The Star Entertainment Group Annual Report 2022

FY2022 Annual Report · The Star Entertainment Group

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2022 Annual Report

Acknowledgment of Country

The Star Entertainment Group
respectfully acknowledges the
Traditional Owners of the land
where our properties are situated.
This includes the Turrbal and Jagera
Traditional Owners of the Brisbane
region, the Danggan Balun
(Five Rivers) people of the
Gold Coast, and the Traditional
Owners of the land in Pyrmont, the
Gadigal people of the Eora Nation.

We also wish to pay our respects
to Elders past and present.

People
Health and Safety
Asset Protection

Neighbourhood Engagement

Talented Teams
Diversity and Inclusion

Community and Charitable Partnerships

Directors’, Remuneration
And Financial Report
Directors’ Report
Remuneration Report
Financial Report

Additional Information
Shareholder Information
Corporate Information
Corporate Governance
Statement Details
Annual General Meeting Details
About this Annual Report
Key Dates For FY2023
Company Directory

146

149

150

151

Contents

Introduction

Executive Chairman's Message 4

Board and Executive Team
Board of Directors 6
Executive Team 7

Financial Performance

Key Projects
Queen’s Wharf Brisbane
The Star Sydney
The Star Gold Coast

Sustainability
Responsible Business,
Sustainable Destinations Strategy

Our Environmental Targets
Sustainability Approach

Responsibility
Responsible Gambling
Responsible Service Of Alcohol

Environment
Climate Change
Alignment with the Task-Force
on Climate Related Financial Disclosures
Net-zero 2030 and Carbon
Emissions Management
Corrymbia – A Carbon Offsetting Project
Resource Efficiency, Waste
Mangement and Sustainable Design
The Global Compact Network Australia
Reporting and Assurance

Modern Slavery

Front Cover photo: The Star Gold Coast, Isoletto PoolBack Cover: Artist's concept image of The Star Gold Coast expansion4

The Star Entertainment Group 2022 Annual Report

Introduction

This is an era of change for The Star

At The Star Gold Coast, construction

Entertainment Group Limited.

of a second tower commenced, and the

In FY2022 and now into FY2023, we are

embracing change across our organisation

to address issues raised in recent reviews

by our regulators.

We have developed and are acting on a

detailed Remediation Plan to transform

our business and ensure nothing like this

ever happens again. There is still much work

to be done but we are already taking the

steps required to make it right.

We invite you to follow our progress
at starentertainmentgroup.com.au/
transformation.

New South Wales Government provided

a development pathway for a new

six-star luxury hotel, additional theatres

and exciting new rooftop dining

experiences at The Star Sydney.

The transformative Queen’s Wharf Brisbane

project also progressed, with an anticipated

staged opening from the second half

of calendar year 2023. As part of the

Queen’s Wharf precinct development,

The Star and our joint venture partners

are delivering an extensive public space

arts program with several Australian-

based artists announced and showcased

While executing our Remediation Plan,

during FY2022.

we also remain committed to delivering

As plans to expand The Star’s offerings are

memorable experiences and guest

realised, we will help create thousands of

service excellence across our expanding

direct and indirect jobs across the tourism,

portfolio of tourism, hospitality and

hospitality and entertainment sectors,

entertainment venues.

and drive additional visitation to the

In FY2022, we opened Australia’s first

communities we serve.

Dorsett hotel and The Star Residences in a

We are continuing to embrace change at

53-storey tower at the Gold Coast, whilst

every level of our business as we progress

upgrading and unveiling a further 10 food

into FY2023. We are working with urgency

and beverage venues across our properties

to address the issues identified by our

in Sydney, Brisbane, and the Gold Coast.

regulators, and laying the foundations for a

safer, stronger, more sustainable future.

Our Vision

To be Australia’s leading integrated resort company by harnessing the unique opportunities

provided by each of the cities, communities and locations in which we operate.

Our Values

Ownership

Welcoming

True Teamwork

Do The Right Thing

Executive
Chairman’s Message

(Note: Ben Heap was appointed as Interim Chairman from 1 June 2022 and
subsequently appointed as Executive Chairman on 26 September 2022.)

Information contained in this message is correct as at the time of writing on
13 October 2022.

This past year was an incredibly
challenging one for our business.
I want to address the underlying
issues in detail below, but first
want to extend again my unreserved
apology to our approximately
73,000 shareholders and 8,000
team members. We let you down.
As our most valued stakeholders,
you deserved better.

At the time of writing, we have
received the report undertaken by
Mr Adam Bell SC in connection
with the review of The Star Sydney
under the Casino Control Act 1992
(NSW). Released publicly on
13 September 2022, Mr Bell’s report
found The Star Sydney to be
unsuitable, and a show cause notice
was issued by the NSW Independent
Casino Commission (NICC) to
which The Star Entertainment Group
Limited (The Star) responded on
26 September 2022.

We have submitted a response to the
NICC accepting the findings of the
Bell Report, including the finding of
unsuitability. We acknowledged the
gravity of the conduct raised and
outlined how significant and urgent
remedial steps have commenced
as part of a comprehensive
Remediation Plan.

This Remediation Plan is designed
to transform all aspects of the
organisation’s governance, culture,
and risk and compliance practices,
while also focusing on accountability
and the capabilities required to
embed the necessary changes to
satisfy the NICC that The Star Pty
Limited, the licence holder in NSW,
can continue to hold its licence.

We submitted that the appropriate
action the NICC should take is
to allow The Star Pty Limited to
continue to operate the licence
under strict supervision while being

held to account for the milestones
included in the Remediation Plan.
At the time of writing, we are waiting
on a decision from the NICC.

We have also received the findings
from the independent external
review of the operations of The Star’s
casinos in Queensland led by
eminent former judge, The Honourable
Robert Gotterson AO, under section 91
of the Casino Control Act 1982 (Qld).
Mr Gotterson delivered his report to
the Queensland Attorney-General
on 30 September 2022 and it was
publicly released on 6 October 2022.

The Attorney-General responded to
the report saying she had considered
the findings from Mr Gotterson,
and the findings from the Bell Review
in NSW, and had formed the view
that The Star was unsuitable to
hold a casino licence in Queensland.
The Attorney-General asked
the Office of Liquor and Gaming
Regulation to begin preparing
materials to issue The Star with
a show cause notice. The Star is
awaiting the show cause notice
at the time of writing.

This has been a period in the
company’s history from which we
must learn and will learn. We can
never make the same mistakes
again and we must take action to
ensure a stronger, more robust,
more sustainable, and better
company emerges.

We must transform our culture.
We need more transparency, more
robust governance, and greater
accountability. We need to be a
workplace where all team members
feel empowered to raise concerns,
where we have open and honest
dialogue with our regulators, and
where our leadership is vigilant,
open to hear concerns when they
are raised, and committed to taking

action whenever necessary. We also
need to shift to a culture that asks
not only “can we”, but “should we.”

Our goal is to earn back trust and
confidence. I know this will not
happen overnight. But I ask all of you
to not judge us by our words, but by
our actions.

COVID-19 IMPACTS

I mentioned at the outset the
incredible challenges FY2022 has
provided. Beyond the pressing
regulatory issues, we continued
to encounter COVID-19 related
disruptions which materially
impacted earnings. Property
shutdowns, operating restrictions
and border closures remained
as obstacles to be negotiated
responsibly, with agility, and at all
times compliantly.

I would like to again acknowledge
the commitment of our tireless
team members for their resolute
and enthusiastic efforts to keep
delivering world-class experiences to
our guests at every opportunity.

When we did emerge from shutdowns
and restrictions, the underlying
strength of the business enabled us
to rebound strongly.

NEW APPOINTMENTS

Experienced, high quality, senior
executives have chosen to join
The Star to drive our future direction
and growth.

They included Robbie Cooke
joining us as Managing Director
and Chief Executive Officer on
17 October 2022, Scott Wharton being
appointed as Chief Executive Officer
of The Star Sydney and Group Head
of Transformation, Scott Saunders
being appointed as Group Chief Risk
Officer and Nawal Silfani being

The Star Entertainment Group 2022 Annual Report

appointed as an additional
Company Secretary. Each of
these appointments are subject
to all necessary regulatory
approvals being obtained.

Robbie is a respected and highly
experienced chief executive.
He has been the CEO of major ASX
200 listed companies and brings
extensive commercial experience in
operating and driving transformation
programs within highly regulated
environments, overseeing large
workforces and building executive
teams in multi-jurisdictional
locations. He is well placed to lead
The Star and restore confidence in
the organisation.

The Star Entertainment Group Board
announced it would embark on a
program of Board renewal in a timely
manner, acknowledging the need
for accelerated change. Mr Michael
Issenberg commenced as a Non-
Executive Director on 11 July 2022
following receipt of all necessary
regulatory approvals. Ms Anne Ward
and Mr David Foster were appointed
as Non-Executive Directors on
15 August 2022 subject to regulatory
approvals being obtained.

FINANCIALS

FY2022 marks the third consecutive
year where our operations were
significantly affected by the ongoing
impacts of COVID-19. Property
closures, operating restrictions and
border restrictions significantly
impacted earnings in the first half
and into the second half of FY2022.
Restrictions began to ease in the
second half, allowing for the return
to more normal operating conditions
by the fourth quarter of the
financial year.

Domestic revenue in the fourth quarter
of FY2022 was above pre-COVID-19
levels (as represented by the
corresponding period in 2019), driven
by strong growth in slots and non-
gaming revenue. Performance was also
affected by The Star’s suspension of
all domestic and international rebate
programs and costs associated
with the commencement of the
Remediation Plan. Normalised EBITDA
of $235.1m was down 45.3% on pcp
while the normalised net loss after tax,
excluding significant items,
was $33.4m.

The Star remains committed to
maintaining a sound balance sheet.
No final dividend was declared, in
accordance with the conditions of the
debt covenant waivers, which restrict
further cash dividends from being
paid until The Star’s gearing ratio is
below 2.5 times (net debt to 12-month
trailing statutory EBITDA).

PROJECT UPDATES

During the year, the Dorsett hotel
and The Star Residences opened at
the Gold Coast. The Dorsett hotel is
performing above forecast levels given
higher than expected occupancy levels
and average daily rates, and in excess
of 90% of the apartments have
settled. Construction of Gold Coast
Tower 2, a 63-storey mixed-use tower
which will include a five-star hotel and
residential units, is also well underway.
All residential offerings have been pre-
sold with construction of the tower due
for completion mid-to-late calendar
year (CY) 2024. Once developed,
the two towers will add approximately
1,400 hotel rooms and residences,
additional restaurants and bars,
and substantial resort facilities
and attractions. The Queensland
Government-approved $2 billion-
plus masterplan for Broadbeach
Island also provides potential for
a further three towers.

As advised on 29 July 2022,
Queen’s Wharf Brisbane is now
expected to open during the
second half of CY2023. The podium
structure has been completed,
while the restoration and repurposing
of the heritage buildings has
commenced. A multi-million-dollar
arts program which will see a
range of works installed across
the precinct is underway, the
landscaping of green spaces
along the Brisbane River has
occurred, and the Neville Bonner
Bridge providing pedestrian
access between Southbank and
Queen’s Wharf continues to
progress. An exciting and important
project for The Star, it will add
significant scale in both gaming
and non-gaming amenities.

In NSW, we continue to engage with
the Department of Planning and
progress through the various stages
of the Pyrmont Peninsula Place
Strategy. On 29 July 2022, the NSW
Government provided a development

pathway through amended planning
controls that provides opportunity for
The Star Sydney to deliver a new six-
star luxury hotel, additional theatres
– creating a genuine theatre precinct
– and exciting new rooftop dining
experiences.

FY2023 PRIORITIES

Our key priority in FY2023 will be
to execute against the Remediation
Plan. This is part of a larger
transformation platform to create
world-class experiences for our
guests and members, headlined by
our multi-billion-dollar developments
in Brisbane and on the Gold Coast.
In addition to our development plans
for these properties, we are excited
about the potential to progress
development opportunities in Sydney.

The focus on remediation does not
mean our focus will slip with respect
to current business operations.
We operate three casinos and over
60 hospitality venues. Our leaders
are acutely focused on our revenue
growth in a post-COVID-19
environment and the importance
of prudent cost control.

Finally, we will continue to explore
opportunities to unlock the underlying
value of The Star’s property portfolio,
including through asset sales, but
only in the event that it adds value
to shareholders.

The fundamental earnings prospects
for The Star’s business remain
attractive and the past year has
demonstrated how resilient our
business is and how quickly customers
return when the properties are
allowed to open and operate without
restrictions. This gives us great
confidence moving forward.

In closing, I wish to express my
gratitude to the Board for their
considerable support during FY2022
and to pay tribute to our thousands
of dedicated team members without
whom we cannot continue to delight
our guests each and every day.

BEN HEAP
Executive Chairman
The Star Entertainment Group

Board of Directors

(As at 13 October 2022)

BEN HEAP

GERARD BRADLEY AO

MICHAEL ISSENBERG

KATIE LAHEY AM

EXECUTIVE CHAIRMAN

NON-EXECUTIVE DIRECTOR

Bachelor of Commerce (Finance);
Bachelor of Science (Mathematics);
Graduate of the Australian
Institute of Company Directors

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 Institute of
Managers and Leader; Officer
of the Order of Australia

BS in Hotel Administration –
Cornell University USA;
French Order of Merit
(Ordre national du Mérite)

Bachelor of Arts (First Class
Honours); Master of Business
Administration; Member of
the Order of Australia

RICHARD SHEPPARD

DAVID FOSTER

ANNE WARD

ROBBIE COOKE

NON-EXECUTIVE DIRECTOR

Bachelor of Economics (First Class
Honours); Fellow of the Australian
Institute of Company Directors

NON-EXECUTIVE DIRECTOR
(Subject to regulatory approvals)

Master of Business Administration;
Bachelor of Applied Science;
Fellow of the Australian Institute
of Management; Senior Fellow
of the Financial Services Institute
of Australasia; Member of
the Australian Institute of
Company Directors

Barrister and Solicitor of the
Supreme Court of Victoria;
Fellow of the Australian
Institute of Company Directors;
Bachelor of Laws; Bachelor
of Arts

MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
(Announced on 29 June 2022
and commenced from
17 October 2022 subject to
regulatory approvals)

Solicitor of the Supreme Court
of Queensland; Bachelor of
Laws (Honours); Bachelor of
Commerce; Graduate Diploma in
Company Secretarial Practice;
Associate of the Governance
Institute of Australia; Member
of the Australian Institute of
Company Directors

Board changes:
Sally Pitkin AO (resigned as Non-Executive Director on 30 June 2022)
John O’Neill AO (resigned as Executive Chairman on 20 May 2022)
Matt Bekier (resigned as Managing Director and Chief Executive Officer on 28 March 2022)

8
8

The Star Entertainment Group 2022 Annual Report

Executive Team

(As at 13 October 2022)

ROBBIE COOKE

CHRISTINA KATSIBOUBA

SCOTT WHARTON

NEIL CARABINE

MANAGING DIRECTOR AND
CHIEF EXECUTIVE OFFICER
(Announced on 29 June 2022
and commenced from
17 October 2022 subject to
regulatory approvals)

INTERIM CHIEF
FINANCIAL OFFICER

CHIEF EXECUTIVE
OFFICER, THE
STAR SYDNEY AND
GROUP HEAD OF
TRANSFORMATION
(Subject to regulatory
approvals)

INTERIM CHIEF LEGAL
OFFICER

GEORGE HUGHES

CHIEF MARKETING
OFFICER

PETER JENKINS

GROUP EXECUTIVE
EXTERNAL AFFAIRS

PAULA HAMMOND

CHIEF PEOPLE
AND PERFORMANCE
OFFICER

JESSICA MELLOR

CHIEF OPERATING
OFFICER, THE STAR
GOLD COAST

Executive changes:
Geoff Hogg (resigned as Acting Chief Executive Officer on 26 September 2022)
Kim Lee (resigned as Chief of Staff on 23 September 2022)
Harry Theodore (resigned as Chief Financial Officer on 6 May 2022)
Greg Hawkins (resigned as Chief Casino Officer – NSW on 6 May 2022)
Paula Martin (resigned as Chief Legal & Risk Officer and Company Secretary on 6 May 2022)
Matt Bekier (resigned as Managing Director and Chief Executive Officer on 28 March 2022)

9
9

Financial
Performance

FY2022 marks the third consecutive year where our operations were

significantly affected by the ongoing impacts of COVID-19. Property

closures, operating restrictions and border closures significantly impacted

earnings in 1H FY2022 and into 2H FY2022.

Restrictions began to ease in 2H FY2022, allowing for the return to more

normal operating conditions by 4Q FY2022. Earnings were also impacted by

the suspension of domestic and international rebate programs and costs

associated with the commencement of the Remediation Plan.

Statutory EBITDA

Domestic revenue

Operating expenses

EBITDA margin

$238m

DOWN 44.3%

$1.52bn

DOWN 1.2%

$911m

DOWN 23.1%

15%

VS 27%

Statutory EBITDA

Domestic revenue

Operating expenses

EBITDA margin

$83m

DOWN 58.3%

$774m

DOWN 4.8%

$483m

DOWN 18.2%

11%

VS 24%

Statutory EBITDA

Domestic revenue

Operating expenses

EBITDA margin

$89m

DOWN 20.6%

$422m

UP 11.2%

$251m

DOWN 34%

21%

VS 30%

Statutory EBITDA

Domestic revenue

Operating expenses

EBITDA margin

$65m

DOWN 43.4%

$325m

DOWN 6.1%

$176m

DOWN 22.5%

20%

VS 33%

The Star Entertainment Group 2022 Annual Report

Group Performance (vs PCP)Sydney (vs PCP)Gold Coast (vs PCP)Brisbane (vs PCP)Group Performance

Gross Revenue

Net Revenue1

EBITDA2

NPAT3

Sydney

Gross Revenue

Net Revenue

EBITDA

Gold Coast

Gross Revenue

Net Revenue

EBITDA

Brisbane

Gross Revenue

Net Revenue

EBITDA

1,531.5

1,524.5

235.1

(33.4)

781.0

775.4

81.1

424.4

423.3

89.3

326.1

325.8

64.7

NORMALISED4

STATUTORY

vs pcp5

↓1.9%

↓1.6%

↓45.3%

N.M.

1,534.1

1,527.1

237.5

(202.5)

NORMALISED

STATUTORY

vs pcp

↓6.1%

↓5.5%

↓60.2%

vs pcp

↑11.2%

↑11.5%

↓20.0%

vs pcp5

↓6.2%

↓6.4%

↓43.4%

NORMALISED

783.5

777.9

83.4

424.4

423.3

89.3

326.2

325.9

64.8

STATUTORY

vs pcp

↓1.5%

↓1.2%

↓44.3%

N.M.

vs pcp

↓5.4%

↓4.8%

↓58.3%

vs pcp

↑11.3%

↓20.6%

vs pcp

↓6.2%

↓6.4%

↓43.4%

Three Year Statutory Financial Results Summary6

Gross Revenue

Net Revenue

EBITDA

EBIT

Significant Items (after tax)

NPAT (before significant items)

Earnings Per Share (cents)

Full Year Dividend (cents)

FY20207

vs pcp

FY2021

vs pcp

FY2022

vs pcp

1,748.9

1,487.0

282.0

79.8

114.4

19.6

(10.3)

10.5

↓30.4%

↓31.1%

↓49.0%

↓77.0%

↓521.7%

↓90.9%

↓147.7%

↓48.8%

1,557.1

↓11.0%

1,545.4

↑3.9%

1,534.1

1,527.1

426.7

216.2

51.5

109.4

6.1

↑51.3%

↑170.9%

↑55.0%

↑458.3%

N.M.

237.5

29.2

170.8

(31.7)

(21.3)

↓1.5%

↓1.2%

↓44.3%

↓86.5%

↓231.7%

N.M.

1. Net of player rebates and promotional allowances.
2. EBTIDA is before equity accounted investments profits/losses and significant items.
3. Normalised NPAT is after equity accounted investments profits/losses and before

significant items.

5. Prior comparable period.
6. For further information, please refer to the financial report contained in the

Annual Report for the relevant financial year.

7. FY2020 comparatives have been restated due to a change in accounting policy.

4. Normalised results reflect the underlying performance of the business as they remove

the inherent win rate volatility of the International VIP Rebate business. Normalised
results are adjusted using an average win rate of 1.35% on actual turnover, taxes and
revenue share commissions, unless otherwise stated, and are before significant items.

N.M. Not meaning ful as the result moved between a profit and a loss.

Key Projects

In FY2022, The Star and its partners
continued the development of its key
projects in South-East Queensland, while
also expanding hospitality offerings and
non-gaming assets across its properties.

This includes the opening and upgrade of 10

establishments such as signature restaurant Ele

by Federico & Karl (The Star Sydney), Uncle Su

and Isoletto Pool Club (The Star Gold Coast).

These establishments form part of a current

portfolio of over 60 bars, restaurants and cafes,

with over 50 food and beverage outlets to be

added as part of Queen’s Wharf Brisbane.

Queen’s Wharf Brisbane

With an anticipated staged opening from the

second half of 2023, Queen’s Wharf Brisbane (QWB)

will transform the CBD and river’s edge with an

iconic design that embraces Brisbane’s inviting

subtropical climate.

It will also celebrate the precinct’s Indigenous

and European heritage with interpretive trails

and experiences spanning the Brisbane River

and ridgeline, covering more than 12 hectares

of CBD land.

1212

The Star Entertainment Group 2022 Annual Report

In FY2022, the transformational Queen’s Wharf Brisbane

development reached further significant milestones.

• Public artworks: Significant installations underway

(including from world-renowned artist Lindy Lee whose

sculpture ‘Being Swallowed by the Milky Way’ will be

positioned at Atrium entrance)

• Green spaces: Trees and landscaping installed on

the 6,000 square metres of new public space along

the Brisbane River

• Neville Bonner Bridge: More than 50% of the new bridge

with mast and lookout sections in place

• Queen’s Wharf Tower: sales launch of apartments of

the second residential tower

• Maintaining heritage: commencement of restoration

and repurposing of heritage buildings including

The Printery Office, the former DPI building and

Harris Terrace

• Podium structure complete with all four international

resort development towers beyond Level 20.

The QWB development will continue to take shape

throughout FY2023, with construction and fit out

works well underway. The Star will continue to operate

Treasury Brisbane until the new property

opens and the transition to a new casino occurs.

QWB, being delivered by Destination Brisbane

Consortium, is a multi-billion-dollar joint venture

development comprising The Star and its Hong Kong

based partners, Chow Tai Fook Enterprises Limited

and Far East Consortium International Limited.

Concept image of QWB project only.
© Destination Brisbane Consortium.

1313

The Star Sydney

The Star Sydney continues to be one of

• Mashi no Mashi: Launched by

the city’s leading tourism, hospitality and

WAGYUMAFIA, Mashi no Mashi is

entertainment destination. In the 2022

WAGYUMAFIA’s renowned wagyu Ozaki

financial year, the property delivered a

beef ramen and gyoza. With flagship stores

program which saw four new restaurants

in Hong Kong and Japan, Mashi no Mashi

and bars opened.

at The Star Sydney is WAGYUMAFIA’s first

In the same period, The Darling – Sydney’s

location in Australia

only Forbes Five Star rated luxury hotel

• Rumble: Launched in The Star Sydney

commenced refurbishment works with

harbour facing promenade, Rumble is an

the delivery of the revitalised pool deck

evocative and playful collision of the sweet,

already complete.

Details of the key projects undertaken

throughout FY2022 included:

• ELE by Federico & Karl: Launched by

celebrated chefs Federico Zanellato

and Karl Firla, ELE by Federico & Karl

offers a sensory dining experience,

comprising an eight-course degustation

inspired by the elements and incorporating

visuals and music

sour, salty and spicy world of South-East

Asia, and a welcome addition to The Star

Sydney’s premium dining experiences

• The Darling: The refurbishment works will

continue throughout the remainder of the

hotel with the project due to be completed

by Q4 FY2023.

The Star Entertainment Group 2022 Annual Report

The Star Gold Coast

The Star Gold Coast’s masterplan continues
at pace. In FY2022, several key projects were
delivered and significant milestones achieved.
These included:

• Tower 1: The 53-storey mixed-use tower

was completed and delivered by Destination
Gold Coast Consortium, a joint venture
development comprising The Star and its
Hong Kong based partners, Chow Tai Fook
Enterprises Limited and Far East Consortium
International Limited.

Included among the key features of the tower

was the launch of:

– Australia’s first Dorsett hotel,
featuring 313 rooms as part of
The Star’s Gold Coast property

– Isoletto Pool Club and Isoletto Privé events
space, The Star Gold Coast’s new luxurious
pool club and skyline party and events
space located on the luxe leisure deck of
the tower podium

– The Star Residences, 422 apartments in

the upper levels of The Star’s new hotel and
apartments tower offering short-term stays,
long-term rentals and permanent residency.

• Tower 2: The $400 million, 63-storey
mixed-use tower being delivered by
Destination Gold Coast Consortium, is well
underway. The tower, the second as part of
the $2 billion-plus masterplan for Broadbeach
Island, will include an internationally
recognised five-star hotel brand and the
second stage of The Star Residences.
The tower will see the delivery of the
fourth hotel at The Star Gold Coast, with
construction due to be completed in
mid-to-late 2024.

As approved by the Queensland Government in
November 2018, the $2 billion masterplan, along
with the above-mentioned Tower 1 and Tower 2
developments, provides potential for a further
three towers on Broadbeach Island, as well
as additional resort facilities, dining precincts,
bars and cafes, and entertainment areas.

1515

Sustainability

Responsible Business,
Sustainable Destinations Strategy

In FY2022, The Star redeveloped its

management of material and

tolerance to financial crime

sustainability strategy, reassessed

emerging ESG issue areas, and

its most material environmental,

increases efforts in a number of key

social and governance (ESG) issues

business impact areas.

and commenced the development of

a new strategic roadmap, action plan

and a series of targets towards 2030.

The strategy, titled ‘Responsible

Business, Sustainable Destinations’,

is aligned to the United Nations

Sustainable Development Goals

The strategy’s three pillar

framework reaffirms The Star’s

commitments towards:

(SDGs). This new sustainability

• Responsibility – To lead with

strategy encapsulates The Star’s

integrity to ensure safer gambling,

intent for the current and future

sustainable growth and zero

• Environment – Creating low carbon

areas. An action plan detailing the

places that support nature and

objectives, targets and activities will

conserve resources

be released in FY2023 on The Star’s
corporate website.

• People – Foster wellbeing and

enhance communities, within and

beyond our precincts.

Supporting each of the three pillars is

a summary explanation of each of

The Star’s 15 most material issue

CREATE LOW CARBON
PLACES THAT SUPPORT
NATURE AND CONSERVE
RESOURCES

FOSTER WELLBEING AND
ENHANCE COMMUNITIES,
WITHIN AND BEYOND
OUR PRECINCTS

Contribute to a
zero carbon future

Reduce waste &
improve circularity

Support biodiverse
ecosystems and curb
nature loss

Conserve water and
protect waterways

Ensure sustainable
sourcing practices

Develop environmentally
and socially sustainable
precincts and tourism

LEAD WITH INTEGRITY TO
ENSURE SAFER GAMBLING,
SUSTAINABLE GROWTH,
AND ZERO TOLERANCE
FOR FINANCIAL CRIME

Go beyond compliance to
ensure safer gambling, harm
minimisation and zero
tolerance for ﬁnancial crime

Be transparent and
accountable about ESG
performance, tax
and donations

Ensure the security and
privacy of guests, staff
and partners

Deliver value to all stakeholders
through sustainable
long-term growth

Enhance community
wellbeing, prosperity
and resilience

Empower a diverse and
inclusive culture where
everyone has the
opportunity to thrive

Support the physical
and mental wellbeing of
our people and guests

Ensure ethical sourcing
and protect human rights

Develop leaders and
grow meaningful careers

The Star Entertainment Group 2022 Annual Report

Our Environmental Targets

Net-zero
carbon emissions
by 2030*

100%
takeaway food
packaging to be
compostable^

*Scope 1 and Scope 2 for wholly owned and operated assets
^(currently at 98%)
**against a FY2013 baseline

90%
of the portfolio
to attain green
ratings by FY2022
(achieved)

30%
reduction in
carbon intensity
by 2023**

30%
reduction in
water intensity
by 2023**

The Star continues to
be a constituent of the
FTSE4Good Index

Sustainability Approach

The Star’s sustainability approach is

The Star’s 2022 Sustainability Report

focused on creating long term value

provides detailed disclosures and

in the management of its ESG risks

performance reporting against each

and opportunities. Each year,

of The Star’s most material issues

The Star sets additional measures

and provides further detail on the new

to increase its ESG performance

‘Responsible Business, Sustainable

and reporting transparency which

Destinations’ ESG Strategy.

includes increasing data assurance,

performance metrics and targets.

To view the 2022 Sustainability
Report and full details of
the information provided,
scan the QR code.

Materiality

‘Responsible Business, Sustainable

Council Framework, and considers

To ensure that each of the 15

Destinations’ is underpinned by a

the United Nations Sustainable

most material issues identified

structured materiality assessment

Development Goals (SDGs).

as important to The Star and its

process that is conducted annually

The SDGs capture global sustainable

stakeholders is measured, managed

and available on The Star’s corporate

development priorities and

and reported against, all issues have

website and within the 2022

demonstrate where corporations

been addressed in the new strategy

Sustainability Report.

can have an impact on global

and action plan in addition to existing

The materiality approach adheres

to the requirements of the Global

Reporting Initiative, AccountAbility

AA1000 Principles Standard and the

International Integrated Reporting

environmental and social issues.

controls, policies and programs.

This year we have also mapped

our material topics to the relevant

Sustainability Accounting Standards

Board (SASB) industry topics from

the ‘Casino & Gaming’ industry.

Responsibility
Responsible Gambling

The Star is committed to minimising the risk of the
potential harmful impact of problem gambling.

Most guests who visit The Star enjoy

The key elements of The Star’s

to avoid offering inappropriate

gambling as part of their leisure

responsible gambling program include:

incentives to those guests at risk

and entertainment experience and

do so within their financial means.
We acknowledge some guests may

experience difficulty in controlling

• Availability of behavioural

• A groupwide exclusion program which

assessments by our counselling

includes self-exclusion and venue-

service provider Betcare

initiated exclusions for guests

their gambling.

• Providing role specific training to

• Using a range of training and

The Star’s responsible gambling

program aims to promote the early

identification and intervention

of guests who may exhibit signs of

problem gambling.

The program’s objective is to minimise

the potential harm caused by

gambling (such as financial hardship,

emotional distress, and relationship

breakdown), and to provide guests

with the best tools and information

team members – and developing

technical capabilities, including

appropriate conversational skills

facial recognition technology, to

– with a focus on those in front-

support our exclusion program

of-house roles who are most likely

and to prevent minors from

to encounter guests experiencing

accessing our gaming areas.

gambling harm

Board oversight of our responsible

• Across each property, Guest

gambling program is provided by the

Support Advocates and dedicated

Remuneration, People, and Social

Guest Support Managers provide

Responsibility Committee.

confidential support and advice to

help guests to gamble safely

that help them make informed

• Access to online information

decisions about managing their

about where to receive and seek

gambling safely.

out help – in English and various

The Star has set policies and standards

other languages

for the program at a group level.

• Integrating our data and information,

Each property operates under a

communication, and technology

‘Responsible Gambling Code of

system capabilities to identify

Practice’ that sets the operational

potential risks and to address risky

standards for the responsible delivery

behaviours of guests

of gambling products and services.

• Developing systems with The Star’s

marketing and sales teams to

promote responsible gambling and

The Star Entertainment Group 2022 Annual Report

Responsible Service of Alcohol
The Star takes its obligations in relation to the safe and
responsible service of alcohol (RSA) seriously.

The Star’s RSA program is supported

MINIMISING HARM

COMMUNITY AMENITY

by policies, procedures, and

mandatory training for all team

members. Management and team

members are committed to providing

patrons with a safe and secure

• The sale, supply and consumption

• Reduction of noise

of alcohol is not permitted by

person(s) under the age of 18 years,

with proof of age required

entertainment environment.

• Signage is provided in each

Responsible service of alcohol to

customers is an integral part of

property related to the service

of alcohol restrictions

this commitment to minimise harm

• Promotions that encourage rapid or

caused by the misuse of alcohol

excessive drinking are prohibited, as

and to minimise potential impacts

are activities that could potentially

on the local community.

lead to harassment of patrons or

The Star’s RSA Manual contains

team members

• Safe and responsible advertising

of alcohol

• Supporting government and

community initiatives relating to

safer nights out.

RSA committees in each of our

properties meet monthly to manage

and monitor activities and incidents

related to the RSA program.

Each committee works towards

continuous improvement to address

requirements that are specific to each

• Free drinking water is available from

local regulatory and community

property as well as the following broad

all food and beverage outlets, and

requirements and the circumstances

requirements across the organisation.

bottled water is always available

that are specific to their respective

PROVIDING SAFE VENUES

• Refusing entry or service to

intoxicated patrons

• Managing illegal or

undesirable activity

for purchase

property and venues.

• Light or mid-strength alcohol options

Board oversight of the RSA

are sold at cheaper prices than full

program is provided by the

strength drinks and are available in

Remuneration, People and Social

all outlets

Responsibility Committee.

• Drink spiking awareness is promoted

• Providing role-specific training for

within the properties

venue managers and team members

• No shot style drinks are served in

• Use of safe glassware including

any outlet

toughened and/or tempered glass

in most venues or polycarbonate

plastic in higher risk areas.

• Outlet Managers are empowered

to identify high risk periods and

manage consumption in these times

by limiting the number of drinks that

can be purchased at any one time

(e.g. one drink per person during

high-risk periods).

Environment
Climate Change

The Star is committed to supporting the

The Star has long recognised the potential

transition to a low carbon economy and is

impacts from climate change and has

working towards achieving net-zero Scope 1

adopted the Task Force on Climate Related

and Scope 2 emissions from owned and

Financial Disclosures (TCFD) framework.

managed assets by 2030.

The Star released its third TCFD aligned

Climate change risks are included in the

company risk register and are managed

under the normal risk processes with

oversight from the Board.

report in FY2022 which is available on

The Star's corporate website.

Alignment with the Task-Force on
Climate Related Financial Disclosures

The Star’s TCFD aligned report focuses

This includes how the framework is

on the management of transitional and

integrated into risk management processes,

financial climate risks and provides details

how capital projects are aligned to the

on how The Star is managing the impacts

framework’s four areas of ‘Governance,’

of these risks into the future. In line with

‘Strategy’, ‘Risk Management’ and ‘Metrics

a commitment to assess the potential

and Targets’ and how progress against

physical risks that may be presented by

the framework is reported.

climate change, The Star completed its third

assessment in 2021 building on previous risk

assessments completed in 2017 and 2019.

Further details on physical and transition

risk mitigation and progress can be found in

the 2022 Sustainability Report.

Climate adaptation and mitigation design

and operational requirements to manage

resilience and potential physical climate

risks continue to be updated annually in

The Star’s ‘Sustainable Design and

Operational Standards’, which can be

The Star continues to mature in its

accessed on the corporate website.

approach to the TCFD.

Net-zero 2030 and
Carbon Emissions Management

The Star is committed to long term carbon

To achieve this target, The Star has

emissions reduction.

identified a pathway that includes:

To support the transition to a low carbon

• Purchasing of renewable electricity

economy The Star is targeting net-zero

Scope 1 and Scope 2 carbon emissions for

• Onsite solar (where possible)

its wholly owned and operated assets

• Electrification over time

by the 2030 calendar year, in line with

the reductions required within the

Paris Agreement.

• Continuation of a group-wide energy

efficiency program

• Development of a carbon offsetting

project and strategy that delivers

environmental and social benefit.

The Star Entertainment Group 2022 Annual Report

In FY2022 a materiality assessment was

To continue to focus on immediate

conducted to understand The Star’s most

reductions and to drive resource efficiency

material Scope 3 emissions from operations

outcomes, The Star has interim carbon and

in preparation for the development of

water targets to achieve a 30% reduction

category Scope 3 management plans.

in intensity by FY2023 against a FY2013

This assessment progressed from the

baseline on a square metre basis.

Scope 3 emissions assessment conducted

in FY2021 which assessed Scope 3

emissions from the procurement of

products and services.

The Star’s Scope 1, Scope 2 emissions for

FY2022 were 8,761 (tCO2-e) and 88,077

(tCO2-e) respectively, while Scope 3

emissions were calculated at 114,525

At this time, Scope 3 emissions are not

(tCO2-e) based on FY2021 and FY2022 data.

included in The Star’s net-zero emissions

targets for its properties. These plans

are actively being developed, and once

complete, consideration will be given to

establishing Scope 3 targets.

For detailed year on year Scope 1,

Scope 2 and Scope 3 carbon emissions,

data on energy use and progress

against The Star’s targets, refer to

the 2022 Sustainability Report.

Corymbia – A Carbon Offsetting Project

As part of The Star’s commitment and

and manage the impact that planting over

pathway to net-zero, a carbon offsetting

100 hectares of native forest will have on

project was established to support residual

local ecosystems and habitat creation.

emissions offsetting that will also deliver

environmental and social value.

Working with its partners, The Star will

continue to assess biodiversity impacts

During FY2022, The Star secured 170

annually in line with managing its ACCU

hectares of farmland near Gympie,

obligations and work towards the property

Queensland and registered its first native

becoming a koala sanctuary.

revegetation project under the Clean

Energy Regulator’s Emissions Reduction

Fund to create its own Australian Carbon

Credit Units (ACCU) to support its

net-zero pathway.

The Star is working with partners to

commence native tree planting in the next

financial year that will support habitat

for endangered koalas.

Sustainable agriculture opportunities are

being explored to provide produce streams

in The Star’s restaurants and that support

local farming communities.

‘Corymbia’ is providing an opportunity for

a local farming couple to develop farming

business models that work alongside native

tree generation. Detailed information on

The Star’s carbon abatement project and

Initial biodiversity assessments have been

sanctuary development can be found in the

completed to capture data and to monitor

2022 Sustainability Report.

80,000 trees
to be planted over 3 years

3 hectares
re-vegetated
for every hectare
of property operations

Annual biodiversity
assessment to
support native
flora and fauna

22%*
energy savings

26%*
carbon savings

27%*
water savings

*by intensity from a FY2013 baseline

Resource Efficiency,
Waste Management and
Sustainable Design

The Star’s commitment to sustainable

In this period, The Star Sydney’s

The Star is committed to improving

design and operations in the

‘Green Star – Performance’ rating

waste diversion from landfill,

development and management of its

was increased to three stars

reducing food waste at the point of

assets is aligned to the groupwide

(the equivalent to good practice), an

generation and organics recycling and

Environmental Management Policy,

additional building was NABERS rated,

increasing the number of recycling

Sustainable Design and Operational

new 5 Star Green Star Design and

streams across its properties.

Standards and its net-zero and

As Built Commitments were made at

The Star’s food takeaway packaging

resource performance targets.

The Star Gold Coast and existing

is 98% compostable, targeting 100%

The Star’s operational resource
reduction plans focus on reducing

Green Star commitments progressed

as additional packaging material

as part of the development pipeline.

solutions become available.

potable water use, reducing electricity

A summary of third-party certification

WASTE AND RECYCLING STRATEGY

and gas use (and moving away

ratings and commitments across the

from fossil fuel use), reducing waste

property portfolio can be found in the

to landfill including food waste and

2022 Sustainability Report.

In FY2022, The Star’s ‘Waste and

Recycling Strategy’ was expanded to

include innovative textile recycling

increasing recycling.

The Star continues to audit and

partnerships that provide new

Resource use performance for

monitor building performance

pathways for uniform and linens

FY2022 and prior years, as well as

through its building optimisation

recycling. These initiatives have

programs and initiatives have been

and analytics systems. Further,

diverted over 15 tonnes of material

detailed within the 2022 Sustainability

efficiency gains continue to be

from landfill.

Report available found on The Star’s

realised as plant and equipment

corporate website.

SUSTAINABLE DESIGN AND

OPERATIONAL STANDARDS

The ‘Sustainable Design and

Operational Standards’ demonstrate

the company’s commitment to green

building ratings and building world-

class destinations. The Standards,

which are aligned with ‘Green Star

– Performance’ standards, provide

upgrades and replacements are

identified in optimisation systems

and through property energy and

water audit reports.

In FY2022, The Star completed

five upgrade projects and seven

optimisation projects resulting in

energy savings of 1,282MWh, carbon

savings of 1,038 tonnes and expected

In the next financial year, The Star

will start to implement digital

tracking technology to monitor waste

generation levels at source with further

waste auditing scheduled in FY2023.

Food donation partnerships continue

with OzHarvest with 2.4 tonnes

of food donated during the 2022

financial year.

future financial savings of $360,560.

The Star’s reporting on waste

suppliers, builders, contractors and

ENERGY AND WATER

The Star’s property operations teams

PROJECT PIPELINE

and recycling performance for

FY2022 and prior years, as well as

its related programs and initiatives

with recommendations by category

to ensure more sustainable design.

Energy and water savings and cost

have been detailed in the 2022

benefits from projects implemented

Sustainability Report and can be

In FY2022, The Star achieved its

are monitored through The Star’s

found on the corporate website.

target to ensure that over 90% of

‘Energy and Water Project Pipeline’

its portfolio by floor space was third

and through the building optimisation

party certified with a sustainability

and analytics system.

rating which includes NABERS,
Green Star or EarthCheck.

The Star Entertainment Group 2022 Annual Report

over 15 tonnes
of textile diverted
from landfill

2.4 tonnes
of food donated to
OzHarvest

The Global Compact Network Australia

In 2022 The Star continued its commitments

The Star became a signatory member of the

to the UN Global Compact sustainability

UN Global Compact Network Australia in 2021

corporate responsibility initiatives

and we are committed to continuing to work

and principles of human rights, labour, the

with our team members, suppliers, and other

environment and anti-corruption.

stakeholders to make a positive contribution

The Star submitted its communication on

progress and letter of commitment as part of

the Early Adopter Program on 30 June 2022,

detailing progress related to the 12 months prior.

to achieving the United Nations Sustainable

Development Goals.

Reporting and Assurance

The Star has attained Limited Assurance for

In FY2022, Limited Assurance was expanded

environmental data including both Scope 1 and

to include additional social metrics in relation

Scope 2 carbon emissions, energy use, water use,

to responsible gambling – The Star’s most

and waste and recycling data and social metrics

material ESG issue. During this period, The Star

which include employee safety (Total Recordable

has released its fifth Global Reporting Initiative

Injury Frequency Rate), workforce diversity

aligned report. These can both be found within

(female representation across team member and

the 2022 Sustainability Report.

management cohorts) and gender pay gap data.

Modern Slavery

The Star is committed to working in partnership

slavery risks are required to undertake

with our team members, suppliers and other

mandatory online modern slavery training

stakeholders to understand and address the

which achieved 100% completion in FY2022.

issues of modern slavery so that together, we

In addition, all team members and contractors

can respect and support the rights of workers in

have access to the online training module, and

our operations and supply chain.

86% have completed the training voluntarily.

Our Supplier Management Strategy is

As part of our obligations under the Modern

multifaceted and incorporates elements of our

Slavery Act 2018 (Cth) The Star provides

modern slavery approach, our Supplier Code

an annual modern slavery statement that

of Conduct, our supplier expectations, the way

addresses reporting requirements during

we classify and risk assess our suppliers, and

the financial year, which is submitted to the

the way we onboard suppliers into our business.

Australian Border Force Modern Slavery

Raising awareness and skills among team

members is an ongoing aspect of The Star’s

To read The Star’s Modern Slavery Statement

modern slavery program. Our team members

FY2021 (published December 2021) please

involved directly in the supply chain,

visit www.starentertainmentgroup.com.au/

procurement, and roles related to modern

modernslavery.

People
Health and Safety

While the COVID-19 pandemic continued to impact the hospitality
and tourism industry during FY2022, The Star remained committed to
developing best-practice processes in how it supported and cared for
its people, contractors, and guests.

Despite COVID-19 related restrictions

health awareness training to increase

understanding of the importance

impacting our operations in Sydney

their confidence in supporting their

of the safety management system,

and Queensland, The Star continued

teams. Wellness education was

risk management, consultation and

to deliver measures to help protect

delivered via webinars to equip

communication, working safely

the physical health of team members

team members with the tools

with contractors and managing and

and guests including providing on-

and knowledge to make informed

incident investigation.

property PCR testing for its workforce

health choices.

and enhancing technical measures to

improve air quality.

INJURY PREVENTION

CONTINUOUS IMPROVEMENT

In FY2022, The Star continued its

The last 24 months have also

highlighted the importance of

promoting and supporting the

mental health and wellbeing of

team members.

The Star’s goal – for individuals

systematic approach to identifying

and teams to take personal

psychosocial hazards in the workplace

responsibility for health and safety

and identifying and reviewing the

– is to make processes and policies

existing controls we have in place

consistent across the organisation

to minimise or eliminate the risk of

and to improve efficiencies while

psychological injury.

In FY2022, The Star focused on

preventing injuries.

a combination of education and

awareness initiatives, providing

additional resources and continual

communication and feedback with

team members to ensure they had

(and were aware of) the availability

To ensure that our review and

In FY2022, The Star’s total recordable

recommendations have maximum

injury frequency rate (TRIFR), based

impact, we have consulted at all

on accepted workers’ compensation

levels of the organisation to identify

claims was 11.8* which was lower than

additional controls including enhanced

our pre-COVID-19 figures.

education and training opportunities

of relevant support structures

To empower our team members with

and assistance.

MENTAL HEALTH

the best tools and training at their

fingertips, The Star introduced key

safety training via bespoke online

A digital wellbeing platform, 'Unmind',

videos focusing on internal processes

was made available to all team

and likely scenarios.

members, and utilised throughout

the organisation, with the most

popular modules accessed including

‘managing stress’, ‘building resilience’

The Star endeavours to engage and

educate team members in the health

and safety decision making process.

and ‘nutrition’.

This has been actioned by

focusing on improving both individual

skills to increase resilience and leader

capability to support teams and

individuals. Consultation has also
focused on work design, safe systems

of work, training content and delivery,

and incident and injury management.

The Star has also committed to

providing a healthier environment for

its front of house team members and

guests by phasing out smoking in all

The Star also encouraged leaders

to complete comprehensive mental

providing online training focused on

indoor areas by the end of the 2022

increasing their knowledge base and

calendar year.

* In 2020, the NSW Government amended the Workers Compensation Act 1987 to introduce a
presumption that workers in prescribed employment who contracted COVID-19 were automatically
presumed to have contracted it in the course of their employment. The purpose of this legislation
was to make it easier for workers to receive workers compensation entitlements without delay.
Given that these claims are driven from an administrative position, they have been excluded from
the annual audit verification calculation for total recordable injury frequency rates.

Under this legislation, in FY2022 there were 1,392 claims reported to The Star from team members
with COVID-19.

The Star Entertainment Group 2022 Annual Report

Asset
Protection

Across each of its three properties, The Star

has 24/7 security and monitoring in addition to

standard operating procedures that deal with

and respond to suspected undesirable conduct.

In FY2022, The Star made significant

investments to update and standardise its

asset protection and surveillance technology

systems at The Star Gold Coast in line with

operations at The Star Sydney.

The Star Gold Coast invested over $3.5 million

to install facial recognition technology (which is

subject to regulatory approval) and integrating

a new CCTV system called ‘Avigilon’ for a

group-wide solution.

In total, The Star now has more than 7,100

cameras installed across its three properties in

Sydney, Gold Coast and Brisbane.

As Queen’s Wharf Brisbane continues to be

developed and readied for its staged opening

in 2023, there will be further investments in

security technology and asset protection

across that precinct.

Across our three properties, we have more than

450 team members working in the security and

surveillance department.

2727

Neighbourhood
Engagement

In FY2022, The Star unveiled three of the

National Gallery of Australia, is the gallery's

proposed art installations that will be featured

most expensive acquisition.

across Queen’s Wharf Brisbane’s (QWB) as part

of a multi-million-dollar public art program.

Samuel Tupou, who is of Tongan and

Polynesian heritage, has been selected to

A Specialist Artistic Advisory panel, led

create a supersized wall mural depicting

by highly regarded art figure Philip Bacon

Australian lungfish swimming into a vibrant

AO alongside art curator and Director of

sunrise, and called ‘Lungfish Dreamz.’

the Institute of Modern Art Liz Nowell and

respected Indigenous curator and arts

administrator Avril Quaill, is curating the

collection of artworks.

The 16 x 2 metre panoramic mural, comprising

pixilated squares of blue, violet, orange and

yellow mosaic glass tiles, will run adjacent to
the bicentennial bike path between Queen’s

Selected by the panel, these first confirmed

Wharf Road and the Brisbane River.

installations will be created by local Queensland

artists including Chinese-Australian painter and

sculptor Lindy Lee, Samuel Tupou and digital

art duo Alinta Krauth and Jason Nelson.

South-East Queensland duo Alinta Krauth and

Jason Nelson will deliver a light installation to

The Printery Office, a heritage building that

was the first in Queensland to be powered by

Lindy Lee’s installation, titled ‘Being Swallowed

electricity and restored for public use. Named

by the Milky Way’, an 8-metre, 8,000-kilogram

‘A Cottage Year’, the display will transform the

bronze sculpture for the George Street

building into a giant canvas for 52 different

Atrium entrance to the QWB precinct will be

digital light projections – one for every week

the signature artwork. The stunning oblong

of the year.

sculpture will feature thousands of tiny holes

puncturing its bronze surface. At night it will

appear as a shimmering, light-filled galaxy of

silver and gold stars.

Ms Lee is an internationally renowned artist,

whose recent $14 million commission for the

There are number of Indigenous,

contemporary and international artists

yet to be announced.

Artists impression of
Lindy Lee’s eight-metre
installation, titled
‘Being Swallowed by
the Milky Way'.

The Star Entertainment Group 2022 Annual Report

Talented Teams

In FY2022, The Star reaffirmed its commitment to building talented
teams that provide outstanding guest experiences and, as a result,
generate shareholder value. The company’s learning, training and
development programs focus on upskilling team members and leaders
in all departments.

To ensure The Star maintains a consistent

pipeline of talent across its business –

The Star Academy

particularly in areas that require specialised

skills and training such as culinary arts,

hospitality management and table

games (i.e. croupiers), contemporary

talent management practices have been

implemented to reduce attrition, and support

To facilitate and deliver on its commitment

to training team members, The Star Academy

centres around three pillars of learning:

The Skills Centre, The Foundation Centre and

The Leadership Centre.

the business’ growth and wider strategy.

In response to business disruption caused

A dedicated ‘Talent Capability’ team works

with business units across the organisation

to optimise these practices and contributes

to the design and delivery of talent

management programs.

by the COVID-19 pandemic between July

and October 2021, The Star Academy

adjusted its approach to delivering learning

and development modules efficiently.

The Academy created ‘Lockdown Learn and

Connect,’ an online learning and engagement

In FY2022, an annual review identified key

platform for participation by team members

talent, skills and gaps across the organisation

and leaders.

for managers and senior leaders. The review

identified and categorised personnel across

three key areas – Achieving Leader, Future

Leader and Key Achiever.

Utilising relationships with external training

and sponsorship partners including

NSW Rugby League and Gold Coast Titans,

44 virtual learning sessions were designed

High-level capability themes and

to deliver a bespoke program to uplift skills

development needs were also identified

that support growth and capability. In total,

through talent review conversations

around 1,500 team members attended

and feedback to The Star Academy

these sessions.

for integration into future leadership

and management capability building

development programs.

The Skills Centre

The Skills Centre houses The Star Culinary

Institute, The Star Graduate Program and

the Food and Beverage Skills Program.

The Skills Centre is designed to attract the

best talent to The Star’s properties and to

provide them with a pathway to long-term

careers in hospitality and tourism industry.

The Star Culinary
Institute

Celebrating its 10-year anniversary in FY2022,

The Star Culinary Institute (SCI) continues to

attract, nurture, and develop apprentices who

are highly skilled in the kitchen, and passionate

ambassadors for the industry. Over the last

10 years, the program has welcomed over

487 apprentices.

SCI offers full-time and school-based

apprenticeships across Commercial Cookery,

Retail Bakery and Patisserie.

In the 2022 financial year, 14 apprentices

completed the program, with 100% of those

finding full-time roles within The Star’s operations.

In this period, enrolment numbers have increased

by 66%, with male to female enrolment

ratios nearing 50%.

In FY2022, The Star continued to support the

National Indigenous Culinary Institute, a leading

organisation aimed at connecting aspiring

Aboriginal and Torres Strait Islander chefs

with some of Australia’s most prestigious fine

dining restaurants.

The Star Graduate
Program

Established in 2018, 43 tertiary-educated

graduates have been welcomed across the

Technical (IT), Hospitality and Corporate

programs. In January 2022, a new cohort of
14 graduates was welcomed.

The Star Graduate Program has maintained 100%

employability and retention with 19 graduates who

completed the program securing full-time roles.

Twenty-four graduates are currently completing

the 2021 and 2022 programs.

The Star Entertainment Group 2022 Annual Report

Food and Beverage
(F&B) Skills Program

Discovery Suite is accessible to People

Leaders within the organisation. This suite

of development modules consists of seven

leadership topics that encapsulates what

In response to challenges posed by labour

leadership at The Star looks like and will

shortages in hospitality, The Star Academy

elevate the capability of our leaders through

developed a fast-track basic skills program

continuous learning and reinforcement.

with the aim of rapidly upskilling candidates

to meet demand.

The ‘Supernova program’ is a specialised

leadership program that supports the skill

The four-day on-boarding and skills training

development of leaders who have been

allows any vacancies throughout venues

identified in the latest round of The Star’s

across The Star’s three properties to be filled

talent review as a future senior leader

efficiently with team members who

and who meet the following criteria:

demonstrate a positive attitude and aptitude
and who possess the necessary skills to

deliver exceptional guest service.

1. Critical Skills Shortage

Any leader who is from a division that is

considered a skills shortage sector was

To support delivery of this program,

selected as a priority

2. Asian leadership

All nine Asian leaders who had expressed

interest were selected with consideration

to the current ‘Bamboo Ceiling’ and

multicultural targets at The Star

3. Female Leadership

The selection panel agreed to a 2 to 1 ratio

of female to male participants to emphasise

the development of our female leaders

4. Potential lateral movement to

skills shortage divisions

Any leader who was considered to have

the potential to move laterally to a senior

leadership role in a skills shortage sector

5. Impact of loss and risk of loss

Any leader who was identified as having

a high impact and risk of loss.

The Star’s ‘Supernova program’ focusses

on developing the skills, knowledge, and

behaviours of future senior leaders to

implement the wider business strategy.

It is continually measured to ensure The Star

is retaining and growing its top talent.

The Star Academy in Sydney invested in

a purpose-built F&B Skills Academy that

opened in February 2022, and which will also

be replicated at The Star Gold Coast and

Queen’s Wharf Brisbane.

The Leadership Centre

In FY2022, The Leadership Centre’s priorities

for development consisted of the following:

1. Leadership Coach Support Program

The Star Academy continued the

‘Leaders Coach Support Program’ which

was first rolled out FY2021. It offers two

internal (active/transformation) coaching

engagement modules across The Star

and includes a transition coaching

engagement for senior leaders moving

into promoted roles.

2. New People Leader Platform

The Star is committed to ensure every

new leader is equipped with the necessary

tools to succeed in their new role.

A dedicated platform was rolled out,

providing a “one-stop-shop” and includes

on-boarding modules for 30, 60 or 90 days.

3. Formal Leadership Development

The Star has partnered with Courageous

Leader, an external organisation to deliver

two new groupwide leadership development

offerings – ‘Discovery Suite’ and the

‘Supernova program’.

Diversity and Inclusion

The Star's diversity, equity and inclusion proposition
is represented in all areas of our business and
team member experiences. Our dedication to diversity
and inclusion is the foundation of our culture and
sits at the heart of our vision.

The Star’s diversity and inclusion

the employee-led network groups –

targets are supported and

Balance@TheStar, Proud@TheStar,

championed by the Board of

Unity@TheStar and

Directors, the Executive Team and

Reconciliation@TheStar.

Recognition for The Star’s accomplishments
across workplace inclusivity

Workplace Gender Equality
Agency ‘Employer of Choice’ 2022

2022 Australian Workplace Equality
Index ‘Gold Employer’ Status

Booking.com’s ‘Travel Proud’ badge recognises
The Star's properties as LGBTQI+ friendly and
inclusive to all guests

The Star Entertainment Group 2022 Annual Report

Balance@TheStar

INTERNATIONAL WOMEN’S DAY

In FY2022, The Star marked the

Driving gender equity by targeting a

importance of International Women’s

45% female, 45% male and 10%

Day, the role women play across

non-binary balance at leadership levels.

the company and society and their

achievements, by celebrating over a

full week with a range of initiatives

and events for team members designed

to highlight this year’s theme of

‘Break the Bias.’

These included a leaders’ panel with a

guest speaker, celebrations with team

members, and partner sessions focused

on women’s financial well-being.

INCLUSIVE LEADERSHIP TRAINING

In September 2021, The Star introduced

mandatory training modules for leaders

to equip them with an understanding

of The Star’s expectations on gender

equality and flexible work.

In consultation with Balance@TheStar,

a revised gender equality strategy was

established in FY2022, with a focus on five

key areas:

Leadership
accountability

Gender
pay equity

Building capability
of talent pipeline

Cultural change and
communication

Flexible work and
support for carers

The Star proudly plays an active role in

progressing gender equality as a founding

member of Women in Gaming and

Hospitality Australasia (WGHA). We ensure

all team members, particularly women, have

access to training and information that

allows them to progress their careers in

the industry. The Star champions gender

equity in a variety of ways.

WORKPLACE GENDER EQUALITY

AGENCY (WGEA) – Employer of Choice for

Gender Equality Citation

In March 2022, The Star was one of only 12

new companies to be recognised by WGEA,

an Australian Government agency, for its

commitment and contribution to progressing

gender equality and equity in the workplace.

INTERNATIONAL MEN’S DAY

Celebrated in November 2021, with a

focus on inclusion for all genders,

Balance@TheStar committee members

shared their experiences of positive male

role models across The Star’s internal

communication channels.

Proud@TheStar

PRIDE IN PRACTICE –

BOOKING.COM TRAVEL

SPONSORSHIP AND PANEL SESSION

PROUD BADGES

Creating a safe and inclusive

environment by providing

LGBTQI+team members with

a platform of support and

Pride in Practice Conference:

In FY2022, The Star was awarded

In November 2021, The Star was

Travel Proud badges, and recognised

a platinum sponsor of the Pride in

as an LGBTQI+ friendly destination by

Practice Conference. As part of

online travel agency Booking.com.

representation, to participate in

the conference, our CEO provided

LGBTQI+ days of significance and

a keynote speech highlighting the

celebrations, and become an ally

need for continuing momentum of

and friends of the community.

workplace diversity and inclusion

2022 AUSTRALIAN WORKPLACE

EQUALITY INDEX (AWEI)

programs – particularly for the

LGBTQI+ community, the importance

of leading from the top, the power

IDAHOBIT

In FY2022, The Star was awarded gold

of allyship, gender diversity and the

Team members from The Star’s

hotels and reservation teams

attended specialty awareness training

sessions to understand and connect

with LGBTQI+ travellers.

employer status and exceeded its

target of a 5% year on year growth
in the AWEI. The 21% increase in

score equates to the top 7% of most

inclusive workplaces in Australia.

ALLY TRAINING

Led by our Proud@TheStar employee

network group members, The Star

encourages all team members to join

The Star’s LGBTQI+ Ally training.

Our goal is not to ‘change your

mind’, values or beliefs. Our goal is to

educate and provide awareness.

Over 300 team
members and leaders
have taken part in
Proud@TheStar’s Ally
Awareness Training.

achievements of Proud@TheStar.

The Star and leading brewer Lion joined

forces to raise awareness of, and

The Star also hosted a 30-minute

support for the 2022 International

panel session with representatives

Day Against Homophobia, Transphobia

from the leadership team. The panel

and Biphobia (IDAHOBIT).

shared lived experiences from

the LGBTQI+ community and the

importance of allyship.

Welcoming around 100 employees

from across both The Star and Lion,

the event combined trivia, networking,

INTERSEX AWARNESS DAY

and a DJ set while donating all

proceeds from ticket sales to Minus18

– an Australian charity dedicated to

improving the lives of LGBTQIA+ youth.

In October 2021, The Star partnered

with Intersex Human Rights Australia

to provide over 30 Proud@TheStar

members with a training session to

educate and bring awareness of the

intersex community and the challenges

that people with intersex variations

may face. The training included

introductions to intersex, health and

human rights and intersex

community and allyship.

The Star Entertainment Group 2022 Annual Report

Unity@TheStar

AMBASSADOR PROGRAM

In November 2021, Unity also

The Star supports cultural diversity

launched the CALD Leaders Program.

and inclusion for all and is driving

The 6-month program will enable

leadership representation and

open and honest dialogue between

professional development for our

The Star’s Executive Team and Senior

Asian team members, aiming for

Leaders (Ambassadors) and leaders

20% Asian representation (senior

with culturally and linguistically

diverse backgrounds. It has been

designed to enable Ambassadors

and CALD Leaders to share

information, to help the organisation

develop a better understanding of

what impacts professional career

objectives and aspirations of CALD
Leaders and to drive a more inclusive

and equitable workplace for all.

leadership level) by 2023.

At The Star we appreciate that our

workforce is made up of team members

from many cultures. We proudly

celebrate that diversity. In FY2022,

The Star expanded its ‘Days of

Significance’ calendar to include two

additional culture festivals – Diwali

(the festival of lights) and Ramadan.

ASIAN LEADERSHIP PROJECT

The Star is a corporate member of

the Asian Leadership Project, which

aims to build a strong network of

Asian talent that feel supported

via ongoing personal and professional

career development opportunities.

This includes participation at their

mentoring events, where aspiring

culturally and linguistically diverse

talent from member organisations

have the opportunity to connect with

business leaders and learn from

lived experiences to inspire them to

grow professionally.

LUNCH AND LISTEN

Unity prioritises a need to support

and encourage the development

of team members from culturally

and linguistically diverse (CALD)

backgrounds. To help promote that

development in FY2022, the network-

group initiated ‘Lunch and Listen’,

a new program to promote open

dialogue between leaders from CALD

backgrounds and senior leaders from

across The Star. The networking

sessions provided the groups with

an opportunity to discuss career

challenges, as well as sharing ideas

on how to overcome them and

individual success stories.

Reconciliation@TheStar

The Star has taken significant steps to progress

reconciliation activities including:

• The growth of Reconciliation@TheStar, the

employee network group that supports

activities, initiatives and days of significance

as outlined in the Reconciliation employee

network group strategy

• Activation of Aboriginal & Torres Strait Islander

Peoples days of significance in the diversity

and inclusion calendar, including National

Reconciliation Week and NAIDOC Week

• Updates to the Acknowledgment of Country
at all meetings and events of significance

across The Star

• The inaugural strategy day for

Reconciliation@TheStar was held on

18 January 2022.

INDIGENOUS EMPLOYMENT INDEX

The Star participated with 41 other large

organisations in the Minderoo Indigenous

Employment Index. This index aims to

establish a baseline for the state of Indigenous

employment parity, identify best practices,

and achieve sustainable Indigenous

employment for the future.

As part of National Reconciliation Week,

Reconciliation@TheStar committee members

completed a three-hour cultural competency

training run by The BlackCard (a certified

organisation of Supply Nation).

In celebration of NAIDOC Week, over 300 team members
came together across The Star’s three properties (our meeting
places) and alongside Indigenous artists to create amazing
pieces that represent the traditional owners of the lands we
operate on (including the Gadigal People, the Danggan Balun
People, and the Turrbal and Jagera People) our communities,
teams, and their respective journeys.

We thank Jason Douglas and Trevor Eastwood from Dalmarri,
Ambrose Killian and Matt Robert from Ngalin Ayeye, who helped
our team members harness their artistic flair in workshops
throughout the week to create these artworks.

The Star Entertainment Group 2022 Annual Report

Community
and Charitable
Partnerships

The Star partners with a number of
community organisations, charities and
not-for-profits in Sydney, Brisbane
and the Gold Coast to make a positive
impact on the communities we call home.

In FY2022, The Star continued its relationship

with GIVIT – our National Community Partner, by

supporting their charitable work in several ways

including through their initiatives with local Indigenous

organisations, their 2021 Christmas Appeal and

various natural disaster drives.

In the 2022 financial year, The Star partnered

with GIVIT on a national ‘Spring Clean’ campaign;

kickstarting the initiative by pledging $2 million worth

of items to GIVIT partner charities, including brand

new mattresses, designer sofas, dining tables, chairs

and crockery.

The Star Sydney has been part of the Pyrmont

community for around three decades and continues

to invest in local community groups, events, and

organisations such as Pyrmont Wine and Food Festival,

Pyrmont Sings, and Christmas in Pyrmont.

Team members from The Star Sydney, including chefs

and culinary apprentices, have donated their time and

skills to help the local community raise much needed

funds. As part of the 2021 Christmas In Pyrmont

street fare, apprentices created gingerbread houses,

casual restaurant Bar Nexus provided food, and chefs

delivered a tent full of pastries and sweets. Altogether,

The Star raised over $10,000 for three local charities

including Ultimo Public School Music Program,

Barnardos’ Response to the COVID-19 Crisis and

Uniting Harris Community Centre.

The Star also partners with the National

Our partnership with SLSQ is one that goes

Indigenous Culinary Institute, by directly

back almost 30 years. We play our part

investing in the future of young and talented

by supporting ‘Surf Woman of the Year’,

indigenous chefs and helping build the

promoting young women from across the

capacity of the organisation to expand

Gold Coast and Queensland to develop their

their operations both in New South Wales

skills and careers. The Star Gold Coast has

and into Queensland.

Treasury Brisbane continues its support of

local craft brewers and winemakers through

a long history with Surf Life Saving’s ‘Surf Girl’

program and its fantastic to be involved in

the first two years of its rebirth.

its partnership with The Royal National

Currumbin Wildlife Hospital is one of

Agricultural and Industrial Association of

the busiest wildlife hospitals in the world

Queensland’s (RNA) Royal Queensland

and treats thousands of injured, sick and

Beer and Wine Awards. These awards have

displaced animals every year. The Star

provided the opportunity to promote some

Gold Coast is a proud supporter of the

of Queensland’s best beer and wine as well

Hospital’s important work in ensuring the

as the emerging talent and craftsmanship of
these breweries and wineries.

conservation of local wildlife and animal
care through the provision of donations,

The Star also partners with one of

Queensland’s newest and most prestigious

as well as raising awareness within the

community and visitors to the property.

art prizes, the Brisbane Portrait Prize. As the

Established in 2008 at The Star Gold Coast

Presenting Partner of the Prize, we are

and Treasury Brisbane, ‘Open Your Hearts’

directly investing in showcasing some of

is The Star’s team member giving program.

the most talented artists in Brisbane and

beyond, as well as playing an integral role in

an art prize that is quintessentially Brisbane.

In FY2022, the program was expanded to

all properties, with an aim to give all team

members the same opportunity to make a

The Star Gold Coast has two long term

positive impact on the communities in

community partners which it is proud to

which they work and live.

support – Surf Life Saving Queensland

(SLSQ) and Currumbin Wildlife Hospital –

both being iconic Gold Coast organisations

that have a daily impact on our team

members and our guests.

The Star Entertainment Group 2022 Annual Report

Directors’,
Remuneration and
Financial Report

For the year ended 30 June 2022

Contents

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

Directors’ Declaration

Independent Auditor’s Report

PLEASE NOTE: The above page numbering is from the original
Directors’, Remuneration and Financial Report released to the ASX
on 27 September 2022 and has been included for reference.

THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES

Directors’
Report

For the year ended 30 June 2022

THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES

The Star Entertainment Group 2022 Annual Report

Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

The Directors of The Star Entertainment Group Limited (the Company) submit their report for the consolidated entity
comprising the Company and its controlled entities (collectively referred to as the Group) in respect of the financial year
ended 30 June 2022.

1 Directors

The names and titles of the Company's Directors in office during the financial year ended 30 June 2022 and until the
date of this report are set out below. Directors were in office for this entire period unless otherwise stated.

Directors
Ben Heap a
Gerard Bradley AO
Michael Issenberg b
Katie Lahey AM
Richard Sheppard

Former
John O'Neill AO c
Matt Bekier d
Sally Pitkin AO e
a

Interim Chairman and Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director
Non-Executive Director

Chairman and Non-Executive Director
Managing Director and Chief Executive Officer
Non-Executive Director

Commenced as Interim Chairman on 1 June 2022.

Michael Issenberg commenced as a Non-Executive Director on 11 July 2022 following the receipt of all necessary regulatory
approvals. For the period 17 February 2022 to 10 July 2022 he was an Observer.

Ceased as Chairman and Non-Executive Director on 31 May 2022.

Ceased as Managing Director and Chief Executive Officer on 28 March 2022.

Ceased as Non-Executive Director on 30 June 2022.

2 Operating and Financial Review

The Operating and Financial Review for the year ended 30 June 2022 has been designed to provide shareholders with
a clear and concise overview of the Group’s 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 Group, to allow shareholders to make an informed assessment of the results and
future prospects of the Company. The review complements the Financial Report and has been prepared in accordance
with the guidance set out in ASIC’s Regulatory Guide 247.

2.1 Principal activities

The principal activities of the Group are the management of integrated resorts with gaming, entertainment and
hospitality services.
The Group operates The Star Sydney (Sydney), The Star Gold Coast (Gold Coast) and Treasury Brisbane
(Brisbane). The Group also manages the Gold Coast Convention and Exhibition Centre on behalf of the Queensland
Government and invests in a number of strategic joint ventures.
The Group holds casino licences to operate its properties: The Star Sydney, expiring in 2093; The Star Gold Coast,
perpetual licence; Treasury Brisbane, perpetual licence that expires in 2070. The Group owns Broadbeach Island on
which The Star Gold Coast is located.

2.2 Business strategies

Create world class integrated resorts with local spirit;

The key long term strategic priorities for the Group, in pursuit of its vision to be Australia's leading integrated resort
company, remain unchanged:
(cid:4)
(cid:4) Manage planned capital expenditure programs to deliver value and returns for shareholders;
(cid:4)

Improve profitability from local, domestic and international source markets through continued emphasis on loyalty,
gaming and non-gaming strategies;
Deliver on the Remediation and Transformation Program (see below);
Identify, retain, develop and engage a highly talented team of employees across properties and the Group; and
Improve customer experience, including providing customers with tailored product and service offerings.

(cid:4)
(cid:4)
(cid:4)

1Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Looking forward into FY2023, management’s focus will be on the following key areas:
(cid:4)

Remediation and transformation
(cid:5) Commitment to demonstrating suitability to hold casino licences in New South Wales (NSW) and Queensland

(QLD);

(cid:5) Complete new senior executive and Board appointments;
(cid:5) Address outcomes of the Bell and Gotterson Reviews;
(cid:5) Consider and adopt the changes to the NSW Casino Control Act 1992 and the Bill to amend the Queensland

Casino Control Act 1982;

(cid:5) Progress investments in hospitality and tourism assets; and
(cid:5) Progress the Remediation and Transformation Program:

(cid:6) The program commenced in May 2022 under the oversight of external advisors Allens and Overy, with
significant progress made to date. The program will provide the structure and accountability necessary to
significantly overhaul our risk management governance, operating model, processes, systems and culture;
(cid:6) The program will evolve to address the outcomes of the Bell and Gotterson reviews and AUSTRAC

investigation;

(cid:6) FY2023 initiatives underway to deliver:

(cid:7) Organisation-wide culture change through board and management led reviews;
(cid:7)

Introduce an Enhanced Investigations and Integrity initiative, resourced and empowered to make
sweeping changes;
Introduce a new, more rigorous and proactive harm minimisation and Responsible Gambling strategy,
called "Safer Gambling at The Star";
Upgrade AML / CTF, 'Know Your Client' and due diligence processes; and
Elevate Risk and Compliance functions with increased resourcing and capabilities of respective
teams.

(cid:7)

(cid:7)
(cid:7)

(cid:4) Operations

(cid:5) Drive revenue growth in a post COVID-19 earnings recovery;
(cid:5) Maintain cost control; and
(cid:5) Manage the competitive impact of Crown Sydney.

(cid:4) Major projects

(cid:5) Continue to progress the construction of the Queen's Wharf Brisbane Integrated Resort in Brisbane and manage

the cost overruns, whilst continuing preparations for the opening in 1H FY2024;

(cid:5) Complete Tower 1 apartment settlements and continue to progress the construction of Tower 2 on the Gold

Coast; and

(cid:5) Progress development opportunities for the Sydney property.

(cid:4)

Asset sales
(cid:5) Complete the sale of the Treasury Buildings and the NSW Government's compulsory acquisition of the Union

(cid:5)

Street Pyrmont property (owned with Far East Consortium (FEC));
In partnership with Chow Tai Fook (CTF) and FEC explore ownership options for the Sheraton Grand Mirage
Resort Gold Coast;

(cid:5) Explore opportunities to unlock the underlying value of the Group’s property portfolio; and
(cid:5) Use proceeds to pay down debt and reduce gearing levels.

The Star Entertainment Group 2022 Annual Report2Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

2.3 Group performance

The Group continued executing its growth strategy despite the extraordinary challenges and significant impacts of both
COVID-19 related disruptions and ongoing regulatory reviews. The underlying strength of the business has enabled a
strong rebound post COVID-19 related property shutdowns and operating restrictions.
FY2022 marks the third consecutive year significantly affected by the ongoing impacts of COVID-19. Property closures,
operating restrictions and domestic border closures significantly impacted earnings in 1H FY2022 and into 2H FY2022.
Restrictions began to ease in 2H FY2022, allowing for the return to more normal operating conditions by 4Q FY2022.
Domestic revenue for 4Q FY2022 was above pre-COVID-19 levels (represented by the corresponding period in
FY2019), driven by strong growth in slots and non-gaming revenue. Performance was also affected by the Group’s
suspension of all domestic and international rebate programs (in response to the Bell Review) and costs associated
with the commencement of the Remediation and Transformation Program. The prior comparable period (pcp) included
fluctuating spatial distancing requirements and other COVID-19 related health orders constrained domestic visitation,
particularly in Sydney. International border closures substantially reduced the International VIP Rebate business (prior
to its suspension in May 2022).
Earnings before interest, tax, depreciation and amortisation (EBITDA) (excluding significant items) of $237.5 million was
down 44.3% on the pcp. Normalised1 EBITDA of $235.1 million was down 45.3%. Statutory and normalised results for
FY2022 are largely consistent given the limited International VIP Rebate business revenue (prior to its suspension in
May 2022).
Net revenue of $1,527.1 million was down 1.2% on the pcp. Non-gaming revenue was up 32.3%2, with growth across all
three properties, driven by re-opened venues, including the Harvest Buffet, new amenities and return of the
conferencing business. Domestic gaming revenue was down 5.4%2, materially affected by ongoing COVID-19
restrictions, including property closures across all three properties and health orders, and the South East Queensland
floods. International VIP Rebate revenue remains immaterial given border closures (prior to its suspension in May
2022).
Operating costs (before significant items) of $910.6 million were up 23.1% on the pcp. Excluding the impact of
JobKeeper in the pcp, operating costs are up 13.9%, reflecting COVID-19 related impacts, the tight labour market,
increased operating footprint, inflationary pressures, ongoing regulatory reviews and increased investment in regulatory
and compliance functions and external consulting costs. Significant expense items ($176.0 million before tax) relate to
the impairment of goodwill for The Star Sydney, Bell Review costs, one-off COVID-19 related expenditure, underpaid
casino duty and interest, software-as-a-service project costs, business interruption and crown unsolicited proposal
costs, partially offset by JV profit on the residential Tower 1 sale of units, disposal of jet and dispute settlement.
Depreciation and amortisation expense of $208.3 million was down 1.0% on pcp. Finance costs of $50.2 million
(excluding significant items) were down 7.6%, due to lower average debt balances and cancellation of the $200 million
club facility in December 2020.
Net loss after tax was $202.5 million. Normalised net loss after tax, excluding significant items, was $32.3 million. Basic
and Diluted Earnings per Share were both a loss of (21.3) cents (both earnings of 6.1 cents in the pcp).

2.4 Group financial position

The Group remains committed to maintaining a balance sheet that positions it for post-COVID-19 recovery and the
potential for financial penalties arising from the ongoing regulatory matters. No final dividend was declared, in
accordance with the conditions of debt covenant waivers which restrict further cash dividends from being paid until the
Group’s gearing, which represents the ratio of net debt to 12 month trailing statutory EBITDA, is below 2.5 times.
Net debt3 was $1,149.0 million (30 June 2021: $1,171.4 million). Operating cash flow before interest and tax was $181.3
million (30 June 2021: $471.3 million) with an EBITDA to cash conversion ratio of 82% (30 June 2021: 123%).
The Sydney property and broader casino industry is in a state of significant uncertainty. Recent regulatory changes
have resulted in the cessation of the junket business, the pausing of international and domestic rebate businesses while
COVID-19 restrictions continue to affect international visitation. The outcome from the Bell review and AUSTRAC
investigation remain uncertain. In combination, these factors have reduced the valuation of the Sydney cash generating
unit, requiring an impairment of $162.5 million to be recognised against The Star Sydney’s goodwill at 30 June 2022.

1 Normalised results reflect the underlying performance of the business as they remove the inherent win rate volatility of the International VIP Rebate
business. Normalised results are adjusted using an average win rate of 1.35% of actual turnover, gaming taxes and commission on revenue share
programs. Normalised results exclude significant items.

2 Revenue movements reflect the underlying performance of the business in that they consider where revenue from loyalty points were earnt, rather than
redeemed. This is different to note A2, which follows the presentation requirements of AASB 15 Revenue from Contracts with Customers.

3 Net debt is shown as interest bearing liabilities (excluding lease liabilities), less cash and cash equivalents, less net position of derivative financial
instruments.

3Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

2.5 Segment operations

The Group comprises the following three operating segments:
(cid:4) Sydney;
(cid:4) Gold Coast; and
(cid:4) Brisbane.
Refer to note A1 for more details of the financial performance of the Company’s operating segments. The activities and
drivers of the results for these operations are discussed below.

Sydney
Net revenue was $777.9 million, down 4.8% on the pcp and EBITDA (excluding significant items) was $83.4 million,
down 58.3% on the pcp. The property was significantly impacted by the COVID-19 enforced property closure, which
lasted 102 days from July to October 2021, operating restrictions and other COVID-19 related impacts. Domestic
gaming revenue was down 7.6%, partially offset by a 21.8% increase in non-gaming revenue, driven by the reopening
of key venues including Harvest Buffet. International VIP Rebate revenue remained immaterial (prior to its suspension
in May 2022). Gaming taxes and levies and operating expenses (before significant items) were up 1.5% and 18.2%
respectively. The increase in operating expenses reflects the impact of JobKeeper payments in the pcp, staff payments
for a significant shutdown period, higher non-gaming activity levels and the tight labour market. Throughout the year,
domestic revenues were strong when the property was open on an unrestricted basis. 4Q FY2022 domestic revenue
was in line with pre-COVID-19 levels.
The property is a Foundation Partner of the Australian Turf Club and participates in The Everest, the world’s richest
race on turf. It is also a sponsor of the New South Wales Rugby League (NSW Blues) and Sydney FC male and female
teams. The property also contributed to National Indigenous Culinary Institute and GIVIT during the reporting period.

Gold Coast
Net revenue was $423.3 million, up 11.3% on the pcp and EBITDA (excluding significant items) was $89.3 million, down
20.6% on the pcp. Despite the closure of the property for 11 days, domestic gaming revenue was up 1.8% while non-
gaming revenue was up 49.7%, driven by new amenities and the return of the conferencing business. International VIP
Rebate revenue remained immaterial (prior to its suspension in May 2022). Gaming taxes and levies and operating
expenses (before significant items) were up 3.0% and 34.0% respectively. The increase in operating costs reflects the
impact of JobKeeper payments in the pcp, higher activity levels, new amenities and higher staffing costs, while the pcp
also benefitted from a deliberately slow ramp-up. Throughout the year, domestic revenues were strong when the
property was open on an unrestricted basis. 4Q FY2022 domestic revenue was up 48% on pre-COVID-19 levels, with
growth across all major categories (slots, tables and non-gaming), driven by new amenities and the return of
conferencing business.
The Star Gold Coast is a major sponsor of The Star Magic Millions Raceday and Carnival and is a partner of the TV
Week Logie Awards, Gold Coast Titans and Gold Coast Suns. The property also contributed to various charities and
not-for-profit organisations including Surf Life Saving Queensland, Currumbin Wildlife Hospital and GIVIT during the
reporting period.

Brisbane
Net revenue was $325.9 million, down 6.4% on the pcp and EBITDA (excluding significant items) was $64.8 million,
down 43.4% on the pcp. Domestic gaming revenue was down 7.3%, partially offset by an 11.4% increase in non-
gaming revenue. Earnings were impacted by closure of the property for 12 days, operating restrictions, floods and other
COVID-19 related impacts. International VIP Rebate revenue remained immaterial (prior to its suspension in May 2022).
Gaming taxes and levies (before significant items) were down 5.8%, in line with reduced domestic gaming revenue.
Operating expenses were up 23.1%, reflecting the impact of JobKeeper payments in the pcp, higher activity levels,
COVID-19 related costs and investment in management capability in advance of the Queen's Wharf Brisbane opening.
4Q FY2022 domestic revenue was up 13% on pre-COVID-19 levels, primarily driven by slots.
The Brisbane property is a major partner of Queensland Rugby League, platinum partner of the Brisbane Fashion
Festival, Group One Sponsor of Brisbane Racing Club and has partnered with The Royal National Agricultural and
Industrial Association of Queensland, Brisbane Portrait Prize and contributed to GIVIT during the reporting period.

International VIP rebate business
The results of the International VIP Rebate business are embedded in the segment performance overviews above.
International VIP Rebate revenue remained immaterial given border closures. Following the release of the Bergin
Report in February 2021, in May 2021 the Group agreed with the ILGA to terminate business with international junket
operators. The Group is applying the undertaking to all of its casino operations (New South Wales and Queensland). In
May 2022 the Group suspended all international rebate programs (in response to the Bell Review).

The Star Entertainment Group 2022 Annual Report4Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

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.

Bell report
In September 2021 the Group was notified by ILGA that Adam Bell SC would undertake the regular review of The Star
Sydney's (The Star) casino operations in accordance with the Casino Control Act 1992 (NSW) (CCA) (the Review).
On 19 October 2021 ILGA advised the Review would include public hearings relating to The Star’s casino operations.
The public hearings ran from March to May 2022 and considered various matters concerning suitability to hold a casino
licence, including the Group’s maintenance and administration of systems to counter money laundering and infiltration
by organised crime.
Mr Bell’s report was provided to ILGA by 31 August 2022 (the Report). On 5 September 2022, the New South Wales
Independent Casino Commission (the NICC) was appointed as regulator of casinos in NSW. On 13 September 2022
the NICC published the Report. The Report found The Star unsuitable to hold a casino licence in NSW.
The Report made a total of 30 recommendations to the NICC. The NICC will respond to the recommendations in due
course.
On 13 September 2022 the NICC issued The Star a Show Cause Notice under section 23 of the CCA (the Notice). The
Star has responded to the Notice. The response outlines why disciplinary action should not be taken and includes
submissions about the possible appointment of a manager. The NICC may then decide to take appropriate disciplinary
action. (Refer to section 5 for more detail).

Impact of COVID-19
FY2022 marks the third consecutive year significantly affected by the impacts of COVID-19. Property closures,
operating restrictions and domestic border closures significantly impacted earnings in 1H FY2022 and into 2H FY2022.
Restrictions began to ease in 2H FY2022, allowing for the return to more normal operating conditions by 4Q FY2022.
International travel remains subdued and it is unknown for how long this will persist. While a return of COVID-19 related
operating restrictions is possible, it is considered unlikely. The Group retains balance sheet flexibility, enabling it to
respond operationally and financially to future operating restrictions, should they arise.

External review of the Group's Queensland operations
In July 2022 an independent review commenced of the Group’s Queensland casinos, The Star Gold Coast and
Treasury Brisbane following a request by the Queensland Attorney-General.
The review, led by the Honourable Robert Gotterson AO, will examine whether these casinos operate in a way that is
consistent with achieving the objectives of the Casino Control Act 1982 and the ongoing suitability of the Group’s casino
licensees. Public hearings took place from 23-29 August 2022.
The review will report to the Attorney-General by 30 September 2022.

Sydney
The Group continues to monitor development opportunities post finalisation of the new planning controls for the
Pyrmont Peninsula, including development of a six star hotel, theatres and a new rooftop dining area and event space.
The Government has commenced its compulsory acquisition of the Pyrmont commercial building, acquired in October
2020 in joint venture with FEC (both 50%). The proposed new Sydney Metro West Station, to be developed on this site
by the Government, will allow for greater access for patrons to The Star.
Capital expenditure in the year was approximately $60.8 million across various minor projects.

Gold Coast
The Group remains focused on delivering the proposed $2 billion masterplan on the Gold Coast in joint venture with
CTF and FEC. The Dorsett Gold Coast Hotel and The Star Residences in the first tower opened during the year. The
settlement of residential unit sales commenced in May 2022, with over 90% settled to date. The second tower (Tower
2) construction continues, with all residential units pre-sold. Once developed, the scale of the property under the
masterplan 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.
Capital expenditure in the year (excluding equity investment into the Tower 2 joint venture with partners CTF and FEC)
was approximately $65.2 million across various minor projects.
The Group also continues to manage the Gold Coast Convention and Exhibition Centre adjacent to the casino.

5Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Brisbane
In November 2015 contractual close was reached between the Queensland Government and Destination Brisbane
Consortium (DBC) on the Queen’s Wharf Brisbane development. DBC’s 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 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 Group’s casino licence will be surrendered and DBC will
hold 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
Queen’s Wharf Brisbane development. The Group is not a party to the residential apartments development joint
venture.
The Integrated Resort is expected to open in 1H FY2024. Total project costs for DBC’s development of the Integrated
Resort are expected to be up approximately 10% on prior guidance of $2.6 billion. The majority of these cost overruns
are to be funded via additional equity contributions in proportion with the existing joint venture interests. DBC is in
ongoing discussions with the builder regarding purported claims for additional costs, extensions of time and damages,
with which DBC disagrees. The contract provides for liquidated damages. $1.6 billion project level debt facilities were
secured in May 2020 and run for a 5.5 year term, which includes approximately 3 years of operating performance.

2.7 Risk management

The Group takes a structured approach to identifying, evaluating and managing those current and emerging risks which
have the potential to affect achievement of strategic objectives. The commentary relating to Principle 7 in the
Company’s Corporate Governance Statement describes the Group’s risk management framework which is based on
ISO31000, the international standard on risk management. The Corporate Governance Statement can be viewed on the
Company’s website.
Details of the Group’s major risks and associated mitigation strategies are set out below. The mitigation strategies are
designed to reduce the likelihood of the risk occurring and/or to minimise the adverse consequences of the risk should it
happen. However, some risks are affected by factors external to, and beyond the control of, the Group.

Risk and description

Mitigation strategy

Competitive Position
The potential effect of increased competition in
the Group’s key markets of Sydney, Brisbane
and Gold Coast.

Realising value from capital projects
The ability to generate adequate returns from
in capital
the
projects.

financial capital

invested

Human capital management
The ability to attract, recruit and retain the right
people for key leadership and operational
roles.

The Group’s vision is to be Australia’s leading integrated resort
company. Substantial investments have been made to develop new or
improved venue facilities in all key markets, and to improve customer
service capabilities of employees. Revenue sources have also been
diversified.

The Group has a comprehensive project management framework and
has employed appropriately skilled and experienced project managers
to reduce the risk of delays in completion and/or overruns in costs of
capital projects and maintain appropriate oversight of joint venture
investments. The Group continues to improve capital efficiency,
through reduced capital outlook and potential capital recycling of
supporting assets. The Group markets and promotes its portfolio of
attractive resort facilities to achieve the level of customer patronage
required to deliver the expected returns on investment.

The Group has in place a variety of avenues to attract, recruit and
develop high performing and high potential employees. It undertakes
training and development programs to provide employees with career
development opportunities. The Group has moved to 'continuous
listening' employee engagement surveys to monitor for emerging
issues which might affect the ability to retain talented employees and
enable actions in response. The Group’s diversity and inclusion
programs are widely recognised as being among the best in the
industry.

The Star Entertainment Group 2022 Annual Report6Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Risk and description
Key stakeholders

The ability to engage with key stakeholders
proactively and fairly.

Legal, regulatory and compliance
The potential effect of legal or regulatory
changes or decisions affecting the operation of
casinos, or the potential effect of changes in
the administration of laws in foreign countries
affecting the ability of foreign nationals to
travel to and/or bring funds to Australia.

AML Compliance
The potential effect of obligations under the
AML/CTF Act.

the

Data and systems security and reliability
integrity of
to protect
The ability
confidential business or customer data which
is collected, used, stored, and disposed of in
the course of business operations, and the
ability to maintain the security and operating
reliability of key business systems.

Major business disruption events
The ability to anticipate, prevent, respond to
and recover from events which have the
potential to prevent the continued operation of
one of the Group's resort facilities, or which
inhibit the ability of guests being able to visit
one of its resort facilities for a sustained period
of time.

People health and safety
The ability to operate the Group’s resort
facilities without affecting the safety, security
and wellbeing of its guests and employees.

Mitigation strategy

The Group has developed strong communication lines with a variety
of stakeholder groups, including State Governments in New South
Wales and Queensland, key Federal and State regulators, investors,
media and unions. The Group has also developed partnerships with
local community groups and charitable organisations.

The Group engages with regulatory stakeholders to anticipate
regulatory decisions and is active in submissions about proposed
decisions. The Group continuously monitors for potential legislative
changes or changes in relevant government policy in the States and
countries in which it conducts business operations. This includes
matters core to the integrity of gaming operations such as gaming
regulatory compliance, safe gaming, service of alcohol and Anti-
Money Laundering and Counter-Terrorism Financing (AML & CTF)
Act compliance.

The Group has dedicated regulatory and compliance teams and a
specialist AML & CTF team that has been continuing to invest and
enhance the Group's AML & CTF risk management capabilities,
including through dedicated IT systems development. The Group also
makes representations to government and industry groups to promote
effective, appropriate and consistent regulatory and policy outcomes.

The Group has a dedicated IT security function which continuously
tests and monitors technology systems to detect and block viruses
and other threats to the security of the Company's data. The IT
function also continues
to implement a cyber resilience plan.
Employees are regularly trained on the importance of maintaining
effective cyber security and data privacy processes.

The Group’s business continuity
framework enables early
identification of material risks to the continued operation of a resort
facility. The framework is supported by a suite of emergency
response, crisis management, and disaster recovery plans that are
regularly tested and updated.

The Group takes a risk based approach to managing health and
injury management
safety. Dedicated health and safety and
specialists are employed at each resort
in
maintaining the safety and security of its guests and employees, each
facility employs a substantial number of security and
resort
surveillance personnel to provide support in monitoring existential
threats and managing potential incidents on a real time basis.

facility. To assist

Financial management
The ability to maintain financial performance
and a strong balance sheet which enables the
Group to fund future growth opportunities on
commercially acceptable terms.

The Group annually establishes a financial budget and 5 year plan
which underpin the setting of performance targets incorporated in
employee incentive plans. Financial performance is continuously
monitored for any variations from annual financial budgets and market
expectations.

7Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Risk and description
Corporate governance

Mitigation strategy

The ability to maintain a strong and effective
governance structure which supports a culture
of
and
compliance.

accountability,

transparency,

The Star Brisbane
fully operational
The ability
business model that delivers an integrated
resort experience.

to deliver a

and

change,

sustainability

Climate
environmental impact
The ability to identify climate related risks and
reduce
report
opportunities,
improve
impacts
environmental
sustainability
all
performance
operations

and
and

across

The Group operates an integrated “3 lines of defence” model to
identify and manage key risks and to provide assurance that critical
controls are effective in managing those risks. This model is
supported by the risk management framework.

The Group has a pre-opening team to deliver a structured program to
transition from Treasury Brisbane to The Star Brisbane. It operates
with an integrated “3 lines of defence” model to identify and manage
key risks and to provide assurance that the controls and actions
underway are effective in managing those risks. Management of the
joint venture provide reporting to the Board and to the joint venture
board.

The Group’s ESG strategy, Responsible Business, Sustainable
Destinations responds to all of the company’s most material ESG
issues in addition to existing policies and controls. The Group has
adopted the Task Force on Climate-related Financial Disclosures’
in
(TCFD) Framework Recommendations and reports annually
risk
alignment with
assessments are conducted every two years. The Company is
targeting net zero Scope 1 and Scope 2 carbon emissions for its
wholly owned and operated assets by 2030, is implementing its
Decarbonisation Plan and has set resource reduction targets. Climate
change, sustainability and environmental impact matters report to the
Board Committee Remuneration, People and Social Responsibility.

the TCFD Framework. Physical climate

The Star Entertainment Group 2022 Annual Report8Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

2.8 Environmental regulation and performance

In line with its Environmental Management Policy, the Company aims to minimise the adverse social and environmental
effects of its operations. The Group is committed to sustainability leadership in the entertainment sector and reducing
resource consumption across its operations.
The Group’s Sustainability Strategy is focused on building business capacity and delivering continuous improvement in
the management of environmental, social and governance issues (ESG). The Sustainability Strategy is aligned to the
business strategy and is underpinned by a structured materiality assessment process that is conducted annually to
ensure ESG issues remain relevant. The Group’s key activities to manage sustainability risks identified as part of the
materiality assessment can be found in the Company’s Sustainability Reports in addition to existing policies and
controls. The Company’s Sustainability Strategy is aligned to the United Nations Sustainable Development Goals, the
Company’s material issues, priorities, commitments and future goals.
The Group recognises the recommendations of the Financial Stability Board Task Force on Climate-related Financial
Disclosures (TCFD) and the associated framework and reports its progress annually. In the 2022 reporting year, the
Group released its third ‘Climate-related Disclosures Report’ which details the company’s progress in managing the
expected physical and transitional risks of climate change aligned to the TCFD framework. Reports can be found on the
Company's website. The Company is committed to a low carbon future and has a target in place to achieve net zero
Scope 1 and Scope 2 carbon emissions for its wholly owned and operated assets by 2030. The pathway to achieve this
target includes the purchasing of renewable electricity and the assessment of onsite solar, continuing the Company’s
energy efficiency program and developing a carbon offsetting strategy which delivers environmental and social benefits.
The Group remains committed to immediate action through its interim targets to achieve a 30% reduction in carbon and
water intensity by FY2023 against the base year FY2013.
As part of the Group’s commitment to building world class properties, the Group continues to target sustainable
reductions in resource use through capital, and operational energy and water improvement projects. The Group has a
target to achieve coverage of third party certified environmental ratings across 90% of its managed portfolio by FY2022
which has been achieved.
An active energy and water project pipeline, first established in FY2014, continues to monitor and track projects that
deliver cost and environmental benefits. To ensure energy and water efficiency is achieved in refurbishment and
development projects, the Group’s Sustainable Design and Operational Standards have been applied to achieve more
sustainable building outcomes by specifying energy efficient technologies and best practice water and waste
management. Implementation of these Standards has led to Green Star Performance and NABERS Ratings, enabling
the benchmarking of operational performance of The Star's assets. Waste diversion from landfill, increasing recycling
rates and implementing more circular waste solutions remain priorities.
The Group's Global Reporting Index (GRI) reports are published on the Company's website, demonstrating a ‘core’
level of compliance. 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 each year.
The Company’s Environmental Management Policy, Sustainability Strategy and Action Plan, Materiality Assessment,
Climate-related Disclosures Reports and Sustainable Design and Operational Standards can be found on the
Company’s website. Sustainability performance and progress against the Sustainability Strategy is reported to the
Remuneration People and Social Responsibility Committee regularly and can be found in the Company’s Sustainability
Report.

9Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Earnings per share (EPS)
Basic and diluted EPS for the financial year was a loss of (21.3) cents (2021: earnings of 6.1 cents). EPS is disclosed in
note F3 of the Financial Report.

4 Dividends

The Group remains committed to maintaining a balance sheet that positions it for post-COVID-19 recovery. No final
dividend was declared, given the continuing impacts of COVID-19 on the Group and in accordance with the conditions
of debt covenant waivers which restrict further cash dividends from being paid until the Group’s gearing, which
represents the ratio of net debt to 12 month trailing statutory EBITDA, is below 2.5 times.

Significant events after the end of the financial year
NSW casino regulatory framework reforms
On 11 August 2022 the Casino Legislation Amendment Act 2022 (NSW) was enacted to give effect to amendments to
the Casino Control Act 1992. These amendments enact reforms to the NSW casino regulatory framework, including to
address all 19 recommendations of the Bergin Inquiry and certain additional measures. This included establishing the
NICC as a new independent regulator. The Group is considering the impact and will implement the changes required for
The Star.

Bell report
Mr Bell’s Report on The Star’s casino operations in accordance with the CCA was provided to ILGA by 31 August 2022.
On 5 September 2022, the NICC was appointed as regulator of casinos in NSW. On 13 September 2022 the NICC
published the Report. Mr Bell found The Star unsuitable to hold a casino licence in NSW.
Mr Bell made a total of 30 recommendations to the NICC. The NICC will respond to the recommendations in due
course.
On 13 September 2022 the NICC issued The Star a Show Cause Notice under section 23 of the CCA.
Under the Notice the NICC stated that it was considering taking disciplinary action against The Star for one or more
grounds being: CCA and licence contraventions found in the Report; that The Star is no longer suitable to give effect to
its licence because of Review’s findings and the absence of effective action, resources and capability to remedy matters
identified in the Report; and that it is no longer in the public interest that the licence remain in force.
The disciplinary action being considered by the NICC is one or more of the following:
(cid:4)
(cid:4)

cancellation or suspension of the licence of The Star;
imposition of a pecuniary penalty of up to $100 million (note that pecuniary penalties can be imposed on multiple
grounds such that $100 million is not a cap on aggregate penalties that may be imposed on The Star);
the amendment of the terms or conditions of the licence;

(cid:4)
(cid:4) The Star or a close associate give an enforceable undertaking to do or refrain from doing something; and
(cid:4)

the issue of a letter of censure to The Star.

The Notice also stated that in the event the NICC decides to cancel or suspend The Star’s licence, it may consider
appointing a person to manage the casino pursuant to section 28 of the CCA. In addition, a charge given by The Star in
1994 allows the regulator – on cancellation or suspension of the licence - to appoint a receiver over all assets at the
Sydney premises (including the lease), allowing the whole business to be operated and prepared for sale to a new
licensee.
The Star has responded to the Notice. The response outlines why disciplinary action should not be taken and includes
submissions about the possible appointment of a manager. The NICC may then decide to take appropriate disciplinary
action.
A comprehensive Remediation and Transformation Program is being updated to adopt and address the significant
findings of the Report and other ongoing reviews. It will serve as the Group’s integrated roadmap for improving
governance, culture and controls.
The Remediation and Transformation Program will effect significant improvements in governance, people, culture, risk
and compliance management, AML/CTF compliance, harm minimisation (including responsible gambling) and
investigations.

External review of the Group’s Queensland operations
In July 2022 an independent review commenced of the Group’s Queensland casinos, The Star Gold Coast and
Treasury Brisbane following a request by the Queensland Attorney-General. The review, led by the Honourable Robert
Gotterson AO, will examine whether these casinos operate in a way that is consistent with achieving the objectives of
the Casino Control Act 1982 and the ongoing suitability of the Group’s casino licensees. Public hearings took place from
23 to 29 August 2022. The review will report to the Attorney-General by 30 September 2022.
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 2022 and up to the date of this report that have materially
affected or may materially affect the Group’s operations, the results of those operations or the Group’s state of affairs.

The Star Entertainment Group 2022 Annual Report10Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

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

Ben Heap

Interim Chairman (from 1 June 2022);
Non-Executive Director (from 23 May 2018)
Bachelor of Commerce (Finance); Bachelor of Science (Mathematics); Graduate of the
Australian Institute of Company Directors

Experience:
Ben Heap is an experienced company director with wide-ranging experience in asset and
capital management roles in the finance sector and in technology and digital businesses.

Mr Heap is a Founding Partner of H2 Ventures, a venture capital investment firm. Mr Heap is
also a Non-Executive Director of Redbubble Limited and Chairman of its People,
Remuneration and Nomination Committee, and a Non-Executive Director of Pendal Group
Limited, and Chairman of its Governance and Nominations Committee.

Mr Heap was previously Managing Director for UBS Global Asset Management in
Australasia and prior to this, Head of Infrastructure for UBS Global Asset Management in the
Americas. He held a number of directorships associated with these roles. Earlier in his
career, Mr Heap was Group Executive, E-Commerce & Corporate Development for TAB
Limited.

Special Responsibilities:
• Interim Chairman of the Board
• Chair of the Risk, Compliance and Regulatory Performance Committee
• Member of the Audit Committee
• Member of the People, Culture and Social Responsibility Committee (to 31 December
2021)
• Member of the Remuneration, People and Social Responsibility Committee (from 1
January 2022)

Directorships of other Australian listed companies held during the last 3 years:
• Redbubble Limited (20 April 2020 to present)
• Pendal Group Limited (1 March 2022 to present)

11Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Current Directors

Gerard Bradley

Michael Issenberg

Non-Executive Director (from 30 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 Institute of Managers and Leaders; Officer of the Order of
Australia

Experience:
Gerard Bradley was formerly the Chairman of Queensland Treasury Corporation for 10 years
(retired on 30 June 2022) 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.

Mr Bradley is currently a Non-Executive Director of Pinnacle Investment Management Group
Limited and a Director of the Winston Churchill Memorial Trust.

Special Responsibilities:
• Member of the Risk, Compliance and Regulatory Performance Committee
• Member of the Audit Committee
• Member of the Remuneration Committee (to 31 December 2021)
• Member of Remuneration, People and Social Responsibility Committee (from 1 January
2022)

Directorships of other Australian listed companies held during the last 3 years:
• Pinnacle Investment Management Group Limited (1 September 2016 to present)

Board Observer (from 17 February 2022 to 10 July 2022)
Non-Executive Director (from 11 July 2022)
BS in Hotel Administration – Cornell University USA; French Order of Merit (Ordre national
du Mérite)

Experience:
Mr Issenberg is an experienced executive and director with over 40 years’ experience in the
hotel industry.

Mr Issenberg was formerly the Chairman of Reef Corporate Services Limited, the
Responsible Entity of Reef Casino Trust. Prior to that, he held various executive roles with
AccorHotels for 25 years, most recently as Chairman and Chief Executive Officer of
AccorHotels Asia Pacific. He previously held the role of Chief Executive Officer of Mirvac
Hotels, following a successful career at Westin Hotels and Resorts, Laventhol & Horwath,
and Horwath & Horwath Services Pty Limited in San Francisco and Sydney.

Mr Issenberg is currently the Chairman of Tourism Australia. He also a Lifetime Member of
Tourism & Transport Forum Australia and the Cornell Hotel Society.

Special Responsibilities:
• Member of the Audit Committee
• Member of the Risk, Compliance and Regulatory Performance Committee
• Member of Remuneration, People and Social Responsibility Committee

Directorships of other Australian listed companies held during the last 3 years:
• Reef Corporate Services as responsible entity of Reef Casino Trust (21 January 2022 to
18 March 2022)

The Star Entertainment Group 2022 Annual Report12Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Current Directors

Katie Lahey AM

Richard Sheppard

Non-Executive Director (from 1 March 2013)
Bachelor of Arts (First Class Honours); Master of Business Administration; Member of the
Order of Australia

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 a Director of Carnival Corporation & plc, and is a member of the
National Indigenous Culinary Institute Advisory Board.

Ms Lahey was previously the Chair of Carnival Australia and the Chairman Australasia of
Korn Ferry International. In addition, Ms Lahey was also 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:
• Chair of the Remuneration, People and Social Responsibility Committee (from 1 January
2022)
• Chair of the People, Culture and Social Responsibility Committee (to 31 December 2021)
• Member of the Remuneration Committee (to 31 December 2021)
• Member of the Risk, Compliance and Regulatory Performance Committee

Directorships of other Australian listed companies held during the last 3 years:
Nil

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 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.

Special Responsibilities:
• Chair of the Audit Committee
• Member of the Risk, Compliance and Regulatory Performance Committee
Directorships of other Australian listed companies held during the last 3 years:
• Dexus Property Group (1 January 2012 to present)

13Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Former Director

John O'Neill AO

Chairman (from 8 June 2012 to 31 May 2022)
Non-Executive Director (from 28 March 2011 to 31 March 2022)
Executive Chairman (from 1 April 2022 to 31 May 2022)
Diploma of Law; Foundation Fellow of the Australian Institute of Company Directors; Officer
of the Order of Australia; French decoration of Chevalier de la Legion d'Honneur

Experience (as at date of cessation):
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, as well as a Director of Tabcorp Holdings 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, as well as a Director of
Rugby World Cup Limited.

Special Responsibilities:
• 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

Matt Bekier

Managing Director and Chief Executive Officer (from 11 April 2014 to 28 March 2022)
Master of Economics and Commerce; PhD in Finance

Experience (as at date of cessation):
Matt Bekier was 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 held various roles with McKinsey & Company.

Special Responsibilities:
Nil

Directorships of other Australian listed companies held during the last 3 years:
Nil

The Star Entertainment Group 2022 Annual Report14Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Former Director

Sally Pitkin AO

Non-Executive Director (from 19 December 2014 to 30 June 2022)
Doctor of Philosophy (Governance); Master of Laws; Bachelor of Laws; Fellow of the
Australian Institute of Company Directors; Officer of the Order of Australia

Experience (as at date of cessation):
Sally Pitkin is a company director with over 20 years’ experience as a Non-Executive
Director and board member across a wide range of industries in the private and public
sectors. She has extensive experience in the gaming industry.

Dr Pitkin is a former lawyer and senior corporate partner with a national law firm.

Dr Pitkin is currently the Chair of Super Retail Group Limited and a Non-Executive Director
of Link Administration Holdings Limited.

Special Responsibilities:
• Chair of the Remuneration Committee (to 31 December 2021)
• Member of the Audit Committee
• Member of the People, Culture and Social Responsibility Committee (to 31 December
2021)
• Member of the Remuneration, People and Social Responsibility Committee (from 1
January 2022)

Directorships of other Australian listed companies held during the last 3 years:
• Super Retail Group Limited (1 July 2010 to present)
• Link Administration Holdings Limited (23 September 2015 to present)

15Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

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
Ben Heap

Gerard Bradley AO
Michael Issenberg a

Katie Lahey AM

Richard Sheppard

Ordinary Shares

Performance Rights

50,000
75,000
Nil
56,907
300,000

Nil
Nil
Nil
Nil
Nil

Michael Issenberg commenced as a Non-Executive Director on 11 July 2022 following the receipt of all necessary regulatory
approvals.

8 Company Secretary

Jennie Yuen holds the position of Group Manager Shareholder Relations and Company Secretary (appointed on 29 July
2021).
Ms Yuen has a commercial and corporate law background in private practice and over 15 years of company secretariat
and corporate governance experience with ASX listed and public companies.
Prior to joining The Star Entertainment Group, Ms Yuen was employed as a solicitor and company secretary at
Company Matters Pty Limited and was the outsourced company secretary of various ASX listed companies, including
Analytica Limited, National Leisure and Gaming Limited and Oaks Hotels & Resorts Limited.
Ms Yuen holds a Bachelor of Laws and a Bachelor of Commerce. She is a member of the Queensland Law Society and
a Fellow of the Governance Institute of Australia.

Former Company Secretary
Paula Martin held the position of Chief Legal & Risk Officer and Company Secretary until 6 May 2022. She holds a
Bachelor of Business (Int. Bus.), a Bachelor of Laws and a Graduate Diploma in Applied Corporate Governance.
Paula has over 16 years' experience in the gaming industry, first with Tabcorp Holdings Limited and continuing with The
Star Entertainment Group. Following consolidation of the legal, risk, regulatory and compliance functions, Paula was
appointed to the role of Chief Legal & Risk Officer in August 2019.
Paula has a broad commercial law and regulatory background, having first practiced with King & Wood Mallesons in the
telecommunications, information technology and competition law areas.

The Star Entertainment Group 2022 Annual Report16Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

9 Board and Committee meeting attendance

During the financial year ended 30 June 2022, the Company held 26 meetings of the Board of Directors (including 12
unscheduled meetings). The numbers of Board and Committee meetings attended by each of the Directors during the
year are set out in the table below.

People, Culture
& Social
Responsibility
Committee e
A B A B A B A B A B

Remuner-
ation
Committee e

Audit
Committee

Board of
Directors

Risk
Compliance
& Regulatory
Performance
Committee

26
26
9
26
26

23
13
26

26
26
-
26
26

23
13
26

5
5
1
5
5

-
5

5
5
-
5
5

-
5

4
4
-
4
4

-
4

4
4
-
4
4

-
-

2
2
-
2
-

-
2

2
2
-
2
-

-
2

2
2
-
2
1

-
2

2
-
-
2
-

-
2

Remuneration,
People & Social
Responsibility
Committee e
A B

2
2
-
2
2

-
2

2
2
-
2
-

-
2

Directors

Ben Heap

Gerard Bradley AO
Michael Issenberg a

Katie Lahey AM

Richard Sheppard
Former
John O'Neill AO b
Matt Bekier c
Sally Pitkin AO d

A -

Number of meetings attended as a Board, Committee member or Observer.

B - Maximum number of meetings available for attendance as a Board or Committee member.
a

Meetings attended by Michael Issenberg while he was an Observer (17 February 2022 to 10 July 2022). Michael Issenberg
commenced as a Non-Executive Director on 11 July 2022 following the receipt of all necessary regulatory approvals.

Ceased as Chairman and Non-Executive Director on 31 May 2022.

The Managing Director and Chief Executive Officer is not a member of any Board Committee but may attend Board Committee
meetings upon invitation. This attendance is not recorded here. Ceased as Managing Director and Chief Executive Officer on
28 March 2022.

Ceased as Non-Executive Director on 30 June 2022.

The Remuneration Committee was merged with the People, Culture and Social Responsibility Committee and renamed as the
Remuneration, People and Social Responsibility Committee from 1 January 2022.

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 Company’s 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 Indemnification of auditors

To the extent permitted by law, the Company has agreed to indemnify its auditors, Ernst & Young Australia, as part of
the terms of its audit engagement agreement against claims by third parties arising from the audit (for an unspecified
amount). No payment has been made to indemnify Ernst & Young during or since the end of the financial year.

12 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 2022. 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 auditor’s performance
on an annual basis.

17Directors’ Report

For the year ended 30 June 2022
Directors' Report
for the year ended 30 June 2022

Limited authority is delegated to the Company's Chief Financial Officer for the pre-approval of audit and non-audit
services proposed by the external auditor, limited to $50,000 per engagement and capped at 40% of the relevant year's
audit fee. Delegated authority is only exercised in relation to services that are not in conflict with the role of statutory
auditors, where management does not consider the services to impair the independence of the external auditor and the
external auditor has confirmed that the services would not impair their independence. Any other non-audit related work
to be undertaken by the external auditor must be approved by the Chair of the Audit Committee.
Further details relating to the Audit Committee and the engagement of auditors are available in the Corporate
Governance Statement.
Ernst & Young, acting as the Company’s 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

Fees for other assurance and agreed-upon-procedures services (including sustainability assurance) under
contractual arrangements where there is discretion as to whether the service is provided by the auditor
Fees for other advisory and compliance services

Total of all non-audit and other services

$000

77.0
55.5

132.5

Amounts paid or payable by the Company for audit and non-audit services are disclosed in note F11 of the Financial
Report.

13 Rounding of amounts

The Star Entertainment Group Limited is a company of the kind specified in the Australian Securities and Investments
Commission’s ASIC Corporations (Rounding in Financial/Directors’ Reports) 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.

14 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 2022. The auditor's independence
declaration forms part of this Directors’ Report.
This report has been signed in accordance with a resolution of Directors.

Ben Heap
Interim Chairman
Sydney
27 September 2022

The Star Entertainment Group 2022 Annual Report18Auditor's Independence Declaration

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Ernst & Young
Auditor’s Independence Declaration to the Directors of The Star
200 George Street
Sydney NSW 2000 Australia
Entertainment Group Limited
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

As lead auditor for the audit of the financial report of The Star Entertainment Group for the financial
year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:

a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in

Auditor’s Independence Declaration to the Directors of The Star
Entertainment Group Limited

relation to the audit;

b) No contraventions of any applicable code of professional conduct in relation to the audit; and

c) No non-audit services provided that contravene any applicable code of professional conduct in

relation to the audit.

As lead auditor for the audit of the financial report of The Star Entertainment Group for the financial
year ended 30 June 2022, I declare to the best of my knowledge and belief, there have been:
This declaration is in respect of The Star Entertainment Group Limited and the entities it controlled
during the financial year.

a) No contraventions of the auditor independence requirements of the Corporations Act 2001 in

relation to the audit;

b) No contraventions of any applicable code of professional conduct in relation to the audit; and

c) No non-audit services provided that contravene any applicable code of professional conduct in

relation to the audit.

Ernst & Young
This declaration is in respect of The Star Entertainment Group Limited and the entities it controlled
during the financial year.

Megan Wilson
Partner
Ernst & Young
27 September 2022

Megan Wilson
Partner
27 September 2022

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

A member firm of Ernst & Young Global Limited

Liability limited by a scheme approved under Professional Standards Legislation

19Remuneration
Report

For the year ended 30 June 2022

THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES

The Star Entertainment Group 2022 Annual Report

Introduction from the Remuneration, People and Social Responsibility Committee Chair

Dear Shareholder,

On behalf of the Board, I present the Remuneration Report for the year ended 30 June 2022 (FY2022). This report is prepared on a
consistent basis to the previous year for ease of reference.

2021 Annual General Meeting (AGM)
The FY2021 Remuneration Report received positive shareholder support at the 2021 AGM, with 98.02% of votes in favour of
the resolution.

Executive KMP Changes
On 28 March 2022, the Company announced the resignation of its Managing Director and Chief Executive Officer (MD & CEO)
Matt Bekier. Mr Bekier’s decision follows issues raised in the public hearings in connection with the review of The Star Sydney
being undertaken by Mr Adam Bell SC (Bell Review). Following this, the Company announced on 1 April 2022 the appointment of
John O’Neill to the position of Executive Chairman on an interim basis until a new MD & CEO is appointed. Mr O’Neill has since
tendered his resignation from this position effective 31 May 2022 and Geoff Hogg, current Chief Casino Officer QLD, was
appointed Acting Chief Executive Officer from 1 June 2022.

In addition, on 6 May 2022 Harry Theodore resigned from his position of Chief Financial Officer and Greg Hawkins resigned from
his position of Chief Casino Officer NSW. Christina Katsibouba, former Group Executive Gaming and previously Deputy Chief
Financial officer has been appointed as Interim Chief Financial Officer.

On 26 September 2022, the Company announced the resignation of Geoff Hogg from his role as Acting Chief Executive Officer, and
from all other positions held at The Star. Mr Hogg’s termination date will be confirmed in due course. Ben Heap was subsequently
appointed as Executive Chairman effective 26 September 2022.

The Company announced the appointment of Robbie Cooke as MD & CEO on 29 June 2022. Mr Cooke’s start date will be confirmed
in the near future. The Company has also announced the appointment of Scott Wharton to the role of CEO, The Star Sydney and
Group Head of Transformation. Mr Wharton commenced in this role on 25 July 2022.

Remuneration treatment for outgoing Executive KMP
In line with the Company’s Employee Performance Plan rules, the outgoing Executive KMP members will not be entitled to receive
any payments under either the Short Term Incentive Plan (STI) or the Long Term Incentive Plan (LTI). All performance rights under
the four current LTI tranches will lapse in full upon their last day of employment with the Company. The outgoing Executive KMP
will be paid their contractual fixed remuneration for the duration of their contractual notice period.

NED Changes
The Company announced on 13 May 2022 that the Board would undertake a remediation process as it acknowledged the need for
accelerated Board change. As part of this process, John O’Neill resigned as Chairman effective 31 May 2022 with Ben Heap being
appointed as Interim Chairman commencing 1 June 2022. Sally Pitkin has also stepped down from the Board effective 30 June
2022 and Gerard Bradley will depart in the coming months. It is expected that other changes will occur in due course.

On 17 February 2022, the Company announced the appointment of Michael Issenberg to the Board as an observer. Mr Issenberg
has since received all necessary regulatory approvals and was appointed as a Non-Executive Director from 11 July 2022.

On 15 August 2022, the Company announced the appointments of Anne Ward and David Foster to the Board. Both have commenced
as observers until all necessary regulatory approvals are received.

Short Term Incentive Plan
As detailed in the FY2021 Remuneration Report, the Company introduced a new STI design for FY2022. The new design makes
payments in relation to the achievement of four Company metrics, and a portion relating to individual performance. Further
details on the new STI design can be found in section 4.3.

Two of the four Company metrics were achieved for FY2022. As such, the Board has issued partial STI awards to the Executive
KMP. Further details regarding the Company outcomes and determination of individual awards can be found in section 5.1.

For the FY2023 STI plan design, the Board has approved an increase to the weighting of the Group Regulatory Compliance and
Risk Management metric from 10% to 20% in order to place greater emphasis on this critical area. As such, the Group Normalised
NPAT target weighting will reduce from 50% to 40%.

Long Term Incentive Plan
The FY2018 LTI award was tested for vesting during the period and did not vest as the relative Total Shareholder Return (TSR),
Earnings per Share (EPS), and Return on Invested Capital (ROIC) hurdles were not met.

The FY2019 LTI award will be tested for vesting in October 2022. The guiding principles communicated in FY2020 will be applied to
support a fair and reasonable outcome. Further updates on the outcomes will be provided ahead of the 2022 AGM.

We welcome your feedback on our Remuneration Report.

Yours sincerely,

Katie Lahey
Remuneration, People and Social Responsibility Committee Chair

20Remuneration Report

For the year ended 30 June 2022

CONTENTS

1 QUESTIONS AND ANSWERS

2 KEY MANAGEMENT PERSONNEL

3 REMUNERATION GOVERNANCE

4 REMUNERATION STRATEGY AND PROGRAMS
25
26
27
29
31

4.1 REMUNERATION OVERVIEW
4.2 FIXED REMUNERATION
4.3 STI DESIGN
4.4 LTI DESIGN
4.5 MINIMUM SHAREHOLDING POLICY

VARIABLE REWARD OUTCOMES FOR
THE FINANCIAL YEAR ENDED 30 JUNE 2022

5.1 STI OUTCOME FOR FY2022
5.2 VESTING UNDER THE LTI

EXECUTIVE KMP CONTRACTS
AND REMUNERATION

STATUTORY EXECUTIVE KMP
REMUNERATION

8 NED REMUNERATION

9 OTHER INFORMATION

32
34

9.1 LOANS AND OTHER

TRANSACTIONS WITH KMP

The Directors of The Star Entertainment Group
Limited (The Star Entertainment Group or the
Company) have approved this Remuneration Report
for the consolidated entity comprising the Company
and its controlled entities (collectively referred to
as the Group) in respect of the financial year ended
30 June 2022.

This Remuneration Report outlines the remuneration

arrangements for Key Management Personnel (KMP)

who are defined as those persons having authority and

responsibility for planning, directing and controlling

the major activities of the Group, directly or indirectly,

including any director (whether executive or otherwise)

of The Star Entertainment Group Limited. This report has

been prepared in accordance with the requirements of

the Corporations Act 2001, (Cth) (the Corporations Act)

and its regulations. The information has been audited

as required by section 308(3C) of the Corporations Act
where indicated.

For the purposes of this report, the term ‘Executive KMP’

means the former executive director (Managing Director

and Chief Executive Officer) and senior executives (the

former Chief Financial Officer, Acting Chief Executive

Officer, Interim Chief Financial Officer, Chief Casino

Officer NSW and the Chief Casino Officer QLD) but

excludes Non-Executive Directors (NEDs).

THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES

The Star Entertainment Group 2022 Annual Report

1 QUESTIONS AND ANSWERS

Were there any changes to the Remuneration arrangements of Executive KMP and NEDs in FY2022?

The Board approved an increase of 15.2% to the Chief Casino Officer QLD’s fixed pay and short-term incentive for FY2022 to

bring his package in line with the positioning for this role. Mr Hogg was also offered an increased fixed pay rate of $1,000,000

to assume the role of Acting Chief Executive Officer. These arrangements will cease upon Mr Hogg’s termination once this

date is confirmed. In addition, Christina Katsibouba was offered a fixed pay rate of $800,000 to assume the role of Interim

Chief Financial Officer.

Further details on Executive KMP remuneration are provided in Table 13.

Non-Executive Director fees were increased by 3.5% for both the Chairman and Board Member fees effective from 1

September 2021. In addition, upon his appointment to the role of Executive Chairman, the Board approved a fixed pay

salary of $1.5 million for John O’Neill, taking his total remuneration to $2,001,458. Mr O’Neill was not invited to participate

in any of the Company’s incentive plans and his additional $1.5 million salary is not included in the NED fee pool limit as

it relates to executive duties. This pay arrangement ceased on 30 June 2022 once the Company had paid Mr O’Neill’s one

month notice following his resignation effective 31 May 2022. There were no changes to the Committee fees or the fee

pool limit of $2.5 million per annum.

What was the STI outcome for FY2022?

Two of the four Company metrics were achieved for the FY2022 financial year. As such, the Board has issued partial

STI awards to the Executive KMP. For the purpose of the FY2022 STI award, Christina Katsibouba’s performance was

assessed in her capacity as a non-KMP only. Given none of her STI award relates to her KMP role, the details of the

award have not been disclosed. Further details regarding the Company outcomes and determination of individual awards

can be found in section 5.1.

Did any LTI awards vest during the year?

Performance rights relating to the FY2018 award were tested in October 2021 with none of these rights vesting into

fully paid ordinary shares. The TSR performance of the Group was -7.25% (excluding the value of franking credits), with

a percentile ranking of 21.54%. As this was below the 50th percentile, none of the TSR component of the FY2018 award

vested. The EPS performance hurdle of 6.4 cents per share was below the threshold of 35.9 cents per share and target of

43.8 cents per share, and accordingly none of the EPS component of the FY2018 award vested. This was the first time the

ROIC performance hurdle was tested, with an outcome of 1.3% which was below the threshold of 9.5% and target of 11.5%,

resulting in no vesting of performance rights for this component. The FY2019 LTI award will be tested in October 2022.

What were the actual remuneration outcomes for Executive KMP in FY2022?

Table 1 provides a summary of total remuneration received by Executive KMP during the 2022 financial year. This non-

IFRS information differs from the Statutory Remuneration in Table 14, which presents remuneration in accordance with

accounting standards.

TABLE 1: FY2022 EXECUTIVE REMUNERATION

Name

Fixed
remuneration

STI
Cash

Total
Cash

STI deferred
equity

LTI vested actual
during the year $

Total value of
remuneration2 $

LTI lapsed
during the year3

Current Executive KMP

Geoff Hogg1

771,839

137,835

909,674

68,918

Christina Katsibouba1

118,182

Former Executive KMP4

Matt Bekier

Harry Theodore

Greg Hawkins

1,960,415

924,423

1,226,077

–

118,182

1,960,415

924,423

1,226,077

–

TOTAL

5,000,936

137,835

5,138,771

68,918

–

978,592

118,182

(230,175)

1,960,415

(1,751,300)

924,423

(88,772)

1,226,077

(456,544)

5,207,689

(2,526,791)

1 Reflects fixed pay for acting position and STI and LTI outcomes for substantive role. As Ms Katsibouba's substantive role is not a KMP role, no STI or LTI

award amount has been disclosed.

2 Total value excludes any negative amounts from lapsed LTI grant.

3 Represents the award value (at the 30 June 2022 share price) of the FY2018 performance rights that lapsed/were foregone during the year as the

minimum performance hurdles required for vesting were not met.

4 Includes payments made after resignations were tendered, including any notice period and termination payments.

222 KEY MANAGEMENT PERSONNEL

The names and titles of the Company’s KMP for the year ended 30 June 2022 are set out below.

NON-EXECUTIVE DIRECTORS

Ben Heap1
Interim Chairman
Chair of Risk, Compliance and
Regulatory Reform Committee

Gerard Bradley AO
Board Member

Katie Lahey AM
Chair of Remuneration, People and
Social Responsibility Committee

Richard Sheppard
Chair of Audit Committee

Michael Issenberg2
Observer

FORMER NON-EXECUTIVE DIRECTORS

John O’Neill AO3 (Ceased 31 May 2022)
Non-Executive Chairman / Executive Chairman

Sally Pitkin AO4 (Ceased 30 June 2022)
Board Member

CURRENT EXECUTIVE KMP

Geoff Hogg5
Acting Chief Executive Officer

Christina Katsibouba6
Interim Chief Financial Officer

FORMER EXECUTIVE KMP

Matt Bekier7
Managing Director and Chief Executive Officer

Harry Theodore8
Chief Financial Officer

Greg Hawkins9 (Ceased 30 June 2022)
Chief Casino Officer NSW

1 On 23 May 2022, the Company announced the appointment of Ben Heap as Interim Chairman, following the resignation of Chairman John O'Neill.

Mr Heap commenced in this role from 1 June 2022. On 26 September 2022, the Company announced that Mr Heap would assume the role of Executive
Chairman following the resignation of Acting Chief Executive Officer Geoff Hogg.

2 On 17 February 2022, the Company announced the appointment of Michael Issenberg as a Non Executive Director, subject to casino regulatory approvals

being obtained. Michael Issenberg commenced as a Non-Executive Director on 11 July 2022.

3 On 20 May 2022, the Company announced the resignation of John O'Neill as Executive Chairman. His last working day was 31 May 2022 and his

cessation date was 30 June 2022.

4 On 30 June 2022, the Company announced the resignation of Sally Pitkin from the Board. Ms Pitkin’s cessation date was 30 June 2022.
5 On 23 May 2022, the Company announced the appointment of Geoff Hogg to Acting Chief Executive Officer commencing 1 June 2022. Mr Hogg resigned

on 26 September 2022.

6 On 9 May 2022, the Company announced the appointment of Christina Katsibouba as Interim Chief Financial Officer.
7 On 28 March 2022, the Company announced the resignation of Matt Bekier, with his cessation date to be confirmed in due course but no later than his

contractual notice period of 12 months.

8 On 6 May 2022, the Company announced the resignation of Harry Theodore, with his cessation date to be confirmed in due course but no later than his

contractual notice period of 9 months.

9 On 6 May 2022, the Company announced the resignation of Greg Hawkins. Mr Hawkins’ cessation date was 30 June 2022.

The Star Entertainment Group 2022 Annual Report

233 REMUNERATION GOVERNANCE

The Remuneration, People and Social Responsibility Committee (the Committee) considers matters relating to
the remuneration of KMP as well as the remuneration policies of the Group generally. This includes reviewing and
recommending to the Board, the remuneration of the Chairman and NEDs, Executive KMP and other direct reports
to the MD and CEO. The main responsibilities of the Committee are outlined in the Committee's Terms of Reference,
available on the corporate governance page of the Company’s website at:
www.starentertainmentgroup.com.au/corporate-governance/

Under the Committee’s Terms of Reference, the majority of Committee members must be independent non-
executive directors and the Chair of the Committee must be an independent non-executive director. All members of the
Committee (including the Chair of the Committee) are independent non-executive directors. Details of members of
the Committee and their background are included in the Directors’ Report on pages 11 to 15.

THE FOLLOWING DIAGRAM REPRESENTS THE STAR ENTERTAINMENT GROUP’S
REMUNERATION DECISION-MAKING STRUCTURE

BOARD
• Reviews and approves remuneration outcomes,
framework, strategy and policy

• Exercises discretion in relation to targets,
goals or funding pools

REMUNERATION, PEOPLE AND
SOCIAL RESPONSIBILITY COMMITTEE
• Reviews and recommends to the Board the remuneration
framework, strategy and policy

• Reviews and recommends to the Board remuneration
review outcomes for NEDs, Executive KMP and other direct
reports to the MD and CEO

SHAREHOLDERS
• Feedback received through
shareholder votes on the
Remuneration Report at the
AGM and consultation with
key stakeholders

MANAGEMENT
• Proposals on executive
remuneration outcomes

• Implementing
remuneration policies

REMUNERATION ADVISORS
• External and
independent remuneration
advice and information

Use of remuneration advisors

The Committee seeks external advice from time to time to ensure it is fully informed when making remuneration
decisions. Remuneration advisors are engaged by, and report directly to, the Committee. PricewaterhouseCoopers
(PwC) are the Group’s appointed independent external remuneration consultants. No remuneration recommendations
as defined by the Corporations Act were provided by PwC during FY2022.

Remuneration Report approval at 2021 Annual General Meeting (AGM)

The FY2021 Remuneration Report received positive shareholder support at the 2021 AGM, with 98.02% of votes in
favour of the resolution.

Gender pay equity

The Group is committed to all employees being remunerated fairly and equitably. The Group conducts annual
gender pay equity reviews that are presented to the Committee and continues to address any gender pay equity
issues as they arise.

244 REMUNERATION STRATEGY AND PROGRAMS

4.1 Remuneration overview

Remuneration Principles

FIGURE 1: REMUNERATION PRINCIPLES

Being market competitive
to attract and retain
high performing individuals.

Linking variable
pay outcomes
to both Company
and individual
performance.

Having a transparent
and leader-lead
performance
management system.

Promoting
gender pay
equity.

Administering consistent,
easy to understand,
transparent remuneration
practices underpinned by a
strong governance process.

Remuneration Mix

Variable remuneration (comprising STI and LTI at target amounts) accounts for the majority of the total remuneration mix
for the incoming Managing Director and Chief Executive Officer and other Executive KMP as illustrated in Figure 2 below.

FIGURE 2: REMUNERATION MIX

Fixed
Remuneration

38.5%

LTI

Fixed
Remuneration

47%

STI Cash

19%

STI
Restricted
Shares

Fixed

At Risk

28%

LTI

STI
Restricted
Shares

17%

STI Cash

Incoming Managing Director and
Chief Executive Officer

Other Executive KMP

Remuneration time horizon

Figure 3 provides an illustrative indication of how remuneration will be delivered to Executive KMP.

FIGURE 3: REMUNERATION TIME HORIZON

Fixed Remuneration

STI Cash (66.66%)

STI restricted shares
(33.33%)

LTI performance
rights

YEAR 1

YEAR 2

YEAR 3

YEAR 4

YEAR 5

Date granted

End of deferral/performance period

Date payable/eligible for vesting

The Star Entertainment Group 2022 Annual Report

Table 2 below summarises the components of Executive KMP’s Total Annual Reward (TAR) and their link to the
strategic objectives of the Group.

TABLE 2: COMPONENTS OF EXECUTIVE KMP’S TAR OPPORTUNITY

Fixed Remuneration

STI

LTI

Rationale

Structure

Quantum

Fixed remuneration forms
an integral component of
the overall employee value
proposition of the Group,
designed to attract and
retain the talented teams
required to operate the
business. These teams will
be critical in delivering on
our business plan to achieve
excellence in guest service,
build and operate world
class properties, and create
long term shareholder value.
Annual pay reviews occur
in August each year with
remuneration changes
effective from 1 September.

Base remuneration
and superannuation.

The STI is designed to
drive the execution of the
business plan in the short
and long term and aligns
performance outcomes to
shareholder value creation.
STI performance targets
are underpinned by the
Group’s strategic priorities
that include:

The LTI is designed to
reward participants
for their contributions
towards achieving the
Group’s strategic priorities
orientated around delivering
long term sustainable
shareholder value creation.
Performance is measured
against three criteria:

• Shareholder Value

• Relative Total Shareholder

• World Class Properties

• Guest Service Excellence

Return (TSR)

• Earnings per Share (EPS)

(differentiated value
proposition)

• Return on Invested

Capital (ROIC)

• Talented Teams

• Risk Management and

Sustainability

Two thirds cash, one
third equity deferred for
one year.

Targeted at the
median of relevant
external peer group.

Executive KMP target 60%
of fixed remuneration.

Performance rights
with vesting subject
to performance over
a four year period.

Executive KMP target 60%
of fixed remuneration.
MD & CEO target 100% of
fixed remuneration.

4.2 Fixed remuneration

The fixed remuneration received by Executive KMP may include base salary, superannuation and non-monetary
benefits. The amount of fixed remuneration an executive receives is based on the following:

• Scope and responsibilities of the role;

• Reference to the level of remuneration paid to executives of comparable ASX-listed organisations, with similar
market capitalisation (range 70% to 160% of The Star Entertainment Group’s market capitalisation) and
appropriate gaming and entertainment peers; and

• Level of international and domestic gaming knowledge, skills and experience of the individual.

Fixed remuneration is reviewed annually, and the policy is to target fixed remuneration at the median of the market.
Fixed remuneration may deviate from the market median depending on the individual’s capabilities and other
business factors.

264.3 STI Design (STI)

As disclosed in last year’s Remuneration Report, the Company has redesigned its STI plan for FY2022 to ensure
it remains fit for purpose. The new design incorporates the following changes:

• The introduction of a holistic ‘basket of measures’ to assess Company performance
The Company has assessed the funding model under the STI and specifically reviewed the function of the
gateway measure in determining payments under the plan. It was determined that moving to a holistic basket
of measures to assess Company performance would allow for a greater balance between financial and non-
financial measures, rather than having one binary gateway as the determination for funding. Company
performance now accounts for 80% of the overall STI award for Executive KMP, with the capacity to pay
maintained through a higher weighting on the NPAT metric at 50% of the total award.

• Three new company metrics – Group Regulatory Compliance and Risk Management, Employee Engagement

and Guest Satisfaction

A Group Regulatory Compliance and Risk Management metric was introduced with a weighting of 10% of the
award opportunity to recognise the Company’s focus on this critical area in the business. This metric takes
into account safety measures, mandatory compliance training, risk management and internal audit action
items and timely reporting of incidents and breaches.

Engagement was introduced as a metric to enhance the focus on people as the Company faces increasing
competition for talent which also has a weighting of 10% of the total award opportunity. A Guest Satisfaction
performance metric of 10% was introduced to focus on providing Guests with exceptional service.

• Individual performance is now part of the funding outcome
Individual performance now accounts for 20% of the overall STI award for Executive KMP, where previously it
was used as a modifier to outcomes once a pool was funded. This change allows for emphasis to be placed on
individual priorities for each Executive KMP to reward exceptional performance.

• Guiding principles to inform the use of discretion
Similar to the LTI, a set of guiding principles have been introduced to inform the use of discretion under the STI,

refer to Table 3 below.

The number of employees who participated in the STI for FY2022 was 682 (decreased from 724 for FY2021). Each of
the Executive KMP participated in the plan. For the FY2023 STI plan design, the Board has approved an increase to
the weighting of the Group Regulatory Compliance and Risk Management metric from 10% to 20% in order to place
greater emphasis on this critical area. As such, the Group Normalised NPAT target weighting will reduce to 40%.

Table 3 sets out the key features of the STI.

TABLE 3: KEY DESIGN FEATURES OF THE STI

Purpose

To reward participants for execution of the Group’s strategy and achievement of operational goals during
the performance period.

Performance
Metrics and
weightings

Metric
Group Normalised NPAT1

Group Guest Satisfaction

Weighting

50% (reduced to 40% for FY2023)

10%

Group Regulatory Compliance and Risk Management

10% (increased to 20% for FY2023)

Group Engagement

Individual Performance

10%

20%

Group
Performance
Metrics
Payment
Scale

Individual
Performance
Payment
Scale

Group performance metrics are assessed by measuring each individual outcome against the Board
approved targets.

Outcome %

<90%

90%

95%

100%

110%

Payout %

No payment

50%

75%

100%

150%

Individual performance is determined by assessing performance against individual priorities (Table 7) to
arrive at a performance rating. Performance ratings link to payment ranges as follows:

Rating

1 – Did not meet

2 – Meets some

3 – Meets all

4 – Exceeds

5 – Outstanding

Payout % Range

No payment

0 - 50%

50 - 100%

100 - 125%

125 - 150%

The Star Entertainment Group 2022 Annual Report

27Payment
calculation

A participant’s individual STI award is based on the following calculation:

Fixed
Remuneration

Individual
Target STI %

Performance
Metrics
Outcome %
(0–150%)

Individual
STI award
(capped at
150% x
target)

Incentive
opportunity
levels

Delivery of
payments
(including
deferrals)

Clawback

Guiding
Principles for
informing
discretion

Opportunities are based on the participant’s incentive target in their employment contract (refer Table 13).

The payment range available is 0%-150% of the participant’s incentive target.

Two-thirds of payments are delivered in cash in September.

One-third of all payments are held in restricted shares for a period of twelve months from the date of
the award. These shares are forfeited in the event that the participant voluntarily terminates from the
Group or is terminated with cause (refer Clawback below). Participants are entitled to receive dividends
and have voting rights during the restriction period, however they are unable to vote on remuneration
resolutions at the AGM.

Incentives may be clawed back where there has been a material misrepresentation of the financial
outcomes on which the payment had been assessed and/or the participant’s actions have been found to
be fraudulent, dishonest or in breach of the Group’s Code of Conduct (e.g. misconduct). This provision may
extend up to the prior three financial years of STI payments.

1. Nature and timing of adjustments – adjustments, both positive and negative, will only be made to the

performance/reward outcome (rather than the target) at the time of vesting.

2. Transparency – the Company will provide a clear rationale and disclosure for any adjustments made
(for example, providing a reconciliation to statutory results), especially in cases where, prima facie,
performance has not been achieved.

3. Material or significant events – adjustments will only be made for events or items over the performance
period that have a material impact on the outcome. Adjustments will also only be made where it has an
impact on the result of the award.

4. Balancing short term and long term performance – adjustments will be made that balance the interests
of short term performance outcomes with long term performance outcomes. For example, where a short
term objective was not met because a strategic decision was taken to support a longer term objective.
Adjustments will, where appropriate, be informed by the assumptions used in the business plan from
which the target was set, to determine whether there has been a material deviation in the assumptions
used and whether this was outside of management’s control.

5. Maintain plan integrity – adjustments will be carefully considered to ensure they maintain the plan’s

integrity and purpose.

6. Assessing behavioural impacts on performance outcomes – the actions of participants will be considered

in the achievement of performance metrics to assess adherence to the Company’s code of conduct.
7. Exercising discretion consistently and fairly – the use of discretion will be applied consistently both

positively and negatively and information used will be sufficiently objective and free from bias to ensure
decisions are arrived at fairly.

1 Normalised results reflect the underlying performance of the business as they remove the inherent volatility of the International VIP
Rebate business and exclude significant items that are considered by their nature and size unusual or not in the ordinary course of
business. This methodology has been consistently applied since FY2012.

284.4 LTI design

There were no changes to the design or performance measures in place for FY2022.

In FY2022, there were 32 participants invited to participate in the plan (decreased from 33 participants in FY2021).
Each of the Executive KMP participates in the plan.

TABLE 4: KEY DESIGN FEATURES OF THE LTI

Purpose

The LTI is designed to reward participants for their contributions towards achieving the Group’s strategic
priorities orientated around delivering long term sustainable shareholder value creation.

Type of Equity
Award

Performance rights (zero exercise price options) are used for the LTI. No amount is payable on the grant of
the performance rights or upon vesting of performance rights. If the performance rights vest, an equivalent
number of fully paid ordinary shares will be automatically delivered to the holder.

Upon vesting of the performance rights and subject to the holder remaining employed with the Company,
the Company will deliver to the holder fully paid ordinary shares in the Company. The holder will receive full
voting and dividend rights corresponding to the rights of all other holders of ordinary shares in the Company.

Determination
of the number
of rights

The number of performance rights allocated to a participant is based on their Target LTI award,
divided by the Face Value of a Performance Right as shown in the following calculation:

Target LTI ($)

Face Value of
a performance
right

Number of
performance
rights
allocated

The Face Value reflects the face value of the share at the effective Grant Date with reference to the
volume weighted average price (VWAP) of the Company’s shares traded on the ASX on the 20 trading days
prior to the Effective Grant Date. Details of annual grants to Executive KMP are set out in Table 11.

Dividend
entitlements

Participants are not entitled to dividends until shares are allocated (based on meeting the relevant
performance hurdles). At that time, dividends will either be paid by allocating dividend equalisation
shares or by means of a cash equivalent payment, based on actual dividends paid to shareholders
during the vesting period, the degree to which performance hurdles were met and the extent of vesting of
the award.

Test Date and
Vesting date

Cessation of
employment,
Change of
Control and
Clawback

Vesting
conditions
(hurdles)

Performance rights are tested on the fourth anniversary of the Effective Grant Date and are not
subject to retesting.

All unvested performance rights lapse immediately upon cessation of employment with the Group.
However, the Board has discretion in special circumstances to determine the number of performance rights
retained and the terms applicable. Special circumstances include events such as retirement, redundancy,
death and permanent disability. If a Change of Control Event occurs, or the Board determines in its
absolute discretion that a Change of Control Event may occur, the Board will determine in its absolute
discretion appropriate treatment regarding any awards.

Unvested rights may be clawed back where there has been a material misrepresentation of the financial
outcomes on which the award had been assessed and/or the participant’s actions have been found to be
fraudulent, dishonest or in breach of the Company’s Code of Conduct (e.g. misconduct).

TSR (33.3% of the award)

The Company’s TSR ranking against the peer group of companies (relative TSR) is used as a performance
hurdle, as it directly aligns the interests of participants with the interests of shareholders, which is to
maximise its TSR compared with the TSR for peer companies.

The table below sets out the vesting scale for TSR. The Company’s TSR ranking, compared to its peer group,
must be at least at the 50th percentile for any vesting to occur.

TSR Percentile Ranking

Below the 50th percentile

At the 50th percentile

Percentage of awards vesting

0% vesting

50% vesting

Above the 50th and below the 75th percentile

Pro-rata between 50% (at 50th percentile) and 100%
(at 75th percentile)

At or above the 75th percentile

100%

EPS (33.3% of the award)

The EPS hurdle measures statutory earnings per ordinary share adjusted for the theoretical win rate in
the VIP Rebate business. It drives a line of sight between shareholder value creation and management’s
financial performance.

The threshold hurdle is set by the Board by reference to market consensus. The target hurdle is set by
the Board by reference to the Company’s Board approved five-year business plan. While the Board
may exercise certain discretions under the LTI, the Board will only consider exercising its discretion with
respect to any applicable adjustments to thresholds and targets, at the time of testing for vesting
purposes (refer to guiding principles on next page).

The Star Entertainment Group 2022 Annual Report

29Vesting
conditions
(hurdles)
(continued)

The table below sets out the percentage of the performance rights subject to the Company’s EPS
performance as at the Test Date.

EPS Performance

Below threshold

At threshold

Percentage of awards vesting

0% vesting

50% vesting

Between threshold and stretch

Pro-rata between threshold and stretch

Stretch target

100%

ROIC (33.4% of the award)

The ROIC hurdle measures statutory EBIT, adjusted for the theoretical win rate in the International VIP
Rebate business, as a proportion of average Net Debt and average Shareholder Equity. That is:

ROIC = EBIT adjusted for theoretical win rate in the International VIP Rebate business

Average Net Debt + average Shareholder Equity

The ROIC hurdle measures the efficiency of earnings generated from capital investments made by
the Group and seeks to create alignment of incentive programs in driving the execution of the
Group’s capital intensive strategy to build new assets and improve existing properties, with the aim
of generating additional revenue and ultimately sustainable value for shareholders.

The threshold hurdle is set by the Board based on the Group’s present ROIC levels, and the target
hurdle is set with reference to the Group’s five-year business plan.

While the Board may exercise certain discretions under the LTI, the Board will only consider exercising its
discretion with respect to adjustments to thresholds and targets at the time of testing for vesting purposes
and applying the guiding principles set out below.

The table below sets out the percentage of performance rights subject to the Company’s ROIC
performance as at the Test Date.

ROIC Performance

Below threshold

At threshold

Percentage of awards vesting

0% vesting

50% vesting

Between threshold and stretch

Pro-rata between threshold and stretch

Stretch target

100%

Impact of
COVID-19

The impact of COVID-19 on the outcome of the FY2019 LTI will be assessed at the time of testing in October
2022. The guiding principles communicated in FY2019 and outlined below, will be applied to support a
fair and reasonable outcome. Further updates on the outcomes will be provided ahead of the 2022 AGM.

Disclosure of
performance
hurdles

Guiding
principles for
informing
discretion

The Company will disclose the EPS and ROIC targets on a retrospective basis to ensure that the
Company’s competitive position is not undermined.

The Board has adopted a set of guiding principles when it considers adjustments to performance
outcomes under the LTI. The process for adjustments and principles applied are outlined below:

1. Nature and timing of adjustments – adjustments, both positive and negative, will only be made to the

performance/reward outcome (rather than the target) at the time of vesting.

2. Transparency – the Company will provide a clear rationale and disclosure, for any adjustments made
(for example, providing a reconciliation to statutory results), especially in cases where, prima facie,
performance has not been achieved. Where possible, advance disclosure of events that may give rise
to adjustments will be disclosed to ensure early communication to shareholders.

3. Material or significant events – adjustments will only be made for events or items over the vesting

period that have a material impact on the outcome. Adjustments will also only be made where it has an
impact on the result of the award. Where possible, the item will be referenced back to the assumptions
used in the business plan from which the target was set, to determine whether there has been a material
deviation in the assumptions used and whether this was outside of management’s control. For example,
if there has been a change to accounting policies resulting in the EPS and/or ROIC targets being
determined in a different way to how the outcome is determined at the time of vesting.

4. Balance interests of shareholders and management – adjustments will be made to balance the

interests of shareholders and management, for example, if shareholders are experiencing poor results,
then management should share in the burden, and vice versa (unless there are compelling reasons for
this not being the case, in which event, details will be provided).

5. Maintain plan integrity – adjustments will be carefully considered to ensure they maintain the plan’s
integrity and purpose (i.e. to incentivise and reward management for undertaking transactions that
deliver long-term sustainable shareholder value).

6. Exercising discretion consistently and fairly – the use of discretion will be applied consistently (both

positively and negatively) and information used will be sufficiently objective and free from bias to ensure
decisions are arrived at fairly.

304.5 Minimum shareholding policy

To support the alignment of the interests of the Board and executives with the interests of shareholders, the Group
has minimum shareholding policies in place. Executive KMP are required to progressively acquire shares over a
five year period from the date of their appointment (for new Executive KMP).

The Managing Director and Chief Executive Officer is to hold a minimum number of shares which is of equal value
to 150% of one year’s salary at the time of his unconditional appointment. Other Executive KMP are to hold a
minimum number of shares which is of equal value to 100% of one year’s salary at the time of their unconditional
appointment. Direct and indirect holdings in shares will count towards the minimum shareholding target. Unvested
performance rights do not count towards minimum shareholding requirements.

All Executive KMP are currently meeting, or on track to meet, their minimum shareholding requirements in the required
timeframes.

Table 5 shows the number of shares and performance rights held by Executive KMP at the beginning and end of the
financial year unless otherwise stated.

TABLE 5: SHARES AND PERFORMANCE RIGHTS HELD BY EXECUTIVE KMP AT 30 JUNE 2022

Name

Holding

Balance at
start
of the year1

Acquired or
granted as
compensation

Restricted
shares released
during the year2

Disposed or
lapsed during
the year

Balance
at the end of
the year3

Current Executive KMP

Geoff Hogg

Performance Rights

378,409

108,019

Christina
Katsibouba

Ordinary Shares

264,979

Restricted Shares4

42,788

Performance Rights

195,095

Ordinary Shares

Restricted Shares

277

42,127

1,315

Former Executive KMP

Matt Bekier

Performance Rights

2,936,077

696,128

Ordinary Shares

1,008,905

273,903

(42,127)

Restricted Shares

273,903

(273,903)

Harry
Theodore

Performance Rights

302,363

136,825

Ordinary Shares

71,979

62,736

Restricted Shares

62,736

(62,736)

Greg Hawkins Performance Rights

736,250

181,473

Ordinary Shares

230,6025

79,846

(82,500)

403,928

307,106

1,976

195,095

277

(627,706)

3,004,499

1,282,808

(31,818)

407,370

134,715

(163,636)

754,087

(37,522)

272,926

Restricted Shares

79,846

(79,846)

1 For KMPs who commenced their role as KMP during the year, the balance disclosed is from the date they commenced as a KMP.

2 Restricted shares that are no longer subject to a holding lock are transferred into the ordinary shares category.

3 For KMPs who ceased their role as KMP during the year, the balance disclosed is from the date they ceased as a KMP.

4 Includes 1,315 ordinary shares acquired in FY2022 through salary sacrifice under the General Employee Share Plan. The shares are subject

to a holding lock of two years from the acquisition dates. The holding lock ends in FY2023.

5 Mr Hawkins opening balance has been restated to include shares held in a separate account not previously disclosed.

The Star Entertainment Group 2022 Annual Report

315 VARIABLE REWARD OUTCOMES FOR

THE FINANCIAL YEAR ENDED 30 JUNE 2022

5.1 STI outcome for FY2022

Group Performance:
Under the Company’s new STI design, as detailed in Table 3, awards for Executive KMP are generated by
performance against four Company metrics, comprising 80% of the award, and individual performance
comprising 20% of the award.

Details of the Company's targets and outcomes for FY2022 are noted in Table 6 below.

TABLE 6: FY2022 PERFORMANCE OUTCOMES AGAINST KEY PERFORMANCE INDICATORS FOR THE STI

STI Metric

Weighting

Target

Outcome

Outcome
% of Target

Weighted
Outcome %

NPAT
• Deliver Budgeted Normalised NPAT

50%

$0.6m

-$33.4m

N.M.1

GUEST SATISFACTION
• Elevate the guest service culture and guest

experience across all our properties

10%

106

123%

15%

REGULATORY
COMPLIANCE
& RISK
MANAGEMENT

• Total Reportable Injury
Frequency Rate (TRIFR)

3.33%

14.4

11.8

118%

• Compliance Training Completion

3.33%

102%

3.67%

• Incident, breach reporting and

actions completion

3.34%

MET

100%

3.33%

ENGAGEMENT
• Retain talented teams through a compelling

Employee Value Proposition and highly engaged
Team Member environment.

WEIGHTED GROUP STI OUTCOME

FINAL GROUP STI OUTCOME
(BOARD DISCRETION APPLIED)

10%

7.5

100%

10%

37%

25%

1 The outcome % of target for normalised NPAT is not meaningful as result was a loss.

The Board reviewed the Group STI outcomes and resolved to use its discretion to zero out the Regulatory
Compliance and Risk Management metric. This decision was taken with the view that the metric has not been met
in its intended spirit due to the issues raised in the Bell review.

Executive KMP Performance
Under the STI, Executive KMP are required to complete a balanced scorecard that comprises a mixture of financial
and non-financial targets and strategic priorities.

Table 7 (over page) shows individual key performance indicators and the FY2022 percentage of STI target
received by each eligible Executive KMP. Key performance indicators and STI outcomes for Christina
Katsibouba are not included as they relate in full to her previous non-KMP role.

32TABLE 7: INDIVIDUAL KEY PERFORMANCE INDICATORS AND FY2022 STI PERCENTAGE OF TARGET RECEIVED

Geoff Hogg – Acting Chief Executive Officer1

Individual Priorities

1. Develop QLD Leadership Team

Achievements:

Built depth and capability of senior leadership roles including in Hospitality.
COO Brisbane appointed.

2. Drive QWB operational design decisions and pre-opening planning

for a December 2022 opening

Achievements:

Operational design decisions have been completed. Pre-opening planning is well advanced
for a delayed opening in mid-2023.

3. Improve operating conditions

Achievements:

Covid related restrictions were progressively removed throughout FY22. Approval granted
for QLD EGM commission programs and a table games cashless trial.

4. Support Diversity & Inclusion

Achievements:

Employee engagement survey results on diversity exceeded targets. Company formally
recognised externally as a leader in diversity and inclusion.

Individual STI Outcome

Weighted Individual STI Outcome (20% x individual outcome %)

Total Individual STI Outcome
(weighted Group STI outcome per Table 6 + weighted individual STI outcome)

1 KPIs and achievements for FY2022 reflect those agreed for the substantive role.

Weighting

Outcome

25%

Met target

25%

Below Target

25%

On Target

25%

Above Target

100% of target

20%

$206,753 /
45% of target

Table 8 details the variable remuneration of Executive KMP under the STI during the period.

TABLE 8: VARIABLE REMUNERATION UNDER THE STI FOR THE YEAR ENDED 30 JUNE 2022

Executive

Financial
year

Cash
Award
$

Restricted
Share Grant
$

As a % of total
remuneration

STI not
achieved as a
% of target1

Current Executive KMP

Geoff Hogg

Christina Katsibouba

Former Executive KMP

Matt Bekier

Harry Theodore

Greg Hawkins

TOTAL FY2022

TOTAL FY2021

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

137,835

68,918

–

137,835

68,918

–

1 Maximum opportunity is 150% of the executives' target incentive level

20%

–

55%

100%

–

100%

The Star Entertainment Group 2022 Annual Report

33
Table 9 outlines the performance of the Group and shareholder returns over the last five financial years.

TABLE 9: STATUTORY KEY PERFORMANCE INDICATORS

Performance metric

Statutory NPAT

Basic EPS (statutory)

Full year dividend (fully franked, cents per share)

Share price at year end

Increase/(decrease) in share price

5.2 Vesting under the LTI

FY2018

FY2019

FY2020

FY2021

FY2022

$148.1m

$198.0m

$(94.6)m

$57.9m

$(202.5)m

17.5c

20.5c

$4.93

(2%)

21.6c

20.5c

$4.12

(16%)

(10.3)c

10.5c

$2.84

(31%)

6.1c

0.0c

$3.69

+30%

(21.0)c

0.0c

$2.79

(24%)

Since the Company’s inception in 2011, there have been eleven awards made under the LTI, with six awards tested
and two vesting outcomes (FY2014 and FY2015 awards). Table 10 sets out the details of performance rights issued
over the last five financial years.

TABLE 10: DETAILS OF LTI AWARDS ACTIVE DURING THE YEAR

Detail

FY2018 Award

FY2019 Award

FY2020 Award

FY2021 Award

FY2022 Award

Grant date

2 Oct 2017

3 Oct 2018

25 Sep 2019

24 Sep 2020

23 Sep 2021

Test date

2 Oct 2021

3 Oct 2022

25 Sep 2023

24 Sep 2024

23 Sep 2025

Vesting hurdle(s)

TSR, EPS & ROIC

Test result

All rights lapsed

N/A

During FY2022, the FY2018 Award was tested and did not vest as performance hurdles were not met. The next test date will be in October
2022, for performance rights granted in FY2019.

Performance rights relating to the FY2018 award were tested in October 2021 with none of these rights vesting into
fully paid ordinary shares. The TSR performance of the Group was -7.25% (excluding the value of franking credits),
with a percentile ranking of 21.54%. As this was below the 50th percentile, none of the TSR component of the
FY2018 award vested. The EPS performance hurdle of 6.4 cents per share was below the threshold of 35.9 cents per
share and target of 43.8 cents per share, and accordingly none of the EPS component of the FY2018 award vested.
This was the first time the ROIC performance hurdle was tested, with an outcome of 1.3% which was below the
threshold of 9.5% and target of 11.5%, resulting in no vesting of performance rights for this component.

The FY2019 award, due to be tested on 3 October 2022, has EPS, TSR and ROIC performance hurdles that each
comprise one third of the award outcome. Details of the performance outcomes relative to target and threshold
amounts will be provided to shareholders ahead of the 2022 AGM and reported in the FY2023 Remuneration Report.

Table 11 summarises the unvested performance rights held by Executive KMP as at 30 June 2022.

34TABLE 11: PERFORMANCE RIGHTS BY AWARD HELD BY EXECUTIVE KMP AT 30 JUNE 2022

Executive KMP

FY2019
Award

FY2020
Award

FY2021
Award

FY2022
Award

Total
performance
rights retained

Current Executive KMP

Geoff Hogg

Christina Katsibouba1

Former Executive KMP2

74,952

20,145

93,118

127,839

108,019

403,928

30,032

73,625

71,293

195,095

Matt Bekier

668,203

691,216

948,952

696,128

3,004,499

Harry Theodore

28,908

94,386

147,251

136,825

407,370

Greg Hawkins

–

Total performance rights

792,208

908,752

1,297,667

1,012,265

4,010,892

1 Performance rights in FY2019, FY2020, FY2021 and FY2022 reflect those granted prior to her appointment as Interim Chief Financial Officer.
2 All performance rights under the LTI will lapse upon termination, as per the performance plan rules. The termination dates for Mr Bekier and
Mr Theodore are to be confirmed in due course, and as such the rights have not formally lapsed. Mr Hawkins' rights lapsed on 30 June 2022
following his termination.

Table 12 shows the variable remuneration of Executive KMP under the LTI during the period. Details of the number of
performance rights granted, vested or lapsed during the period are also provided as required under the Corporations
Act and its regulations, including the relevant Australian Accounting Standard principles.

TABLE 12: VARIABLE REMUNERATION UNDER THE LTI FOR THE YEAR ENDED 30 JUNE 2022

Executive

Financial
Year

Number of
Performance
Rights Granted

Fair Value of
Performance
Rights
Granted

Fair Value
at Grant
Date

Grant Date

Test Date

As a % of
total
remuneration1

Number of
Performance
Rights
Vested

Number of
Performance
Rights
Lapsed2

Current Executive KMP

Geoff Hogg

Christina
Katsibouba

2022

2021

2022

2021

108,919

408,254

3.78

23/09/2021

23/09/2025

127,839

352,836

2.76

24/09/2020 24/09/2024

71,293

269,450

3.78

23/09/2021

23/09/2025

–

-2%

11%

–

Former Executive KMP

Matt Bekier

2022

2021

696,128

2,630,993

3.78

23/09/2021

23/09/2025

-104%

948,952

2,619,108

2.76

24/09/2020 24/09/2024

21%

Harry Theodore

2022

136,825

517,126

3.78

23/09/2021

23/09/2025

-15%

Greg Hawkins

2021

2022

2021

147,251

406,413

2.76

24/09/2020 24/09/2024

12%

181,473

685,871

3.78

23/09/2021

23/09/2025

-32%

247,382

682,774

2.76

24/09/2020 24/09/2024

11%

TOTAL FY2022

1,122,445

4,424,244

TOTAL FY2021

1,471,424

4,061,131

–

(82,500)

(54,064)

–

(627,706)

(548,204)

(31,818)

(26,938)

(917,723)

(117,958)

(1,659,747)

(747,164)

1 Percentage calculation based on accounting LTI expense and total remuneration as reported in Table 14.

2 Performance rights granted in FY2018 were tested in October 2021 and resulted in no performance rights vesting. Performance rights
granted in FY2019 are due for testing in October 2022. All of Mr Hawkin's rights lapsed on 30 June 2022 following his termination.

The Star Entertainment Group 2022 Annual Report

35
6 EXECUTIVE KMP CONTRACTS AND REMUNERATION

Remuneration arrangements for Executive KMP are reviewed annually by the Board. Table 13 outlines the remuneration
arrangements for Executive KMP in FY2022 and their contracted employment details.

TABLE 13: EXECUTIVE KMP REMUNERATION AND EMPLOYMENT CONTRACTS

CURRENT EXECUTIVE KMP
Contract Details

Geoff Hogg3
Acting Chief Executive Officer

Christina Katsibouba
Interim Chief Financial Officer

Geoff Hogg
Chief Casino Officer QLD

FY2021

FY2022

FY2021

FY2022

FY2021

FY2022

Fixed remuneration1

Short-term
incentive target

Long-term incentive
(annual award value)

Total Target
Annual Reward

Short-term incentive maximum
value

Long-term incentive
maximum value

Non-monetary benefits

Other benefits

N/A

Notice by the Executive

9 months

Notice by the Group

Restraint2

Non solicitation

9 months

12 months

$1,000,000

N/A

$800,000

$651,131

$750,000

$600,000

N/A

$400,000

$390,679

$450,000

$600,000

N/A

$480,000

$390,679

$450,000

$2,200,000

N/A

$1,680,000

$1,432,489

$1,650,000

$900,000

N/A

$600,000

$586,019

$675,000

$600,000

N/A

9 months

12 months

$480,000

$390,679

$450,000

N/A

9 months

12 months

Contract duration

Open ended

FORMER EXECUTIVE KMP
Contract Details

Matt Bekier
Former Managing Director and
Chief Executive Officer

Harry Theodore
Former Chief Financial Officer

Greg Hawkins
Former Chief Casino Officer
NSW

FY2021

FY2022

FY2021

FY2022

FY2021

FY2022

Fixed remuneration1

$1,728,900

$1,875,000

$750,000

$950,000

$1,260,000

$1,728,900

$1,875000

$450,000

$570,000

$756,000

$2,900,000

$450,000

$570,000

$756,000

$6,357,800

$6,650,000

$1,650,000

$2,090,000

$2,772,000

$2,593,350

$2,812,500

$675,000

$855,000

$1,134,000

$2,900,000

$450,000

$570,000

$756,000

Short-term
incentive target

Long-term incentive
(annual award value)

Total Target
Annual Reward

Short-term incentive maximum
value

Long-term incentive
maximum value

Non-monetary benefits

Other benefits

N/A

Notice by the Executive

12 months

Notice by the Group

Restraint2

Non solicitation

12 months

N/A

9 months

12 months

N/A

9 months

12 months

Contract duration

Open ended

36INCOMING EXECUTIVE KMP
Contract Details

Robbie Cooke
Incoming Managing Director and
Chief Executive Officer

Scott Wharton
Chief Executive Officer The Star Sydney and
Group Head of Transformation

FY2022

FY2023

FY2022

Fixed remuneration1

Short-term
incentive target

Long-term incentive
(annual award value)

Total Target
Annual Reward

Short-term incentive maximum
value

Long-term incentive
maximum value

Non-monetary benefits

Other benefits

N/A

Notice by the Executive

12 months

Notice by the Group

Restraint2

Non solicitation

12 months

Contract duration

Open ended

$1,600,000

$960,000

$1,600,000

$4,160,000

$1,440,000

$1,600,000

N/A

9 months

12 months

Open ended

FY2023

$950,000

$570,000

$950,000

$2,470,000

$855,000

$950,000

1 The Star Entertainment Group deducts superannuation from the Executives’ fixed remuneration as per the Australian Taxation Office Superannuation
Guarantee Cap.

2 Exclusion from being engaged in any business or activity in Australia which competes with or is substantially similar to the business of

The Star Entertainment Group.

3 Mr Hogg commenced the role of Acting Chief Executive Officer on 1 June 2022. Mr Hogg tendered his resignation on 26 September 2022.

The Star Entertainment Group 2022 Annual Report

377 STATUTORY EXECUTIVE KMP REMUNERATION

Table 14 sets out Executive KMP remuneration as required by the Corporations Act and its regulations, including
the relevant Australian Accounting Standard principles.

TABLE 14: STATUTORY EXECUTIVE KMP REMUNERATION

Executive

Financial
year

Short-term

Long-term Post-Employment

Charge for share
based allocations

Termination
payments6

Total
remuneration

Performance
related

Salary1

Bonus

Non-monetary
benefits2
$

Long service
leave
$

Performance
rights4
$

Restricted
shares5
$

Current Executive KMP

Geoff Hogg

2022

849,664 137,835

5,364

Christina
Katsibouba

2021

700,760

2022

124,043

2021

–

Former Executive KMP

Matt Bekier

2022

1,428,705

2021

1,988,464

Harry Theodore

2022

909,365

2021

851,943

Greg Hawkins

2022

906,023

2021

1,304,268

–

2,409

840

–

2,605

4,276

2,605

4,276

2,605

4,276

Superannuation3

23,568

21,694

3,076

–

16,397

10,676

1,936

–

22,452

28,348

13,053

12,298

17,550

(19,746)

31,808

95,139

57,700

11,251

–

1,044,890

888,378

141,146

–

14%

17%

–

2,076,886

1,736,128

-104%

17,486

(1,812,006)

26,163

633,928

383,018

–

3,064,197

33%

20,400

(222,199)

–

784,371

1,507,595

-15%

21,694

128,702

87,729

–

1,106,642

20%

20,400

(454,831)

–

932,580

1,424,327

-32%

20,660

26,494

186,401

111,655

–

1,653,754

18%

TOTAL FY2022

4,217,800 137,835

14,019

71,388

84,930

(2,497,531)

31,808

3,793,837

5,854,086

TOTAL FY2021

4,845,435

–

15,237

71,982

96,045

1,044,170

640,102

–

6,712,971

–

1 Comprises salary, salary sacrificed benefits (including motor vehicle novated leases) and annual leave expense.
2Comprises car parking, accommodation, airfares and travel costs where applicable. These amounts are non-contractual.
3 Comprises superannuation contributions per Superannuation Guarantee legislation and salary sacrificed superannuation.
4 Represents the fair value of share based payments expensed / (credited) by The Star Entertainment Group in relation to LTI awards.
The reduction in the expense in FY2022 is due to the adjustment made under the accounting standards to reflect the probability of
these rights vesting.

5 Represents the fair value of share based payments expensed by The Star Entertainment Group in relation to STI awards. The expense is

recognised over a 26 month holding lock period.

6 Termination payments include salary, annual leave expense, long service leave expense and other on-costs expected to be incurred
between the executives’ resignation date and termination date. The termination dates for Mr Bekier and Mr Theodore are to be confirmed
in due course. Mr Hawkins terminated on 30 June 2022 and received a payment in lieu of his contractual notice period.

8 NED REMUNERATION

Remuneration Policy

• NEDs (excluding the Chairman) receive a Board fee and a Committee fee for their participation as Chair or

member of each Committee.

• The Chairman receives an all-inclusive fee as Chairman of the Board and as an ex-officio member of all

Board Committees.

• NEDs do not receive any performance or incentive payments and are not eligible to participate in any of the
Group’s reward programs. This policy aligns with the principle that NEDs act independently and impartially.

• Board fees are not paid to the Managing Director and Chief Executive Officer. Executive KMPs do not receive

fees for directorships of any subsidiaries.

NED Fees

The aggregate fees payable to NEDs for their services as directors are limited to the maximum annual amount
approved by shareholders, currently set at $2,500,000 including superannuation contributions.

The Board approved a 3.5% increase to the Board and Chair fees effective from 1 September 2021. There was no
change to Committee fees in FY2022 and there will be no changes to NED or Committee fees for FY2023.

Table 15 sets out the annual Board and Committee fee structure for FY2022.

38TABLE 15: ANNUAL NED FEES (INCLUSIVE OF SUPERANNUATION)

Chair

Member

Board

$501,458

$168,912

Audit

$35,000

$17,500

Risk, Compliance and
Regulatory Performance

Remuneration, People &
Social Responsibility1

$35,000

$17,500

$35,000

$17,500

1 The Remuneration Committee was merged with the People, Culture and Social Responsibility Committee and renamed as the Remuneration,
People and Social Responsibility Committee from 1 January 2022.

The Star Entertainment Group Limited remunerates NEDs for the full month of fees irrespective of their
commencement date. Observer fees are paid where the NED appointment is subject to casino regulatory approvals
being obtained. Observer fees are equivalent to applicable Board and Committee fees.

Table 16 sets out total remuneration received by each NED.

TABLE 16: NED REMUNERATION

NED

Financial
year

Board and
Committee Fees
$

Executive
Salary
$

Superannuation1

Total2

Current Non-Executive Directors

Ben Heap

Gerard Bradley AO

Katie Lahey AM

Michael Issenberg3

Richard Sheppard

2022

2021

2022

2021

2022

2021

2022

2021

2022

2021

Former Non-Executive Directors

John O’Neill AO4

Sally Pitkin AO

Zlatko Todorcevski

TOTAL FY2022

TOTAL FY2021

2022

2021

2022

2021

2022

2021

2022

2021

230,590

212,968

193,795

196,986

201,219

212,968

51,185

–

193,795

194,322

458,631

462,806

201,219

212,968

–

32,831

–

375,000

–

1,530,434

375,000

1,525,849

–

21,380

20,232

19,380

18,714

20,122

20,232

5,119

–

19,380

18,461

23,568

21,694

20,122

20,232

–

3,119

129,071

122,684

251,970

233,200

213,175

215,700

221,341

233,200

56,304

–

213,175

212,783

857,199

484,500

221,341

233,200

–

35,950

2,034,505

1,648,533

1 Comprises superannuation contributions per Superannuation Guarantee legislation and salary sacrificed superannuation.

2 During FY2022, NEDs accepted a 20% reduction in fees in August and September following the impact of COVID-19 business closures.

3 On 17 February 2022, the Company announced the appointment of Michael Issenberg as a Non Executive Director, subject to casino

regulatory approvals being obtained. Michael Issenberg commenced as a Non-Executive Director on 11 July 2022.

4 In addition to his Chairman fees, John O'Neill received an annualised salary of $1.5 million to serve as Executive Chairman on an
interim basis. This amount is not included in the $2.5 million annual NED fee limit as it related to his Executive Chairman duties. This
arrangement ceased on 31 May 2022 with one month's notice being paid until 30 June 2022. Mr O'Neill was not invited to participate in
any of the Company's incentive plans during this time.

Minimum Shareholding Policy for NEDs

To support the alignment of the interests of the Board and executives with the interests of shareholders, the Group
has minimum shareholding policies in place. NEDs are required to progressively acquire shares over a three year
period from the date of commencement of their unconditional appointment (within three years from the date of
commencement of the policy (for existing directors). NEDs are to hold shares of equal value to their respective
annual base fee applicable at the time of their unconditional appointment. Direct and indirect holdings will count
towards the minimum shareholding target.

All NEDs are currently meeting, or on track to meet, their minimum shareholding requirements in the required timeframes.

The Star Entertainment Group 2022 Annual Report

TABLE 17: SHARES HELD BY NEDS AT 30 JUNE 2022

Name

Balance at
start of the year

Number acquired

Number divested

Balance at the
end of the year

Current Non-Executive Directors

Ben Heap

Gerard Bradley AO

Katie Lahey AM

Michael Issenberg

Richard Sheppard

Former Non-Executive Directors

John O’Neill AO

Sally Pitkin AO

Total ordinary shares

40,000

75,000

56,907

–

10,000

–

250,000

50,000

133,800

45,900

601,607

16,200

–

76,200

–

50,000

75,000

56,907

–

300,000

150,000

45,900

677,807

9 OTHER INFORMATION

9.1. LOANS AND OTHER TRANSACTIONS WITH KMP

There have been no loans or other transactions with KMP during the year.

40Financial
Report

For the year ended 30 June 2022

THE STAR ENTERTAINMENT GROUP LIMITED
A.C.N. 149 629 023
ASX CODE: SGR
AND ITS CONTROLLED ENTITIES

The Star Entertainment Group 2022 Annual Report

Consolidated Income Statement

For the year ended 30 June 2022

Consolidated income statement
For the year ended 30 June 2022

Revenue

Other income
Government taxes and levies
Employment costs
Depreciation, amortisation and impairment
Cost of sales
Property costs
Advertising and promotions
Other expenses
Share of net profit/(loss) of associate and joint venture entities
accounted for using the equity method

(Loss)/earnings before interest and income tax (LBIT/EBIT)

Net finance costs

(Loss)/profit before income tax (LBT/PBT)

Income tax benefit/(expense)

Net (loss)/profit after tax (NLAT/NPAT)

Other comprehensive income/(loss)
Items that may be reclassified subsequently to profit or loss
Change in fair value of cash flow hedges taken to equity, net of tax

Total comprehensive (loss)/income for the period

Earnings per share:
Basic earnings per share
Diluted earnings per share

Note
A2

2022

1,527.1

2021

$m
1,545.4

A3
A3
A3
A4

F3
F3

15.0
(387.0)
(598.7)
(370.8)
(77.1)
(60.2)
(64.5)
(148.8)

16.4

(148.6)

(57.0)

(205.6)

3.1

(202.5)

20.5

(182.0)

12.6
(378.7)
(501.7)
(243.8)
(64.8)
(56.2)
(54.3)
(115.7)

(4.4)

138.4

(58.6)

79.8

(21.9)

57.9

(6.4)

51.5

(21.3)
(21.3)

6.1 cents
6.1 cents

The above consolidated income statement should be read in conjunction with the accompanying notes.

41Consolidated Balance Sheet

For the year ended 30 June 2022

Consolidated balance sheet
For the year ended 30 June 2022

ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Income tax receivable
Derivative financial instruments
Asset held for sale
Other assets

Total current assets

Property, plant and equipment
Intangible assets
Derivative financial instruments
Investment in associate and joint venture entities
Other assets

Total non current assets

TOTAL ASSETS

LIABILITIES
Trade and other payables
Interest bearing liabilities
Income tax payable
Provisions
Derivative financial instruments
Other liabilities

Total current liabilities

Interest bearing liabilities
Deferred tax liabilities
Provisions
Derivative financial instruments
Other liabilities

Total non current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY
Share capital
Retained earnings
Reserves

TOTAL EQUITY

Note

B1
B2

F2
B3
F12
F4

B4
B5
B3
D5
F4

F5
B7
F2
F6
B3
F7

B7
F2
F6
B3
F7

The above consolidated balance sheet should be read in conjunction with the accompanying notes.

* Comparatives have been restated due to wage compliance (refer to note G).

2022

82.0
18.0
16.2
4.4
1.4
-
79.5

201.5

2,635.5
1,662.0
62.9
669.6
39.9

5,069.9

5,271.4

206.4
6.1
-
115.2
5.7
23.1

356.5

1,326.4
140.9
8.3
-
9.0

1,484.6

1,841.1

3,430.3

3,171.0
247.8
11.5

3,430.3

2021
Restated*

67.9
23.3
15.2
-
2.9
30.6
23.8

163.7

2,695.4
1,831.4
13.9
631.7
37.2

5,209.6

5,373.3

179.1
6.8
1.0
94.5
5.6
23.5

310.5

1,285.9
134.3
10.0
8.0
9.8

1,448.0

1,758.5

3,614.8

3,159.3
450.3
5.2

3,614.8

The Star Entertainment Group 2022 Annual Report42Consolidated Statement of Cash Flows

For the year ended 30 June 2022

Consolidated statement of cash flows
For the year ended 30 June 2022

Cash flows from operating activities
Net cash receipts from customers (inclusive of GST)
Payments to suppliers and employees (inclusive of GST)
Payment of government levies, gaming taxes and GST
Income taxes paid
Receipt of government grants

Net cash inflow from operating activities

Cash flows from investing activities
Payments for property, plant, equipment and intangibles
Proceeds from sale of plant and equipment
Payments for investment in associate and joint venture entities

Net cash outflow from investing activities

Cash flows from financing activities
Proceeds from interest bearing liabilities
Repayment of interest bearing liabilities
Dividends paid
Proceeds from issue of shares
Finance costs
Purchase of treasury shares
Disposal of treasury shares
Interest payment of lease liabilities
Principal payment of lease liabilities

Net cash outflow from financing activities

Net increase in cash and cash equivalents

Cash and cash equivalents at beginning of the year

Cash and cash equivalents at end of the year

Note

E2
E2

F8
F8
E2
E2

2022

1,665.9
(1,072.0)
(412.6)
(5.1)
-

176.2

(142.8)
40.8
(21.7)

(123.7)

125.9
(104.0)
-
-
(48.9)
(1.9)
-
(3.5)
(6.0)

(38.4)

14.1

67.9

82.0

The above consolidated statement of cash flows should be read in conjunction with the accompanying notes.

2021

1,689.7
(995.9)
(335.2)
(6.8)
112.7

464.5

(102.1)
33.1
(118.3)

(187.3)

154.0
(369.0)
(75.1)
75.0
(61.3)
-
11.7
(3.8)
(6.9)

(275.4)

1.8

66.1

67.9

43Consolidated Statement of Changes in Equity

For the year ended 30 June 2022

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The Star Entertainment Group 2022 Annual Report44

Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Refer to the Operating and Financial Review (OFR) within the Directors' Report for details of the key transactions during the
year.
Contents
A Key income statement disclosures
A1 Segment information...................................................................................................................................................46
A2 Revenue......................................................................................................................................................................47
A3 Other income and expenses........................................................................................................................................47
A4 Depreciation, amortisation and impairment.................................................................................................................48
A5 Net finance costs.........................................................................................................................................................48
A6 Dividends.....................................................................................................................................................................49
A7 Significant items..........................................................................................................................................................50
A8 Leases.........................................................................................................................................................................50

B Key balance sheet disclosures
B1 Cash and cash equivalents.........................................................................................................................................51
B2 Trade and other receivables........................................................................................................................................51
B3 Derivative financial instruments...................................................................................................................................52
B4 Property, plant and equipment....................................................................................................................................53
B5 Intangible assets.........................................................................................................................................................55
B6 Impairment testing and goodwill..................................................................................................................................56
B7 Interest bearing liabilities.............................................................................................................................................58

C Commitments, contingencies and subsequent events
C1 Commitments..............................................................................................................................................................60
C2 Contingent assets and liabilities..................................................................................................................................60
C3 Subsequent events.....................................................................................................................................................62

D Group structure
D1 Related party disclosures............................................................................................................................................64
D2 Parent entity disclosures.............................................................................................................................................66
D3 Deed of cross guarantee.............................................................................................................................................68
D4 Key Management Personnel disclosures....................................................................................................................69
D5 Investment in associate and joint venture entities.......................................................................................................70

E Risk Management
E1 Financial risk management objectives and policies.....................................................................................................74
E2 Additional financial instruments disclosures................................................................................................................78

F Other disclosures
F1 Other comprehensive income......................................................................................................................................80
F2 Income tax...................................................................................................................................................................80
F3 Earnings per share......................................................................................................................................................83
F4 Other assets................................................................................................................................................................83
F5 Trade and other payables............................................................................................................................................83
F6 Provisions....................................................................................................................................................................84
F7 Other liabilities.............................................................................................................................................................85
F8 Share capital and reserves..........................................................................................................................................85
F9 Reconciliation of net profit after tax to net cash inflow from operations.......................................................................87
F10 Employee share plans...............................................................................................................................................88
F11 Auditor's remuneration...............................................................................................................................................89
F12 Assets held for sale...................................................................................................................................................89
G Accounting policies and corporate information......................................................................................................90

45Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

A Key income statement disclosures
A1 Segment information

The Group's operating segments have been determined based on the internal management reporting structure and the
nature of products and services provided by the Group. They reflect the business level at which financial information is
provided to those in the roles of executive decision makers, being the Acting Chief Executive Officer (prior to this, the
Managing Director and Chief Executive Officer) and the Interim Chief Financial Officer (prior to this, the Chief Financial
Officer), for decision making regarding resource allocation and performance assessment.
The Group has three reportable segments:

Sydney

Comprises The Star Sydney's casino operations, including hotels, restaurants, bars and other
entertainment facilities.

Gold Coast

Comprises The Star Gold Coast's casino operations, including hotels, theatre, restaurants, bars and
other entertainment facilities.

Brisbane

Comprises Treasury's casino operations, including hotel, restaurants and bars.

2022
Gross revenues - VIP a
Gross revenues - domestic a

Segment revenue

Segment earnings before
tax,
depreciation, amortisation and significant
items

interest,

Depreciation
significant items (refer to note A4)

amortisation

and

before

Capital expenditure

2021
Gross revenues - VIP a
Gross revenues - domestic a

Segment revenue

Segment
depreciation, amortisation and significant items

earnings

interest,

before

tax,

Depreciation and amortisation before significant
items (refer to note A4)

Capital expenditure

Sydney
$m

Gold Coast
$m

Brisbane
$m

4.7
778.8

783.5

83.4

118.3

60.8

8.5
819.7

828.2

199.8

119.9

58.5

0.6
423.8

424.4

89.3

63.1

65.2

0.6
380.7

381.3

112.5

61.9

59.3

0.2
326.0

326.2

64.8

26.9

13.6

0.4
347.2

347.6

114.4

28.7

13.5

Total
$m

5.5
1,528.6

1,534.1

237.5

208.3

139.6

9.5
1,547.6

1,557.1

426.7

210.5

131.3

a Total gross revenue is presented as the gross gaming win before player rebates and promotional allowances of $7.0 million

(2021: $11.7 million).

Reconciliation of reportable segment profit to profit before income tax
Segment earnings before interest, tax, depreciation, amortisation and
significant items
Depreciation and amortisation a (refer to note A4)
Significant items (refer to note A7)
Unallocated items:
- net finance costs a (refer to note A5)
- share of net loss of associate and joint venture entities accounted for using
the equity method a (refer to note D5)

(Loss)/profit before income tax (LBT/PBT)
a These items are before significant items (refer to note A7).

2022
$m

237.5
(208.3)
(176.0)

(50.2)

(8.6)

(205.6)

2021
$m

426.7
(210.5)
(77.7)

(54.3)

(4.4)

79.8

The Star Entertainment Group 2022 Annual Report46Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

A2 Revenue

Gaming
Non-gaming
Other

Total revenue

2022

1,070.7
448.1
8.3

1,527.1

2021

1,150.9
385.1
9.4

1,545.4

Revenue
Revenue is recognised when the Group satisfies its obligations in relation to the provision of goods and services to its
customers in the ordinary course of business. Revenue is measured at an amount that reflects the consideration to
which the Group expects to be entitled in exchange for performing these obligations, including any discounts, rebates,
price concessions, incentives or performance bonuses. Revenue is constrained such that the significant reversal of
revenue in a future period is not highly probable. Revenue comprises net gaming win, less player and gaming promoter
rebates and promotional allowances, as well as other non-gaming revenue from hotels, restaurants and bars.
Customer loyalty programs
The Group operates customer loyalty programs enabling customers to accumulate award credits for on-property spend.
A portion of the spend, equal to the fair value of the award credits earned and reduced for expected breakage, is treated
as deferred revenue (refer to note F7). Revenue from the award credits is recognised in the income statement when the
award is redeemed or expires. The stand alone selling price of complimentary services (including hotel room nights,
food and beverage, and other services) that are provided to casino guests as incentives related to gaming play are
recorded as revenues related to the respective goods or services, as they are provided to the patron. The residual
amount is recorded as gaming revenue.

A3 Other income and expenses

(Loss)/profit before income tax is stated after charging the following expenses and significant items:

Other income

Gain on disposal of assets a

Net foreign exchange gain

Other

a The gain on disposal of assets includes the disposal of Jet (2021: disposal of land). Refer to note A7.

Government taxes and levies (including gaming GST):

New South Wales
Queensland

Employment costs:
Salaries, wages, bonuses, redundancies and other benefits b

Defined contribution plan expense (superannuation guarantee charges)
Share based payment expense (refer to note F10)

2022

10.1
0.1
4.8

15.0

219.2
167.8

387.0

554.6
44.9
(0.8)

598.7

2021

10.2
-
2.4

12.6

208.0
170.7

378.7

451.3
42.2
8.2

501.7

b Salaries and wages have increased due to the COVID-19 restrictions being lifted. In the prior comparable period (pcp), the amount is
net of $88.2 million of financial support provided by the Federal Government under the JobKeeper wage subsidy scheme. As a result
of the JobKeeper subsidy, the Group received a $58.0 million benefit towards salaries and wages expenses, for employees who had
been stood up or were working reduced hours.

47Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

A4 Depreciation, amortisation and impairment

Property, plant and equipment (refer to note B4)
Intangible assets (refer to note B5)
Other
Total depreciation and amortisation
Impairment - Property, plant and equipment
Impairment - Goodwill (refer to note A7)

Total impairment
Total depreciation, amortisation and impairment

2022

171.5
36.2
0.6
208.3
-
162.5

162.5
370.8

2021

176.2
33.4
0.9
210.5
33.3
-

33.3
243.8

Depreciation is calculated using a straight line method. The useful lives over which the assets are depreciated are as
follows (for further details of the useful lives of intangible assets refer to note B5):

Freehold and leasehold buildings
Leasehold improvements
Plant and equipment
Software
Licences

10 - 95 years
4 - 75 years
5 - 20 years
3 - 10 years
Until expiry

Operating equipment (which includes uniforms, casino chips, kitchen utensils, crockery, cutlery and linen) is recognised
as a depreciation expense based on usage. The period of usage depends on the nature of the operating equipment.
Right of use assets, which includes plant, equipment and property, is depreciated on a straight line basis over the
shorter of its estimated useful life and the lease term. The Group's lease portfolio includes assets with lease terms
between 1 and 75 years.
The residual values and useful lives are reviewed annually, and adjusted if appropriate, at each financial reporting date.

A5 Net finance costs

Interest paid on borrowings
Borrowing costs
US Private Placement premium unwind
Fair value hedging adjustment
Leases interest
Interest on underpaid casino duty

Net finance costs recognised in the income statement a

2022
$m

37.6
13.3
-
(2.1)
3.5
4.7

57.0

2021
$m

46.1
13.7
(5.4)
0.4
3.8
-

58.6

a Net finance costs include $2.1 million (2021: $4.3 million) of finance costs associated with COVID-19 affected loan facilities and

$4.7 million (2021: nil) of interest on underpaid casino duty (refer to note A7).

Net finance costs of $57.0 million were down 2.7% on the pcp primarily due to lower average debt balances
and cancellation of the $200 million club facility in December 2020, partially offset by recognition of the interest
on underpaid casino duty.

The Star Entertainment Group 2022 Annual Report48Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

A6 Dividends

The Group remains committed to maintaining a balance sheet that positions it for post-COVID-19 recovery. No
final dividend was declared, given the continuing impacts of COVID-19 on the Group and in accordance with
the conditions of debt covenant waivers which restrict further cash dividends from being paid until the
Group’s gearing, which represents the ratio of net debt to 12 month trailing statutory EBITDA, is below 2.5
times.

Dividends declared and paid during the year on ordinary shares
Final dividend paid during the year in respect of the year ended 30 June a

Interim dividend paid during the year in respect of the half year ended 31
December 2019 b

2022
$m

2021
$m

96.4

No final dividend were declared for the years ended 30 June 2022 or 30 June 2021.

No interim dividends were declared for the half year ended 31 December 2021 or 31 December 2020. The FY2020 interim
dividend payment was deferred from the original payment date of 1 April 2020 due to the exceptional circumstances associated
with COVID-19 requiring the closure of the properties, and a revised Dividend Reinvestment Plan (DRP) which was fully
underwritten by Credit Suisse Equities (Australia) Limited. On 2 July 2020, the Group issued 30,730,998 new shares to settle the
interim dividend. Existing shareholders who elected to participate in the DRP received 6,849,977 new shares worth $21.3 million.
In accordance with the underwriting agreement, Credit Suisse Equities (Australia) Limited received 23,881,021 new shares in
exchange for $75.1 million cash to fund the interim dividend cash payment.

Franking credit balance
Amount of franking credits available to shareholders

92.0

86.9

49Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

A7 Significant items

(Loss)/profit before income tax (LBT/PBT) is stated after charging the following significant items:

Goodwill impairment a
Bell review costs b
One-off COVID-19 related expenditure c
Underpaid casino duty and interest d
Software-as-a-Service project costs e
Business Interruption and Crown unsolicited proposal costs f
JV profit on sale of units g
Disposal of Jet h
Dispute settlement i
Impairment j
Expected credit losses k
Gain on disposal of land l
Net significant items
Tax on significant items
Significant items net of tax
a

Impairment of goodwill for The Star Sydney (see note B6).

2022

162.5
17.4
11.9
12.7
7.7
2.7
(25.0)
(9.2)

(4.7)
-
-
-
176.0
(5.2)
170.8

2021

-
-
21.1
-
7.1
1.1
-
-

-
36.5
21.3
(9.4)
77.7
(26.2)
51.5

Legal costs associated with the Bell review (see note C2).

Incremental one-off COVID-19 related expenditure including support payments for employees impacted by property shutdowns
and covenant amendment fees for COVID-19 affected loan facilities. In the pcp, restructuring and redundancy costs relating to
Group reorganisation as a result of the impact of COVID-19.

Liability for estimated underpaid casino duty and interest (see note C2).

Software-as-a-Service (SaaS) arrangement project implementation costs. Major projects include the implementation of new
SAP payroll and customer management Salesforce systems.

Business Interruption insurance claim and adviser costs related to the unsolicited Crown Resorts bid.

Equity accounted share of Destination Gold Coast Consortium’s profit relating to the sale of Tower 1 residential units.

In September 2021, sale of the 2018 Bombardier Jet was completed.

The Group settled a dispute with suppliers, resulting in recovery of $4.7 million in funds in relation to combustible cladding
claims.

Impairment expense for write-down of 2018 Bombardier Jet held for sale to its recoverable amount, venue closures and excess
office space due to the closure of international junket operations following outcomes of Bergin Inquiry recommendations, and
write-off of combustible cladding used in property upgrades.

Increased expected credit loss provisioning and impairment of other receivables as a result of the ongoing COVID-19 impacts
on border closures and cessation of international junket operations due to the outcomes of the Bergin Inquiry recommendations.

Gain on disposal of Gold Coast land to the Destination Gold Coast Consortium joint venture for construction of the second
residential, hotel and retail tower.

Significant items are determined by management based on their nature and size. They are items of income or expense
which are, either individually or in aggregate, material to the Group or to the relevant business segment and:
(cid:4)
(cid:4)

not in the ordinary course of business (for example, the cost of significant reorganisations or restructuring); or
part of the ordinary activities of the business but unusual due to their size and nature (for example, impairment of
assets).

A8 Leases

The following amounts relating to AASB16 leases are recognised in the income statement:

Depreciation expense of right-of-use assets (refer to note B4)
Interest expense on lease liabilities (refer to note A5)

Total

2022

6.0
3.5

9.5

2021

7.2
3.8

11.0

The Star Entertainment Group 2022 Annual Report50Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

B Key balance sheet disclosures

Assets

B1 Cash and cash equivalents

Cash on hand and in banks
Short term deposits, maturing within 30 days

B2 Trade and other receivables

Trade receivables
Less provision for impairment
Net trade receivables
Other receivables

(i) Provision for impairment reconciliation

Balance at beginning of year
Impairment of trade receivables a
Less amounts written off as uncollectible

Balance at end of year

2022
$m

82.0
-

82.0

44.8
(37.0)

7.8
10.2

18.0

(38.1)
(1.0)
2.1

(37.0)

2021
$m

64.1
3.8

67.9

44.1
(38.1)

6.0
17.3

23.3

(103.6)
(16.4)
81.9

(38.1)

These amounts are included in other expenses in the income statement.

The estimates and assumptions associated with the Group's expected credit loss model were revised in FY2021 as a
result of the impact of the Bergin Inquiry on international junkets and the ongoing effects of COVID-19. An additional
$16.4 million provision was recognised in FY2021, to reflect the increased uncertainty around collection of outstanding
junket receivables.
Trade receivables are non-interest bearing and are generally on 30 day terms.

(ii) Ageing of trade and other receivables

Trade receivables

2022
Not yet due

Past due not impaired

Considered impaired

2021

Not yet due

Past due not impaired

Considered impaired

0 - 30 days

30 days - 1
year

1 - 3 years

3 years +

6.5
0.3
-

6.8

1.8

-
-
2.0

2.0

0.1

-
-
26.4

26.4

3.8

38.1

41.9

-
1.0
8.6

9.6

0.3

Total

6.5
1.3
37.0

44.8

1.8

4.2

38.1

44.1

51Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Other receivables
Other receivables are not past due or considered impaired. It is expected that these balances will be received as they
fall due.

Impairment of trade receivables
The Group impairment analysis is performed at each reporting date to measure expected credit losses. The provision
reflects the probability-weighted outcome of reasonable and supportable information that is available at the reporting
date about past events, current conditions and forecasts of future economic conditions.
Due to the unprecedented impact of the COVID-19 pandemic, impacts of the Bergin Inquiry recommendations,
government imposed restrictions, international border closures and other economic impacts, debtor balances have been
individually assessed based on criteria, including: patron's financial circumstances; payment history; relationship with
the Group; international gambling activity; and whether a legal claim has commenced to collect the balance.

B3 Derivative financial instruments

Current assets
Cross currency swaps
Interest rate swaps

Non current assets
Cross currency swaps
Interest rate swaps

Current liabilities
Cross currency swaps

Interest rate swaps

Non current liabilities
Cross currency swaps

Interest rate swaps

Net financial assets

2022

-
1.4

1.4

59.6
3.3

62.9

5.7

58.6

2021

2.9
-

2.9

13.7
0.2

13.9

2.9

2.7

5.6

4.3

3.7

8.0

3.2

Net derivative assets are up $55.4 million due to depreciation of the AUD:USD exchange rate and increase in
AUD floating interest rates.

Valuation of derivatives and other financial instruments
The valuation of derivatives and financial instruments is based on market conditions at the balance sheet date. The
value of the instrument fluctuates on a daily basis and the actual amounts realised may differ materially from their value
at the balance sheet date.
Refer to note E2 for additional financial instruments disclosure.

The Star Entertainment Group 2022 Annual Report52Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

B4 Property, plant and equipment

2022
Cost
Opening balance at beginning of the year

Additions

Disposals / write offs

Reclassification / transfer

Closing balance at end of the year a

Accumulated depreciation
Opening balance at beginning of the year

Depreciation expense

Disposals / transfers

Closing balance at end of the year

Carrying Amount

Opening balance at beginning of the year

Closing balance at end of the year

Freehold
and
leasehold
buildings

Freehold
land

Leasehold
improvements

Plant and
equipment

Right of
use
asset

Note

Total

72.5

1.6

2,677.9

305.5

1,159.5

62.9

4,278.3

64.6

(10.3)

(10.1)

0.5

(2.1)

(2.7)

43.5

(29.5)

15.0

0.8

(4.9)

111.0

(46.8)

2.2

74.1

2,722.1

301.2

1,188.5

58.8

4,344.7

575.7

73.6

(10.4)

638.9

134.8

8.0

(1.5)

855.8

83.9

(28.9)

16.6

1,582.9

6.0

(4.4)

171.5

(45.2)

141.3

910.8

18.2

1,709.2

72.5

74.1

2,102.2

2,083.2

170.7

159.9

303.7

277.7

46.3

40.6

2,695.4

2,635.5

2021

Cost
Opening balance at beginning of the year

Additions

Disposals / write offs

Reclassification / transfer

Non-current asset held for sale

F12

Closing balance at end of the year a

Accumulated depreciation
Opening balance at beginning of the year

Depreciation expense

Disposals / transfers

Non-current asset held for sale

Impairments

Closing balance at end of the year

Carrying Amount

Opening balance at beginning of the year

Closing balance at end of the year

77.0

2,676.6

297.7

1,193.7

64.4

4,309.4

(4.5)

64.6

(37.4)

(25.9)

3.7

(0.4)

4.5

38.1

(33.1)

21.8

(61.0)

0.4

(1.9)

106.8

(77.3)

0.4

(61.0)

72.5

2,677.9

305.5

1,159.5

62.9

4,278.3

F12

534.1

63.9

(30.1)

7.8

123.5

12.0

(0.9)

0.2

806.7

93.1

(36.1)

(30.4)

22.5

8.1

7.2

(1.5)

2.8

1,472.4

176.2

(68.6)

(30.4)

33.3

575.7

134.8

855.8

16.6

1,582.9

77.0

72.5

2,142.5

2,102.2

174.2

170.7

387.0

303.7

56.3

46.3

2,837.0

2,695.4

53Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

a Includes capital works in progress of:

Buildings - at cost

Leasehold improvements - at cost

Plant and equipment - at cost

Total capital works in progress

2022

19.6

0.3

6.7

26.6

2021
$m

22.9

1.2

2.9

27.0

For details on capital activities refer to section 2.6 of the Directors' Report.
Property, plant and equipment is comprised of the following assets:
(cid:4)
(cid:4)
(cid:4)
(cid:4)
(cid:4)

Freehold land - Gold Coast property;
Freehold and leasehold buildings - Brisbane, Gold Coast and Sydney properties;
Leasehold improvements - Brisbane and Sydney properties;
Plant and equipment - operational and other equipment: and
Right-of-Use assets - Property and other equipment.

Asset useful lives and residual values
For the accounting policy on depreciation and useful lives of property, plant and equipment refer to note A4.

Impairment
Refer to note B6 for details of the accounting policy and key assumptions included in the impairment calculation.

The Star Entertainment Group 2022 Annual Report54Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

B5 Intangible assets

Sydney and
Brisbane
casino
licences

Sydney
casino
concessions

Goodwill

Software a

Note

Other

Total

2022
Cost
Opening balance at beginning of the year

Additions

Disposals / write offs

Reclassification / transfer

Closing balance at end of the year a

Accumulated amortisation
Opening balance at beginning of the year

Amortisation expense

Disposals

Impairments

Closing balance at end of the year

Carrying Amount
Opening balance at beginning of the year
Closing balance at end of the year

2021

Cost
Opening balance at beginning of the year

Additions

Disposals

Reclassification / transfer

Closing balance at end of the year a

Accumulated amortisation
Opening balance at beginning of the year

Amortisation expense

Disposals

Closing balance at end of the year

1,442.2

294.7

100.0

292.9

29.4

(0.9)

(2.2)

20.1

2,149.9

29.4

(0.9)

(2.2)

1,442.2

294.7

100.0

319.2

20.1

2,176.2

162.5

1,442.2
1,279.7

78.6

3.2

81.8

216.1
212.9

31.4

0.9

201.8

31.7

(3.0)

32.3

230.5

6.7

0.4

7.1

318.5

36.2

(3.0)

162.5

514.2

68.6
67.7

91.1
88.7

13.4
13.0

1,831.4
1,662.0

1,442.2

294.7

100.0

268.6

24.9

(0.2)

(0.4)

20.1

2,125.6

24.9

(0.2)

(0.4)

1,442.2

294.7

100.0

292.9

20.1

2,149.9

75.5

3.1

78.6

219.2

216.1

30.4

1.0

31.4

69.6

68.6

173.6

28.9

(0.7)

201.8

95.0

91.1

6.3

0.4

6.7

285.8

33.4

(0.7)

318.5

13.8

13.4

1,839.8

1,831.4

Carrying Amount
Opening balance at beginning of the year

Closing balance at end of the year

1,442.2

Includes capital works in progress of $17.3 million (2021: $11.2 million).

Intangible asset additions relate predominantly to software as the Group progresses its strategic priority to
maximise value from technology, including further enhancing gaming and loyalty experience and delivering
new integrated IT platforms.

Asset useful lives and residual values
Intangible assets are amortised using the straight line method as follows:
(cid:4)
(cid:4)

The Sydney casino licence is amortised from its date of issue until expiry in 2093.
The Sydney casino concessions granted by the New South Wales government include product concessions in New
South Wales which are amortised over the period of expected benefits.

55Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(cid:4)

The Brisbane casino licence is amortised over the remaining life of the lease to which the licence is linked, which
expires in 2070. The Group will continue to amortise the casino licence over its current term up until it is
surrendered, following the expected opening of the Integrated Resort at Queen's Wharf Brisbane (QWB) in 1H
FY2024.
Software is amortised over useful lives of 3 to 10 years.

(cid:4)
(cid:4) Other assets include the contribution to the construction costs of the state government owned Gold Coast
Convention and Exhibition Centre. The Group's Gold Coast casino is deriving future benefits from the contribution,
which is being amortised over a period of 50 years.

Goodwill and impairment testing
Goodwill is assessed for impairment on an annual basis and is carried at cost less accumulated impairment losses.
Refer to note B6 for the accounting policy on asset impairment and details of key assumptions included in the
impairment testing calculation.

B6 Impairment testing and goodwill

Goodwill acquired through business combinations has been allocated to the applicable cash generating unit for
impairment testing. Each cash generating unit represents a business operation of the Group.

Carrying amount of goodwill allocated to each cash generating unit

Cash generating unit
(Reportable segment)

2022

2021

Sydney
$m

Gold Coast
$m

Brisbane
$m

851.0

1,013.5

165.5

263.2

Total carrying
amount
$m

1,279.7

1,442.2

The recoverable amount of each of the three cash generating units at year end (Sydney, Gold Coast and Brisbane) is
determined based on 'fair value less costs of disposal', which is calculated using the discounted cash flow approach.
This approach utilises cash flow forecasts that represent a market participant's view of the future cash flows that would
arise from operating and developing the Group's assets. These cash flows are principally based upon Board approved
business plans for a five-year period, together with longer term projections and approved capital investment plans,
extrapolated using an implied terminal growth rate of 2.5% (2021: 2.5%). These cash flows are then discounted using a
relevant long term post-tax discount rate specific to each cash generating unit, ranging between 8.9% to 9.3% (2021:
7.9% to 8.4%). The pre-tax discount rates range between 11.4% to 11.8% (2021: 10.0% to 10.4%).
An impairment of $162.5 million was recognised in the Sydney cash generating unit at 30 June 2022 (2021: nil). No
other impairments were recognised (2021: nil).

Key assumptions
The fair value measurement is valued using level 3 valuation techniques (refer to note E2(i) for details of the levels).
The key assumptions on which management based its cash flow projections when determining 'fair value less costs of
disposal' are as follows:

i. Cash flow forecasts
The cash flow forecasts are based upon Board approved business plans for a five-year period, together with longer
term projections, growth rates and approved capital investment plans for each cash generating unit.

ii. Terminal value
The terminal growth rate used is in line with the forecast long term underlying growth rate in the Consumer Price Index
(CPI).

iii. Discount rates
Discount rates applied are based on the post tax weighted average cost of capital applicable to the relevant cash
generating unit. The FY2022 discount rate for Sydney includes a risk premium for the uncertainty associated with
ongoing regulatory and other matters.

iv. Regulatory changes
Bergin Inquiry
Following the release of the Bergin Report in February 2021, in May 2021 the Group agreed with the Independent
Liquor and Gaming Authority (ILGA) in New South Wales (NSW) to terminate business with international junket
operators. The Group is applying the undertaking to all of its casino operations (New South Wales and Queensland).
This has been reflected in the cash flow forecasts.

The Star Entertainment Group 2022 Annual Report56Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Bell review
The Group has taken several additional remedial steps, including suspending all domestic and international rebate
programs in May 2022. This has been reflected in the cash flow forecasts.
Brisbane
Upon opening of the Integrated Resort in 1H FY2024, the existing Brisbane casino will cease to operate and the Group
will act as the operator of the QWB casino.
The Group currently holds a perpetual casino licence in Brisbane that is attached to the lease of the current Brisbane
site that expires in 2070. Upon opening of the QWB casino, the Group's casino licence will be surrendered and
Destination Brisbane Consortium (DBC) will be granted a casino licence for 99 years including an exclusivity period of
25 years. The Group will surrender the Brisbane casino licence and some operational assets in exchange for the right to
operate the new QWB casino.
The Group's assessment of the Brisbane cash generating unit's recoverable amount considered the remaining year of
existing operations and a terminal value based on either the exchange of assets for management rights over the new
QWB casino or applying a terminal growth to the final year of operations. Neither model resulted in an impairment.
Gold Coast
The Group continues to focus on delivery of its major investment projects in Queensland in joint venture with CTF and
FEC.
Sydney
As announced on 1 June 2020, The Star Sydney and the NSW Government entered into an agreement which gave The
Star Sydney regulatory certainty in the Sydney market for a 20 year period. This included preserving The Star Sydney’s
exclusivity over electronic gaming machines in the Sydney casino market and flat rates of gaming tax (from FY2022) as
a percentage of revenue until the end of FY2041.
Reforms to the NSW regulatory framework (see note C3) purport to override compensation arrangements for specific
regulatory actions taken by the NSW Government. The NSW Government has stated that there are various commercial
arrangements, including restrictions or exclusivities applying to each of the licences, that should be honoured. The
Group is considering the reforms and the potential implications for The Star Sydney.
In June 2022, ILGA granted a conditional licence for Crown Resorts Limited (Crown) to operate its Sydney Casino. The
casino opened to the public on 8 August 2022. The expected impact of Crown Sydney has been taken into
consideration in determining the recoverable amount of Sydney's cash generating unit at 30 June 2022. Management
will continue to monitor actual impacts against the assumptions taken to determine the impact, if any, that this may have
on the cash generating unit's carrying value.
v. Impairment
The Sydney property and broader casino industry is in a state of significant uncertainty. Recent regulatory changes
have resulted in the cessation of the junket business, the pausing of international and domestic rebate businesses while
COVID-19 restrictions continue to affect international visitation. The outcome from the Bell review and AUSTRAC
investigation remain uncertain. In combination, these factors have reduced the valuation of the Sydney cash generating
unit, requiring an impairment of $162.5 million to be recognised at 30 June 2022. The impairment is recognised in the
line ‘Depreciation, amortisation and impairment expense’ in the Consolidated Income Statement and has been applied
wholly to the cash generating units goodwill balance.

vi. Sensitivities
The key estimates and assumptions used to determine the 'fair value less costs of disposal' of a cash generating unit
are based on management's current expectations after considering past experience, future investment plans and
external information. They are considered to be reasonably achievable, however, significant changes in any of these
key estimates, assumptions or regulatory environments may result in a cash generating unit's carrying value exceeding
its recoverable value, requiring an impairment charge to be recognised.
An increase or decrease of 0.5% in the Sydney discount rate (9.3%) would result in either a further impairment of
$176.1 million or no impairment.
For Gold Coast, the recoverable amount is sensitive to changes in the compound average growth rate and discount
rate. A 1.6% decline to compound average growth rate or a 0.4% increase in discount rate are reasonably possible
changes that individually could give rise to a potential impairment.
For the Brisbane property, a reasonably possible change in any of the assumptions used does not result in an
impairment charge. Management will continue to monitor the assumptions on the respective carrying values.

Impairment of assets
Goodwill and indefinite life intangible assets are tested for impairment at least annually. Property, plant and equipment,
other intangible assets and other non-financial assets are considered for impairment if there is a reason to believe that
impairment may be necessary. Factors taken into consideration in reaching such a decision include the economic
viability of the asset itself and where it is a component of a larger economic entity, the viability of the unit itself.

57Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Liabilities

B7 Interest bearing liabilities

Current
Lease liabilities

Non current
Bank loans - unsecured (net of unamortised borrowing costs)
Private placement - US dollar - amortised cost
Lease liabilities

2022
$m

6.1

705.7
583.9
36.8

2021
$m

6.8

776.5
466.0
43.4

1,326.4

1,285.9

The bank facilities have maturities between one and five years, with an average weighted maturity of 2.9 years (2021:
3.7 years).
On 14 May 2021, the Group extended $250 million of its bilateral facilities for up to 2 years. The $200 million club
facility, executed in FY2020 to provide additional liquidity during the COVID-19 pandemic, was cancelled early on 9
December 2020. The $98.1 million USPP matured on 15 June 2021 and was repaid utilising available bank facilities.

Net debt was $1,149.0 million, down 1.9% on the pcp. Adjusted gearing levels, calculated as agreed with the
financiers on an annualised 2H FY2022 run rate, were 2.8x (2021: 2.7x unadjusted).

Refer to note F8 (iii) for Capital management disclosures and the calculation of the gearing ratio.

2022

Type

Bank loans

Total bank loans

USPP

Total USPP

Total

Facility amount

$m USD

-
-
-
-
-

50.0
288.4
70.0

408.4

Facility amount
$m AUD a
75.0
150.0
765.0
175.0
40.0

1,205.0

64.0
369.4
93.9

527.3

1,732.3

Unutilised at 30 June

Maturity date

July 2022
July 2023
July 2024
July 2025
July 2026

August 2025
August 2027
September 2028

75.0
56.0
225.0
100.0
40.0

496.0

-
-
-

496.0

100

The Star Entertainment Group 2022 Annual Report58Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

2021

Type

Bank loans

Total bank loans

USPP

Total USPP

Total

Facility amount

Unutilised at 30 June

$m USD

-
-
-
-
-

50.0
288.4

338.4

$m AUD a
75.0
150.0
765.0
175.0
40.0

1,205.0

64.0
369.4

433.4

1,638.4

Maturity date

July 2022
July 2023
July 2024
July 2025
July 2026

August 2025
August 2027

31.0
5.0
257.0
100.0
31.0

424.0

-
-

424.0

a USPP Notes are issued in USD and converted to AUD for presentation purposes.

Bank loans - unsecured (net of unamortised borrowing costs) & US Private Placement (USPP)
Bank loans and working capital facility
Interest on bank facilities is variable, linked to Bank Bill Swap Bid Rate, plus a margin.
The Group has entered into interest rate swap agreements to hedge underlying debt obligations and allow $250 million
of floating rate bank loans to be swapped to fixed rate borrowings. Further details about the Group's exposure to
interest rate movements are provided in notes E1 and E2.

USPP
The $583.9 million (2021: $466.0 million) USPP comprises the US$408.4 million (2021: US$338.4 million) USPP
converted to $591.6 million AUD at 30 June rates (2021: $450.2 million AUD) and the fair value movement of future
interest payments subject to fair value hedges, being an asset of $7.7 million (2021: liability of $15.8 million). The
$527.3 million (2021: $433.4 million) USPP facilities are stated in the table above at the AUD amount repayable under
cross currency swaps at maturity. Interest is a combination of fixed and variable, linked to Bank Bill Swap Rate, and a
defined gearing ratio at the end of certain test dates.

Fair value disclosures
Details of the fair value of the Group's interest bearing liabilities are set out in note E2.

Financial Risk Management
As a result of the USPP borrowings, the Group is exposed to foreign currency risk through the movements in USD/AUD
exchange rate. The Group has entered into cross currency swaps in order to hedge this exposure. As at 30 June 2022,
100% of the USPP borrowings balance of US$408.4 million (2021: US$338.4 million) is hedged.
The Group is also exposed to the interest rate risk as a result of bank loans and the USPP borrowings. To hedge
against this risk, the Group has entered into interest rate swaps. As at 30 June 2022, after taking into account the effect
of interest rate swaps, approximately 46.0% (2021: 39.0%) of the Group's borrowings are hedged at a fixed rate of
interest. Further details about the Group's exposure to interest rate and foreign currency movements are provided in
notes E1 and E2.

101

59Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

C Commitments, contingencies and subsequent events
C1 Commitments

(i) Other commitments a

Not later than one year
Later than one year but not later than five years
Later than five years

2022

44.6
0.3
-

44.9

2021

13.8
3.7
-

17.5

a Other commitments as at 30 June 2022 have increased in line with the resumption of capital projects which were delayed due to

COVID-19 disruptions.

Total project costs for Destination Brisbane Consortium's development of the Integrated Resort are expected to be up
~10% on prior guidance of $2.6 billion. The majority of these cost over-runs are to be funded via additional equity
contributions in proportion with the existing joint venture interests. The Group's expected contribution is approximately
$100 million. Remaining construction costs are to be funded out of committed project financing.
For Destination Gold Coast Consortium, construction is underway on Tower 2 at 30 June 2022 (2021: Towers 1 and 2).
Equity contributions towards Tower 1 are complete. The Group has $15 million of committed equity contributions
towards Tower 2. Project financing for the remaining build costs is currently under negotiation.
Refer to note D5 for commitments in respect of investment in associate and joint venture entities.

C2 Contingent assets and liabilities

AUSTRAC enforcement investigation
As announced on 7 June 2021, the Company was informed by AUSTRAC’s Regulatory Operations Team that it has
identified potential serious non-compliance by The Star Pty Limited (The Star) with the Australian Anti-Money
Laundering and Counter-Terrorism Financing Act 2006 (AML/CTF Act) and the Anti-Money Laundering and Counter-
Terrorism Financing Rules Instrument 2007 (No.1) (AML/CTF Rules).
The potential non-compliance includes concerns regarding ongoing customer due diligence, adopting and maintaining
an AML/CTF Program and compliance with Part A of that Program. These concerns have been identified in the course
of a compliance assessment which was commenced by AUSTRAC in September 2019. The compliance assessment
focused on The Star’s management of customers identified as high risk and politically exposed persons.
The matter was referred to AUSTRAC’s Enforcement Team to conduct an enforcement investigation. In January 2022,
AUSTRAC expanded the scope of its investigation to other entities within the Group and has served notices requiring
the production of information and documents to AUSTRAC.
AUSTRAC has advised that it has not made a decision regarding the appropriate regulatory response that it may apply
to the Group, including the extent to which enforcement action will be taken.
While AUSTRAC may take enforcement action, the type of that enforcement action and quantum of financial penalty
imposed by the Federal Court is not known.

Bell report
In September 2021 the Group was notified by ILGA that Adam Bell SC will undertake the next regular review of The
Star’s casino operations in accordance with the Casino Control Act 1992 (NSW).
On 19 October 2021 ILGA advised the review would include public hearings relating to The Star’s casino operations.
The public hearings ran from March to May 2022 and considered various matters concerning suitability to hold a casino
licence, including the Group’s maintenance and administration of systems to counter money laundering and infiltration
by organised crime.
Mr Bell’s report was provided to ILGA by 31 August 2022 (the Report). On 5 September 2022, the New South Wales
Independent Casino Commission (the NICC) was appointed as regulator of casinos in NSW. On 13 September 2022
the NICC published the Report. Mr Bell found The Star unsuitable to hold a casino licence in NSW.
Mr Bell made a total of 30 recommendations to the NICC. The NICC will respond to the recommendations in due
course.

102

The Star Entertainment Group 2022 Annual Report60Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

On 13 September 2022 the NICC issued The Star a Show Cause Notice under section 23 of the CCA (the Notice).
Under the Notice the NICC stated that it was considering taking disciplinary action against The Star for one or more
grounds being: CCA and licence contraventions found in the Report; that The Star is no longer suitable to give effect to
its licence because of Review’s findings and the absence of effective action, resources and capability to remedy matters
identified in the Report; and that it is no longer in the public interest that the licence remain in force.
The disciplinary action being considered by the NICC is one or more of the following:
(cid:4)

cancellation or suspension of the licence of The Star;

(cid:4)

imposition of a pecuniary penalty of up to $100 million (note that pecuniary penalties can be imposed on multiple
grounds such that $100 million is not a cap on aggregate penalties that may be imposed on The Star);

the amendment of the terms or conditions of the licence;

(cid:4) The Star or a close associate give an enforceable undertaking to do or refrain from doing something; and
(cid:4)

the issue of a letter of censure to The Star.

The Notice also stated that in the event the NICC decides to cancel or suspend The Star’s licence, it may consider
appointing a person to manage the casino pursuant to section 28 of the CCA. In addition, a charge given by The Star in
1994 allows the regulator – on cancellation or suspension of the licence - to appoint a receiver over all assets at the
Sydney premises (including the lease), allowing the whole business to be operated and prepared for sale to a new
licensee.
The Star has responded to the Notice. The response outlines why disciplinary action should not be taken and includes
submissions about the possible appointment of a manager. The NICC may then decide to take appropriate disciplinary
action.
In FY2020 the Group ceased the use of China Union Pay for gaming purposes and in FY2021 ceased business with
international junket operators. In FY2022 the Group suspended all rebate programs.
A comprehensive Remediation and Transformation Program is being developed. The program will adopt and address
the significant findings of the Report and other ongoing reviews. It will serve as the Group’s integrated roadmap for
improving governance, culture and controls.
The Remediation and Transformation Program will effect significant improvements in governance, people, culture, risk
and compliance management, AML/CTF compliance, harm minimisation (including responsible gambling) and
investigations.
The outcome of the NICC’s disciplinary action is unknown, and the extent of a financial impact is uncertain.

Underpaid casino duty
The Group has commenced an independent assessment of residency status and consequential rebate gaming activity
for a number of patrons that had changed their residency status, as identified in the Bell review. To date, the review has
identified some instances where the eligibility for rebate play was not properly supported. A liability for underpaid casino
duty and interest has been recognised in the balance sheet at 30 June 2022.
The Bell report has recommended the NICC engage an independent expert to perform their own audit of all patrons that
engaged in rebate play at The Star since 28 November 2016. There is no way to reliably measure the impact for the
FY2022 financial statements.
The final quantum of casino duty and interest cannot be reliably estimated and may be material as it is subject to further
analysis, including audit by and discussions with the NICC.

Class action
In March 2022 the Company was served by Slater & Gordon with a statement of claim for a securities class action in the
Supreme Court of Victoria.
The claim alleges the Group failed to comply with continuous disclosure requirements and engaged in misleading or
deceptive conduct between 29 March 2016 and 16 March 2022 through various alleged disclosures or non-disclosures
about its systems, controls, operations and regulatory risks. The allegations reference the Bell review and previous
media reporting. The matter is listed for a case management conference to be held before the end of 2022. The Group
intends to defend the proceedings.
The outcome and any potential financial impacts are unknown.

103

61Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

GST amended assessments
On 11 August 2021 the Group received amended assessments from the Australian Taxation Office (ATO) in respect of
a dispute for the period October 2013 to August 2017 (inclusive) in relation to the GST treatment of rebates paid to
junket operators for The Star Pty Limited. The amount in dispute for this period is approximately $138.8 million (primary
tax of $81.9 million and interest of $56.9 million). During 1H FY2022 the Group paid $40.9 million as a deposit to the
ATO on a no-admissions basis. The deposit is held as a current asset on the balance sheet.
On 6 September 2021 the Group filed an application for judicial review with the Federal Court in relation to the interest
assessment and on 5 October 2021 lodged an objection against the primary assessments with the ATO. The outcome
of the objection is unknown.
The Group considers that it has paid the correct amount of tax and will pursue all available avenues of objection.

Withholding tax penalty
The ATO has issued a penalty for $6.4 million in relation to a dispute over the appropriate method for calculating
withholding tax on Junket rebates for the 2015 to 2020 income tax years. The Group has objected to the ATO’s decision
to issue the penalty, consequently the ATO is conducting an internal review of this matter.
The Group considers that it has paid the correct amount of tax and will pursue all available avenues of objection.

Legal challenges
There are outstanding legal actions between the Company and its controlled entities and third parties as at 30 June
2022. The Group has notified its insurance carrier of all relevant litigation and believes that any damages (other than
exemplary damages) that may be awarded against the Group, in addition to its costs incurred in connection with the
action, will be covered by its insurance policies where such policies are in place. Where there are no policies in place,
provisions are made for known obligations where the existence of a liability is probable and can be reasonably
quantified. As the outcomes of these actions remain uncertain, contingent liabilities exist for possible amounts
eventually payable that are in excess of the amounts covered for by the insurance policies in place or of the amounts
provided for.

The Group has no other contingent liabilities at 30 June 2022.

Financial guarantees
Refer to note E1 for details of financial guarantees provided by the Group at the reporting date.

C3 Subsequent events

Bell report
Mr Bell’s Report on The Star’s casino operations in accordance with the CCA was provided to ILGA by 31 August 2022.
On 5 September 2022, the NICC was appointed as regulator of casinos in NSW. On 13 September 2022 the NICC
published the Report. Mr Bell found The Star unsuitable to hold a casino licence in NSW.
Mr Bell made a total of 30 recommendations to the NICC. The NICC will respond to the recommendations in due
course.
On 13 September 2022 the NICC issued The Star a show cause Notice under section 23 of the CCA.
Under the Notice the NICC stated that it was considering taking disciplinary action against The Star for one or more
grounds being: CCA and licence contraventions found in the Report; that The Star is no longer suitable to give effect to
its licence because of Review’s findings and the absence of effective action, resources and capability to remedy matters
identified in the Report; and that it is no longer in the public interest that the licence remain in force.
The disciplinary action being considered by the NICC is one or more of the following:
(cid:4)

cancellation or suspension of the licence of The Star;

(cid:4)

the amendment of the terms or conditions of the licence;

(cid:4) The Star or a close associate give an enforceable undertaking to do or refrain from doing something; and
(cid:4)

the issue of a letter of censure to The Star.

104

The Star Entertainment Group 2022 Annual Report62Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

The Star has responded to the Notice. The response outlines why disciplinary action should not be taken and includes
submissions about the possible appointment of a manager. The NICC may then decide to take appropriate disciplinary
action.
The Group understands the gravity of the matters set out in the Report and acknowledge its findings and
recommendations. It is clear from the Report that fundamental cultural reform is required. There needs to be more
transparency, more robust governance and greater accountability. The Group is reflecting on the existing programs in
place, changes made to date and planned initiatives in order to develop a response to earn the trust and confidence of
regulators, government, public, patrons and employees.
A comprehensive Remediation and Transformation Program is being developed. The program will adopt and address
the significant findings of the Report and other ongoing reviews. It will serve as the Group’s integrated roadmap for
improving governance, culture and controls.
The Remediation and Transformation Program will effect significant improvements in governance, people, culture, risk
and compliance management, AML/CTF compliance, harm minimisation (including responsible gambling) and
investigations.

NSW casino regulatory framework reforms
On 11 August 2022 the Casino Legislation Amendment Act 2022 (NSW) was enacted to give effect to amendments to
the Casino Control Act 1992. These amendments enact reforms to the NSW casino regulatory framework, including to
address all 19 recommendations of the Bergin Inquiry and certain additional measures. This included establishing the
NICC as a new independent regulator. The Group is considering the impact and will implement the changes required for
The Star.

External review of the Group’s Queensland operations
In July 2022 an independent review commenced of the Group’s Queensland casinos, The Star Gold Coast and
Treasury Brisbane following a request by the Queensland Attorney-General.
The review, led by the Honourable Robert Gotterson AO, will examine whether these casinos operate in a way that is
consistent with achieving the objectives of the Casino Control Act 1982 and the ongoing suitability of the Group’s casino
licensees. Public hearings took place from 23 to 29 August 2022.
The review will report to the Attorney-General by 30 September 2022.
Other than those events disclosed in the Directors' Report or elsewhere in these financial statements, there have been
no other significant events occurring after the balance sheet date and up to the date of this report, which may materially
affect either the Group's operations or results of those operations or the Group's state of affairs.

105

63Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

D D Group structure
D1 Related party disclosures
(i) Parent entity

The ultimate parent entity within the Group is The Star Entertainment Group Limited.

(ii)

Investments in controlled entities
The consolidated financial statements incorporate the assets, liabilities and results of the following controlled entities in
accordance with the accounting policy described in note G. The financial years of all controlled entities are the same as
that of the Company (unless stated otherwise below).

Note

Country of
incorporation Equity type

Australia

ordinary shares

Equity
interest at
30 June
2022
%

Equity
interest at
30 June
2021
%

Name of controlled entity

Parent entity
The Star Entertainment Group Limited

Controlled entities
The Star Entertainment Sydney Holdings Limited

The Star Pty Limited

The Star Entertainment Pty Ltd

The Star Entertainment Sydney Properties Pty Ltd

The Star Entertainment Sydney Apartments Pty Ltd

Star City Investments Pty Limited

Star City Share Plan Company Pty Ltd

The Star Entertainment QLD Limited

The Star Entertainment QLD Custodian Pty Ltd

The Star Entertainment Gold Coast Trust

The Star Entertainment International No.1 Pty Ltd

The Star Entertainment International No.2 Pty Ltd

a b

The Star Entertainment (Macau) Limited

The Star Entertainment International No.3 Pty Ltd

EEI Services (Hong Kong) Holdings Limited

EEI Services (Hong Kong) Limited

EEI C&C Services Pte Ltd

The Star Entertainment RTO Pty Ltd

The Star Entertainment Finance Limited

Destination Cairns Consortium Pty Limited

The Star Entertainment Technology Services Pty Ltd

The Star Entertainment Training Company Pty Ltd

PPIT Pty Ltd

The Star Entertainment Letting Pty Ltd

The Star Entertainment Online Holdings Pty Ltd

The Star Entertainment Online Pty Ltd

The Star Entertainment Brisbane Holdings Pty Ltd

The Star Entertainment Brisbane Operations Pty Ltd

The Star Entertainment DBC Holdings Pty Ltd

The Star Brisbane Car Park Holdings Pty Ltd

The Star Entertainment Gold Coast Holdings Pty Ltd

The Star Entertainment GC Investments Pty Ltd

The Star Entertainment GC Investments No.1 Pty Ltd
The Star Entertainment International No.5 Pty Ltd

EEI Services Holdings No.1 Pty Ltd

EEI Services Holdings No.2 Pty Ltd

EEI Services (Macau) Limited

The Star Entertainment International Tourism Pty Ltd

106

Australia

Macau

Australia

Hong Kong

Singapore

Australia

Australia
Australia

Australia

Macau

Australia

ordinary shares

units

ordinary shares

ordinary shares
ordinary shares

ordinary shares

100.0

100.0
100.0

100.0

100.0
100.0

100.0

The Star Entertainment Group 2022 Annual Report64Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Name of controlled entity

Destination Sydney Consortium Pty Limited

The Star Entertainment Pyrmont Investments No.1 Pty Ltd

The Star Entertainment GC No.1 Pty Ltd

The Star Entertainment GC No.2 Pty Ltd
The Star Entertainment Group Limited Employee Share Trust

Note

Country of
incorporation Equity type

Equity
interest at
30 June
2022
%

Equity
interest at
30 June
2021
%

Australia

ordinary shares

units

100.0

0.0

100.0

0.0

a These companies entered into a deed of cross guarantee with The Star Entertainment Sydney Holdings Limited on 31 May 2011,
and as such are members of the closed group as defined in Australian Securities and Investments Commission Instrument
2016/785 (refer to note D3).

b These companies have provided a charge over their assets and undertakings as explained in note E1.

This company's financial year end is 31 December.

(iii) Transactions with controlled entities

The Star Entertainment Group Limited
During the period, the Company entered into the following transactions with controlled entities:
(cid:4)
(cid:4)

loans of $49.5 million were repaid by controlled entities (2021: $55.0 million); and
income tax and GST paid on behalf of controlled entities was $133.7 million (2021: $94.9 million).

The amount receivable by the Company from controlled entities at year end is $707.5 million (2021: $757.0 million). All
the transactions were undertaken on normal commercial terms and conditions.

(iv) Transactions with other related parties

Other transactions
During the period, in addition to equity contributions (refer to note D5), the Group entered into the following transactions
with related parties:
(cid:4)

Amount recharged to Destination Gold Coast Consortium Pty Ltd was $0.1 million (2021: $0.1 million). There was
no outstanding balance at 30 June 2022 (2021: nil); and
Amount paid to Destination Gold Coast Consortium Pty Ltd was $10.7 million (2021: $17.7 million) relating to
capital works.

(cid:4)

107

65Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

D2 Parent entity disclosures

The Star Entertainment Group Limited, the parent entity of the Group, was incorporated on 2 March 2011.

Result of the parent entity
Loss for the year

Total comprehensive loss for the year a

2022

(0.2)

2021

(0.2)

The Group remains committed to maintaining a balance sheet that positions it for post-COVID-19 recovery. No final dividend was
declared, given the continuing impacts of COVID-19 on the Group and in accordance with the conditions of debt covenant
waivers which restrict further cash dividends from being paid until the Group’s gearing, which represents the ratio of net debt to
12 month trailing statutory EBITDA, is below 2.5 times (refer to note A6).

Financial position of the parent entity
Current assets

Non current assets

Total assets

Current liabilities

Non current liabilities

Total liabilities

Net assets

Total equity of the parent entity
Issued capital

Retained earnings

Shared based payments benefits reserve

Total equity

1,783.0
2,593.5

4,376.5

45.6
1,032.2

1,077.8

3,298.7

3,177.8
110.6
10.3

3,298.7

1,785.5
2,592.6

4,378.1

36.9
1,033.4

1,070.3

3,307.8

3,178.1
114.6
15.1

3,307.8

Contingent liabilities
Class Action
In March 2022 the Company was served by Slater & Gordon with a statement of claim for a securities class action in the
Supreme Court of Victoria.
The claim alleges the Group failed to comply with continuous disclosure requirements and engaged in misleading or
deceptive conduct between 29 March 2016 and 16 March 2022 through various alleged disclosures or non-disclosures
about its systems, controls, operations and regulatory risks. The allegations reference the Bell review and previous
media reporting. The matter is listed for a case management conference to be held before the end of 2022. The Group
intends to defend the proceedings.
The outcome and any potential financial impacts are unknown.

GST Amended Assessments
On 11 August 2021 the Group received amended assessments from the Australian Taxation Office (ATO) in respect of
a dispute for the period October 2013 to August 2017 (inclusive) in relation to the GST treatment of rebates paid to
junket operators for The Star Pty Limited. The amount in dispute for this period is approximately $138.8 million (primary
tax of $81.9 million and interest of $56.9 million). During 1H FY2022 the Group paid $40.9 million as a deposit to the
ATO on a no-admissions basis. The deposit is held as a current asset on the balance sheet.
On 6 September 2021 the Group filed an application for judicial review with the Federal Court in relation to the interest
assessment and on 5 October 2021 lodged an objection against the primary assessments with the ATO. The outcome
of the objection is unknown.
The Group considers that it has paid the correct amount of tax and will pursue all available avenues of objection.

The Parent has no other contingent liabilities at 30 June 2022.

108

The Star Entertainment Group 2022 Annual Report66Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Capital expenditure
The parent entity does not have any capital expenditure commitments for the acquisition of property, plant and
equipment contracted but not provided for at 30 June 2022 (2021: nil).

Guarantees
The Star Entertainment Group Limited has guaranteed the liabilities of The Star Entertainment Finance Limited, The
Star Entertainment International No.3 Pty Ltd and the customer loans for EEI Services (Hong Kong) Limited1. As at 30
June 2022, the carrying amount included in current liabilities at 30 June 2022 of $12.0 million (2021: $12.0 million), and
the maximum amount of these guarantees was $68.1 million (2021: $67.2 million) (refer to note E1). The Company has
also undertaken to support its controlled entities when necessary to enable them to pay their debts as and when they
fall due.
1 The EEI Services (Hong Kong) Limited office has been closed. The guarantee amount will remain until the process for dealing with outstanding
customer loans has completed.

Accounting policy for investments in controlled entities
All investments are initially recognised at cost, being the fair value of the consideration given. Subsequently,
investments are carried at cost less any impairment losses.

109

67Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

D3 Deed of cross guarantee

The Star Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star
Entertainment Sydney Properties Pty Ltd, The Star Entertainment Sydney Apartments Pty Ltd and Star City
Investments Pty Limited are parties to a deed of cross guarantee under which each company guarantees the debts of
the others. By entering into the deed, the wholly-owned entities have been relieved from the requirements to prepare a
Financial Report and Directors' Report under Instrument 2016/785 issued by the Australian Securities and Investments
Commission.

Consolidated income statement and summary of movements in consolidated earnings
The above companies represent a 'closed group' for the purposes of the Class Order, and as there are no other parties
to the deed of cross guarantee that are controlled by The Star Entertainment Sydney Holdings Limited, they also
represent the 'extended closed group'.
Set out below is a consolidated income statement and a summary of movements in consolidated retained earnings for
the year ended 30 June 2022 of the closed group.

Consolidated income statement

Revenue

Other income

Government taxes and levies

Employment costs

Depreciation, amortisation and impairment

Cost of sales

Property costs

Advertising and promotions

Other expenses

(Loss)/Earnings before interest and tax (LBIT/EBIT)
Net finance costs

(Loss)/profit before income tax (LBT/PBT)
Income tax benefit/(expense)

Net (loss)/profit after tax (NLAT/NPAT)

Total comprehensive (loss)/income for the period

Summary of movements in consolidated retained earnings
Accumulated profit at the beginning of the financial year

(Loss)/profit for the year

Accumulated profit at the end of the financial year

2022

775.8

0.2
(219.2)
(223.9)
(91.2)
(33.4)
(32.0)
(30.3)
(228.3)

(82.3)
(5.1)

(87.4)
25.1

(62.3)

111.4
(62.3)

49.1

2021

815.1

2.3
(208.0)
(204.6)
(123.3)
(29.8)
(32.0)
(28.3)
(183.6)

7.8
(0.5)

7.3
(6.0)

1.3

110.1
1.3

111.4

Consolidated balance sheet
Set out below is a consolidated balance sheet as at 30 June 2022 of the closed group consisting of The Star
Entertainment Sydney Holdings Limited, The Star Pty Limited, The Star Entertainment Pty Ltd, The Star Entertainment
Sydney Properties Pty Limited, The Star Entertainment Sydney Apartments Pty Limited, and Star City Investments Pty
Limited.

110

The Star Entertainment Group 2022 Annual Report68Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Consolidated balance sheet

ASSETS
Cash assets

Trade and other receivables

Inventories

Other

Total current assets
Property, plant and equipment

Intangible assets

Other assets

Total non current assets

TOTAL ASSETS

LIABILITIES
Trade and other payables

Interest bearing liabilities

Provisions

Other liabilities

Total current liabilities

Deferred tax liabilities

Interest bearing liabilities

Provisions

Total non current liabilities

TOTAL LIABILITIES

NET ASSETS

EQUITY
Issued Capital

Retained Earnings

TOTAL EQUITY

D4 Key Management Personnel disclosures

Compensation of Key Management Personnel
Short term
Long term
Share based payments
Termination benefits

Total compensation

2022

39.5
14.8
7.0
12.4

73.7
1,470.0
262.6
4.2

1,736.8

1,810.5

508.6
0.9
52.3
11.5

573.3

42.4
3.0
2.8

48.2

621.5

1,189.0

1,139.9
49.1

1,189.0

2022

$000

6,275
285
(2,466)
3,794

7,888

2021

26.8
22.7
7.3
-

56.8
1,516.5
269.6
2.7

1,788.8

1,845.6

491.5
1.4
35.7
12.2

540.8

44.8
4.9
3.8

53.5

594.3

1,251.3

1,139.9
111.4

1,251.3

2021

$000

6,387
291
1,044
-

7,722

The above reflects the compensation for individuals who are Key Management Personnel of the Group. The note
should be read in conjunction with the Remuneration Report.

111

69Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

D5 Investment in associate and joint venture entities

Set out below are the investments of the Group as at 30 June 2022. The entities listed below have share capital
consisting solely of ordinary shares, which are held by the Group. The country of incorporation is also their principal
place of business, and the proportion of ownership interest is the same as the proportion of voting rights held. All
investments listed below are measured using the equity accounting method.

2022

Name of entity

Material
Destination Brisbane Consortium Integrated Resort
Holdings Pty Ltd (i)

Destination Gold Coast Investments Pty Ltd (ii)

Destination Gold Coast Consortium Pty Ltd (iii)

Non material
Festival Car Park Pty Ltd

Destination Sydney Consortium Investments Pty Ltd *

Total equity accounted investments

Country of
incorporation

% of
ownership

Nature of
ownership

Share of
(loss)/profit

Carrying
amount

Australia

33.3

Associate

Joint venture

(5.3)

538.6

0.2

23.6

0.4

(2.5)

36.1

73.6

14.3

7.0

16.4

669.6

* On 2 September 2022, the NSW Government notified the joint venture that it had compulsorily acquired the Pyrmont
Tower for use by Sydney Metro. The final purchase price is not yet known, however will exceed the carrying value of the
joint venture's assets. The Group will work with Government to finalise the acquisition.

Total share of profit is up $20.8 million on the pcp primarily due to Destination Gold Coast Consortium Pty Ltd,
which is the joint venture responsible for development of residential and hotel towers on the Gold Coast. In
2H2022 a significant portion of the Tower 1 residential unit sales settled resulting in a gain of $25.0 million
(refer to note A7).

For those investments considered material to the Group, further information is provided below:

(i) Destination Brisbane Consortium Integrated Resort Holdings Pty Ltd

The Group has partnered with Hong Kong-based organisations Chow Tai Fook Enterprises Limited (CTF) and Far East
Consortium International Limited (FEC) to form Destination Brisbane Consortium (DBC) for the Queen’s Wharf
Brisbane Project. The parties have formed two vehicles (the Integrated Resort Joint Venture and the Residential Joint
Venture), which together are responsible for completing the Queen’s Wharf Brisbane project.

Consistent with the ownership structure, the Group will contribute 50% of the capital to the development of the
Integrated Resort and act as the casino operator under a long dated casino management agreement. CTF and FEC will
each contribute 25% of the capital to the development of the Integrated Resort. The Group's interest is accounted for
using the equity method. CTF and FEC will each contribute 50% of the capital to undertake the residential and related
components of the broader Queen’s Wharf Brisbane development. The Group is not a party to the residential
apartments development joint venture.30 June 2022

The Integrated Resort is anticipated to open from 1H FY2024. Total project costs for DBC's development of the
Integrated Resort are expected to be up ~10% on prior guidance of $2.6 billion. The majority of these cost over-runs are
to be funded via additional equity contributions in proportion with the existing joint venture interests. DBC is in ongoing
discussions with the builder regarding purported claims for additional costs, extensions of time and damages, with which
DBC disagrees. The contract provides for liquidated damages.

Commitments and contingent liabilities
DBC has current capital commitments of approximately $0.9 billion (2021: $1.4 billion) to fund the construction of the
Integrated Resort, which is expected to open in 1H FY2024 (subject to various approvals).
On 14 February 2018, Destination Brisbane Consortium Integrated Resort Operations Pty Ltd as trustee for the
Destination Brisbane Consortium Integrated Resort Operating Trust (‘Operating Trust’) entered into a $200 million
performance guarantee facility with Australia and New Zealand Banking Group Limited as Lender. This facility
guarantee is in favour of the State of Queensland and provided to secure due performance as developer under the
Development Agreement – Queen’s Wharf Brisbane. The parent entities of the unitholders of the Operating Trust
guarantee on a several basis the Trust’s performance under the facility. On 8 July 2020 $125 million of the $200 million
performance guarantee was returned from the State of Queensland and subsequently cancelled by Australia and New
Zealand Banking Group Limited.

112

The Star Entertainment Group 2022 Annual Report70Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

In 1H FY2022, the Trust was advised by the builder of expected delays to its construction program. An anticipated
progressive opening is currently expected in 1H FY2024, previously 1H FY2023. The construction contract has
provision for liquidated damages payable on key milestones (as adjusted in accordance with the contract). Following
correspondence received from the builder in January 2022, the builder has purported that it has a claim against the
Trust for additional costs, extensions of time and damages, which the Trust disputes, and hence no provision for
additional costs has been recognised as at 30 June 2022. The Trust are holding discussions with the builder on an
ongoing basis. The outcome of these discussions is unknown at the date of this report.

Summarised financial information
The financial statements of the associate is prepared for the same reporting period as the Group and follow the same
accounting policies of the Group.

Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities

Net assets

Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of loss for the period
Share of equity contributions for the Group

Carrying amount at the end of the year

Income statement
Interest revenue
Depreciation and amortisation expense
Operating expenses

Loss before tax
Income tax benefit

Loss for the year (continuing operations)
Total comprehensive loss for the year (continuing operations)

Group's share of loss for the year

2022
$m

2021
$m

156.7
19.3
1,946.9
(107.8)
(846.3)

1,168.8

543.9
(5.3)
-

538.6

0.2
(2.2)
(8.6)
(10.6)
-

(10.6)
(10.6)
(5.3)

80.0
8.0
1,230.5
(95.8)
(149.4)

1,073.3

443.0
(2.7)
103.6

543.9

0.1
(2.4)
(3.2)
(5.5)
-

(5.5)
(5.5)
(2.7)

113

71Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(ii) Destination Gold Coast Investments Pty Ltd

On 20 October 2016, a 50% interest was acquired in Destination Gold Coast Investments Pty Ltd (DGCI). DGCI is a
joint venture with CTF and FEC involved in the operation of the Sheraton Grand Mirage Resort, Gold Coast. The
Group's interest is accounted for using the equity method.

The Securityholders’ Deed for Destination Gold Coast Investments Pty Ltd requires unanimous consent for each Board
resolution. Due to the unanimous requirement for decisions, each party has joint control of the entity. The entity is
designed to exist on its own and the Deed does not grant the rights to assets and liabilities directly to the Group. The
investment has therefore been classified as a joint venture.

Commitments and contingent liabilities
The joint venture had no capital commitments as at 30 June 2022 (2021: nil). There were no other contingent liabilities.

Summarised financial information
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
same accounting policies of the Group.

Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities - financial liabilities
Other non current liabilities
Net assets

Reconciliation to investment carrying amount:
Carrying amount at the beginning of the year
Share of profit/(loss) for the period
Share of equity contributions for the Group
Carrying amount at the end of the year

Income statement
Revenue
Interest expense
Depreciation and impairment expense

Operating expenses

Profit/(loss) before tax
Income tax expense

Profit/(loss) for the year (continuing operations)
Total comprehensive loss for the year (continuing operations)

Group's share of profit/(loss) for the year

114

2022

13.7
1.7
148.0
(10.3)
(67.5)
(13.5)
72.1

35.9
0.2
-
36.1

44.2
(1.4)
(3.6)

(38.7)

0.5
(0.1)
0.4
0.4
0.2

2021

11.5
1.8
147.9
(9.2)
(67.8)
(12.4)
71.8

35.2
(0.2)
0.9
35.9

35.4
(1.4)
(3.6)

(30.7)

(0.3)
(0.1)
(0.4)
(0.4)
(0.2)

The Star Entertainment Group 2022 Annual Report72Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(iii) Destination Gold Coast Consortium Pty Ltd

On 22 November 2016, a 33.3% interest was acquired in Destination Gold Coast Consortium Pty Ltd (DGCC). DGCC is
a joint venture with CTF and FEC for the purpose of constructing a new residential and hotel tower in Gold Coast. The
Group's interest is accounted for using the equity method.

Commitments and contingent liabilities
DGCC has current capital commitments of $0.1 billion (2021: $0.5 billion) in relation to Tower 2 (2021: Towers 1 and 2).
Committed spend is to be funded out of a combination of project level debt facilities and equity. There were no other
contingent liabilities.

Summarised financial information
The financial statements of the joint venture are prepared for the same reporting period as the Group and follow the
same accounting polices of the Group.

Balance sheet
Cash and cash equivalents
Total current assets excluding cash and cash equivalents
Total non current assets
Total current liabilities
Total non current liabilities

Net assets

Reconciliation to investment carrying amounts:
Carrying amount at the beginning of the year
Share of profit/(loss) for the period
Share of equity contributions for the Group
Other
Elimination of gain on sale of land

Carrying amount at the end of the year

Income statement
Revenue
Depreciation and amortisation expense
Operating expenses

Profit/(loss) before tax
Income tax expense

Profit/(loss) for the year (continuing operations)

Total comprehensive profit/(loss)
operations)

for

the year

(continuing

Group's share of profit/(loss) for the year

2022

30.2
164.3
94.6
(39.2)
(77.0)

172.9

30.4
19.5
19.7
4.0
-

73.6

274.4
(0.1)
(213.1)

61.2
-

61.2

23.6

2021

7.6
1.3
320.7
(19.3)
(232.4)

77.9

33.4
(0.2)
4.5
-
(7.3)

30.4

75.7
(0.1)
(75.1)

(0.5)
-

(0.5)

(0.2)

Significant accounting policies
The following accounting policy is unique to DGCC's accounting within the Group.
Apartment sales revenue
Revenue in respect of the development project is recognised upon fulfillment of all performance obligations on a
contract. The revenue is measured at the transaction price agreed under the contract. Payment is received on actual
settlement of individual units when risk and benefits of ownership are transferred to the customer.

115

73Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

E Risk Management
E1 Financial risk management objectives and policies

The Group's principal financial instruments, other than derivatives, comprise cash, short term deposits, Australian
denominated bank loans, and foreign currency denominated notes.
The main purpose of these financial instruments is to provide funding for the Group's operations. The Group has
various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its
operations. Derivative transactions are also entered into by the Group, being interest rate swaps, cross currency swaps
and forward currency contracts, the purpose being to manage interest rate and currency risks arising from the Group's
operations and sources of finance.
The Group's risk management policy is carried out by the Group Treasury function under the Group Treasury Policy
approved by the Board. Group Treasury reports regularly to the Board on the Group's risk management activities and
policies. It is, and has been throughout the period under review, the Group's policy that no trading in financial
instruments shall be undertaken.
The main risks arising from the Group's financial instruments are interest rate risk, foreign currency risk, credit risk and
liquidity risk.
Details of significant accounting policies and methods adopted, including criteria for recognition, the basis of
measurement and the basis on which income and expenses are recognised, in respect of each class of financial asset,
financial liability and equity instrument, are disclosed in note G.
Interest rate risk
The Group manages interest rate risk by using a floating versus fixed rate debt framework. The relative mix of fixed and
floating interest rate funding is managed by using interest rate swap contracts. The Group manages its cash flow
interest rate risk by using floating-to-fixed interest rate swap contracts.
Foreign currency risk
As a result of issuing private notes denominated in US Dollars (USD), the Group's balance sheet can be affected by
movements in the USD/AUD exchange rate. In order to manage this exposure, the Group has entered into cross
currency swaps to fix the exchange rate on the notes until maturity. The Group agrees to exchange a fixed USD amount
for an agreed Australian Dollar (AUD) amount with swap counterparties, and re-exchange this again at maturity. These
swaps are designated to hedge the principal and interest obligations under the private notes.
Credit risk
Credit risk on financial assets which have been recognised on the balance sheet, is the carrying amount less any
allowance for non recovery. The Group minimises credit risk via adherence to a strict credit risk management policy.
Collateral is not held as security.
Customer credit risk
Credit risk in trade receivables is managed in the following ways:
(cid:4)

The provision of cheque cashing facilities for casino gaming patrons is subject to detailed policies and procedures
designed to minimise any potential loss, including the use of a central credit agency which collates information from
the major casinos around the world; and

(cid:4)

The provision of non gaming credit is covered by a risk assessment process for customers using the Credit
Reference Association of Australia, bank opinions and trade references.

Receivable balances are monitored on an ongoing basis with the result that the Group's exposure to bad debts is
carefully managed and controlled.
Financial institution credit risk
Credit risk arising from other financial assets of the Group, which comprise cash, cash equivalents and derivative
contracts, is reduced by transacting with relationship banks that have acceptable credit ratings, as determined by a
recognised ratings agency.
Cash investments, derivative financial instruments, bank guarantees, and other contingent instruments create credit risk
in relation to the relevant counterparties, which are principally large relationship banks. As such, there is a low level of
credit risk.
The maximum counterparty credit exposure on forward currency and cross currency swaps is the fair value amount that
the Group receives when settlement occurs, should the counterparty fail to pay the amount which it has committed to
pay the Group. The credit risk on interest rate hedges is limited to the positive mark to market amount to be received
from counterparties over the life of contracts that are favourable to the Group. The Group's maximum credit risk
exposure in respect of interest rate swap contracts, cross currency swap contracts and forward currency contracts is
detailed in note E2.

116

The Star Entertainment Group 2022 Annual Report74Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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 (2021:
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 ILGA 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 ILGA.

Guarantees and indemnities
The controlled entities denoted (b) in note D1 have entered into a guarantee and indemnity agreement in favour of ILGA
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 Group Limited has guaranteed the liabilities of The Star Entertainment Finance Limited, The
Star Entertainment International No.3 Pty Ltd and the customer loans for EEI Services (Hong Kong) Limited. As at 30
June 2022, the carrying amount included in current liabilities was $12.0 million (2021: $12.0 million), and the maximum
amount of these guarantees was $68.1 million (2021: $67.2 million).

Liquidity risk
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 manages liquidity risk through maintaining sufficient cash and adequate amount of committed credit facilities
to be held above the forecast requirements of the business. The Group manages liquidity risk centrally by monitoring
cash flow forecasts and maintaining adequate cash reserves and debt facilities. The debt portfolio is periodically
reviewed to ensure there is funding flexibility across an appropriate maturity profile.
Refer to notes B7 and E2 for maturity of financial liabilities.
The contractual timing of cash flows on derivatives and non-derivative financial assets and liabilities at the reporting
date, including drawn borrowings and estimated interest, are set out in the tables below:

(i) Non-derivative financial instruments

Financial assets
Cash assets

Short term deposits

Trade and other receivables

Financial liabilities
Trade and other payables*

Bank loans - unsecured

Lease liabilities

Private placement - US dollar

2022

2021

< 1 year
$m

1 - 5 years

> 5 years

< 1 year

1 - 5 years

> 5 years

82.0
-
18.0

100.0

202.9
28.6
9.3
24.8

265.6

-
-
-

-
738.7
33.2
157.4

929.3

-
-
-

-
-
74.4
469.8

544.2

64.1
3.8
23.3

91.2

176.6
17.2
10.2
19.8

223.8

-
-
-

-
805.7
35.0
140.7

981.4

-
-
-

-
9.0
82.5
388.8

480.3

Net outflow

(165.6)

(929.3)

(544.2)

(132.6)

(981.4)

(480.3)

* Comparatives have been restated due to wage compliance (refer to note G).

117

75Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(ii) Derivative financial instruments

Financial assets
Interest rate swaps - receive AUD floating

Cross currency swaps - receive USD fixed

Financial liabilities
Interest rate swaps - pay AUD fixed

Cross currency swaps - pay AUD floating

Cross currency swaps - pay AUD fixed

2022

2021

< 1 year

1 - 5 years

> 5 years

< 1 year

1 - 5 years

> 5 years

2.8
24.8

27.6

2.6
11.5
19.0

33.1

2.5
157.4

159.9

2.5
103.3
76.1

181.9

-
469.8

469.8

-
146.3
324.7

471.0

0.2
19.8

20.0

3.7
6.4
13.6

23.7

0.2
140.7

140.9

5.1
87.9
54.2

147.2

-
388.8

388.8

-
150.2
239.7

389.9

Net outflow

(5.5)

(22.0)

(1.2)

(3.7)

(6.3)

(1.1)

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.

(iii) 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:

Net profit after tax

Other
comprehensive
income

higher/(lower)

2022

AUD
+ 0.5% (50 basis points)

- 0.5% (50 basis points)

USD
+ 0.5% (50 basis points)

- 0.5% (50 basis points)

2021

AUD
+ 0.5% (50 basis points)

- 0.5% (50 basis points)

USD
+ 0.5% (50 basis points)

- 0.5% (50 basis points)

118

(2.5)
2.5

-
-

(1.7)
1.7

-
-

21.0
1.8

25.9
(2.5)

10.9
(11.2)

(14.0)
14.4

The Star Entertainment Group 2022 Annual Report76Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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:
(cid:4)

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.

(cid:4)

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

Other
comprehensive
income

Net profit after tax

Other
comprehensive
income

higher/(lower)

2022

(0.3)
0.4

2022

7.8
16.5

2021

-
-

2021

(10.0)
13.1

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 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:
(cid:4)

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 twelve months.

(cid:4)

119

77Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

E2 Additional financial instruments disclosures
(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.
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.
Interest rate swaps and cross currency swaps
The fair value of cross currency contracts is calculated as the present value of expected future cash flows of these
instruments. Key variables include market pricing data, discount rates and credit risk of the group or counterparty where
relevant. Variables reflect those which would be used by the market participants to execute and value the instruments.

Forward currency contracts
Fair value is calculated using forward exchange market rates at the balance sheet date.

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) 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 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:

Less than one year
One to five years
More than five years

Notional Principal

2022

-
250.0
-

250.0

2021

-
250.0
-

250.0

Fixed interest rate range p.a.

0.4% - 2.6% 0.4% - 2.6%

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.

(iii) Financial instruments - cross currency swaps (cash flow hedges)

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.

120

The Star Entertainment Group 2022 Annual Report78Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Financial instruments - cross currency swaps (fair value hedges)
These cross currency swaps are being used to hedge the exposure to fair value changes of the USD debt under the
USPP as a result of fluctuations in the underlying USD to AUD exchange rate and US interest benchmark and are
assessed as highly effective. The increase in fair value of the cross currency swaps of $22.4 million (2021: $13.0
million) has been recognised in finance costs and offsetting loss on the USPP borrowings. The ineffectiveness
recognised in FY2022 was immaterial (2021: immaterial).
The principal amounts and periods of expiry of the cross currency swap contracts are as follows:

Less than one year

One to five years

More than five years

Notional principal

2022

2021

AUD $m

USD $m

AUD $m

USD $m

-
433.4
93.9

527.3

-
338.4
70.0

408.4

-
64.0
369.4

433.4

-
50.0
288.4

338.4

Fixed interest rate range p.a.

3.2% - 4.4%

4.3% - 4.4%

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 USPP borrowings as set out in note B7.

(iv) Reconciliation of movement in financing activities

Opening

Cash
flows

Changes
in fair
values

Foreign
exchange
movement

Option
premium

Borrowing
costs

Matured

Closing

(1,242.5)

(21.9)

22.4

(46.5)

3.2

55.4

(1,567.8)

215.0

13.0

51.1

119.0

(73.8)

5.5

(1.1)

(1,289.6)

58.6

42.0

(1.3)

(1,242.5)

(42.0)

3.2

Opening

Cash
flows

Interest

Additions

Disposals

Other
costs

Closing

(50.2)

9.5

(3.5)

1.7

(0.4)

(42.9)

(57.2)

10.7

(3.8)

0.4

(0.4)

0.1

(50.2)

2022
Interest
liabilities
bearing
(excluding lease liabilities) (refer
to note B7)
Net derivative assets (refer to
note B3)

2021
Interest
liabilities
bearing
(excluding significant items) (refer
to note B7)
Net derivative assets (refer to
note B3)

2022
Lease liabilities (refer to note B7)

2021
Lease liabilities (refer to note B7)

121

79Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F Other disclosures
F1 Other comprehensive income

Net gain/(loss) on derivatives
Tax on above items recognised in other comprehensive income

F2 Income tax
(i)

Income tax expense/(benefit)

The major components of income tax (expense)/benefit is:

Current tax expense
Adjustments in respect of current income tax of previous years
Deferred income tax benefit

Income tax benefit/(expense) reported in the income statement

Aggregate of current and deferred tax relating to items charged
or credited to equity:
Current tax benefit reported in equity
Deferred tax (expense)/benefit reported in equity

Income tax (expense)/benefit reported in equity

Income tax expense
A reconciliation between income tax benefit/(expense) and the product
of accounting profit before income tax multiplied by the income tax rate
is as follows:
Accounting (loss)/profit before income tax benefit/(expense)
At the Group's statutory income tax rate of 30%
- Non deductible goodwill impairment
- Non assessable gain on sale
- Recognition of temporary differences
- Over provision in prior years
- Other items

Aggregate income tax benefit/(expense)

Effective income tax rate

122

2022

29.3
(8.8)

20.5

2022

(1.2)
1.7
2.6

3.1

0.5
(8.8)

(8.3)

(205.6)
61.7
(48.8)
(9.7)
0.1
-
(0.2)

3.1

%1.5

2021

(9.1)
2.7

(6.4)

2021
Restated*

(23.7)
0.7
1.1

(21.9)

-
2.7

2.7

79.8
(23.9)
-
2.8
0.2
0.7
(1.7)

(21.9)

%27.4

The Star Entertainment Group 2022 Annual Report80Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(ii) Deferred tax balances

The balance comprises temporary differences attributable to:

2022

Employee provisions

Other provisions and accruals

Impairment of trade receivables

Unrealised financial liabilities

Finance leases

Other

Deferred tax assets set off

Intangible assets

Property, plant and equipment

Unrealised financial assets

Other

Net deferred tax liabilities

2021 Restated*

Employee provisions

Other provisions and accruals

Impairment of trade receivables

Unrealised financial liabilities

Finance leases

Other

Tax losses

Deferred tax assets set off

Intangible assets

Property, plant and equipment

Unrealised financial assets

Other

Net deferred tax (liabilities)/assets

Balance

1 July 2021*

Recognised
in the
income
statement

Recognised
directly in
equity

Balance

Other

30 June 2022

23.9
14.6
11.5
14.0
15.0
8.4

87.4

(59.6)
(145.1)
(5.1)
(11.9)

(221.7)

(134.3)

6.2
3.2
(0.3)
(0.9)
(1.7)
(0.5)

6.0

4.9
0.6
-
(8.9)

(3.4)

2.6

-
-
-
5.5
-
-

5.5

-
-
(14.2)
-

(14.2)

(8.7)

-
(0.5)
-
-
-
-

(0.5)

-
-
-
-

(0.5)

30.1
17.3
11.2
18.6
13.3
7.9

98.4

(54.7)
(144.5)
(19.3)
(20.8)

(239.3)

(140.9)

Balance

1 July 2020*

Recognised
in the
income
statement

Recognised
directly in
equity

Balance

Other

30 June 2021*

21.8
21.6
31.2
47.3
17.2
7.2
7.8

154.1
(81.4)
(126.7)
(39.9)
(36.7)

(284.7)

(130.6)

2.1
(7.0)
(19.7)
(13.6)
(2.2)
1.2
-

(39.2)
21.8
(18.4)
12.4
24.8

40.6

1.4

-
-
-
(19.7)
-
-
-

(19.7)
-
-
22.4
-

22.4

2.7

-
-
-
-
-
-
(7.8)

(7.8)
-
-
-
-

(7.8)

* Comparatives have been restated due to wage compliance (refer to note G).

23.9
14.6
11.5
14.0
15.0
8.4
-

87.4
(59.6)
(145.1)
(5.1)
(11.9)

(221.7)

(134.3)

123

81Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(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:

No instalments were paid.

The receivable balance relates to depreciation for capital projects.

(Payable)/
receivable
1 July 2021

Increase in
tax payable

Tax
instalment
paid

Over
provision of
tax

(6.2)

4.8

(1.4)

0.4

(1.0)

(1.7)

5.1

1.1

0.9

2.0

(0.3)

1.7

Receivable
1 July 2020
$m

(Increase) /
decrease in
tax payable
$m

Tax
instalment
paid
$m

Over
provision of
tax
$m

0.3

6.9

7.2

0.3

7.5

(23.8)

1.8

(1.7)

(23.7)

9.8

(3.1)

6.7

0.1

6.8

0.7

Other

0.3

Other
$m

7.8

(0.1)

7.7

(Payable) /
receivable
30 June
2022

(1.7)

6.0

4.3

0.1

4.4

(Payable)/
receivable
30 June
2021
$m

(6.2)

2.7

2.1

(1.4)

0.4

(1.0)

2022

Tax consolidated group - year ended
30 June 2022 a
Tax consolidated group - year ended
30 June 2021
Prior years b

Total Australia

Overseas subsidiaries

Tax consolidated group - year ended
30 June 2021 a
Tax consolidated group - year ended
30 June 2020 a
Prior years b

Total Australia

Overseas subsidiaries

Total

2021

Total
a
b

124

The 2020 tax loss was recognised as a deferred tax asset and utilised in 2021 to decrease tax payable.
The receivable relates to depreciation for capital projects.

The Star Entertainment Group 2022 Annual Report82Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F3 Earnings per share

Net profit after tax attributable to ordinary shareholders
Basic (loss)/earnings per share (cents per share)

Diluted (loss)/earnings per share (cents per share)

Weighted average number of shares used as the denominator
Number of ordinary shares issued at the beginning of the year

Adjustment for issue of new share capital on 2 July 2020

Movement in treasury shares

2022

(202.5)

(21.3)

2022

2021

57.9

6.1

2021

Number

946,489,027

912,004,595

30,646,803

2,754,899

2,865,392

Weighted average number of shares used as the denominator

949,243,926

945,516,790

Adjustment for calculation of diluted earnings per share:
Adjustment for Performance Rights

1,300,488

6,355,397

Weighted average number of ordinary shares and potential ordinary shares
as used as the denominator in calculating diluted earnings per share at the
end of the year

950,544,414

951,872,187

F4 Other assets

Current
Prepayments
Other assets

Non current
Rental paid in advance
Other assets

F5 Trade and other payables

Trade creditors and accrued expenses *
Interest payable

* Comparatives have been restated due to wage compliance (refer to note G).

2022

35.9
43.6

79.5

0.8
39.1

39.9

202.9
3.5

206.4

2021

21.2
2.6

23.8

-
37.2

37.2

176.6
2.5

179.1

125

83Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F6 Provisions

Current
Employee benefits *
Workers' compensation

Underpaid casino duty and interest (refer note A7)

Non-current
Employee benefits
Other

2022

96.1
6.4

12.7

115.2

6.9
1.4

8.3

2021

88.2
6.3

94.5

8.6
1.4

10.0

* Comparatives have been restated due to wage compliance (refer to note G).

Reconciliation
Reconciliations of each class of provision, except for employee benefits and other (current), at the end of each financial
year are set out below:

Workers' compensation reconciliation

2022

Carrying amount at beginning of the year

Provisions made during the year

Provisions utilised during the year

Carrying amount at end of the year

2021

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

6.3
2.6
(2.5)

6.4

7.7
0.9
(2.3)

6.3

1.4
-
-

1.4

1.3
0.1
-

1.4

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.

126

The Star Entertainment Group 2022 Annual Report84Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F7 Other liabilities

Current
Customer loyalty deferred revenue a
Other deferred revenue

Non current
Other

2022

19.1
4.0

23.1

9.0

2021

19.1
4.4

23.5

9.8

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

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.

Opening balance 1 July 2021
Shares purchased for future employee share
programs
Shares
programs

to settle employee share

issued

capital

Treasury

Net

outstanding

952,014,210

3,177.9

(5,525,183)

(18.6)

946,489,027

3,159.3

(464,958)

(1.9)

(464,958)

4,094,698

13.6

4,094,698

(1.9)

13.6

Closing balance 30 June 2022

952,014,210

3,177.9

(1,895,443)

(6.9)

950,118,767

3,171.0

Opening balance 1 July 2020
Issue of share capital - 2 July 2020 a
Issue of share capital - 16 September 2020 b
Value of treasury shares disposed
Shares
programs

issued

to settle employee share

917,322,730

3,069.7

(5,318,135)

(18.9)

912,004,595

3,050.8

30,730,998

3,960,482

96.2

12.0

30,730,998

(3,960,482)

3,717,053

(12.0)

11.7

3,717,053

36,381

0.6

36,381

96.2

11.7

0.6

Closing balance 30 June 2021

952,014,210

3,177.9

(5,525,183)

(18.6)

946,489,027

3,159.3

a On 2 July 2020, the Group issued 30,730,998 new shares to settle the FY2020 interim dividend. 23,881,021 shares were purchased
by the underwriter in accordance with the dividend underwriting agreement and the balance went to existing shareholders participating
in the DRP (see Note A6).

b On 16 September 2020, the Company issued 3,960,482 shares for allocation to short term incentive plan participants subject to a
holding lock that ends on 15 September 2021. The shares were purchased by Pacific Custodians Pty Limited as trustee for The Star
Entertainment Group Limited Employee Share Trust, a wholly controlled entity of the Company.

127

85Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

(ii) Reserves (net of tax)

Hedging reserve a
Cost of hedging reserve b
Share based payments reserve c

2022

(1.7)
2.6
10.6

11.5

2021

(21.3)
1.6
24.9

5.2

Nature and purpose of reserves
a

The hedging reserve records the spot element of 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.

The spot element of derivative contracts are designated as hedging instruments with fair value changes recorded in the hedging
reserve. The forward element is recognised in other comprehensive income and accumulated in a separate component of equity
under costs of hedging reserve.

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, impairment, significant items and share of the net loss
of associate and joint venture entities.
Net debt comprises interest bearing liabilities, with US dollar borrowings translated at the 30 June 2022 USD/AUD spot
rate of 1.4518 (2021: 1.3334), after adjusting for cash and cash equivalents and derivative financial instruments.
The Group’s 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. The Group obtained an amendment for
the 30 June 2022 testing date, allowing for both gearing and interest cover ratio to have enhanced headroom and to be
calculated on an annualised 2H FY2022 run rate (2021: an amendment was obtained resulting in enhanced gearing and
interest cover ratio headroom).

Gross Debt
Net Debt a
EBITDA (before significant items) b

Gearing ratio (times)

2022

1,332.5

1,149.0

413.6

2.8

2021

1,292.7

1,171.4

426.7

2.7

Net debt is shown as interest bearing liabilities (excluding lease liabilities), less cash and cash equivalents, less net position of
derivative financial instruments.
EBITDA (before significant items) is a non-IFRS disclosure and stands for earnings before interest, tax, depreciation,
amortisation, impairment, significant items and share of profits / losses from joint ventures. For FY2022, EBITDA (before
significant items) was calculated on an annualised 2H FY2022 run rate, as agreed with the financiers.

128

The Star Entertainment Group 2022 Annual Report86Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F9 Reconciliation of net profit after tax to net cash inflow from operations

Note

A4
F10

A5
D5

Net (loss)/profit after tax

- Depreciation, amortisation and impairment
- Employee share based payments expense
- Gain on disposal of property, plant and equipment
- Finance costs
- Share of net (profit)/loss of associate and joint venture entities
- Gain on disposal of Gold coast land
- Gain on disposal of aircraft

Working capital changes

- (Increase)/decrease in trade and other receivables and other assets
- (Increase)/decrease in inventories
- Increase/(decrease) in trade and other payables, accruals and
provisions
- (Decrease)/increase in tax provisions

Net cash inflow from operating activities

2022

(202.5)
370.8
(0.8)
(0.9)
57.0
(16.4)
-
(10.1)

(49.4)
(1.0)

36.5
(7.0)

176.2

2021

57.9
243.8
8.2
(0.8)
58.6
4.4
(9.4)
-

112.9
1.1

(27.4)
15.2

464.5

Operating cash flow before interest and tax was $181.3 million, down 61.5% on the pcp. The EBITDA to cash
conversion ratio was 82%.

129

87Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

F10 Employee share plans
Long term incentive plan
During the current and prior periods, the Company issued Performance Rights under the long term incentive plan to
eligible employees. The share based payment credit of $3.0 million (2021: expense of $1.8 million) in respect of the
equity instruments granted is recognised in the income statement.
The number of Performance Rights granted to employees and forfeited or lapsed during the year are set out below.

2022

Grant Date

2 October 2017

3 October 2018

25 September 2019

24 September 2020

23 September 2021

2021

Grant Date

5 October 2016

2 October 2017

5 October 2018

25 September 2019

24 September 2020

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

1,436,841

1,432,040

1,762,404

2,728,230

982,384

1,150,900

1,626,965

2,213,247

1,231,742

7,359,515

2,213,247

4,991,991

1,436,841

449,656

611,504

1,101,265

981,505

3,143,930

Balance at start of
year

Granted during
the year

Forfeited
during the
year b

Lapsed during
the year

Vested during
the year

Balance at end
of year

1,061,699

1,460,425

1,467,297

1,874,038

2,728,230

1,061,699

23,584

35,257

111,634

5,863,459

2,728,230

170,475

1,061,699

1,436,841

1,432,040

1,762,404

2,728,230

7,359,515

Grants from 5 October 2016 include a market based hurdle (relative total shareholder return (rTSR)) and an earnings
per share (EPS) component. Grants from 2 October 2017 include a market based hurdle (rTSR), an EPS component
and a return on investment capital (ROIC) component. The Performance Rights have been independently valued. For
the rTSR component, valuation was based on assumptions underlying the Black-Scholes methodology to produce a
Monte-Carlo simulation model. For the EPS and ROIC 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.

Performance rights granted on 2 October 2017 were tested on 28 October 2021 and did not vest. The TSR percentile rank for the
Company was 21.54%, below the 50th percentile rank. The EPS was 6.4c, below the 35.9c threshold. The ROIC was 1.3%,
below the 9.5% threshold. As a result, these Performance Rights lapsed and no shares were issued to participants.

The number of performance rights granted on 5 October 2016 were tested on 5 October 2020 and did not vest. The TSR
percentile rank for the Company was 11.43%, below the 50th percentile rank. The EPS was 5.1c, below the 37.7c threshold. 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:

Effective grant date

2 October 2017

3 October 2018

25 September 2019

24 September 2020

23 September 2021

Test and vesting
date

2 October 2021

3 October 2022

25 September 2023

24 September 2024

23 September 2025

Share price at
date of grant

Expected
volatility in
share price

Expected
dividend
yield

Risk free
interest rate

Average Fair
Value per
Performance
Right

5.17

5.21

4.20

3.15

4.35

24.40

22.76

22.00

29.00

31.00

%2.98

%4.66

%2.28

%2.14

%0.72

%0.26

%0.41

4.02

3.77

3.66

2.76

3.78

130

The Star Entertainment Group 2022 Annual Report88Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Equity retention plan
The Company has granted restricted shares under the equity retention plan to eligible employees. The share based
payment expense of $0.7 million (2021: $1.0 million) in respect of the equity instruments granted is recognised in the
income statement. The number of restricted shares granted to employees and forfeited during the year are set out
below.

2022

Grant Date

1 July 2021

2021

Grant Date

1 July 2020

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

1,189,159

219,337

258,857

1,149,639

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

1,317,619

40,067

168,527

1,189,159

The awards are granted at no cost to participants and are subject to a service condition of five years. Participants are
entitled to dividends and may benefit from share price growth over the vesting period.

Short term incentive plan
The Board has approved the award of the FY2022 short term incentive plan. Certain executives receive one third of
their eligible award as shares, subject to a holding lock of one year from the date of issue.
In respect of the FY2020 short term incentive plan, the Board resolved to exercise its discretion to make a significantly
reduced equity award due to the exceptional circumstances associated with COVID-19. The award was delivered as a
share based payment, subject to a holding lock of one year from the date of issue.
The share based payment expense of $1.5 million (2021: $5.4 million) in respect of the short term incentives has been
recognised in the income statement.

F11 Auditor's remuneration

Fees to Ernst & Young (Australia):

- Fees for auditing the statutory financial report of the parent and
consolidated group

fees

-
for other assurance and agreed-upon-procedures services
(including sustainability assurance) under contractual arrangements
where there is discretion as to whether the service is provided by the
auditor
- Fees for other advisory and compliance services

Total fees to Ernst & Young Australia

2022
$

2021
$

1,209,128

1,338,635

77,025
55,500

79,163
38,776

1,341,653

1,456,574

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 Chair of the Audit Committee (or authorised delegate) must
approve any other services provided by Ernst & Young to the Group.

F12 Assets held for sale

Aircraft

2022
$m

2021
$m

30.6

In May 2021 the Group tendered for sale a Bombardier aircraft. The sale completed in September 2021. At 30 June
2021 the aircraft was classified as 'held for sale' and measured at the lower of its carrying value and fair value less
costs to sell at the time of reclassification. The asset's fair value was determined by reference to independent market
data. This is a level 2 measurement as per the fair value hierarchy set out in note E2(i). This resulted in a gain of $9.2
million in FY2022 as the final sale price and currency translation impact were more favourable than initially valued
(2021: impairment expense of $17.9 million). Refer to note A7.

131

89Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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 2022 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 27 September 2022.

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'.

Going concern
The Directors have taken the following matters into consideration in forming a view that the going concern basis of
accounting is appropriate, in that the Group has:
(cid:4)
(cid:4)

A net asset position at 30 June 2022 of $3,430.3 million (2021: $3,614.8 million);
Cash on hand and on deposit at 30 June 2022 of $82.0 million and $365.0 million in available facility capacity, all of
which has maturities beyond 12 months;
A strong rebound of operating cashflows post COVID-19 affected periods;
Experience gained in operating throughout FY2021 and FY2022 under significant Government imposed
restrictions; and

(cid:4)
(cid:4)

(cid:4) Other sources of liquidity such as the Treasury buildings asset sale expected to contribute $248.0 million in cash.
As detailed in note C2, there is a variety of disciplinary actions which could be taken by the NICC against the Group
following their finding that the Group was unsuitable to hold a casino licence in New South Wales. At the date of this
report it is uncertain as to what actions may be taken, which could include significant pecuniary penalties, licence
suspension or cancellation or increased regulatory oversight. Note C2 also sets out material uncertainties related to
other regulatory matters.
The Group is expected to continue as a going concern provided that these outcomes as a whole are not sufficiently
onerous as to prevent the Company from settling its obligations and the Group is able to meet its debt covenants. A
breach in bank covenants, if not amended or waived by the lenders, may lead to those borrowings becoming due and
payable.
In the Directors' opinion, whilst the breadth of disciplinary action that can be taken by the NICC and other regulatory
matters (outlined in note C2) create material uncertainty as to the Group's ability to remain a going concern, the Group
is likely to be able to meet its liabilities as and when they fall due over the next twelve months and continues to remain a
going concern given:
(cid:4)

The Group has taken significant actions to manage the risk of further wrongdoing in the short-term including
refreshing the Board and Senior Executive teams, the cessation of high-risk activities and implementing the
Remediation and Transformation Program to effect significant improvement in the governance, culture and controls
of the Group;
The Group expects to be able to generate sufficient cashflows from its current operations, access other sources of
liquidity or amend existing funding agreements or obtain new funding to fund ongoing operations and any pecuniary
penalties; and
The Group remains in contact with its lenders and would seek additional waivers or amendments if required.
Successful negotiation of waivers and amendments were obtained during the severe impact of COVID-19.

(cid:4)

The financial report does not include any adjustments relating to the recoverability and classification of recorded asset
amounts or to the amounts and classification of liabilities that might be necessary should the entity not continue as a
going concern.

132

The Star Entertainment Group 2022 Annual Report90Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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 statements:
(cid:4) Going concern (refer note above);
(cid:4)
(cid:4)
(cid:4)
(cid:4)
(cid:4)
(cid:4)
(cid:4)

Asset useful lives and residual values (refer notes A4 and B5);
Impairment of assets (refer note B6);
Valuation of derivatives and other financial instruments (refer note B3);
Impairment of trade receivables (refer note B2);
Significant items (refer note A7); and
Provisions (refer note F6).
Asset held for sale (refer note F12).

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 for the year
ended 30 June 2022:

Reference
AASB 7

Title
Amendments to AASB 7: Interest Rate Benchmark Reform - Phase 2

Amendments to AASB 7: Interest Rate Benchmark Reform - Phase 2
The amendments to AASB 7 Financial Instruments provide temporary reliefs which address the financial reporting
effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free interest rate (RFR).
The amendments include the following practical expedients:
(cid:4)

A practical expedient to require contractual changes, or changes to cash flows that are directly required by the
reform, to be treated as changes to a floating interest rate, equivalent to a movement in a market rate of interest;

(cid:4)

Permit changes required by IBOR reform to be made to hedge designations and hedge documentation without the
hedging relationship being discontinued; and

Provide temporary relief to entities from having to meet the separately identifiable requirement when an RFR
instrument is designated as a hedge of a risk component.

These amendments had no impact on the financial statements of the Group as it does not have any interest rate hedge
relationships affected by the interest rate benchmark reforms.

Impact of prior year restatement
Wage compliance
The Group announced to the ASX it had identified the underpayment of wages to certain current and former salaried
team members. The underpayment was identified through a six-year retrospective wage review of salaried team
members underpinned by modern awards. In some cases, team members were found to not be ‘better off overall’ as the
annual salary was not sufficient to compensate the team member for their equivalent award entitlements such as
overtime and penalty rates.
While this review is ongoing, based on preliminary analysis, the Group determined a liability of $13.2 million was
required at 30 June 2020. The liability includes estimated back payments, interest, and superannuation contributions,
where applicable.
The impact of the restatement on the profit before income tax for the year ended 30 June 2022 and 30 June 2021 is ‘nil’
with the remaining amount recorded in retained earnings as a prior period restatement in accordance with Australian
Accounting Standard AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors.
The impact of the restatement on the balance sheet is an increase in provisions of $15.9 million and a decrease in trade
and other payables of $2.7 million, deferred tax liabilities and retained earnings of $4.0 million and $9.2 million
retrospectively at 30 June 2021.

133

91Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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. The key standards, shown below, are not expected to have a material impact on the financial statements:
Reference
AASB 3
AASB 16
AASB 37
AASB 2020-1 Amendments to Australian Accounting Standards - Classification of Liabilities as

Title
Amendments to AASB 3 Business Combinations

Amendments to AASB 37 Provisions, Contingent Liabilities & Contingent Assets

Application date
1 January 2022

Amendments to AASB 16 Leases

1 January 2023

1 January 2022

Current or Non-current

AASB 2015-2 Amendments to Australian Accounting Standards - Disclosure of Accounting

Policies and Definition of Accounting Estimates

AASB 2021-5 Amendments to Australian Accounting Standards - Deferred Tax related to Assets and Liabilities arising

from a Single Transaction

1 January 2023

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.

Government grants
Government grants are recognised where there is reasonable assurance that the grant will be received, and all attached
conditions will be complied with. When the grant relates to an expense, it is recognised net of the related expense for
which it is intended to compensate. There are no unfilled conditions or other contingencies attached to the grants.

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 in which 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:
(cid:4)
(cid:4)

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.

134

The Star Entertainment Group 2022 Annual Report92Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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:
(cid:4)

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.

(cid:4)
(cid:4)

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.

Trade and other receivables
Trade receivables are recognised and carried at original settlement amount less a provision for expected credit loss
impaired, 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:
(cid:4)
(cid:4)

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.

135

93Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Intangible assets
Goodwill
Goodwill represents the excess of the consideration transferred over the fair value of the identifiable net 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 (excluding SaaS arrangements)
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 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 for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised
for the amount by which the asset's carrying amount exceeds its recoverable amount. The recoverable amount is the
higher of an asset's fair value less 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.

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 associate and joint venture entities
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
associate and joint venture entities 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. Distributions 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.

136

The Star Entertainment Group 2022 Annual Report94Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

Leases
Right-of-use assets
The Group recognises right-of-use (ROU) at the commencement date of the lease (i.e. the date the underlying asset is
available for use). ROU assets are measured at cost, less any accumulated depreciation and impairment losses, and
adjusted for any remeasurement of lease liabilities. The cost of ROU assets includes the amount of lease liabilities
recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease
incentives received. The recognised ROU assets are depreciated on a straight-line basis over the shorter of its
estimated useful life and the lease term. ROU assets are subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease
payments to be made over the lease term. The lease payments include fixed payments (including in-substance fixed
payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a
purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating a lease, if
the lease term reflects the Group exercising the option to terminate. The variable lease payments that do not depend on
an index or a rate are recognised as expense in the period on which the event or condition that triggers the payment
occurs.
In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease
commencement date if the interest rate implicit in the lease is not readily determinable. After the commencement date,
the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made.
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a
change in the in-substance fixed lease payments or a change in the assessment to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of buildings, leasehold
improvements and plant and equipment. (i.e., those leases that have a lease term of 12 months or less from the
commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of office equipment that are considered of low value (i.e. below $10,000). Lease payments on
short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease
term.
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 Company operates a long term incentive plan (LTI), which is available to employees at the most senior executive
levels. Under the LTI, 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.

137

95Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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.
The Company operates an Equity Retention Plan, whereby eligible employees may receive up to 100% of their fixed
annual remuneration amount in value as fully paid ordinary shares after five years. The awards are issued at no cost to
participants and are subject to a service condition of five years. Participants are entitled to dividends and may benefit
from share price growth over the vesting period.
Under the Company's short term incentive plan (STI), eligible employees receive two thirds of their annual STI
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 shares are forfeited in the event that the employee voluntarily terminates from the Company. Due
to the exceptional circumstances associated with COVID-19, the Board resolved to exercise its discretion to make a
significantly reduced equity award under the FY2020 STI. The award was delivered as a share based payment, subject
to a holding lock of one year from the date of issue.
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:
(cid:4)
(cid:4)

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 hedges
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.
Fair value hedges
Where a derivative financial instrument is designated as a hedge of the exposure to variability in the fair value of a
recognised asset or liability, any change in the fair value of the hedge is recognised in the income statement as a
finance cost. The change in the fair value of the hedged item attributable to the risk hedged is recorded as part of the
carrying value of the hedged item and is also recognised in the income statement as a finance cost.

138

The Star Entertainment Group 2022 Annual Report96Notes to The Financial Statements

For the year ended 30 June 2022

Notes to the financial statements
For the year ended 30 June 2022

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:
(cid:4)
(cid:4)
(cid:4) methods used to distribute the products or provide the services; and
(cid:4)
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.

nature of the products and services;
type or class of customer for the products and services;

nature of the regulatory environment.

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:
(cid:4)

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;

(cid:4)
(cid:4)

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.

Assets held for sale
Non-current assets are classified as held for sale if their carrying amounts will be recovered principally through a sale
transaction, rather than through continuing use, and a sale is considered highly probable. They are measured at the
lower of their carrying value and fair value less costs to sell. An impairment loss is recognised for the amount by which
the asset’s carrying amount exceeds its fair value less costs to sell.

139

97Directors' 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 2022 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.

Ben Heap
Interim Chairman
Sydney
27 September 2022

140

The Star Entertainment Group 2022 Annual Report98Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited

Report on the Audit of the Financial Report
Independent Auditor's Report to the Members of The Star
Opinion
Entertainment Group Limited

We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
Report on the Audit of the Financial Report
2022, the consolidated income statement, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
Opinion
including a summary of significant accounting policies, and the directors' declaration.

We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
Act 2001, including:
2022, the consolidated income statement, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
a)
including a summary of significant accounting policies, and the directors' declaration.

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
Act 2001, including:

Basis for Opinion
a)

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
b)
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
Basis for Opinion
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
Report section of our report. We are independent of the Group in accordance with the auditor
the Code.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
for our opinion.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

141

99Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited

Material Uncertainties Relating to Going Concern
Report on the Audit of the Financial Report
We draw attention to Notes G and C2 of the financial report which note the uncertainties associated
with the range of potential disciplinary actions that may be taken by the NSW Independent Casino
Opinion
Commission against the Group following their finding that the Group was unsuitable to hold a casino
license in New South Wales, other significant regulatory matters, the Directors’ assessment of the
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
ability of the Group to continue as a going concern, and the Group’s associated contingent liabilities
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
and their inherent uncertainties. These matters indicate that material uncertainties exist that may
2022, the consolidated income statement, consolidated statement of changes in equity and
cast significant doubt on the Company’s ability to continue as a going concern. Significant adverse
consolidated statement of cash flows for the year then ended, notes to the financial statements,
outcomes in relation to these matters may result in the Group not being able to continue as a going
including a summary of significant accounting policies, and the directors' declaration.
concern unless the Group continues to have the support of its lenders. Note G describes the basis for
the Directors’ assessment that the Group has the ability to continue as a going concern. Note C2
outlines the Group’s contingent liabilities and the uncertainties as to the ultimate outcome of these
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
matters. Our opinion is not modified in respect of this matter.
Act 2001, including:

a)
Key Audit Matters

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

Key audit matters are those matters that, in our professional judgement, were of most significance in
complying with Australian Accounting Standards and the Corporations Regulations 2001.
b)
our audit of the financial report of the current year. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, but we do not provide
Basis for Opinion
a separate opinion on these matters. For each matter below, our description of how our audit
addressed the matter is provided in that context. In addition to the matter described in the Material
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
Uncertainties Relating to Going Concern section, we have determined the matters described below to
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
be the key audit matters to be communicated in our report
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Financial Report section of our report, including in relation to these matters. Accordingly, our audit
included the performance of procedures designed to respond to our assessment of the risks of
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
material misstatement of the financial report. The results of our audit procedures, including the
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
procedures performed to address the matters below, provide the basis for our audit opinion on the
the Code.
accompanying financial report.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

A member firm of Ernst & Young Global Limited
Liability limited by a scheme approved under Professional Standards Legislation

A member firm of Ernst & Young Global Limited
142
Liability limited by a scheme approved under Professional Standards Legislation

100

The Star Entertainment Group 2022 Annual Report100Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited

Impairment Testing of Goodwill

Our audit procedures included the following:

How our audit addressed the key audit matter

complying with Australian Accounting Standards and the Corporations Regulations 2001.

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

Report on the Audit of the Financial Report
Why significant to the audit
Opinion
The Group has goodwill of $1,279.7 million at 30 June
Evaluated the cash flow forecasts, which
2022. The Group performs an impairment assessment
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
supported the recoverable value of the
on an annual basis to assess the carrying value of
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
goodwill and impairment recognised.
goodwill. In addition, an impairment assessment is
2022, the consolidated income statement, consolidated statement of changes in equity and
Compared these forecasts to the Board
performed when there is an impairment indicator
consolidated statement of cash flows for the year then ended, notes to the financial statements,
approved budgets and five-year financial
present.
including a summary of significant accounting policies, and the directors' declaration.
plan. We also considered the historical
The impairment assessment is complex and
accuracy of the Group’s cash flow
judgemental, as it includes assumptions and estimates
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
forecasting and budgeting processes.
that are affected by expected future performance and
Act 2001, including:
Involved our valuation specialists to assess
market conditions such as cash flow forecasts, growth
whether the impairment testing
rates, discount rates and terminal value assumptions.
a)
methodology applied was in accordance
An impairment expense of $162.5 million was
with Australian Accounting Standards and
recognised for the year ended 30 June 2022.
to evaluate the key assumptions applied in
b)
Key assumptions, judgements and estimates used in
the impairment models which included
the Group’s assessment of impairment of intangibles
growth rates, terminal value assumptions,
Basis for Opinion
assets are set out in Note B6 of the financial report.
and discount rates which included the
Given the conditions at balance date, reasonable
uncertainty relating to the ongoing legal
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
possible changes in the assumptions around the
and regulatory matters.
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Group’s expected cash flows have been considered.
Tested whether the models used were
Report section of our report. We are independent of the Group in accordance with the auditor
mathematically accurate.
As at 30 June 2022, there was significantly higher
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Performed sensitivity analysis around the
estimation uncertainty in relation to impairment
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
key assumptions to ascertain the extent to
testing due to the impact of ongoing legal and
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
which changes in those assumptions could
regulatory matters. The impact of potential outcomes
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
result in impairment or further
from the ongoing legal and regulatory matters set out
the Code.
impairment.
in Note C2, on cash flows increases the risk of
Assessed the adequacy of the disclosures
inaccurate forecasts and results in a significantly wider
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
included in Notes B5 and B6 of the
range of possible outcomes to consider.
for our opinion.
financial report, and in particular those
Accordingly, we considered this a key audit matter. For
relating to the cash flow forecasts.
the same reasons we consider it important that
attention is drawn to the information in Notes B5 and
B6 of the financial report on management’s
assessment of the impairment testing of goodwill at 30
June 2022.

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101

143

101Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited

Our audit procedures included the following:

How our audit addressed the key audit matter

Regulatory Matters, Provisions and Contingent Liabilities
Report on the Audit of the Financial Report
Why significant to the audit
Opinion
As disclosed in Note C2, the Group is subject to
a number of significant pending and ongoing
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
regulatory and legal matters. These include
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
casino license suitability reviews, and other
2022, the consolidated income statement, consolidated statement of changes in equity and
regulatory investigations including gaming tax
consolidated statement of cash flows for the year then ended, notes to the financial statements,
related matters, an AUSTRAC enforcement
including a summary of significant accounting policies, and the directors' declaration.
investigation, and a shareholder class action.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
There is complexity in relation to the
Act 2001, including:
assessment of these matters and uncertainty
as to the outcome and quantification of any
a)
future economic outflow associated with each
of these matters.

Held discussions with management, reviewed
Board of Directors and Board Committee minutes,
reviewed correspondence with regulators (where
applicable) and attended Audit Committee and
Risk Committee meetings to understand key
complying with Australian Accounting Standards and the Corporations Regulations 2001.
regulatory, compliance, and legal matters.

Evaluated the Group’s assessment as to whether a
present obligation exists arising from past events
based on the available facts and circumstances. In
order to assess the facts and circumstances, we
considered the underlying documentation
prepared by the Group’s internal and external
specialists and other relevant documents.

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

Australian Accounting Standards (accounting
b)
standards) provide criteria for the recognition
of liabilities and disclosure of contingent
Basis for Opinion
liabilities for such matters.

Inspected legal correspondence and legal opinions
and considered their content together with the
information we obtained from our other
procedures. Where required we held inquiries with
the Group’s internal and external legal counsel.

The application of these standards required
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
significant judgement in determining whether
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
present obligations existed at balance date,
Report section of our report. We are independent of the Group in accordance with the auditor
whether they could be reliably measured and
independence requirements of the Corporations Act 2001 and the ethical requirements of the
- Where the Group determined that a present
the extent of required contingent liability
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
obligation existed, we assessed the basis for
disclosures where these conditions were
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
reliable measurement of the provision in
considered not to be met.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
accordance with accounting standards, including
the Code.
matters such as probability of outflow, amounts
Accordingly, we considered this to be a key
and timing, and our understanding of the matter
audit matter.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
from our procedures.
for our opinion.

- Where the Group determined a present obligation
existed, however given the nature and status of
the matter, the timing and amount of any outflow
could not be reliably estimated, we challenged the
Group’s conclusions against the criteria in the
accounting standards, evaluation of precedents,
underlying information and from our other
procedures.

- We considered the disclosures within the financial
report related to these provisions and contingent
liability disclosures.

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Our forensic specialists were involved in the
performance of certain procedures where considered
appropriate.

102

144

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The Star Entertainment Group 2022 Annual Report102Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited
Information Other than the Financial Report and Auditor’s Report Thereon

Report on the Audit of the Financial Report
The directors are responsible for the other information. The other information comprises the
information included in the Group’s 2022 Annual Report other than the financial report and our
auditor’s report thereon. We obtained the Directors’ Report that is to be included in the Annual
Opinion
Report, prior to the date of this auditor’s report, and we expect to obtain the remaining sections of the
Annual Report after the date of this auditor’s report.
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
Our opinion on the financial report does not cover the other information and we do not and will not
2022, the consolidated income statement, consolidated statement of changes in equity and
express any form of assurance conclusion thereon, with the exception of the Remuneration Report
consolidated statement of cash flows for the year then ended, notes to the financial statements,
and our related assurance opinion.
including a summary of significant accounting policies, and the directors' declaration.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
report or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Act 2001, including:

If, based on the work we have performed on the other information obtained prior to the date of this
giving a true and fair view of the consolidated financial position of the Group as at 30 June
a)
auditor’s report, we conclude that there is a material misstatement of this other information, we are
2022 and of its consolidated financial performance for the year ended on that date; and
required to report that fact. We have nothing to report in this regard.

b)
Responsibilities of the Directors for the Financial Report

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
and for such internal control as the directors determine is necessary to enable the preparation of the
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
financial report that gives a true and fair view and is free from material misstatement, whether due to
Report section of our report. We are independent of the Group in accordance with the auditor
fraud or error.
independence requirements of the Corporations Act 2001 and the ethical requirements of the
In preparing the financial report, the directors are responsible for assessing the Group’s ability to
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
continue as a going concern, disclosing, as applicable, matters relating to going concern and using the
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
operations, or have no realistic alternative but to do so.
the Code.

Auditor's Responsibilities for the Audit of the Financial Report
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is
free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an
audit conducted in accordance with the Australian Auditing Standards will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material
if, individually or in the aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of this financial report.

As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:

A member firm of Ernst & Young Global Limited
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103

145

103Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited
(cid:120)

Report on the Audit of the Financial Report

Identify and assess the risks of material misstatement of the financial report, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.

Opinion

(cid:120)
Obtain an understanding of internal control relevant to the audit in order to design audit
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
opinion on the effectiveness of the Group’s internal control.
2022, the consolidated income statement, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
(cid:120)
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
including a summary of significant accounting policies, and the directors' declaration.
estimates and related disclosures made by the directors.

In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
(cid:120)
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
Act 2001, including:
and, based on the audit evidence obtained, whether a material uncertainty exists related to
events or conditions that may cast significant doubt on the Group’s ability to continue as a going
giving a true and fair view of the consolidated financial position of the Group as at 30 June
concern. If we conclude that a material uncertainty exists, we are required to draw attention in
2022 and of its consolidated financial performance for the year ended on that date; and
our auditor’s report to the related disclosures in the financial report or, if such disclosures are
inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up
complying with Australian Accounting Standards and the Corporations Regulations 2001.
to the date of our auditor’s report. However, future events or conditions may cause the Group
to cease to continue as a going concern.

Basis for Opinion
(cid:120)

Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
in a manner that achieves fair presentation.
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
(cid:120)
Obtain sufficient appropriate audit evidence regarding the financial information of the entities
independence requirements of the Corporations Act 2001 and the ethical requirements of the
or business activities within the Group to express an opinion on the financial report. We are
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
responsible for the direction, supervision and performance of the Group audit. We remain solely
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
responsible for our audit opinion.
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
the Code.

We communicate with the directors regarding, among other matters, the planned scope and timing of
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
the audit and significant audit findings, including any significant deficiencies in internal control that we
for our opinion.
identify during our audit.

We also provide the directors with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, actions
taken to eliminate threats or safeguards applied.

From the matters communicated to the directors, we determine those matters that were of most
significance in the audit of the financial report of the current year and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.

A member firm of Ernst & Young Global Limited
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146

104

The Star Entertainment Group 2022 Annual Report104Independent Auditor's Report

Ernst & Young
200 George Street
Sydney NSW 2000 Australia
GPO Box 2646 Sydney NSW 2001

Tel: +61 2 9248 5555
Fax: +61 2 9248 5959
ey.com/au

Independent Auditor's Report to the Members of The Star
Entertainment Group Limited

Report on the Audit of the Remuneration
Report on the Audit of the Financial Report
Opinion on the Remuneration Report

Opinion
We have audited the Remuneration Report included in pages 20 to 40 of the Directors' Report for
the year ended 30 June 2022.
We have audited the financial report of The Star Entertainment Group Limited (the Company) and its
subsidiaries (collectively the Group), which comprises the consolidated balance sheet as at 30 June
In our opinion, the Remuneration Report of The Star Entertainment Group Limited for the year ended
30 June 2022, complies with section 300A of the Corporations Act 2001.
2022, the consolidated income statement, consolidated statement of changes in equity and
consolidated statement of cash flows for the year then ended, notes to the financial statements,
Responsibilities
including a summary of significant accounting policies, and the directors' declaration.

The directors of the Company are responsible for the preparation and presentation of the
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our
Act 2001, including:
responsibility is to express an opinion on the Remuneration Report, based on our audit conducted in
accordance with Australian Auditing Standards.
a)

giving a true and fair view of the consolidated financial position of the Group as at 30 June
2022 and of its consolidated financial performance for the year ended on that date; and

complying with Australian Accounting Standards and the Corporations Regulations 2001.

Basis for Opinion
Ernst & Young
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Megan Wilson
Accountants (including Independence Standards) (the Code) that are relevant to our audit of the
Partner
financial report in Australia. We have also fulfilled our other ethical responsibilities in accordance with
Sydney
the Code.
27 September 2022

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.

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Liability limited by a scheme approved under Professional Standards Legislation

105

147

105Shareholder Information

As at 27 September 2022

ORDINARY SHARE CAPITAL

The Star Entertainment Group Limited has 952,014,210 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.

VOTING RIGHTS

All ordinary shares issued by The Star Entertainment Group carry one vote per share. 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.

EQUITY PLACEMENT

On 29 March 2018, The Star Entertainment Group announced that:

(a) it had entered into a subscription agreement dated 28 March 2018 with its joint venture partners, Chow Tai Fook
Enterprises Limited (CTF) and Far East Consortium International Limited (FEC) (Subscription Agreement) under
which the respective nominated entities of each of CTF and FEC separately acquire 45,825,000 new fully paid
ordinary shares in The Star Entertainment Group (equivalent to a 4.99% stake each) at $5.35 per share, for a total
consideration of $245,163,750 each; and

(b) in addition to existing agreements, The Star Entertainment Group had entered into a Strategic Alliance Agreement

with CTF and FEC which provides a framework for the three parties to work together further to grow
The Star Entertainment Group’s properties and businesses, collaborate on potentially mutually beneficial
development opportunities and establish a marketing alliance (Strategic Alliance).

In accordance with the terms of the Subscription Agreement, 45,825,000 new fully paid ordinary shares were issued
to each of the respective nominated entities of CTF and FEC on 16 April 2018.

TOP-UP RIGHT

The Subscription Agreement grants to CTF and FEC certain top-up rights that entitles each of them to participate in
future equity raisings undertaken by The Star Entertainment Group during the term of the Strategic Alliance in order
to maintain their pre-equity raising ownership interests (Top-Up Right).

The ASX has granted The Star Entertainment Group a waiver from Listing Rule 6.18 which prohibits an entity from granting
an option exercisable over a percentage of the entity’s capital. The waiver granted by ASX permits CTF and FEC
(and their nominees) to maintain, by way of a right to participate in any issue of shares or to subscribe for shares, their
percentage relevant interest in the issued share capital of The Star Entertainment Group in respect of a diluting event.

The waiver from Listing Rule 6.18 is subject to the terms and conditions imposed by ASX which are set out in The Star
Entertainment Group’s ASX Announcement dated 21 May 2018, including a requirement that a summary of the Top-Up
Right be included in each Annual Report.

148

The Star Entertainment Group 2022 Annual Report

Shareholder Information

As at 27 September 2022

In accordance with the Top-Up Right, if The Star Entertainment Group undertakes an equity raising during the
term of the Strategic Alliance which would result in The Star Entertainment Group issuing 1% or more of its
share capital (or would have such an effect in the case of an issue of convertible securities) (Equity Raising),
then The Star Entertainment Group must give each of CTF and FEC (or their respective nominees) an
opportunity to participate in the Equity Raising on a basis that allows them to maintain their pre-Equity Raising
shareholding percentage.

CTF and FEC (or their respective nominees) will be entitled to participate in the Equity Raising on the same
terms and conditions (including price) as all other participants in the Equity Raising.

The Top-Up Right does not operate in respect of issues of securities:

• under a dividend or distribution plan;

• under an employee incentive scheme (including on the conversion of any convertible securities issued

under any such scheme);

• pursuant to any takeover bid or scheme of arrangement; or

• as consideration for the acquisition of an asset by The Star Entertainment Group or any of its related

bodies corporate.

The Top-Up Right will automatically terminate in circumstances where:

• CTF or FEC or their respective nominees and affiliates (as applicable) cease to hold the shares issued under

the Subscription Agreement; or

• the waiver of ASX Listing Rule 6.18 ceases to apply (either as a result of the lapse of time or CTF or FEC

no longer complying with the terms and conditions of the waiver),

whichever occurs first.

If the Top-Up Right ceases or terminates, and The Star Entertainment Group undertakes an Equity Raising then

(subject to any applicable laws, rules or regulations) it must consider making (but is not obliged to make) an offer

to CTF and FEC (or their respective nominees) to participate in the Equity Raising on a basis that allows them to

maintain their pre-Equity Raising shareholding percentage.

SUBSTANTIAL SHAREHOLDERS

The following is a summary of the substantial shareholders as at 27 September 2022 pursuant to notices lodged

with ASX in accordance with section 671B of the Corporations Act 2001 (Cth):

Name

Date of interest

Number of
ordinary shares(i)

% of issued
capital (ii)

Firmament Investment Pte. Ltd and its associated entities

2 July 2020

47,377,137

4.9973%

Far East Consortium International Limited, its controlled
entities and its associated entities(iii)

2 July 2020

47,377,137

4.9973%

State Street Corporation and its subsidiaries

30 March 2022

51,237,485

L1 Capital Pty Ltd and its associated entities

17 May 2022

69,901,669

5.38%

7.34%

(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 19,730 shareholders holding less than a marketable parcel of 188 ordinary shares (valued at $500 or less, based

on a market price of $2.66) at the close of trading on 27 September 2022 and they hold a total of 2,173,823 ordinary shares.

SECURITIES PURCHASED ON-MARKET

The following securities were purchased on-market during the financial year for the purposes of The Star Entertainment

Group’s employee share plans, namely, the General Employee Share Plan (GESP) and the Tax Exempt Plan (TEP).

Ordinary Shares

Number of shares purchased

Average price paid per share

230,550

15,071

$4.185

$4.19

149

Shareholder Information

As at 27 September 2022

TWENTY LARGEST REGISTERED SHAREHOLDERS – ORDINARY SHARES*

Rank

Name

10.

11.

12.

13.

14.

15.

16.

17.

18.

19.

20.

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED

CITICORP NOMINEES PTY LIMITED

J P MORGAN NOMINEES AUSTRALIA PTY LIMITED

NATIONAL NOMINEES LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - GSCO ECA

BNP PARIBAS NOMS PTY LTD

ARGO INVESTMENTS LIMITED

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - A/C 2

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED - GSI EDA

HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED -

Number of
Shares Held

307,049,064

198,469,263

92,721,733

51,298,009

30,223,485

21,999,347

15,500,000

12,228,307

11,614,036

7,876,842

BNP PARIBAS NOMINEES PTY LTD

6,652,921

MUTUAL TRUST PTY LTD

PACIFIC CUSTODIANS PTY LIMITED

GLENN HARGRAVES INVESTMENTS PTY LTD

PACIFIC CUSTODIANS PTY LIMITED

4,690,488

4,087,207

3,725,000

3,594,042

CITICORP NOMINEES PTY LIMITED

3,426,797

WASHINGTON H SOUL PATTINSON AND COMPANY LIMITED

BOND STREET CUSTODIANS LIMITED

MR JOHN ARMOUR

UBS NOMINEES PTY LTD

Total of top 20 registered shareholders

3,398,000

3,234,678

2,250,000

1,888,213

785,927,432

% of Issued
Capital

32.25%

20.85%

9.74%

5.39%

3.17%

2.31%

1.63%

1.28%

1.22%

0.83%

0.70%

0.49%

0.43%

0.39%

0.38%

0.36%

0.34%

0.24%

0.20%

82.56%

*on a grouped basis

DISTRIBUTION OF SECURITIES HELD

ORDINARY SHARES

PERFORMANCE RIGHTS1

Range of Holding

No. of Holders

% of total
ordinary
shares

No. of
Holders

No. of
Securities

% of total
performance
rights

No. of
Securities

15,778,904

45,534,201

25,694,997

51,355,639

46,168

20,681

3,552

2,298

1.66%

4.78%

2.70%

5.39%

1 to 1,000

1,001 to 5,000

5,001 to 10,000

10,001 to 100,000

100,001 and over

Total

72,818

952,014,210

100.00%

119

813,650,469

85.47%

–

8,969

30,862

912,988

5,602,980

0.0%

0.14%

0.47%

13.93%

85.46%

6,555,799

100.00%

1 Performance Rights were issued under the Long Term Incentive Plan (refer to the Remuneration Report for more information).

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.

150

The Star Entertainment Group 2022 Annual Report

Corporate Information

ANNUAL REPORT

This Annual Report is available on-line from The Star Entertainment Group’s website at www.starentertainmentgroup.
com.au/annual-reports/. 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 at 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: GPO Box 13348

George Street Post Shop
Brisbane QLD 4003

Telephone: +61 7 3228 0000

Facsimile: +61 7 3228 0099

Email:

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:

www.linkmarketservices.com.au

GENERAL ENQUIRIES

Investor information is available on The Star Entertainment Group’s website at www.starentertainmentgroup.com.au
including major announcements, Annual Reports, and general company information.

2022 CORPORATE GOVERNANCE STATEMENT

The 2022 Corporate Governance Statement can be found on The Star Entertainment Group’s website at
www.starentertainmentgroup.com.au/corporate-governance.

2022 ANNUAL GENERAL MEETING

The Annual General Meeting of The Star Entertainment Group Limited will be held on Tuesday 22 November 2022
in the Theatre at The Star Gold Coast, Broadbeach Island, Broadbeach, Queensland.

The Notice of Meeting is available on The Star Entertainment Group’s website at

www.starentertainmentgroup.com.au/annual-general-meetings.

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About this Annual Report

CURRENCY

References to currency in this Annual Report are in Australian Dollars unless otherwise stated.

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.

INDICATIVE KEY DATES FOR FY2023*

FY2023 HALF YEAR RESULTS ANNOUNCEMENT:

23 February 2023

2023 FINANCIAL YEAR END:

30 June 2023

FY2023 FULL YEAR RESULTS ANNOUNCEMENT:

24 August 2023

2023 ANNUAL GENERAL MEETING:

2 November 2023

*Dates are subject to change

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The Star Entertainment Group 2022 Annual Report

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

Level 3, 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.thestarsydney.com.au

THE STAR GOLD COAST

Broadbeach Island

Broadbeach QLD 4218

Reservations: 1800 074 344

Telephone: + 61 7 5592 8100

www.thestargoldcoast.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.queenswharfbrisbane.com.au

AUDITOR

Ernst & Young

153

Notes

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