ernst & Young. From time to time, Ernst & Young provides
other services to the Group, which are subject to strict corporate governance procedures encompassing the selection
of service providers and the setting of their remuneration. The Chairman of the Audit Committee (or authorised
delegate) must approve any other services provided by Ernst & Young to the Group.
73
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
F10 Employee share plans
During the current and prior periods, the Group issued Performance Rights under the Long Term Performance Plan to
eligible employees. The share based payment expense of $5.6 million (2015: $0.8 million) in respect of the equity
instruments granted is recognised in the income statement. The movement in the reserves of $3.2 million is shown net
of shares purchased of $2.4 million.
The number of Performance Rights granted to employees and forfeited or lapsed during the year are set out below.
2016
Grant Date
19 September 2012
1 October 2013
26 September 2014
21 September 2015
2015
Grant Date
20 September 2011
19 September 2012
1 October 2013
26 September 2014
Balance at start
Granted during
of year
the year
Forfeited
during the
year
Lapsed
during the
Vested during
Balance at end
year
the year
of year
540,583
461,198
895,208
1,896,989
516,573
629,931
532,064
-
-
696,893
696,893
34,565
34,565
-
-
-
-
-
-
-
-
-
-
-
Forfeited
89,348
70,866
895,208
1,678,568
895,208
160,214
516,573
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
540,583
461,198
895,208
662,328
2,559,317
-
540,583
461,198
895,208
1,896,989
Balance at start of
Granted during
during the
Lapsed during
Vested during
Balance at end
year
the year
year
the year
of year
the year a
516,573
The grants of 20 September 2011 and 19 September 2012 included market-based hurdles. Grants from 1 October
2013 includes a market based hurdle and an EPS component. The Performance Rights have been independently
valued. For the relative TSR component, valuation was based on assumptions underlying the Black-Scholes
methodology to produce a Monte-Carlo simulation model. For the EPS component, a discounted cash flow technique
was utilised. The total value does not contain any specific discount for forfeiture if the employee leaves the Group
during the vesting period. This adjustment, if required, is based on the number of equity instruments expected to vest
at the end of each reporting period.
a Performance rights granted on 20 September 2011 were tested on 20 September 2014 and did not vest. The TSR percentile rank
for the Company was 20.6% and TSR was -7.36%; as a result these Performance Rights lapsed and no shares were issued to
participants.
The key assumptions underlying the Performance Rights valuations are set out below:
Share price
Expected
Value per
at date of
volatility in
Expected
Risk free
Performance
grant
share price
dividend yield
interest rate
Effective grant date
Test and vesting date
20 September 2011
19 September 2012
1 October 2013
26 September 2014
21 September 2015
20 September 2014
19 September 2016
1 October 2017
26 September 2018
21 September 2019
$
3.61
3.86
2.68
3.31
4.82
%
30.00
%
25.00
%
27.00
%
27.00
%
28.00
%
%
%3.00
%2.18
%1.75
%2.90
%2.70
%
%3.57
%2.70
%3.03
%2.88
%1.98
Right
$
2.15
2.20
2.01
2.45
2.72
72
Notes to the financial statements
For the year ended 30 June 2016
F11 Auditor's remuneration
Amounts received or due and receivable by Ernst & Young (Australia) for:
- An audit or review of the Financial Report of the Company and any other
entity in the consolidated group
- Other services in relation to the Company and any other entity in the
consolidated group:
- Assurance related
- Other non-audit services including taxation services
2016
$
2015
$
827,499
869,000
-
301,661
40,300
86,000
1,129,160
995,300
Amounts received or due and receivable by related practices of Ernst &
Young (Australia) for:
- Assurance related services
-
-
The auditor of the Company and its controlled entities is Ernst & Young. From time to time, Ernst & Young provides
other services to the Group, which are subject to strict corporate governance procedures encompassing the selection
of service providers and the setting of their remuneration. The Chairman of the Audit Committee (or authorised
delegate) must approve any other services provided by Ernst & Young to the Group.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
73
115
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
policies
G Accounting
information
Significant accounting policies are contained within
the financial statement notes to which they relate and
are not detailed in this section.
corporate
and
Corporate Information
The Star Entertainment Group Limited
(the
Company) is a company incorporated and domiciled
in Australia. The Financial Report of the Company for
the year ended 30 June 2016 comprises
the
its controlled entities (collectively
Company and
referred to as the Group). The Company's registered
office is Level 3, 159 William Street, Brisbane QLD
4000.
Investments Commission
The Company is of the kind specified in Australian
(ASIC)
Securities and
Instrument 2016/191.
that
Instrument, amounts in the Financial Report and the
Directors' Report have been rounded to the nearest
hundred thousand dollars, unless specifically stated
to be otherwise. All amounts are in Australian dollars
($). The Company is a for profit organisation.
In accordance with
The Financial Report was authorised for issue by the
Directors on 26 August 2016.
Basis of preparation
The Financial Report is a general purpose Financial
Report which has been prepared in accordance with
the Corporations Act 2001, Australian Accounting
Standards and other mandatory Financial Reporting
requirements in Australia.
The financial statements comply with International
Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board.
The financial statements have been prepared under
the historical cost convention except as disclosed in
the accounting policies below and elsewhere in this
report. The policies used in preparing the financial
statements are consistent with those of the previous
year except as
in
accounting policies and disclosures'.
indicated under
'Changes
judgements, estimates
Significant accounting
and assumptions
Preparation of the financial statements in conformity
with Australian Accounting Standards and IFRS
requires management
judgements,
estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of
contingent liabilities at the date of the financial
statements and the reported amounts of revenues
and expenses during the reporting period.
to make
In the process of applying the Group's accounting
policies, management has made
following
judgements, which have the most significant effect on
the amounts recognised in the consolidated financial
statements:
− Asset useful lives and residual values (refer notes
the
A4 and B5);
116
− Impairment of assets (refer note B6);
− Valuation of derivatives and other
financial
instruments (refer note B3);
− Provision for impairment of trade receivables
(refer note B2);
− Significant items (refer note A7); and
− Provisions (refer note F6).
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of the asset or
liability in future periods.
Changes in accounting policies and disclosures
The Group has adopted the following new and
amended accounting standards, which became
applicable from 1 July 2015:
Reference
Title
AASB 2015-3
Amendments to Australian Accounting
Standards arising from the withdrawal
of AASB 1031 Materiality
The adoption of these standards did not have any
material effect on
financial position or
the
performance of the Group, additional disclosures
have been made where required.
Standards and amendments issued but not yet
effective
The Group has not applied Australian Accounting
Standards and IFRS that were issued or amended
but not yet effective. These Standards are disclosed
in the table below:
Reference Title
AASB 9 *
Financial Instruments
AASB
2014-4
Clarification of Acceptable Methods of
Depreciation and Amortisation
(Amendments to AASB 116 and AASB
138)
Application
date
1 January 2018
1 January 2016
AASB 15 * Revenue from Contracts with Customers 1 January 2018
AASB
2015-1
AASB
2015-2
Amendments to Australian Accounting
Standards – Annual Improvements to
Australian Accounting Standards 2012-
2014 Cycle
Amendments to Australian Accounting
Standards-Disclosure Initiative:
Amendments to AASB 101
1 January 2016
1 January 2016
AASB 16 * Leases
1 January 2019
*AASB 9 will replace AASB 139 Financial Instruments:
Recognition and Measurement. The Group is currently
assessing the impact of the new requirements on the
consolidated financial statements.
revenue
recognising
the concept of
*AASB 15 specifies how and when revenue is recognised,
based on
for
performance obligations as they are satisfied. AASB 15 also
requires enhanced disclosures. The Group is currently
assessing the impact of the new requirements on the
consolidated financial statements.
*AASB 16 will replace AASB 117 Leases. It requires
recognition of a right of use asset along with the associated
lease liability where the Group is a lessee. Interest expense
will be recognised in profit or loss using the effective interest
rate method, and the right of use asset will be depreciated.
The standard is effective for annual reporting periods
beginning on or after 1 January 2019. The Group will first
apply AASB 16 in the financial year beginning 1 July 2019.
The Group is currently assessing the impact of the new
requirements on the consolidated financial statements.
Basis of consolidation
Controlled entities
The Group controls an entity when the Group is
exposed, 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.
Controlled entities are consolidated from the date
control is transferred to the Group and are no longer
consolidated from the date control ceases.
Intercompany transactions, balances and unrealised
gains on transactions between Group companies are
eliminated.
Foreign currency
The consolidated financial statements are presented
in Australian dollars ($) which
is
the Group's
functional and presentation currency.
Transactions and balances
Transactions denominated in foreign currencies are
translated at the rate of exchange ruling on the
transaction date.
Monetary items denominated in foreign currencies
are translated at the rate of exchange ruling at the
end of the reporting period. Gains and losses arising
from the translation are credited or charged to the
income statement with the exception of differences
on
foreign currency borrowings
that are
in an
effective hedge relationship. These are taken directly
to equity until the liability is extinguished, at which
time they are recognised in the income statement.
Net finance costs
Finance
income
is
recognised as
the
interest
accrues, using the effective interest method. Finance
costs consist of interest and other borrowing costs
incurred in connection with the borrowing of funds.
Finance costs directly associated with qualifying
assets are capitalised, all other finance costs are
expensed in the period they occur.
Taxation
Income tax
Income tax comprises current and deferred income
tax.
Income
tax
is
recognised
in
the
income
statement except to the extent that it relates to items
recognised directly in equity, in which case it is
recognised in equity.
Current tax is the expected tax payable on the
taxable income for the period, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided using the balance sheet
method, providing for temporary differences between
the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used
for
taxation purposes. The
following
temporary
differences are not provided for:
− goodwill; and
− the initial recognition of an asset or liability in a
transaction which is not a business combination
and that affect neither accounting nor taxable
profit at the time of the transaction.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities.
A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be
available against which the asset can be utilised.
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.
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
reporting date.
Goods and Services Tax (GST)
Revenues, expenses, assets and
liabilities are
recognised net of the amount of GST except:
− when the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as
part of the expense item as applicable;
− casino revenues, due to the GST being offset
against government taxes; and
− receivables and payables, which are stated with
the amount of GST included.
The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of
receivables or payables in the balance sheet.
Cash flows are included in the statement of cash
flows on a gross basis and the GST component of
cash flows arising from investing and financing
activities, which is recoverable from, or payable to,
the taxation authority is classified as operating cash
flows.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance
sheet at face value. Cash and cash equivalents
include cash balances and call deposits with an
original maturity of three months or less. Bank
overdrafts that are repayable on demand and form an
integral part of the Group's cash management are
included as a component of cash for the purpose of
the statement of cash flows.
74
75
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
G Accounting
policies
and
corporate
information
Significant accounting policies are contained within
the financial statement notes to which they relate and
are not detailed in this section.
Corporate Information
The Star Entertainment Group Limited
(the
Company) is a company incorporated and domiciled
in Australia. The Financial Report of the Company for
the year ended 30 June 2016 comprises
the
Company and
its controlled entities (collectively
referred to as the Group). The Company's registered
office is Level 3, 159 William Street, Brisbane QLD
4000.
The Company is of the kind specified in Australian
Securities and
Investments Commission
(ASIC)
Instrument 2016/191.
In accordance with
that
Instrument, amounts in the Financial Report and the
Directors' Report have been rounded to the nearest
hundred thousand dollars, unless specifically stated
to be otherwise. All amounts are in Australian dollars
($). The Company is a for profit organisation.
The Financial Report was authorised for issue by the
Directors on 26 August 2016.
Basis of preparation
The Financial Report is a general purpose Financial
Report which has been prepared in accordance with
the Corporations Act 2001, Australian Accounting
Standards and other mandatory Financial Reporting
requirements in Australia.
The financial statements comply with International
Financial Reporting Standards (IFRS) as issued by
the International Accounting Standards Board.
The financial statements have been prepared under
the historical cost convention except as disclosed in
the accounting policies below and elsewhere in this
report. The policies used in preparing the financial
statements are consistent with those of the previous
year except as
indicated under
'Changes
in
accounting policies and disclosures'.
Significant accounting
judgements, estimates
and assumptions
Preparation of the financial statements in conformity
with Australian Accounting Standards and IFRS
requires management
to make
judgements,
estimates and assumptions that affect the reported
amounts of assets and liabilities and the disclosure of
contingent liabilities at the date of the financial
statements and the reported amounts of revenues
and expenses during the reporting period.
In the process of applying the Group's accounting
policies, management has made
the
following
judgements, which have the most significant effect on
the amounts recognised in the consolidated financial
− Asset useful lives and residual values (refer notes
statements:
A4 and B5);
− Impairment of assets (refer note B6);
− Valuation of derivatives and other
financial
instruments (refer note B3);
− Provision for impairment of trade receivables
(refer note B2);
− Significant items (refer note A7); and
− Provisions (refer note F6).
Uncertainty about these assumptions and estimates
could result in outcomes that require a material
adjustment to the carrying amount of the asset or
liability in future periods.
Changes in accounting policies and disclosures
The Group has adopted the following new and
amended accounting standards, which became
applicable from 1 July 2015:
Reference
Title
AASB 2015-3
Amendments to Australian Accounting
Standards arising from the withdrawal
of AASB 1031 Materiality
The adoption of these standards did not have any
material effect on
the
financial position or
performance of the Group, additional disclosures
have been made where required.
Standards and amendments issued but not yet
effective
The Group has not applied Australian Accounting
Standards and IFRS that were issued or amended
but not yet effective. These Standards are disclosed
in the table below:
Reference Title
AASB 9 *
Financial Instruments
Application
date
1 January 2018
AASB
2014-4
AASB
2015-1
AASB
2015-2
Clarification of Acceptable Methods of
1 January 2016
Depreciation and Amortisation
(Amendments to AASB 116 and AASB
138)
AASB 15 * Revenue from Contracts with Customers 1 January 2018
Amendments to Australian Accounting
1 January 2016
Standards – Annual Improvements to
Australian Accounting Standards 2012-
2014 Cycle
Amendments to Australian Accounting
1 January 2016
Standards-Disclosure Initiative:
Amendments to AASB 101
AASB 16 * Leases
1 January 2019
*AASB 9 will replace AASB 139 Financial Instruments:
Recognition and Measurement. The Group is currently
assessing the impact of the new requirements on the
consolidated financial statements.
*AASB 15 specifies how and when revenue is recognised,
based on
the concept of
recognising
revenue
for
performance obligations as they are satisfied. AASB 15 also
requires enhanced disclosures. The Group is currently
assessing the impact of the new requirements on the
consolidated financial statements.
*AASB 16 will replace AASB 117 Leases. It requires
recognition of a right of use asset along with the associated
lease liability where the Group is a lessee. Interest expense
will be recognised in profit or loss using the effective interest
rate method, and the right of use asset will be depreciated.
74
Notes to the financial statements
For the year ended 30 June 2016
The standard is effective for annual reporting periods
beginning on or after 1 January 2019. The Group will first
apply AASB 16 in the financial year beginning 1 July 2019.
The Group is currently assessing the impact of the new
requirements on the consolidated financial statements.
Basis of consolidation
Controlled entities
The Group controls an entity when the Group is
exposed, 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.
Controlled entities are consolidated from the date
control is transferred to the Group and are no longer
consolidated from the date control ceases.
Intercompany transactions, balances and unrealised
gains on transactions between Group companies are
eliminated.
Foreign currency
The consolidated financial statements are presented
the Group's
in Australian dollars ($) which
functional and presentation currency.
is
Transactions and balances
Transactions denominated in foreign currencies are
translated at the rate of exchange ruling on the
transaction date.
Monetary items denominated in foreign currencies
are translated at the rate of exchange ruling at the
end of the reporting period. Gains and losses arising
from the translation are credited or charged to the
income statement with the exception of differences
on
in an
effective hedge relationship. These are taken directly
to equity until the liability is extinguished, at which
time they are recognised in the income statement.
foreign currency borrowings
that are
is
recognised as
Net finance costs
Finance
interest
income
accrues, using the effective interest method. Finance
costs consist of interest and other borrowing costs
incurred in connection with the borrowing of funds.
Finance costs directly associated with qualifying
assets are capitalised, all other finance costs are
expensed in the period they occur.
the
Taxation
Income tax
Income tax comprises current and deferred income
income
tax.
statement except to the extent that it relates to items
recognised directly in equity, in which case it is
recognised in equity.
recognised
Income
the
tax
in
is
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Current tax is the expected tax payable on the
taxable income for the period, and any adjustment to
tax payable in respect of previous years.
Deferred tax is provided using the balance sheet
method, providing for temporary differences between
the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used
temporary
for
taxation purposes. The
following
differences are not provided for:
− goodwill; and
− the initial recognition of an asset or liability in a
transaction which is not a business combination
and that affect neither accounting nor taxable
profit at the time of the transaction.
The amount of deferred tax provided is based on the
expected manner of realisation or settlement of the
carrying amount of assets and liabilities.
A deferred tax asset is recognised only to the extent
that it is probable that future taxable profits will be
available against which the asset can be utilised.
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.
income
tax assets and
Deferred
liabilities are
measured at the tax rates that are expected to apply
to the year when the asset is realised or the liability is
settled, based on tax rates (and tax laws) that have
been enacted or substantively enacted at
the
reporting date.
liabilities are
Goods and Services Tax (GST)
Revenues, expenses, assets and
recognised net of the amount of GST except:
− when the GST incurred on a purchase of goods
and services is not recoverable from the taxation
authority, in which case the GST is recognised as
part of the cost of acquisition of the asset or as
part of the expense item as applicable;
− casino revenues, due to the GST being offset
against government taxes; and
− receivables and payables, which are stated with
the amount of GST included.
The net amount of GST recoverable from, or payable
to, the taxation authority is included as part of
receivables or payables in the balance sheet.
Cash flows are included in the statement of cash
flows on a gross basis and the GST component of
cash flows arising from investing and financing
activities, which is recoverable from, or payable to,
the taxation authority is classified as operating cash
flows.
Cash and cash equivalents
Cash and cash equivalents are carried in the balance
sheet at face value. Cash and cash equivalents
include cash balances and call deposits with an
original maturity of three months or less. Bank
overdrafts that are repayable on demand and form an
integral part of the Group's cash management are
included as a component of cash for the purpose of
the statement of cash flows.
75
117
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
Trade and other receivables
Trade receivables are recognised and carried at
original settlement amount
for
impairment, where applicable. Bad debts are written
off when
to be uncollectible.
Subsequent recoveries of amounts previously written
off are credited to the income statement. Other
receivables are carried at amortised cost
less
impairment.
less a provision
they are known
Inventories
Inventories include consumable stores, food and
beverage and are carried at the lower of cost and net
realisable value.
Inventories are costed on a
weighted average basis. Net realisable value is the
estimated selling price in the ordinary course of
business.
Property, plant and equipment
Refer to notes A4 and B4 for further details of the
accounting policy, including useful lives of property,
plant and equipment.
is
land
included at cost and
Freehold
is not
depreciated. All other items of property, plant and
equipment are stated at historical cost net of
depreciation, amortisation and
impairment, and
depreciated over periods deemed appropriate to
reduce carrying values to estimated residual values
includes
over
expenditure
the
to
acquisition of these items.
lives. Historical cost
is directly attributable
their useful
that
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount
and are recognised in the income statement.
When the carrying amount of an asset is greater than
its estimated recoverable amount, it is written down
immediately to its recoverable amount.
Costs arising subsequent to the acquisition of an
asset 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. All
other repairs and maintenance costs are charged to
the income statement during the financial year in
which they are incurred.
to development projects are
relating
Costs
recognised as an asset when it is:
− probable
future economic benefit
associated with the item will flow to the entity; and
that any
− it can be measured reliably.
If it becomes apparent that the development will not
income
occur,
statement.
is expensed
the amount
to the
assets acquired and liabilities assumed. Goodwill is
assessed for impairment on an annual basis and is
carried at cost less accumulated impairment losses.
Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash generating units for the
purpose of impairment testing. The allocation is made
to those cash generating units or groups of cash
generating units that are expected to benefit from the
business combination in which the goodwill arose.
Other intangible assets
Indefinite life intangible assets are not amortised and
are assessed annually for impairment. Expenditure
on gaming licences acquired, casino concessions
acquired, computer software and other intangibles
are capitalised and amortised using the straight line
method as described in note B5.
Software
Costs associated with developing or maintaining
computer software programs are recognised as
expenses as incurred. However, costs that are
directly associated with
identifiable and unique
software products controlled by the Group and which
have probable economic benefits exceeding the
costs beyond one year are recognised as intangible
assets. Direct costs include staff costs of the software
development team and an appropriate portion of the
relevant overheads. Expenditure meeting
the
definition of an asset is recognised as a capital
improvement and added to the original cost of the
asset. These costs are amortised over using the
straight line method, as described in note B5.
Casino licences and concessions
Refer to note B5 for details and accounting policy.
Impairment of assets
Assets that have an indefinite useful life are not
subject to depreciation or amortisation and are tested
annually for impairment. Assets that are subject to
for
reviewed
depreciation or amortisation are
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
costs of disposal and value in use. For the purpose of
assessing impairment, assets are grouped at the
lowest level for which there are separately identifiable
cash flows (cash generating units). Refer to note B6
for further details of key assumptions included in the
impairment calculation.
Intangible assets
Goodwill
Goodwill represents the excess of the consideration
transferred over the fair value of the identifiable net
118
76
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
Provisions
A provision is recognised in the balance sheet when
the Group has a present legal or constructive
obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be
required to settle the obligation and the amount can
be reliably estimated.
If
the effect
is material,
provisions are determined by discounting
the
expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and, where appropriate, the risks specific to
the liability.
Investment in associates and joint ventures
Associates are all entities over which the Group has
significant influence but not control or joint control.
Joint control is the contractually agreed sharing of the
joint arrangement, which exists only when decisions
about
the relevant activities require unanimous
consent of the parties sharing control. A joint venture
is a type of arrangement whereby the parties that
have joint control of the arrangement have rights to
the net assets of the joint venture. The Group's
investments in associates and joint ventures are
accounted for using the equity method of accounting,
after initially being recognised at cost. Under the
equity method of accounting, the investments are
initially recognised at cost and are subsequently
adjusted to recognise the Group's share of the post-
acquisition profits or losses of the investee in the
income statement, and
the Group's share of
movements in other comprehensive income of the
investee in other comprehensive income. Dividends
received are recognised as a reduction in the
carrying amount of the investment. The carrying
amount of equity-accounted investments is tested for
impairment in accordance with the Group's policy.
Interest bearing liabilities
Interest bearing liabilities are recognised initially at
fair value and include transaction costs. Subsequent
to initial recognition, interest bearing liabilities are
recognised at amortised cost using the effective
interest
rate method. Any difference between
proceeds and the redemption value is recognised in
the
income statement over
the period of
the
borrowing using the effective interest rate method.
Interest bearing liabilities are classified as current
liabilities unless the Group has an unconditional right
to defer settlement of the liability for at least 12
months after the balance sheet date.
Leases
Leases of assets where
the Group assumes
substantially all the benefits and risks of ownership
are classified as finance leases.
Leases of assets under which substantially all the
risks and benefits of ownership are effectively
retained by the lessor are classified as operating
leases. Payments made under operating leases are
charged to the income statement on a straight line
basis over the period of the lease.
Employee benefits
Post-employment benefits
The Group's commitment to defined contribution
plans
is
limited
to making
the contributions in
accordance with the minimum statutory requirements.
There is no legal or constructive obligation to pay
further contributions
if
the
fund does not hold
sufficient assets to pay all employees relating to
current and past employee services.
Superannuation guarantee charges are recognised
as expenses
in
the
income statement as
the
contributions become payable. A
liability
is
recognised when the Group is required to make
future payments as a result of employees' services
provided.
Long service leave
The Group's net obligation in respect of long term
service benefits, other than pension plans, is the
amount of future benefit that employees have earned
in return for their service in the current and prior
periods. The obligation
is calculated using
the
expected future increases in wage and salary rates
including related on-costs and expected settlement
dates, and is discounted using rates attached to
bonds with sufficiently long maturities at the balance
sheet date, which have maturity dates approximating
to the terms of the Group's obligations.
Annual leave
Liabilities
for annual
leave are calculated at
discounted amounts based on remuneration rates the
Group expects to pay, including related on-costs
when the liability is expected to be settled. Annual
leave is another long term benefit and is measured
using the projected credit unit method.
Share based payment transactions
The Group operates the Long Term Performance
Plan (LTPP), which is available to employees at the
most senior executive
levels. Under the LTPP,
employees may become entitled to Performance
Rights which may potentially convert to ordinary
shares
in
the Company. The
fair value of
Performance Rights is measured at grant date and is
recognised as an employee expense
(with a
corresponding increase in the share based payment
reserve) over
four years
from
the grant date
irrespective of whether the Performance Rights vest
to the holder. A reversal of the expense is only
recognised in the event the instruments lapse due to
cessation of employment within the vesting period.
The
fair value of
the Performance Rights
is
determined by an external valuer and takes into
account the terms and conditions upon which the
Performance Rights were granted.
Under the Group's short term performance plan
(STPP), eligible employees receive two thirds of their
annual STPP entitlement in cash and one third in the
form of restricted shares which are subject to a
holding lock for a period of twelve months. These
77
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
assets acquired and liabilities assumed. Goodwill is
assessed for impairment on an annual basis and is
carried at cost less accumulated impairment losses.
Impairment losses on goodwill are not reversed.
Goodwill is allocated to cash generating units for the
purpose of impairment testing. The allocation is made
to those cash generating units or groups of cash
generating units that are expected to benefit from the
business combination in which the goodwill arose.
Other intangible assets
Indefinite life intangible assets are not amortised and
are assessed annually for impairment. Expenditure
on gaming licences acquired, casino concessions
acquired, computer software and other intangibles
are capitalised and amortised using the straight line
method as described in note B5.
Software
Costs associated with developing or maintaining
computer software programs are recognised as
expenses as incurred. However, costs that are
directly associated with
identifiable and unique
software products controlled by the Group and which
have probable economic benefits exceeding the
costs beyond one year are recognised as intangible
assets. Direct costs include staff costs of the software
development team and an appropriate portion of the
relevant overheads. Expenditure meeting
the
definition of an asset is recognised as a capital
improvement and added to the original cost of the
asset. These costs are amortised over using the
straight line method, as described in note B5.
Casino licences and concessions
Refer to note B5 for details and accounting policy.
Impairment of assets
Assets that have an indefinite useful life are not
subject to depreciation or amortisation and are tested
annually for impairment. Assets that are subject to
depreciation or amortisation are
reviewed
impairment whenever events or changes
for
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
costs of disposal and value in use. For the purpose of
assessing impairment, assets are grouped at the
lowest level for which there are separately identifiable
cash flows (cash generating units). Refer to note B6
for further details of key assumptions included in the
impairment calculation.
Trade and other receivables
Trade receivables are recognised and carried at
original settlement amount
less a provision
for
impairment, where applicable. Bad debts are written
off when
they are known
to be uncollectible.
Subsequent recoveries of amounts previously written
off are credited to the income statement. Other
receivables are carried at amortised cost
less
impairment.
Inventories
Inventories include consumable stores, food and
beverage and are carried at the lower of cost and net
realisable value.
Inventories are costed on a
weighted average basis. Net realisable value is the
estimated selling price in the ordinary course of
business.
Property, plant and equipment
Refer to notes A4 and B4 for further details of the
accounting policy, including useful lives of property,
plant and equipment.
Freehold
land
is
included at cost and
is not
depreciated. All other items of property, plant and
equipment are stated at historical cost net of
depreciation, amortisation and
impairment, and
depreciated over periods deemed appropriate to
reduce carrying values to estimated residual values
over
their useful
lives. Historical cost
includes
expenditure
that
is directly attributable
to
the
acquisition of these items.
Gains and losses on disposals are determined by
comparing the proceeds with the carrying amount
and are recognised in the income statement.
When the carrying amount of an asset is greater than
its estimated recoverable amount, it is written down
immediately to its recoverable amount.
Costs arising subsequent to the acquisition of an
asset 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. All
other repairs and maintenance costs are charged to
the income statement during the financial year in
which they are incurred.
Costs
relating
to development projects are
recognised as an asset when it is:
− probable
that any
future economic benefit
associated with the item will flow to the entity; and
− it can be measured reliably.
If it becomes apparent that the development will not
occur,
the amount
is expensed
to the
income
statement.
Intangible assets
Goodwill
Goodwill represents the excess of the consideration
transferred over the fair value of the identifiable net
Provisions
A provision is recognised in the balance sheet when
the Group has a present legal or constructive
obligation as a result of a past event, and it is
probable that an outflow of economic benefits will be
required to settle the obligation and the amount can
is material,
If
be reliably estimated.
provisions are determined by discounting
the
expected future cash flows at a pre-tax rate that
reflects current market assessments of the time value
of money and, where appropriate, the risks specific to
the liability.
the effect
Investment in associates and joint ventures
Associates are all entities over which the Group has
significant influence but not control or joint control.
Joint control is the contractually agreed sharing of the
joint arrangement, which exists only when decisions
about
the relevant activities require unanimous
consent of the parties sharing control. A joint venture
is a type of arrangement whereby the parties that
have joint control of the arrangement have rights to
the net assets of the joint venture. The Group's
investments in associates and joint ventures are
accounted for using the equity method of accounting,
after initially being recognised at cost. Under the
equity method of accounting, the investments are
initially recognised at cost and are subsequently
adjusted to recognise the Group's share of the post-
acquisition profits or losses of the investee in the
the Group's share of
income statement, and
movements in other comprehensive income of the
investee in other comprehensive income. Dividends
received are recognised as a reduction in the
carrying amount of the investment. The carrying
amount of equity-accounted investments is tested for
impairment in accordance with the Group's policy.
Interest bearing liabilities
Interest bearing liabilities are recognised initially at
fair value and include transaction costs. Subsequent
to initial recognition, interest bearing liabilities are
recognised at amortised cost using the effective
interest
rate method. Any difference between
proceeds and the redemption value is recognised in
the
the period of
the
borrowing using the effective interest rate method.
income statement over
Interest bearing liabilities are classified as current
liabilities unless the Group has an unconditional right
to defer settlement of the liability for at least 12
months after the balance sheet date.
Leases
Leases of assets where
the Group assumes
substantially all the benefits and risks of ownership
are classified as finance leases.
Leases of assets under which substantially all the
risks and benefits of ownership are effectively
retained by the lessor are classified as operating
leases. Payments made under operating leases are
charged to the income statement on a straight line
basis over the period of the lease.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
76
is
limited
Employee benefits
Post-employment benefits
The Group's commitment to defined contribution
plans
the contributions in
accordance with the minimum statutory requirements.
There is no legal or constructive obligation to pay
fund does not hold
further contributions
sufficient assets to pay all employees relating to
current and past employee services.
to making
the
if
in
the
Superannuation guarantee charges are recognised
the
as expenses
contributions become payable. A
is
recognised when the Group is required to make
future payments as a result of employees' services
provided.
income statement as
liability
Long service leave
The Group's net obligation in respect of long term
service benefits, other than pension plans, is the
amount of future benefit that employees have earned
in return for their service in the current and prior
periods. The obligation
the
expected future increases in wage and salary rates
including related on-costs and expected settlement
dates, and is discounted using rates attached to
bonds with sufficiently long maturities at the balance
sheet date, which have maturity dates approximating
to the terms of the Group's obligations.
is calculated using
for annual
Annual leave
leave are calculated at
Liabilities
discounted amounts based on remuneration rates the
Group expects to pay, including related on-costs
when the liability is expected to be settled. Annual
leave is another long term benefit and is measured
using the projected credit unit method.
in
the Company. The
Share based payment transactions
The Group operates the Long Term Performance
Plan (LTPP), which is available to employees at the
most senior executive
levels. Under the LTPP,
employees may become entitled to Performance
Rights which may potentially convert to ordinary
shares
fair value of
Performance Rights is measured at grant date and is
(with a
recognised as an employee expense
corresponding increase in the share based payment
reserve) over
the grant date
irrespective of whether the Performance Rights vest
to the holder. A reversal of the expense is only
recognised in the event the instruments lapse due to
cessation of employment within the vesting period.
four years
from
fair value of
the Performance Rights
The
is
determined by an external valuer and takes into
account the terms and conditions upon which the
Performance Rights were granted.
Under the Group's short term performance plan
(STPP), eligible employees receive two thirds of their
annual STPP entitlement in cash and one third in the
form of restricted shares which are subject to a
holding lock for a period of twelve months. These
77
119
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
Notes to the financial statements
For the year ended 30 June 2016
shares are forfeited in the event that the employee
voluntarily terminates from the Company during the
12 month holding lock period.
is recognised
The cost is recognised in employment costs, together
with a corresponding increase in equity (share based
payment reserve) over the service period. No
expense
that do not
ultimately vest. A liability is recognised for the fair
value of cash settled transactions. The fair value is
measured initially and at each reporting date up to
and including the settlement date, with changes in
fair value recognised in employment costs.
for awards
Derivative financial instruments
The Group uses derivative financial instruments to
hedge its exposure to foreign exchange and interest
rate risks arising from operational, financing and
investment activities. In accordance with its Treasury
Policy, the Group does not hold or issue derivative
financial instruments for trading purposes. However,
derivatives that do not qualify for hedge accounting
are accounted for as trading instruments.
financial
instruments are
Derivative
recognised
initially at fair value at the date the derivative contract
is entered into and are subsequently remeasured to
fair value at the end of each reporting period. The
resulting gain or loss is recognised immediately in the
income statement. However, where derivatives
qualify for cash flow hedge accounting, the effective
portion of the gain or loss is deferred in equity while
the ineffective portion is recognised in the income
statement.
The fair value of interest rate swap, cross currency
swap and forward currency contracts is determined
by reference to market values for similar instruments.
fair value
Refer
determination.
for details of
to note E2
Derivative assets and liabilities are offset and the net
amount reported in the consolidated balance sheet if,
and only if:
− there is a currently enforceable legal right to offset
the recognised amount; and
− there is an intention to settle on a net basis, or to
liabilities
the assets and settle
the
realise
simultaneously.
Hedging
Cash flow hedge
Where a derivative financial instrument is designated
as a hedge of the exposure to variability in cash flows
that are attributable to a particular risk associated
with a recognised asset or liability, or a highly
probable forecast transaction, the effective part of
any gain or loss on the derivative financial instrument
is recognised directly in equity. When the forecast
transaction subsequently results in the recognition of
a non financial asset or liability, the associated
cumulative gain or loss is removed from equity and
included in the initial cost or other carrying amount of
the non financial asset or liability.
Notes to the financial statements
For the year ended 30 June 2016
Dividend distributions
Dividend distributions to the Company's shareholders
are recognised as a liability in the Group's financial
statements in the period in which the dividends are
declared.
Basic earnings per share
Basic earnings per share is calculated by dividing the
net earnings after tax for the period by the weighted
average number of ordinary shares outstanding
during the period.
Diluted earnings per share
Diluted earnings per share is calculated by dividing
the net earnings attributable
to ordinary equity
holders adjusted by the after tax effect of:
− any dividends or other items related to dilutive
potential ordinary shares deducted in arriving at
profit or
loss attributable
to ordinary equity
holders;
− any interest recognised in the period related to
dilutive potential ordinary shares; and
− any other changes in income or expense that
would result from the conversion of the dilutive
potential ordinary shares;
by the weighted average number of issued ordinary
shares plus the weighted average number of ordinary
shares that would be issued on the conversion of all
the dilutive potential ordinary shares into ordinary
shares.
If a hedge of a forecast transaction subsequently
results in the recognition of a financial asset or
financial liability, then the associated gains and
losses that were recognised directly in equity are
reclassified into the income statement in the same
period or periods during which the asset acquired or
liability assumed affects the income statement (i.e.
when interest income or expense is recognised). For
cash flow hedges, the effective part of any gain or
loss on the derivative financial instrument is removed
from equity and recognised in the income statement
in the same period or periods during which the
income
hedged
statement. The ineffective part of any gain or loss is
recognised immediately in the income statement.
transaction affects
forecast
the
is revoked but
When a hedging instrument expires or is sold,
terminated or exercised, or the designation of the
hedge relationship
the hedged
forecast transaction is still expected to occur, the
cumulative gain or loss at that point remains in equity
and is recognised in accordance with the above when
the transaction occurs. If the hedged transaction is no
longer expected to take place, then the cumulative
unrealised gain or loss recognised in equity is
recognised immediately in the income statement.
Issued capital
Issued and paid up capital is recognised at the fair
value of the consideration received. Issued capital
comprises ordinary shares. Any transaction costs
directly attributable to the issue of ordinary shares
are recognised directly in equity, net of tax, as a
reduction of the share proceeds received.
revenues and
Operating segment
An operating segment is a component of an entity
that engages in business activities from which it may
earn
(including
revenues and expenses relating to transactions with
other components of
the same entity), whose
operating results are regularly reviewed by the
entity's executive decision makers
to allocate
resources and assess its performance.
incur expenses
two or more operating
The Group aggregates
they have similar economic
segments when
characteristics, and the segments are similar in each
of the following respects:
− nature of the products and services;
− type or class of customer for the products and
services;
− methods used
to distribute
the products or
provide the services; and
− nature of the regulatory environment.
Segment results include revenue and expenses
directly attributable
to a segment and exclude
significant items.
Capital expenditure
total costs
incurred during the period to acquire segment assets,
including capitalised interest.
represents
the
120
78
79
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSTHE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016Notes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities Notes to the financial statements
For the year ended 30 June 2016
Notes to the financial statements
For the year ended 30 June 2016
Dividend distributions
Dividend distributions to the Company's shareholders
are recognised as a liability in the Group's financial
statements in the period in which the dividends are
declared.
Basic earnings per share
Basic earnings per share is calculated by dividing the
net earnings after tax for the period by the weighted
average number of ordinary shares outstanding
during the period.
Diluted earnings per share
Diluted earnings per share is calculated by dividing
the net earnings attributable
to ordinary equity
holders adjusted by the after tax effect of:
− any dividends or other items related to dilutive
potential ordinary shares deducted in arriving at
profit or
to ordinary equity
holders;
loss attributable
− any interest recognised in the period related to
dilutive potential ordinary shares; and
− any other changes in income or expense that
would result from the conversion of the dilutive
potential ordinary shares;
by the weighted average number of issued ordinary
shares plus the weighted average number of ordinary
shares that would be issued on the conversion of all
the dilutive potential ordinary shares into ordinary
shares.
The Star Entertainment Group Limited and its controlled entities
The Star Entertainment Group Limited and its controlled entities
79
121
shares are forfeited in the event that the employee
voluntarily terminates from the Company during the
12 month holding lock period.
The cost is recognised in employment costs, together
with a corresponding increase in equity (share based
payment reserve) over the service period. No
expense
is recognised
for awards
that do not
ultimately vest. A liability is recognised for the fair
value of cash settled transactions. The fair value is
measured initially and at each reporting date up to
and including the settlement date, with changes in
fair value recognised in employment costs.
Derivative financial instruments
The Group uses derivative financial instruments to
hedge its exposure to foreign exchange and interest
rate risks arising from operational, financing and
investment activities. In accordance with its Treasury
Policy, the Group does not hold or issue derivative
financial instruments for trading purposes. However,
derivatives that do not qualify for hedge accounting
are accounted for as trading instruments.
Derivative
financial
instruments are
recognised
initially at fair value at the date the derivative contract
is entered into and are subsequently remeasured to
fair value at the end of each reporting period. The
resulting gain or loss is recognised immediately in the
income statement. However, where derivatives
qualify for cash flow hedge accounting, the effective
portion of the gain or loss is deferred in equity while
the ineffective portion is recognised in the income
statement.
The fair value of interest rate swap, cross currency
swap and forward currency contracts is determined
by reference to market values for similar instruments.
Refer
to note E2
for details of
fair value
determination.
Derivative assets and liabilities are offset and the net
amount reported in the consolidated balance sheet if,
and only if:
− there is a currently enforceable legal right to offset
the recognised amount; and
− there is an intention to settle on a net basis, or to
realise
the assets and settle
the
liabilities
simultaneously.
Hedging
Cash flow hedge
Where a derivative financial instrument is designated
as a hedge of the exposure to variability in cash flows
that are attributable to a particular risk associated
with a recognised asset or liability, or a highly
probable forecast transaction, the effective part of
any gain or loss on the derivative financial instrument
is recognised directly in equity. When the forecast
transaction subsequently results in the recognition of
a non financial asset or liability, the associated
cumulative gain or loss is removed from equity and
included in the initial cost or other carrying amount of
the non financial asset or liability.
If a hedge of a forecast transaction subsequently
results in the recognition of a financial asset or
financial liability, then the associated gains and
losses that were recognised directly in equity are
reclassified into the income statement in the same
period or periods during which the asset acquired or
liability assumed affects the income statement (i.e.
when interest income or expense is recognised). For
cash flow hedges, the effective part of any gain or
loss on the derivative financial instrument is removed
from equity and recognised in the income statement
in the same period or periods during which the
hedged
forecast
transaction affects
the
income
statement. The ineffective part of any gain or loss is
recognised immediately in the income statement.
When a hedging instrument expires or is sold,
terminated or exercised, or the designation of the
hedge relationship
is revoked but
the hedged
forecast transaction is still expected to occur, the
cumulative gain or loss at that point remains in equity
and is recognised in accordance with the above when
the transaction occurs. If the hedged transaction is no
longer expected to take place, then the cumulative
unrealised gain or loss recognised in equity is
recognised immediately in the income statement.
Issued capital
Issued and paid up capital is recognised at the fair
value of the consideration received. Issued capital
comprises ordinary shares. Any transaction costs
directly attributable to the issue of ordinary shares
are recognised directly in equity, net of tax, as a
reduction of the share proceeds received.
Operating segment
An operating segment is a component of an entity
that engages in business activities from which it may
earn
revenues and
incur expenses
(including
revenues and expenses relating to transactions with
other components of
the same entity), whose
operating results are regularly reviewed by the
entity's executive decision makers
to allocate
resources and assess its performance.
The Group aggregates
two or more operating
segments when
they have similar economic
characteristics, and the segments are similar in each
of the following respects:
− nature of the products and services;
− type or class of customer for the products and
services;
− methods used
to distribute
the products or
provide the services; and
− nature of the regulatory environment.
Segment results include revenue and expenses
directly attributable
to a segment and exclude
significant items.
Capital expenditure
represents
the
total costs
incurred during the period to acquire segment assets,
including capitalised interest.
78
FOR THE YEAR ENDED 30 JUNE 2016NOTES TO THE FINANCIAL STATEMENTSNotes to the financial statementsFor the year ended 30 June 2016BKey balance sheet disclosuresAssetsB1Cash and cash equivalents2016$m2015$mCash on hand and in banks103.496.2Short term deposits, maturing within 30 days55.6100.4159.0196.6B2Trade and other receivablesTrade receivables a123.2107.6Less provision for impairment (12.8)(9.4)Net trade receivables 110.498.2Other receivables19.912.3130.3110.5aIncludes patron cheques not deposited of $69.6 million (2015: $77.9 million).Past due not impaired receivables of $33.2 million were up from $16.2 million in the pcp reflective of theunderlying growth of the business and high 1.50% win rate in the second half of the year.(i)Provision for impairment reconciliationBalance at beginning of year(9.4)(18.3)Provision for impairment recognised during the yearb(23.1)(17.9)Less amounts written off as uncollectible 19.726.8Balance at end of year(12.8)(9.4)bThese amounts are included in other expenses in the income statement (refer to note A3).Trade receivables are non-interest bearing and are generally on 30 day terms.(ii)Ageing of trade and other receivablesTrade receivables0 - 30 days$m30 days - 1year$m1 - 3 years$m3 years +$mTotal$m2016Not yet due77.2---77.2Past due not impaired-31.51.7-33.2Considered impaired-11.51.3-12.877.243.03.0-123.22015Not yet due82.0---82.0Past due not impaired-10.55.7-16.2Considered impaired-5.34.1-9.482.015.89.8-107.641The Star Entertainment Group Limited and its controlled entities
DIRECTORS’ DECLARATION
Directors' Declaration
In the opinion of the Directors of The Star Entertainment Group Limited (the Company):
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group's consolidated financial position as at 30 June 2016 and of its
performance for the year ended on that date; and
(ii)
complying with the Accounting Standards and the Corporations Regulations 2001;
(b)
the Financial Report also complies with International Financial Reporting Standards as disclosed in note G; and
(c)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors.
John O'Neill AO
Chairman
Sydney
26 August 2016
122
80
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 (b)
the Financial Report also complies with International Financial Reporting Standards as disclosed in note G; and
(c)
there are reasonable grounds to believe that the Group will be able to pay its debts as and when they become due and
payable.
This declaration has been made after receiving the declarations required to be made to the directors in accordance with
section 295A of the Corporations Act 2001.
Signed in accordance with a resolution of Directors.
John O'Neill AO
Chairman
Sydney
26 August 2016
Directors' Declaration
INDEPENDENT AUDITOR’S REPORT
In the opinion of the Directors of The Star Entertainment Group Limited (the Company):
(a)
the financial statements and notes of the Group are in accordance with the Corporations Act 2001, including:
Ghafagf
In our opinion:
(i)
giving a true and fair view of the Group's consolidated financial position as at 30 June 2016 and of its
performance for the year ended on that date; and
a.
(ii)
complying with the Accounting Standards and the Corporations Regulations 2001;
ii.
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*(()3Yf\
Independent auditor's report to the members of The Star
Entertainment Group Limited
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Report on the financial report
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We have audited the Remuneration Report included in the directors' report for the year ended 30
We have audited the accompanying financial report of The Star Entertainment Group Limited, which
June 2016. The directors of the company are responsible for the preparation and presentation of the
comprises the consolidated statement of financial position as at 30 June 2016, the consolidated
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
statement of comprehensive income, the consolidated statement of changes in equity and the
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
consolidated statement of cash flows for the year then ended, notes comprising a summary of
accordance with Australian Auditing Standards.
significant accounting policies and other explanatory information, and the directors' declaration of the
consolidated entity comprising the company and the entities it controlled at the year's end or from
time to time during the financial year.
Ghafagf
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended
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We have audited the Remuneration Report included in the directors' report for the year ended 30
[gehdqaf_oal`9mkljYdaYf9[[gmflaf_KlYf\Yj\kYf\l`];gjhgjYlagfkJ]_mdYlagfk
June 2016. The directors of the company are responsible for the preparation and presentation of the
*(()3Yf\
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
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\ak[dgk]\afFgl]?&
b.
ii.
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Ghafagf
We have audited the Remuneration Report included in the directors' report for the year ended 30
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended
June 2016. The directors of the company are responsible for the preparation and presentation of the
30 June 2016, complies with section 300A of the Corporations Act 2001.
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
Ghafagf
Ernst & Young
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended
30 June 2016, complies with section 300A of the Corporations Act 2001.
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124
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82
82
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
ADDITIONAL
INFORMATION
SHAREHOLDER INFORMATION
AS AT 26 AUGUST 2016
ORDINARY SHARE CAPITAL
The Star Entertainment Group Limited has 825,672,730 fully paid ordinary shares on issue.
SHAREHOLDING RESTRICTIONS
The Star Entertainment Group’s Constitution, as well as certain agreements entered into with the New South Wales Independent Liquor and
Gaming Authority and the Queensland Office of Liquor and Gaming Regulation, contain certain restrictions prohibiting an individual from
having a voting power of more than 10% in The Star Entertainment Group without the written consent of the New South Wales Independent
Liquor and Gaming Authority and of the Queensland Minister. The Star Entertainment Group may refuse to register any transfer of shares
which would contravene these shareholding restrictions or require divestiture of the shares that cause an individual to exceed the shareholding
restrictions.
In July 2012, written consent was granted by the New South Wales Independent Liquor and Gaming Authority and the relevant Queensland
Minister for Perpetual Investment Management Limited to increase its shareholding in The Star Entertainment Group from 10% up to a
maximum of 15% of issued shares.
In May 2013, written consent was granted by the New South Wales Independent Liquor and Gaming Authority and the relevant Queensland
Minister for Crown Resorts Limited to increase its potential voting power in The Star Entertainment Group from 10% up to an effective
maximum of 23% (which may be adjusted in certain circumstances).
In December 2015, written consent was granted by the New South Wales Independent Liquor and Gaming Authority and the relevant
Queensland Minister for Genting Hong Kong Limited and its associates to increase their aggregate potential voting power in The Star
Entertainment Group from 10% up to an effective maximum of 23% (which may be adjusted in certain circumstances).
VOTING RIGHTS
All ordinary shares issued by The Star Entertainment Group Limited carry one vote per share. Performance options and performance rights do
not carry any voting rights.
Gambling legislation in New South Wales and Queensland and The Star Entertainment Group’s Constitution contain provisions regulating the
exercise of voting rights by persons with prohibited shareholding interests, as well as the regulation of shareholding interests.
The relevant Minister has the power to request information to determine whether a person has a prohibited shareholding interest. If a person
fails to furnish these details within the time specified or, in the opinion of the Minister, the information is false or misleading, then the Minister
can declare the voting rights of those shares suspended.
Failure to comply with gambling legislation in New South Wales and Queensland or The Star Entertainment Group’s Constitution, including the
shareholder restrictions mentioned above, may result in suspension of voting rights.
SUBSTANTIAL SHAREHOLDERS
The following is a summary of the substantial shareholders as at 26 August 2016 pursuant to notices lodged with ASX in accordance with section
671B of the Corporations Act 2001:
NAME
Genting Hong Kong Limited and its associates
Commonwealth Bank of Australia and its related bodies corporate
The Goldman Sachs Group Inc. and its subsidiaries and Goldman Sachs
Holdings ANZ Pty Limited and its subsidiaries
Bennelong Funds Management Group Pty Ltd
Perpetual Limited and its subsidiaries, including Perpetual Investment
Management Limited
DATE OF
INTEREST
NUMBER OF
ORDINARY SHARES(i)
% OF ISSUED
CAPITAL(ii)
14 June 2013
25 June 2015
26 April 2016
22 July 2016
26 August 2016
54,486,760
78,426,048
46,751,400
58,724,886
49,190,144
6.60%
9.49%
5.66%
7.1124%
5.96%
(i) As disclosed in the last notice lodged with the ASX by the substantial shareholder.
(ii) The percentage set out in the notice lodged with the ASX is based on the total issued share capital of The Star Entertainment Group Limited at the date of interest.
LESS THAN MARKETABLE PARCELS
There were 3,762 shareholders holding less than a marketable parcel of 83 ordinary shares (valued at $500 or less, based on a market
price of $6.04) at the close of trading on 26 August 2016 and they hold a total of 178,454 ordinary shares.
125
SHAREHOLDER INFORMATION
AS AT 26 AUGUST 2016
SECURITIES PURCHASED ON-MARKET
The following securities were purchased on-market during the financial year for the purposes of The Star Entertainment Group’s Short
Term Performance Plan (STPP) and General Employee Share Plan (GESP).
Ordinary Shares (for STPP)
Ordinary Shares (for GESP)
NUMBER OF SHARES
PURCHASED
AVERAGE PRICE PAID
PER SHARE
433,829
145,418
$4.8198
$5.2579
TWENTY LARGEST REGISTERED SHAREHOLDERS – ORDINARY SHARES*
RANK
NAME
NUMBER OF
SHARES HELD
% OF ISSUED
CAPITAL
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
JP MORGAN NOMINEES AUSTRALIA LIMITED
CITICORP NOMINEES PTY LIMITED
NATIONAL NOMINEES LIMITED
MERRILL LYNCH (AUSTRALIA) NOMINEES PTY LIMITED
CITICORP NOMINEES PTY LIMITED
BNP PARIBAS NOMS PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
BNP PARIBAS NOMINEES PTY LTD
AMP LIFE LIMITED
BNP PARIBAS NOMINEES PTY LTD
UBS NOMINEES PTY LTD
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LIMITED
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
NATIONAL NOMINEES LIMITED
RBC INVESTOR SERVICES AUSTRALIA NOMINEES PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CS FOURTH NOMINEES PTY LIMITED
UBS NOMINEES PTY LTD
Total of top 20 registered shareholders
190,544,603
124,805,160
92,982,772
75,880,388
47,433,138
41,452,776
36,828,702
26,924,467
21,336,525
11,438,000
10,819,199
9,493,109
5,345,302
4,787,909
4,074,469
3,593,658
2,147,576
1,854,633
1,824,725
1,805,000
23.08%
15.12%
11.26%
9.19%
5.74%
5.02%
4.46%
3.26%
2.58%
1.39%
1.31%
1.15%
0.65%
0.58%
0.49%
0.44%
0.26%
0.22%
0.22%
0.22%
715,372,111
86.64%
* on a grouped basis
126
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016 DISTRIBUTION OF SECURITIES HELD
RANGE OF HOLDING
ORDINARY SHARES
PERFORMANCE RIGHTS 1
NO. OF HOLDERS
NO. OF SECURITIES
NO. OF HOLDERS
NO. OF SECURITIES
1 to 1,000
1,001 to 5,000
5,001 to 10,000
10,001 to 100,000
100,001 and over
Total
50,173
19,647
2,294
1,024
64
73,202
17,447,318
40,892,326
15,839,335
20,012,028
731,481,723
825,672,730
0
3
0
5
8
16
0
5,535
0
122,570
2,431,212
2,559,317
1 Performance Rights were issued pursuant to The Star Entertainment Group’s Long Term Performance Plan. Refer to the Remuneration Report for more information about The Star
Entertainment Group’s Long Term Performance Plan.
VOLUNTARY ESCROW
There are no securities under voluntary escrow.
SHARE BUY-BACKS
There is no current or planned buy-back of The Star
Entertainment Group’s shares.
ANNUAL REPORT
This Annual Report is available on-line
from The Star Entertainment Group’s website
www.starentertainmentgroup.com.au. Annual Reports will
only be sent to those shareholders who have requested to receive
a copy. Shareholders who no longer wish to receive a hard copy
of the Annual Report or wish to receive the Annual Report
electronically are encouraged to contact the share registry. This
will assist with reducing the costs of production of the hard copy
of the Annual Report.
WEBSITE
The Star Entertainment Group’s website
www.starentertainmentgroup.com.au offers investors a wide
range of information regarding its activities and performance,
including Annual Reports, interim and full year financial results,
webcasts of results and Annual General Meeting presentations,
major news releases and other company statements.
SHAREHOLDER RELATIONS
Investors seeking more information about the Company are
invited to contact The Star Entertainment Group’s Shareholder
Relations Team:
Address:
Telephone
Facsimile:
Email:
GPO Box 13348
George Street Post Shop
Brisbane QLD 4003
+61 7 3228 0000
+61 7 3228 0099
investor@star.com.au
SHAREHOLDER ENQUIRIES
Investors seeking information about their shares in The Star
Entertainment Group should contact The Star Entertainment
Group’s share registry. Investors should have their Shareholder
Reference Number (SRN) or Holder Identification Number
(HIN) available to assist the share registry in responding to
their enquiries.
SHARE REGISTRY
LINK MARKET SERVICES LIMITED
Address:
Level 12, 680 George Street
Sydney NSW 2000
Postal address:
The Star Entertainment Group Limited
C/- Link Market Services Limited
Locked Bag A14
Sydney South NSW 1235
Australia
Telephone:
+61 1300 880 923 (toll free within Australia)
Facsimile:
+61 2 9287 0303
E-mail:
starentertainment@linkmarketservices.com.au
Website:
GENERAL ENQUIRIES
www.linkmarketservices.com.au
Investor information is available on The Star Entertainment
Group’s website www.starentertainmentgroup.com.au,
including major announcements, Annual Reports, and
general company information.
2016 CORPORATE GOVERNANCE STATEMENT
The 2016 Corporate Governance Statement can be found on
The Star Entertainment Group’s website
www.starentertainmentgroup.com.au/corporate-governance.
2016 ANNUAL GENERAL MEETING
The Annual General Meeting of The Star Entertainment Group
Limited will be held on Friday 28 October 2016 in Jupiters Theatre,
Jupiters Hotel and Casino, Broadbeach Island, Broadbeach, Gold
Coast, Queensland, commencing at 11:00am (Queensland time).
127
COMPANY DIRECTORY
REGISTERED OFFICE
The Star Entertainment
Group Limited
Level 3, 159 William Street
Brisbane Qld 4000
Telephone: + 61 7 3228 0000
Facsimile: + 61 7 3228 0099
Email: investor@star.com.au
WEBSITE
www.starentertainmentgroup.com.au
NEW SOUTH WALES OFFICE
Ground Floor
60 Union Street
Pyrmont NSW 2009
Telephone: + 61 2 9657 7600
QUEENSLAND OFFICE
Level 3
159 William Street
Brisbane QLD 4000
Telephone: + 61 7 3228 0000
STOCK EXCHANGE LISTING
The Star Entertainment Group’s securities
are quoted on the Australian Securities
Exchange (ASX) under the share code “SGR”
THE STAR SYDNEY
80 Pyrmont Street
Pyrmont NSW 2009
Reservations: 1800 700 700
Telephone: + 61 2 9777 9000
www.star.com.au
JUPITERS HOTEL AND
CASINO GOLD COAST
Broadbeach Island
Gold Coast QLD 4218
Reservations: 1800 074 344
Telephone: + 61 7 5592 8100
www.jupitersgoldcoast.com.au
TREASURY CASINO AND HOTEL
BRISBANE
George Street
Brisbane QLD 4000
Reservations: 1800 506 889
Telephone: + 61 7 3306 8888
www.treasurybrisbane.com.au
QUEEN’S WHARF BRISBANE
GENERAL ENQUIRIES
Telephone: 1800 104 535
Email:
qwbenquiries@destinationbrisbane.com.au
www.destinationbrisbaneconsortium.com.au
AUDITOR
Ernst & Young
ABOUT THIS ANNUAL REPORT
CURRENCY
References to currency in this Annual
Report are in Australian Dollars unless
otherwise stated.
COPYRIGHT
Information in this report has been
prepared by The Star Entertainment Group
Limited, unless otherwise indicated.
Information may be reproduced provided
it is reproduced accurately and not in a
misleading context. Where the material
is being published or issued to others,
the sources and copyright status should
be acknowledged.
INVESTMENT WARNING
This Annual Report may include forward
looking statements and references which,
by their very nature, involve inherent
risks and uncertainties. These risks and
uncertainties may be matters beyond
The Star Entertainment Group’s control
and could cause actual results to vary
(including materially) from
those predicted.
Forward looking statements are not
guarantees of future performance. Past
performance of shares is not indicative
of future performance and should not
be relied upon as such. The value of
investments and any income from them
is not guaranteed and can fall as well
as rise. The Star Entertainment Group
recommends that investors make their
own assessments and seek independent
professional advice before making
investment decisions.
PRIVACY
The Star Entertainment Group respects
the privacy of its stakeholders. The Star
Entertainment Group’s Privacy Policy
Statement is available on The Star
Entertainment Group’s website at
www.starentertainmentgroup.com.au.
128
THE STAR ENTERTAINMENT GROUP ANNUAL REPORT 2016
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