Australian Grand Prix Corporation Annual Report 2018 1 1

2018 ANNUAL REPORT

Australian Grand Prix Corporation

Annual Report 2018

Report of Operations

1. Responsible Body’s Declaration 2

2. Report of the Chairman 3

3. General Information 8 a. Introduction 8 b. Mission Statement 8 c. Vision Statement 8 d. Functions and Strategic Priorities 8 e. Administrative Structure 13

4. People, Safety and Wellbeing 19 a. Workforce Data 19 b. Wellbeing and Safety 20 c. Occupational Health and Safety performance indicators 21 d. Industrial Relations 21 e. Equal Opportunity 21 f. Multicultural Policy 21 g. Executive Officer Remuneration 22

5. Financial Review 23

6. Legislative and Other Information 25 a. Freedom of Information 25 b. Consultancy Services 26 c. Members’ Meetings 26 d. Building Act 1993 26 e. Local Jobs First - Victorian Industry Participation Policy 26 f. Available Information 27 g. Details of Advertising Expenditure 28 h. Information and Communication Technology Expenditure 28 i. Protected Disclosure Act 28 j. Disability Discrimination Act 29 k. Attestation for Financial Management Compliance 29 l. Disclosure Index 30

7. Financial Statements 31 Comprehensive Operating Statement 32 Balance Sheet 33 Statement of Changes in Equity 34 Cash flow statement 35 Notes to and forming part of the Financial Statements 36 Statement by Members of the Board and Officers 81 Independent Auditor’s Report 82

8. Event Supporters and Suppliers 84

Australian Grand Prix Corporation Annual Report 2018 1 1. Responsible Body’s Declaration 2. Report of the Chairman

In accordance with the Financial Management Act 1994, I am pleased to present the The past year has seen the Australian Grand Prix Corporation (AGPC) again deliver two world- Australian Grand Prix Corporation’s Annual Report for the year ending 30 June 2018. class international motorsport events – the Michelin® Australian Motorcycle Grand Prix 2017 and the Formula 1® 2018 Rolex Australian Grand Prix.

Both events showcase Melbourne and Victoria on the world stage and form an integral part of Victoria’s major events calendar. They generate significant benefits for the state, attracting visitors from across Australia and around the world, and promote Melbourne and Victoria to millions of fans globally.

John Harnden AM Staging iconic motorsport events continues to be at the heart of what we do, however, we Chairman take great pride in continuing to grow the fan experience by showcasing all that our great city Australian Grand Prix Corporation and state have to offer, from a wide range of fields including technology, innovation, art and culture. 16 August 2018 Whilst we reflect on the success of the past 12 months, it is with immense sadness that we acknowledge the passing of former AGPC Chairman, Ronald Walker AC CBE. Ron was a great Australian and Victorian, who passionately loved Melbourne. He left a profound mark on the city and state from his early days as Lord Mayor, through to shaping the landscape of sport and major events in Victoria, and had an enormous impact on the world of motorsport both nationally and internationally. His legacy is unparalleled, and our thoughts continue to be with his family and friends.

It is with great sadness that we also acknowledge the passing of our AGPC Board member, Mark Green. His passion and unwavering commitment to the Board and our events will forever be remembered, as will his wise counsel and judgement.

Michelin® Australian Motorcycle Grand Prix 2017

The Australian Motorcycle Grand Prix has earned its reputation as being regional Australia’s largest international sporting event, and this year’s event shone bright on the global stage.

The Phillip Island Grand Prix Circuit is one of the most unique and breathtaking destinations on the international MotoGP™ calendar, attracting fans from all over the globe to the region. This year, a three-day attendance of an estimated 85,600 provided substantial economic benefits to the local community.

On-track, the 2017 MotoGP™ Riders Parade was led by Australian legend Wayne Gardner AM to celebrate his 30th anniversary since winning the World Championship.

The Michelin® Australian Motorcycle Grand Prix 2017 was won by Spanish Honda superstar, Marc Marquez, who triumphed 1.8 seconds ahead of rival and fan-favourite, Italian Valentino Rossi, who was closely followed by his Yamaha teammate, Maverick Viñales.

Aussie Jack Miller dug deep in front of his home crowd, leading the race in the first four laps and finishing in an impressive seventh place – his best result at Phillip Island – and a remarkable effort considering the race was just three weeks after breaking his leg.

The Phillip Island Grand Prix Circuit was home to a history making event on the Sunday, when KTM took its first win in the Moto2™ category with Miguel Oliveira (Red Bull KTM Ajo) crossing the line three seconds ahead of his closest rival, teammate Brad Binder, who also took his first ever podium in the intermediate class.

While there were still two races remaining, Joan Mir (Leopard Racing) was crowned 2017 Moto3™ World Champion after a stellar year that had seen him take nine wins from 16 races.

2 Australian Grand Prix Corporation Annual Report 2018 1. Responsible Body’s Declaration 2. Report of the Chairman

Michelin® Australian Motorcycle Grand Prix 2017

The Australian Motorcycle Grand Prix has earned its reputation as being regional Australia’s largest international sporting event, and this year’s event shone bright on the global stage.

On-track, the 2017 MotoGP™ Riders Parade was led by Australian legend Wayne Gardner AM to celebrate his 30th anniversary since winning the World Championship.

While there were still two races remaining, Joan Mir (Leopard Racing) was crowned 2017 Moto3™ World Champion after a stellar year that had seen him take nine wins from 16 races.

Australian Grand Prix Corporation Annual Report 2018 3 Off track, the all-new Urban Alley featured MotoGP™ inspired urban art from six talented street Collaborating with Visit Victoria, the Melbourne Food and Wine Festival, Melbourne Fashion artists, including Melburnian Julian Clavijo, who created a stunning tribute to the late American Festival, Melbourne International Comedy Festival and the Festival of Racing helped to MotoGP™ champion, Nicky Hayden. In addition, the autograph stages were a hive of activity enhance the profile of Victoria’s ‘March Madness’ events calendar. with fans getting up close to their favourite MotoGP™ stars. To celebrate Melbourne’s arts culture, the Melbourne Symphony Orchestra performed the Aerial displays from Royal Australian Air Force (RAAF) F/A-18 jets and the RAAF Roulettes had Australian National Anthem on track prior to the race, backing Esther Hannaford and Mat spectators turning their heads to the sky in awe, as did the enormous Boeing C-17 Verevis, the lead performers in ‘Beautiful’ – the Carole King musical which was in town at Her Globemaster, which made its inaugural flight over Phillip Island. Majesty’s Theatre in Melbourne. To see an orchestra build their performance which culminated in an Air Force fly-over was tremendous and highlights how the event continues to find new We were proud to partner with the Prostate Cancer Foundation of Australia (PCFA) as the and different ways to entertain spectators. official charity partner for the Michelin® Australian Motorcycle Grand Prix 2017. PCFA also had the genuine support of Jack Miller, whose grandfather battled prostate cancer. The Industry and Innovation Precinct brought together leaders across government and education sectors to not only inspire the next generation to take on science, technology, Together, Dorna and Visit Victoria help to put the Australian Motorcycle Grand Prix on the engineering and mathematics (STEM), but to cement Victoria’s position as leaders in the global stage, and we appreciate their efforts in supporting the AGPC to promote Melbourne, technology industry. Phillip Island and Victoria to the world through this spectacular event. Adding to the benefits for Victoria, the event provided the perfect platform to host a further Formula 1® 2018 Rolex Australian Grand Prix 15 ancillary functions which connected Australia’s top business people with delegates and government representatives from around the world. For the third year the event also hosted This year marked a significant milestone in Australian motorsport history, celebrating 90 years the Victorian Innovation Roundtable Luncheon, seeing collaboration with 18 industry leaders since the first Australian Grand Prix in 1928, won by Sir Arthur Waite. First staged at Phillip Island, across government and education sectors. This year’s theme focussed on the Victorian the event has since become part of the fabric of Melbourne, putting our state on show to the Defence Industry. world. The Victorian tourism industry again recognised the Formula 1® Australian Grand Prix when the Melbourne was once again the perfect curtain raiser for the 2018 FIA Formula One World event was named the Gold Winner, Major Festivals and Events, at the prestigious RACV Championship™ season. On-track, Scuderia Ferrari driver Sebastian Vettel repeated his 2017 Victorian Tourism Awards, for a second consecutive year. The event also picked up three victory with a copybook performance to win the Formula 1® 2018 Rolex Australian Grand Prix. awards at the SPIA Asia Awards – Asia’s Sports Industry Awards and Conference – including The Ferrari ace took his third win at Albert Park after his team managed to move him ahead of winning Gold for the Best Sports Event Hospitality Offering and also taking home Gold for the pole-sitter and early race leader Lewis Hamilton during the pit cycle. Hamilton finished the race Best Integrated Marketing Campaign for a Sports Event. in second place, with Vettel’s teammate Kimi Raikkonen rounding out the podium in third position. A three-place grid penalty following practice meant Australian superstar Daniel The 2018 Formula 1® Rolex Australian Grand Prix marked the second consecutive year that Ricciardo started the race in eighth position, and it was a great effort by Daniel to fight hard Guide Dogs Australia has been involved as the official charity partner of the event, raising over and ultimately finish the race in fourth place. $100,000 with the help of more than 500 volunteers. A natural synergy between supercharged senses and elite performance, the event created a platform to drive awareness of the Across the four days throughout Albert Park, fans were spoilt for choice, with the 2018 event important work that Guide Dogs Australia does every day to support people with low vision or boasting the largest motorsport line-up of any Formula 1® event in the world and the biggest blindness. ever in Melbourne. Supporting the spectacle of Formula 1®, 2018 saw Supercars compete for ® Championship points for the first time with Jamie Whincup taking the inaugural Larry Perkins 2018 saw the second Formula 1 Rolex Australian Grand Prix under the new ownership of Liberty Trophy for the Coates Hire Supercars Melbourne 400 after four competitive races. The trophy, Media, who has a clear vision to create the world’s leading sport brand, with fan experience designed by AGPC’s educational partner, RMIT University, was created using technologies and technological innovation at their core. such as 3D printing and virtual reality, and drew inspiration from winning trophies of both the ® Formula 1® Australian Grand Prix and Australian Motorcycle Grand Prix. The trophy recently To herald a new era, for the first time in 23 years Formula 1 refreshed its brand and changed ® won a Gold Award in the Prize and Competitions Design category at the international its logo. Aligning with the new F1 branding and associated imagery, AGPC evolved its event A’Design Award and Competition in Italy. brand identity. This saw the ‘Australian Grand Prix’ change to ‘AUSGP’, to reflect the natural vernacular of how fans refer to and interact with the event in the ever-changing digital The Ferrari Challenge Trofeo Pirelli – Asia Pacific was welcomed as the event’s first international landscape. The event was once again popular with Melburnians, as well as visitors from 1 support category in 17 years and was a significant addition. This new category, along with regional Victoria, interstate and overseas; the estimated attendance being 295,000 across competitors from the Porsche Wilson Security Carrera Cup and the Australian GT the four days. More broadly, Melbourne shone on the international stage via traditional Championship, ensured fans were kept entertained with non-stop on-track action. television and media coverage, that provided wide global exposure.

While Formula 1® is the cornerstone attraction of the Grand Prix, the event is more than just a An increased importance is placed today on reaching audiences through non-traditional ® 2 race. Continuing to broaden the reach of Formula 1® to young event-goers off-track, 70 music media. Formula 1 is the fastest-growing sports brand online , and together we are on a journey acts, culinary creations from some of the country’s renowned chefs, RAAF aerial displays, the to further build on the sport’s already large global footprint. Strong growth was achieved on latest in advanced technologies and Australia’s biggest motor show kept fans entertained. all AGPC digital channels, including over 78 million impressions across AUSGP social media The drivers are without doubt the stars of the show, and fans, young and old, were provided the opportunity to get close to their heroes at the Melbourne Walk – the red-carpet arrival location for the Formula 1® heroes. 1 Ticketmaster, AGPC and Grand Prix Travel Office 2018 data 2 Nielsen Sports DNA Survey

4 Australian Grand Prix Corporation Annual Report 2018 Off track, the all-new Urban Alley featured MotoGP™ inspired urban art from six talented street Collaborating with Visit Victoria, the Melbourne Food and Wine Festival, Melbourne Fashion artists, including Melburnian Julian Clavijo, who created a stunning tribute to the late American Festival, Melbourne International Comedy Festival and the Festival of Racing helped to MotoGP™ champion, Nicky Hayden. In addition, the autograph stages were a hive of activity enhance the profile of Victoria’s ‘March Madness’ events calendar. with fans getting up close to their favourite MotoGP™ stars. To celebrate Melbourne’s arts culture, the Melbourne Symphony Orchestra performed the Aerial displays from Royal Australian Air Force (RAAF) F/A-18 jets and the RAAF Roulettes had Australian National Anthem on track prior to the race, backing Esther Hannaford and Mat spectators turning their heads to the sky in awe, as did the enormous Boeing C-17 Verevis, the lead performers in ‘Beautiful’ – the Carole King musical which was in town at Her Globemaster, which made its inaugural flight over Phillip Island. Majesty’s Theatre in Melbourne. To see an orchestra build their performance which culminated in an Air Force fly-over was tremendous and highlights how the event continues to find new We were proud to partner with the Prostate Cancer Foundation of Australia (PCFA) as the and different ways to entertain spectators. official charity partner for the Michelin® Australian Motorcycle Grand Prix 2017. PCFA also had the genuine support of Jack Miller, whose grandfather battled prostate cancer. The Industry and Innovation Precinct brought together leaders across government and education sectors to not only inspire the next generation to take on science, technology, Together, Dorna and Visit Victoria help to put the Australian Motorcycle Grand Prix on the engineering and mathematics (STEM), but to cement Victoria’s position as leaders in the global stage, and we appreciate their efforts in supporting the AGPC to promote Melbourne, technology industry. Phillip Island and Victoria to the world through this spectacular event. Adding to the benefits for Victoria, the event provided the perfect platform to host a further Formula 1® 2018 Rolex Australian Grand Prix 15 ancillary functions which connected Australia’s top business people with delegates and government representatives from around the world. For the third year the event also hosted This year marked a significant milestone in Australian motorsport history, celebrating 90 years the Victorian Innovation Roundtable Luncheon, seeing collaboration with 18 industry leaders since the first Australian Grand Prix in 1928, won by Sir Arthur Waite. First staged at Phillip Island, across government and education sectors. This year’s theme focussed on the Victorian the event has since become part of the fabric of Melbourne, putting our state on show to the Defence Industry. world. The Victorian tourism industry again recognised the Formula 1® Australian Grand Prix when the Melbourne was once again the perfect curtain raiser for the 2018 FIA Formula One World event was named the Gold Winner, Major Festivals and Events, at the prestigious RACV Championship™ season. On-track, Scuderia Ferrari driver Sebastian Vettel repeated his 2017 Victorian Tourism Awards, for a second consecutive year. The event also picked up three victory with a copybook performance to win the Formula 1® 2018 Rolex Australian Grand Prix. awards at the SPIA Asia Awards – Asia’s Sports Industry Awards and Conference – including The Ferrari ace took his third win at Albert Park after his team managed to move him ahead of winning Gold for the Best Sports Event Hospitality Offering and also taking home Gold for the pole-sitter and early race leader Lewis Hamilton during the pit cycle. Hamilton finished the race Best Integrated Marketing Campaign for a Sports Event. in second place, with Vettel’s teammate Kimi Raikkonen rounding out the podium in third position. A three-place grid penalty following practice meant Australian superstar Daniel The 2018 Formula 1® Rolex Australian Grand Prix marked the second consecutive year that Ricciardo started the race in eighth position, and it was a great effort by Daniel to fight hard Guide Dogs Australia has been involved as the official charity partner of the event, raising over and ultimately finish the race in fourth place. $100,000 with the help of more than 500 volunteers. A natural synergy between supercharged senses and elite performance, the event created a platform to drive awareness of the Across the four days throughout Albert Park, fans were spoilt for choice, with the 2018 event important work that Guide Dogs Australia does every day to support people with low vision or boasting the largest motorsport line-up of any Formula 1® event in the world and the biggest blindness. ever in Melbourne. Supporting the spectacle of Formula 1®, 2018 saw Supercars compete for ® Championship points for the first time with Jamie Whincup taking the inaugural Larry Perkins 2018 saw the second Formula 1 Rolex Australian Grand Prix under the new ownership of Liberty Trophy for the Coates Hire Supercars Melbourne 400 after four competitive races. The trophy, Media, who has a clear vision to create the world’s leading sport brand, with fan experience designed by AGPC’s educational partner, RMIT University, was created using technologies and technological innovation at their core. such as 3D printing and virtual reality, and drew inspiration from winning trophies of both the ® Formula 1® Australian Grand Prix and Australian Motorcycle Grand Prix. The trophy recently To herald a new era, for the first time in 23 years Formula 1 refreshed its brand and changed ® won a Gold Award in the Prize and Competitions Design category at the international its logo. Aligning with the new F1 branding and associated imagery, AGPC evolved its event A’Design Award and Competition in Italy. brand identity. This saw the ‘Australian Grand Prix’ change to ‘AUSGP’, to reflect the natural vernacular of how fans refer to and interact with the event in the ever-changing digital The Ferrari Challenge Trofeo Pirelli – Asia Pacific was welcomed as the event’s first international landscape. The event was once again popular with Melburnians, as well as visitors from 1 support category in 17 years and was a significant addition. This new category, along with regional Victoria, interstate and overseas; the estimated attendance being 295,000 across competitors from the Porsche Wilson Security Carrera Cup and the Australian GT the four days. More broadly, Melbourne shone on the international stage via traditional Championship, ensured fans were kept entertained with non-stop on-track action. television and media coverage, that provided wide global exposure.

Australian Grand Prix Corporation Annual Report 2018 5 platforms3, and the combined digital media content from Formula 1® and outlets covering the Lastly, to the Victorian Government, the Premier of Victoria The Hon. Daniel Andrews MP, the sport globally ensured worldwide exposure. Hon. John Eren MP Minister for Tourism and Major Events, the Treasurer, the Hon. Tim Pallas MP and Visit Victoria, we are grateful for your continued support to deliver international exposure The real benefit of our expanding digital footprint is it continues to show Melbourne’s relevance and economic benefits to the state of Victoria via the staging of these two iconic international as a truly global city, able to be viewed more extensively and conveniently than ever before. motorsport events.

The continued success of the event across many facets prompted Chase Carey, CEO and Chairman of Formula 1®, to make the following comments, and we look forward to working closely with Formula 1® moving forward:

“The start of our season is incredibly important, and it is great to launch with a first- class event, at a first-class location, with first-class partners.”

“There can be no better venue than the City of Melbourne to kick off this great show. John Harnden AM The enthusiasm of the Australian public and the setting of Albert Park make this Grand Chairman Prix really special.” Australian Grand Prix Corporation

Acknowledgements

I would like to thank the dedicated individuals who serve as Board members of the AGPC, including Deputy Chair Gillian Franklin, Laura Anderson, Kimberley Brown, Mick Doohan AM, Kate Lundy, Trent Smyth and Mark Webber AO. All Board members act in an honorary capacity, and their hard work is greatly appreciated. I also want to acknowledge Alan Oxley’s retirement from the Board after 15 years of outstanding service, and we are grateful for the pragmatic and considered advice he offered throughout his tenure.

The enthusiasm and dedication shown by the AGPC team to deliver these two world-class international events is superb, and I thank every member of the team for their hard work.

I would also like to thank returning title sponsors Michelin® and Rolex, who supported the Michelin® Australian Motorcycle Grand Prix 2017 and Formula 1® 2018 Rolex Australian Grand Prix events respectively. Both brands represent excellence in their respective fields, and we thank you both for your ongoing commitment and the continuation of these already strong relationships.

To our new and returning partners, stakeholders, suppliers and contractors, I would like to thank you for your valuable support and contribution to delivering these events and producing memorable experiences for our fans year after year.

The efforts of the Confederation of Australian Motor Sport and Motorcycling Australia, along with their hundreds of volunteers and officials, to ensure the success and safety of all drivers and riders, as well as the events themselves, are greatly appreciated.

Both Parks Victoria and the Phillip Island Grand Prix Circuit have again played key roles in helping to project incredible images of Melbourne and Victoria to the world through the presentation of these two exemplary venues, and I thank them for their efforts.

To the fans who come out in large numbers to support their hometown heroes in Daniel Ricciardo and Jack Miller, thank you for your continued patronage and I join you in looking forward to cheering on an Aussie victory on home soil in the near future.

3 AGPC data

6 Australian Grand Prix Corporation Annual Report 2018 platforms3, and the combined digital media content from Formula 1® and outlets covering the Lastly, to the Victorian Government, the Premier of Victoria The Hon. Daniel Andrews MP, the sport globally ensured worldwide exposure. Hon. John Eren MP Minister for Tourism and Major Events, the Treasurer, the Hon. Tim Pallas MP and Visit Victoria, we are grateful for your continued support to deliver international exposure The real benefit of our expanding digital footprint is it continues to show Melbourne’s relevance and economic benefits to the state of Victoria via the staging of these two iconic international as a truly global city, able to be viewed more extensively and conveniently than ever before. motorsport events.

“The start of our season is incredibly important, and it is great to launch with a first- class event, at a first-class location, with first-class partners.”

Acknowledgements

The enthusiasm and dedication shown by the AGPC team to deliver these two world-class international events is superb, and I thank every member of the team for their hard work.

3 AGPC data

Australian Grand Prix Corporation Annual Report 2018 7 3. General Information Strategic Priorities

a. Introduction The strategic priorities and associated supporting strategic objectives of the Australian Grand Prix Corporation are as follows: The Australian Grand Prix Corporation (the Corporation) is a statutory authority established pursuant to the Australian Grands Prix Act 1994 (Vic) (as amended) (“AGP Act”).  Promote Melbourne and Victoria through the events o To ensure local and global branding of Melbourne and Victoria. The Corporation is subject to the direction and control of the Minister administering the o To drive national and international awareness of the events, Melbourne and AGP Act, the Minister for Tourism and Major Events, The Honourable John Eren, MP. Victoria. o To integrate the events into tourism strategies developed by the Victorian b. Mission Statement Government and its agencies. o To cement Melbourne’s reputation as the centre of major events by delivering a Our mission is to provide Melbourne and Victoria with world-class international motorsport world-class event experience to all intrastate, interstate and international visitors. events that deliver increased promotional and economic benefits to the State of Victoria. o To contribute to the growth of the local economy by providing opportunities to showcase Victorian businesses. c. Vision Statement o To contribute to the growth of the Victorian major events industry by providing employment and business development opportunities among related To stage the best international events. organisations.

d. Functions and Strategic Priorities  Maximise revenues and minimise costs o To continually improve our competitive position among other major events to Functions increase return on investment. o To offer patrons compelling and value for money, product and event content. The functions of the Corporation are: o To implement robust financial review and control processes, and keep costs under constant scrutiny  ® To negotiate, enter into and vary agreements under which Formula 1 events are held; o To foster a culture of shared responsibility for financial performance throughout the organisation.  To undertake and facilitate the organisation, conduct, management and promotion of Formula 1® events and Motorcycle Grand Prix events;  Deliver events safely and to the highest standards o To establish and deploy clearly articulated safety management systems and event  To establish at Albert Park a temporary motor racing circuit and supporting facilities for management plans. ® Formula 1 events; o To maintain and continually evaluate an active risk register. o To foster a culture of shared responsibility for event safety and quality among our  To do all other things necessary for or in connection with the conduct and financial people, contractors, agencies, partners and suppliers. ® and commercial management of each Formula 1 event promoted by the o To ensure our people, contractors, agencies, partners and suppliers clearly Corporation; understand and deliver against our expectations of ‘highest standards’.

 With the consent of the Minister, to negotiate and enter into an agreement for the  Increase attendances at the events holding of, and to undertake the organisation, conduct, management and promotion o To expand national and international awareness of the event. of, a motor sport event approved by the Minister; and o To drive ticket sales through clearly defined and implemented sales and marketing communications strategies.  Such other functions as are conferred on the Corporation under the AGP Act or any o To fully understand our customers and what they want and expect from the event. other Act. o To keep the events fresh and compelling by continually challenging, refreshing and improving content and products.

 Provide an exceptional event experience o To exceed patron expectations in product mix and event content. o To surprise and delight patrons by continually reviewing, refreshing and improving product and event content. o To provide patrons with exceptional basic needs, safety, social interaction, communication and entertainment.

 Build positive event brand perceptions o To increase positive public support for the events. o To build a brand identity which is consistent, recognisable and sustainable in the long term. o To engage with the community at large to promote the positive attributes and benefits of the events. o To establish a “Brand Identity” that is sustainable, long term.

8 Australian Grand Prix Corporation Annual Report 2018 3. General Information Strategic Priorities a. Introduction The strategic priorities and associated supporting strategic objectives of the Australian Grand Prix Corporation are as follows: The Australian Grand Prix Corporation (the Corporation) is a statutory authority established pursuant to the Australian Grands Prix Act 1994 (Vic) (as amended) (“AGP Act”).  Promote Melbourne and Victoria through the events o To ensure local and global branding of Melbourne and Victoria. The Corporation is subject to the direction and control of the Minister administering the o To drive national and international awareness of the events, Melbourne and AGP Act, the Minister for Tourism and Major Events, The Honourable John Eren, MP. Victoria. o To integrate the events into tourism strategies developed by the Victorian b. Mission Statement Government and its agencies. o To cement Melbourne’s reputation as the centre of major events by delivering a Our mission is to provide Melbourne and Victoria with world-class international motorsport world-class event experience to all intrastate, interstate and international visitors. events that deliver increased promotional and economic benefits to the State of Victoria. o To contribute to the growth of the local economy by providing opportunities to showcase Victorian businesses. c. Vision Statement o To contribute to the growth of the Victorian major events industry by providing employment and business development opportunities among related To stage the best international events. organisations. d. Functions and Strategic Priorities  Maximise revenues and minimise costs o To continually improve our competitive position among other major events to Functions increase return on investment. o To offer patrons compelling and value for money, product and event content. The functions of the Corporation are: o To implement robust financial review and control processes, and keep costs under constant scrutiny  ® To negotiate, enter into and vary agreements under which Formula 1 events are held; o To foster a culture of shared responsibility for financial performance throughout the organisation.  To undertake and facilitate the organisation, conduct, management and promotion of Formula 1® events and Motorcycle Grand Prix events;  Deliver events safely and to the highest standards o To establish and deploy clearly articulated safety management systems and event  To establish at Albert Park a temporary motor racing circuit and supporting facilities for management plans. ® Formula 1 events; o To maintain and continually evaluate an active risk register. o To foster a culture of shared responsibility for event safety and quality among our  To do all other things necessary for or in connection with the conduct and financial people, contractors, agencies, partners and suppliers. ® and commercial management of each Formula 1 event promoted by the o To ensure our people, contractors, agencies, partners and suppliers clearly Corporation; understand and deliver against our expectations of ‘highest standards’.

Australian Grand Prix Corporation Annual Report 2018 9 ® o To increase and leverage the following of the sports (Formula 1 and MotoGP™) among core customer segments. o To be considered a good community citizen, minimising our impact on the people and regions in which we operate.

 Empower and support our staff Local Authorities Local Authorities City of Port Phillip, City of Melbourne, City of Stonnington o To provide leadership and vision through clearly articulated strategies, objectives and behaviours. o To enhance the skills, professionalism and capabilities of our people. o To encourage our people to succeed, providing them with guidance, support and

resources. To minimise staff turnover and retain organisational IP and knowledge. o

These strategic priorities define the way the Corporation will deliver both the Formula 1®

Australian Grand Prix and the Australian Motorcycle Grand Prix. Each is supported by a set body (CAMS) Others Victoria Visit Agency Ticketing Advertising Agency Media organisations Motorsport governing

of initiatives and specific tactical elements that are reviewed for each event on an annual & Industry

basis. Motorsport,

Entertainment The reporting and consultative structures of the Formula 1® Australian Grand Prix and the Australian Motorcycle Grand Prix are set out on the following pages.

Albert Park Stakeholders Parks Victoria, Users, Sports Golf Driving Range, State Sports Centres Trust, Commercial Golf Tenants, Course Business Services

Victoria of Treasurer

Tim MPThePallas Hon

Committees of Boardthe Committee Risk and Finance Audit, Committee Operations Committee Remuneration and Culture Sales andMarketing Committee Strategy Contracts

AGPC Committees Traffic & Transport, Race Organising, Police & Emergency Services

AUSTRALIAN GRAND PRIX CORPORATION

Suppliers Suppliers Caterers, Concessionaires & Merchandisers

Corporate Affairs Communications

Australian Grand Prix Grand Australian tion ®

AGPC Events

AGPC Board

Responsible Minister Responsible

Chief Executive Officer

HonThe John Eren MP

Minister for Tourism and Major Major and Tourism for Minister Customers Corporate, Grandstand & General Admission Sales, Marketing

Commercial &

Consultation, Liaison and Coordina Reporting Sponsors

Operations ® Reporting & Consultative Structure – Formula 1 Consultative Structure – Formula Reporting & International Formula 1 Championship Authorities

10 Australian Grand Prix Corporation Annual Report 2018 ® o To increase and leverage the following of the sports (Formula 1 and MotoGP™) among core customer segments. o To be considered a good community citizen, minimising our impact on the people and regions in which we operate.

resources. To minimise staff turnover and retain organisational IP and knowledge. o

These strategic priorities define the way the Corporation will deliver both the Formula 1®

Australian Grand Prix and the Australian Motorcycle Grand Prix. Each is supported by a set Others Victoria Visit Agency Ticketing Advertising Agency Media organisations Motorsport governing body (CAMS)

of initiatives and specific tactical elements that are reviewed for each event on an annual & Industry basis. Motorsport,

Entertainment The reporting and consultative structures of the Formula 1® Australian Grand Prix and the Australian Motorcycle Grand Prix are set out on the following pages.

Albert Park Stakeholders Parks Victoria, Users, Sports Golf Driving Range, State Sports Centres Trust, Commercial Golf Tenants, Course Business Services

Victoria of Treasurer

Tim MPThePallas Hon

Committees of Boardthe Committee Risk and Finance Audit, Committee Operations Committee Remuneration and Culture Sales andMarketing Committee Strategy Contracts

AGPC Committees Traffic & Transport, Race Organising, Police & Emergency Services

AUSTRALIAN GRAND PRIX CORPORATION

Suppliers Suppliers Caterers, Concessionaires & Merchandisers

Corporate Affairs Communications

Australian Grand Prix Grand Australian tion ®

AGPC Events

AGPC Board

Responsible Minister Responsible

Chief Executive Officer

HonThe John Eren MP

Minister for Tourism and Major Major and Tourism for Minister Customers Corporate, Grandstand & General Admission Sales, Marketing

Commercial &

Consultation, Liaison and Coordina Reporting Sponsors

Operations ® Reporting & Consultative Structure – Formula 1 Consultative Structure – Formula Reporting & International Formula 1 Championship Authorities

Australian Grand Prix Corporation Annual Report 2018 11

12 Reporting & Consultative Structure – Australian Motorcycle Grand Prix

Responsible Minister

The Hon John Eren MP Treasurer of Victoria Minister for Tourism and Major Events The Hon Tim Pallas MP

AUSTRALIAN GRAND PRIX CORPORATION

AGPC Board Committees of the Board Audit, Finance and Risk Committee Operations Committee

AGPC Culture and Remuneration Committee Sales and Marketing Committee Chief Executive Officer

Sales, Corporate Affairs Strategy Motorsport, Business Operations Commercial & & & Entertainment

Australian Grand Prix Corporation Annual Report 2018Australian GrandPrixCorporation AnnualReport Services Marketing Communications Contracts & Industry

International Sponsors Customers Suppliers AGPC PI Operations Others Local Motorcycle VIP Hospitality, Caterers, Committees Pty Ltd Visit Victoria Authorities Championship Grandstand, Concessionaires Community (Circuit Owners Ticketing Agency Bass Coast Authorities General Admission & Merchandisers Liaison, & Operators) Advertising Agency Shire Council & Campgrounds Race Media organisations Organisation Motorsport committee, governing body Transport & (MA) Traffic, Police & Consultation, Liaison and Coordination Emergency Services Reporting

theCorporation of Members Structure e.Administrative

 Australiafor his servicesto sport in the stagingofthe Commonwealth Games. the world.Originally fromAdelaide, Mr Harnden was awardedthe Member of theOrder of includingthe managementand design ofStadia and Formula1 projects, in aof range areasinvolved has also and been tourism and engineering sporting Australian Grand Prix Corporation. Mr Harndenhas served ona number ofboards in the the and Corporation Games Commonwealth 2006 Melbourne the Parks, Theme International theICCCricket World Cup 2015,the SouthAustralian Cricket Association, VillageRoadshow  are: 2018 June 30 at as Corporation the of Members The capacity. an honorary in act Corporation the of The Members also a founding member of Chief Executive Women (CEW). Women of Chief a founding Executive also member Franklin is Ms Access Committee. Gold Medal the Ministers well as Prime Chaired as Australia) Microsurgery Foundation, Neopec and CEDA (Committeefor Economic Development of Company(MTC), publicly listed Quintis,the largest supplier of Sandalwood inthe world, AdvisoryCommittee. Franklin Ms hasformerly held DirectorshipstheonMelbourne Theatre and FragranceAssociation Australia of (CTFA), ACCORD, and theVisitor Economy Ministerial Toiletry on Cosmetic, the is Board the of Franklin Ms business, her own to addition running In success over manyyears. entrepreneurial outstanding to Franklin’s Ms was a testament award achievement this lifetime Entrepreneurship in the2017EY Entrepreneur of the year program. Being selectedto receive Most recently FranklinMs was selected to be the Southern Region Champion of wasfor her significant contribution tothe industry andactive involvement in thecommunity. Year. In May2014 FranklinMs won theInStyle Audi and 'Women ofStyle' Award. This award Franklin was acknowledged as a 2011 Nominee forthe Ernst Young& Entrepreneur of the Australia” at the Business Women’sLeaders Summit Washingtonin DC, in October 2000. Ms Women’sAward Victoria in 1996. She was also awarded“Global Entrepreneurofthe Year – Business Telstra the won she when 1998 and in Fame of Hall Women’s Australian Business the

Gillian Franklin - Deputy Chairman Chairman Franklin - Deputy Gillian John Harnden AM - Chairman AM - Chairman Harnden John expertiseand successwas acknowledgedwhen she wasinducted into companies, including Creative Brandsand Revlon. Ms Franklin’s consumer leading Australia’s of some for positions Management Franklin haspreviously held Managing Director andGeneral experience in strategic leadership andconsumer marketing.Ms 20 years with over businesswoman winning an award also is Franklin Ms companies. care personal leading Australia’s of one – Ltd Pty Group in business. She theis Founder and ManagingDirector of TheHeat entrepreneurs with a passionand commitmentto supporting women innovative most Australia’s of one as recognised is Franklin Ms and tourism properties through his roles as Chief Executive Officer of He events some ofhas sporting Tourism the largest industries. led world’s and Media Sports, Events, the in advice strategic and 2020 provides Ltd Mr Harnden alsois a director of Australia Worldand Twenty20 Cricket 2007. March since Chairman having joinedthe board August in 2006 and served as Deputy August2015, in Corporation Prix Australian Grand the ofthe board of projectsthat often accompany them. Hewas appointedas Chairman sporting,tourism and entertainment events, as well as thecapital Mr Harnden has extensive experience in the delivery of world-class

® Grand Prix circuits around around circuits Prix Grand

Reporting & Consultative Structure – Australian Motorcycle Grand Prix

Responsible Minister

The Hon John Eren MP Treasurer of Victoria Minister for Tourism and Major Events The Hon Tim Pallas MP

AUSTRALIAN GRAND PRIX CORPORATION

AGPC Board Committees of the Board Audit, Finance and Risk Committee Operations Committee

AGPC Culture and Remuneration Committee Sales and Marketing Committee Chief Executive Officer

Sales, Corporate Affairs Strategy Motorsport, Business Operations Commercial & & & Entertainment Services Marketing Communications Contracts & Industry

Australian Grand Prix Corporation Annual Report 2018Australian GrandPrixCorporation AnnualReport

Members of the Corporation theCorporation of Members Structure e.Administrative

® Grand Prix circuits around around circuits Prix Grand 13

 Laura Anderson, FCIT  The Hon Kate Lundy

Ms Anderson is an International Company Director, Entrepreneur and Ms Lundy was first elected to the Australian Senate in 1996. She has Global Philanthropist. served as the Federal Minister for Sport and Multicultural Affairs and Minister Assisting for Industry, Innovation and the Digital Economy in the Ms Anderson has worked extensively across governments and industries Gillard/Rudd Government, retiring from politics in 2015. She serves as a locally and globally as a senior adviser on global governance, strategy Director of Australian Cyber Security Research Institute, Electro Optic transformation and risk optimisation. Her professional speciality is Systems, the national Youth Science Forum and is managing director of harnessing the power of big data and its effect on global supply chains, Technology Innovation Partners Pty Ltd. Ms Lundy also works part time trade, investment and infrastructure development. as the ACT Defence Industry Advocate. Ms Lundy has been a Non- Executive Director of National Roads and Motorists' Association Limited Ms Anderson is Chairman of SVI Global Pty Ltd, OneGlobalVenture Pty since March 2015. Ltd, LaunchVic and Chairman of the Foundation for the Advancement of Science and Technology in Schools. Ms Anderson is on the Board of Epworth HealthCare, the National Basketball League, Defence Science Institute, the Fulbright  Trent Smyth Commission, and is a Director of several private investment companies. Ms Anderson is a global thought leader on the development of the creative economy and its impact on the Mr Smyth was appointed by the government of the republic of Malawi future of industry structures, social cohesion and economic innovation. as Honorary Consul and head of Mission in 2011 and has held the position of Secretary of the Consular Corps Melbourne since 2014. Mr  Kimberley Brown Smyth is also managing director of Untitled Australia, a diversified property development and holding firm which he founded in 2006. He Ms Brown is a Board member of the States Sports Centre Trust (which has a strong interest in motorsport. He is the chief curator of the runs the Sports and Aquatic Centre and Lakeside Stadium in Albert Park Australian International Concours d’Elegance and advisory board and the State Netball and Hockey Centre at Royal Park), a member of member of Motorclassica being responsible for assembling Australia’s its Audit Committee and is a General Manager of Saltwater Hotels and largest and most important collection of classic and rare cars. Mr Smyth Properties (which comprises 40 accommodation and tourism-based is also the President of the Ferrari Club of Australia (Vic). In 2017 Mr businesses across Australia). Smyth was appointed to the Council of International House, the University of Melbourne’s most diversified residential college. Ms Brown lives in the Bass Coast Shire and has had extensive local Government experience (Bass Coast Shire Councillor from 2012 – 2016,  Mark Webber AO Mayor in 2015, representative to Municipal Association of Victoria) and engagement with the local community (Phillip Island Community Mr Webber competed in 215 races across 12 seasons from 2002 until Advisory Committee, Phillip Island Nature Parks Liaison Group). She was a Board member for 2013 in the FIA Formula One World ChampionshipTM with 4 World Destination Phillip Island, a member of the Visitor Economy Strategy Bass Coast 2020 reference Constructors Championships, 9 race wins, 42 podiums and 13 pole group and the Australia Day Council and has served on countless committees and advisory positions. He was the 2015 FIA World Endurance Champion and is a groups. three time winner of the BRDC Bruce McLaren award. He was made an Officer of the Order of Australia in 2017 for “distinguished service to  Michael (Mick) Doohan AM motor sport as a competitor and ambassador, and to the community through fundraising and patronage of a range of medical and youth Mr Doohan is a Grand Prix motorcycle road racing World Champion, support organisations”. who won five consecutive MotoGP™ (500 cc) World Championships – 1994, 95, 96, 97 & 98. From 2000 – 2005, Mr Doohan served as General Mr Webber is currently a global Porsche Special Representative, Rolex Manager of Racing for Honda Racing Corporation and was a Ambassador, Michelin Australia Ambassador and television commentator and analyst for consultant from 2000 – 2008 to Dorna Sports. Since 2010 Mr Doohan has Channel 4’s coverage of Formula 1® in the United Kingdom. He was appointed an Officer of been an academy member of Laureus and more recently the the Order of Australia (AO) in 2017 and was inducted into the Australian Motor Sport Hall of Chairman and Director of Competition for Karting Australia (Australian Fame in 2018. Karting Association Ltd). Mr Doohan has served on a number of boards including Rally Australia Pty Limited. He was awarded the Member of the Order of Australia in recognition of service to the sport of motorcycle racing in 1996 and received an Australian Sports Medal in 2000. He was inducted into the Sport Australia Hall of Fame in 2009.

14 Australian Grand Prix Corporation Annual Report 2018

 Laura Anderson, FCIT  The Hon Kate Lundy

Australian Grand Prix Corporation Annual Report 2018 15

Audit, Finance and Risk Committee membership and roles Management of the Corporation as at 30 June 2018 The Audit, Finance and Risk Committee consists of the following members:

 Gillian Franklin (Interim Chair)  Chief Executive Officer – Andrew Westacott  Kate Lundy  Kimberley Brown (Interim member)

The main responsibilities of the Audit, Finance and Risk Committee are to review and provide advice on:

1. Financial performance and the financial reporting process, including the annual financial statements

2. The scope of work, performance and independence of the internal and external auditor

3. Matters of accountability and internal control affecting the operations of the Corporation  Deputy Chief Executive Officer and General Manager, Operations – Ashley Davies

4. The acceptability of correct accounting treatment for and disclosure of significant Responsibilities include infrastructure construction and dismantle, event transactions which are not part of the Corporation’s normal course of business overlay, event presentation, event and venue operations, enterprise risk management, safety management, emergency management, traffic and 5. The sign-off of accounting policies transport operations, security and access control, Parks Victoria and local council liaison, community relations, customer experience, disability services 6. The Corporation’s process for monitoring compliance with laws and regulations and its own and catering. Code of Conduct and Code of Financial Practice

7. The sign-off of risk management systems and procedures

8. The design and effectiveness of governance procedures  General Manager, Sales, Commercial & Marketing – Corina Black

9. Management actions and implementations of external and internal audit recommendations Responsibilities include corporate hospitality, grandstand and general admission ticket sales, sponsorship, licensing, marketing, digital advertising, social media advertising and websites.

 General Manager, Motorsport, Entertainment & Industry – Craig Fletcher

Responsibilities include motorsport, all on-track content and scheduling and off-track entertainment, fan engagement activities, track medical services, team driver/rider appearances, talent management, merchandise program, uniforms, GPTV production, podium and anthem ceremonies, GP Expo management & sales, international accreditation and broader industry and education partnerships.

16 Australian Grand Prix Corporation Annual Report 2018

Audit, Finance and Risk Committee membership and roles Management of the Corporation as at 30 June 2018 The Audit, Finance and Risk Committee consists of the following members:

 Gillian Franklin (Interim Chair)  Chief Executive Officer – Andrew Westacott  Kate Lundy  Kimberley Brown (Interim member)

The main responsibilities of the Audit, Finance and Risk Committee are to review and provide advice on:

1. Financial performance and the financial reporting process, including the annual financial statements

2. The scope of work, performance and independence of the internal and external auditor

3. Matters of accountability and internal control affecting the operations of the Corporation  Deputy Chief Executive Officer and General Manager, Operations – Ashley Davies

7. The sign-off of risk management systems and procedures

8. The design and effectiveness of governance procedures  General Manager, Sales, Commercial & Marketing – Corina Black

 General Manager, Motorsport, Entertainment & Industry – Craig Fletcher

Australian Grand Prix Corporation Annual Report 2018 17

 General Manager, Business Services (Chief Finance Officer) – Anthony Connelly

0 0 0 8 3 1 5 0 7 Responsibilities include statutory and management reporting, business FTE planning, financial modelling and financial operations, statutory and

broader governance obligations of the Corporation, along with all human casual

0 0 0 8 3 1 5 0 resources, information technology, business system and process 7 Head Head Fixed term and requirements. count

0 2 4 1 0 19 25 FTE 19.7 20.7

 General Manager, Legal and Strategy (General Counsel) – James Rosengarten 0 0 0 0 1 0 0 1 0 Part-

time* Ongoing

Responsibilities include management of the legal affairs of the Corporation, June 2017 corporate strategy, Government and circuit right holder liaison, statutory

0 2 4 1 obligations and the structuring and formation of the Corporation’s 0 19 19 25 20 Full- commercial arrangements. time*

0 2 4 2 0 27 30

FTE 22.7 27.7

0 2 4 2 0 23 27 28 30 All employees Head Head count count

FTE

casual Head Fixed term and count FTE Part- time* Ongoing June 2018 Full- time* FTE

0 0 0 0 0 0 2 2 2 0 2 0 0 6 6 6 0 6 0 0 3 3 2 0 2 1 1 0 0 0 0 0 0 19 18.7 15 18.7 1 15.7 3 19 3 27 27 17 0 17 10 10 10 17 0 27 27 23 22.7 14 22.7 1 14.7 8 23 8 34 34 28 0 28 6 28 0 34 6 34 All employees employees All Head count count

65+ 55-64 35-44 45-54 25-34 15-24 Self- described Women Age Men Gender

*Head count count *Head data Demographic People, Safety and Wellbeing

Workforce Data

4. a. 2017 JUNE 2018 JUNE– The number of personnel employed by the Corporation 30 as at June 2018 57 was 58).(2017:

18 Australian Grand Prix Corporation Annual Report 2018

 General Manager, Business Services (Chief Finance Officer) – Anthony Connelly

0 1 8 3 0 0 0 7 5 Responsibilities include statutory and management reporting, business FTE planning, financial modelling and financial operations, statutory and

broader governance obligations of the Corporation, along with all human casual

0 1 8 3 0 0 0 resources, information technology, business system and process 7 5 Head Head Fixed term and requirements. count

0 1 4 2 0 25 19 FTE

20.7 19.7

 General Manager, Legal and Strategy (General Counsel) – James Rosengarten 0 0 0 1 0 0 0 1 0 Part-

time* Ongoing

Responsibilities include management of the legal affairs of the Corporation, June 2017 corporate strategy, Government and circuit right holder liaison, statutory

obligations and the structuring and formation of the Corporation’s 0 1 4 2 0 20 25 19 19 Full- commercial arrangements. time*

0 2 4 2 0 30 27

FTE 22.7 27.7

0 2 4 2 0 28 30 27 23 All employees Head Head count count

FTE

casual Head Fixed term and count FTE Part- time* Ongoing June 2018 Full- time* FTE

0 0 0 0 0 0 3 3 2 0 2 1 1 6 6 6 0 6 0 0 2 2 2 0 2 0 0 0 0 0 0 0 0 23 22.7 14 22.7 1 14.7 8 23 8 6 28 0 34 6 34 15 18.7 1 15.7 3 19 3 27 27 17 0 17 10 10 10 17 0 27 27 All employees employees All Head count count

Gender Women Men Self- described Age 15-24 25-34 35-44 45-54 55-64 65+

*Head count count *Head data Demographic People, Safety and Wellbeing

Workforce Data

JUNE 2017 – JUNE 2018 2017 JUNE 2018 JUNE– 4. a. The number of personnel employed by the Corporation 30 as at June 2018 57 was 58).(2017:

Australian Grand Prix Corporation Annual Report 2018 19

b. Wellbeing and Safety c. Occupational Health and Safety Performance Indicators

In meeting its legal and moral obligations with regard to occupational and public health AGPC’s Occupational Health and Safety (OHS) performance continues to remain positive and safety, the Corporation has continued to develop and implement its risk and safety year on year which is reflected in the overall statistics and results. management program. This is attributed to targeted risk management strategies, formal consultation and Initiatives undertaken during the year ending 30 June 2018 to ensure effective risk engagement structures, education and training of key stakeholders, comprehensive management, prevent injury and promote a safe environment included: readiness exercises, audit and assurance activities, specialist resourcing, rigorous planning and delivery by skilled staff and contractors. Risk and Safety Management Systems  Matured the risk and safety management framework The statistical performance relating to AGPC staff and contractors can be summarised as:  Reviewed, enhanced and embedded risk and safety policies and procedures  Audit and assurance of the risk and safety management systems OH&S Incidents 2018 2017 Injuries 8 9 Event and Public Safety Lost Time Injuries 0 1  Development and implementation of the safety and security framework Claims 0 1  Enhanced security infrastructure, personnel, processes and readiness Total 8 11  Enhanced public safety provisions and protocols  Construction and event safety management planning and implementation Workers’ compensation premium performance remains in a strong position due to a long-  Emergency management planning, readiness exercises and implementation standing absence of claims. AGPC’s risk and safety systems are subject to ongoing audit  Contractor and third-party management system implementation and review against industry standards.  Risk profiling and readiness exercises across all business divisions  Circuit planning and infrastructure placement d. Industrial Relations  Risk assessments, site inspections, audits and incident management  Participation in major event and mass gathering networks With the introduction of the Fair Work Act 2009 (Cth) the Corporation continues to develop  Established site safety committee to oversee the safety of the build, event and dismantle and implement revised employment conditions and policies to align with various changes  Established interagency committee to oversee the delivery of safe and secure events to workplace legislation.  Event induction program for staff  Audit and assurance of the build, event and dismantle phases Employee contracts include a standard grievance and dispute resolution procedure. All such matters are addressed by the Chief Executive Officer and can be escalated Health and Wellbeing to the Chair of the Culture and Remuneration Committee of the Board if required.  Matured the health and wellbeing strategy  Development of health and wellbeing policies and procedures In the event of any strike, standard stand-down provisions are incorporated into all  Awareness and engagement campaigns focusing on; employee contracts. There was no time lost due to industrial disputes during the period. o Workplace culture Wellbeing and mindfulness o e. Equal Opportunity o Resilience and high performance o Women’s health The Corporation is an equal opportunity employer. o Men’s health  Health and wellbeing dedicated intranet page f. Multicultural Policy  Event based health and wellbeing programs  Promotion of the employee assistance program The Corporation endeavours to promote policies applicable to a culturally and linguistically  Implementation of healthy options at work diverse society. The Corporation promotes events throughout ethnic communities.  Staff health checks and flu vaccinations

 Physical and mental health related training sessions

20 Australian Grand Prix Corporation Annual Report 2018 b. Wellbeing and Safety c. Occupational Health and Safety Performance Indicators

 Physical and mental health related training sessions

Australian Grand Prix Corporation Annual Report 2018 21

g. Executive Officer Remuneration 5. Financial Review

The number of executive officers and their base remuneration (inclusive of statutory Summary of Financial Results superannuation) during the period are shown in the first two columns in the table below in the relevant income bands. The total remuneration (inclusive of statutory superannuation) Formula 1® Australian Grand Prix of executive officers is shown in the third and fourth columns. Total remuneration includes bonuses. The total annualised employee equivalent provides a measure of full-time The 2018 Formula 1® Rolex Australian Grand Prix was held on 22 – 25 March 2018. Once again, equivalent executive officers over the reporting period. Melbourne and Victoria were on global display as the opening round of the 2018 FIA Formula One World ChampionshipTM. Base Remuneration Total Remuneration 2018 2017 2018 2017 As shown in the table below, the government investment for the Formula 1® 2018 Rolex Australian No. No. No. No. Grand Prix was $56.499 million. This was the third consecutive year where investment has $500,000 - $509,999 - - 1 - reduced and has been at the lowest levels since 2013, and was in part, driven by a 16.3% $480,000 - $499,999 - - - - increase in total revenue over 2017. $460,000 - $479,999 - - - 1 $440,000 - $459,999 - - - - 2018 2017 2016 2015 2014 Formula 1® Grand Prix $420,000 - $439,999 1 - - - Event Event Event Event Event $400,000 - $419,999 - 1 - - $’000 $’000 $’000 $’000 $’000 $380,000 - $399,999 - - - - $360,000 - $379,999 - - - - Sales Revenue 34,903 32,126 27,655 30,218 29,255 $340,000 - $359,999 - - - - $320,000 - $339,999 - - 1 - Total Revenue 46,622 40,098 34,900 39,836 38,291 $300,000 - $319,999 - - 1 1 $280,000 - $299,999 - - 1 1 Total Expenditure (103,121) (97,221) (95,854) (101,571) (98,266) $260,000 - $279,999 1 1 - 1 $240,000 - $259,999 2 1 - - Operating Result before $220,000 - $239,999 - - - 1 Government Investment & (56,499) (57,123) (60,954) (61,735) (59,975) $200,000 - $219,999 - 2 - - Depreciation $180,000 - $199,999 2 - 2 1 $160,000 - $179,999 - 1 - - Government Investment 56,499 57,123 60,954 61,735 59,975 $140,000 - $159,999 - 2 - 2 $120,000 - $139,999 - - - - $100,000 - $119,999 - - - - Less than $100,000 - 1 - 1 Capital Works Activities

The total capital spend for the 2017-18 financial year was $3.206 million (2016-17 $2.588 million). Number of Executives* 6 9 6 9 The 2017-18 capital works expenditure (encompassing works conducted under licence from Total annualised employee 6 8.3 6 8.3 Parks Victoria) included: equivalent (AAE) **  Park improvements and infrastructure; * Includes Executive Officers and other persons occupying a significant management role  Track barriers; ** Annualised employee equivalent is based on working 38 ordinary hours per week over  Pit building improvements; the reporting period.  Barrier gates; and  Event rebrand and related signage.

22 Australian Grand Prix Corporation Annual Report 2018 g. Executive Officer Remuneration 5. Financial Review

Australian Grand Prix Corporation Annual Report 2018 23

Australian Motorcycle Grand Prix 6. Legislative and Other Information

The Michelin® Australian Motorcycle Grand Prix 2017 was held on 19 – 22 October 2017. a. Freedom of Information

® As shown in the table below, the Government investment for the Michelin Australian The Freedom of Information Act 1982 (Vic) allows the public a right of access to documents Motorcycle Grand Prix 2017 was $11.390 million. held by the Australian Grand Prix Corporation (AGPC). For the 12 months ending 30 June

2018, AGPC received three applications. Future 2017 2016 2015 2014 Motorcycle Grand Prix Events Event Event Event Event Making a request - Result by Event $’000 $’000 $’000 $’000 $’000 Requests for access to documents under the Freedom of Information Act 1982 (Vic) should Sales Revenue - 7,215 6,656 6,082 5,186 be addressed to the Freedom of Information Officer, Australian Grand Prix Corporation, Level 5, 616 St Kilda Road, Melbourne, 3004 or via email [email protected] Total Revenue - 9,727 9,116 8,690 7,490 Requests must satisfy the formal requirements set out in the Freedom of Information Act 1982 Total Expenditure - (21,117) (18,971) (17,929) (17,475) (Vic). In particular, applicants should ensure that the request provides sufficient information concerning the document as is reasonably necessary to enable the responsible officer of Operating Result before the Corporation to identify the document. Where a request does not comply with the Government Investment & - (11,390) (9,854) (9,239) (9,985) necessary requirements, the applicant will be so advised and given the opportunity to Depreciation reformulate the request.

Government Investment 5,847 11,390 9,854 9,239 9,985 Upon receipt of the request the Corporation will endeavour to provide a response as soon as practicable and, in any case, not later than 45 days after the day on which the

Corporation receives the request. 2017/18 2016/17 2015/16 2014/15 2013/14 Motorcycle Grand Prix $’000 $’000 $’000 $’000 $’000 The types of documents to which access will not be granted are detailed in Part 4 of the - Result by Financial Year Freedom of Information Act 1982 (Vic) and Section 49 of the Australian Grands Prix Act 1994 (Vic). Where access is denied, applicants will be given reasons. Applicants may then apply to the FOI Commissioner to review the decision. Further appeals to the Ombudsman or the Sales Revenue 7,215 6,656 6,082 5,186 5,328 Victorian Civil and Administrative Tribunal can be made in accordance with the procedures set out in the Freedom of Information Act 1982 (Vic). Total Revenue 9,727 9,116 8,690 7,490 7,236

Further information regarding Freedom of Information can be found on FOI Online Total Expenditure (21,117) (18,971) (17,929) (17,475) (18,508) www.foi.com.au Operating Result before Charges Government Investment & (11,390) (9,854) (9,239) (9,985) (11,272) Depreciation Requests for access must be accompanied by a $28.40 application fee as at 1 July 2018. Further charges for the supply of documents in relation to Freedom of Information requests Government Investment 11,465 10,551 9,280 10,527 9,515 are made in accordance with the Freedom of Information Act 1982 (Vic) and the Freedom of Information (Access Charges) Regulations 2004 (Vic).

Categories of Documents

The Corporation maintains records and files incorporating documents relating to general administrative matters, the Formula 1® event at Albert Park and the Motorcycle Grand Prix held at Phillip Island. All records and files are maintained at the Corporation’s premises in Melbourne or at an external offsite storage provider’s premises.

The Corporation also maintains two websites at www.grandprix.com.au and www.motogp.com.au and produces promotional newsletters for sending to subscribers.

24 Australian Grand Prix Corporation Annual Report 2018

Australian Motorcycle Grand Prix 6. Legislative and Other Information

The Michelin® Australian Motorcycle Grand Prix 2017 was held on 19 – 22 October 2017. a. Freedom of Information

Categories of Documents

The Corporation also maintains two websites at www.grandprix.com.au and www.motogp.com.au and produces promotional newsletters for sending to subscribers.

Australian Grand Prix Corporation Annual Report 2018 25

b. Consultancy Services During 2017-18, the Corporation commenced four Local Jobs First – VIPP applicable procurements totalling $10.34 million. Of those projects, two were located in regional Details of consultancies over $10,000 Victoria, with an average commitment of 92 per cent of local content, and one in metropolitan Melbourne, with a commitment of 100 per cent local content. One project occurred statewide with a commitment of 82.5 per cent local content. Total approved Expenditure Future Purpose of project fee 2017-18 expenditure The outcomes expected from the implementation of the Local Jobs First – VIPP to these Consultant consultancy ($’000s exc. GST) ($’000s exc. GST) (exc. GST) projects, where information was provided, are as follows: KPMG Accounting advice 13 13 - KPMG Derivatives advice 15 15 - • 82.5 per cent of local content commitment was made; • a total of twenty one jobs (annualised employee equivalent (AEE)) were retained (no Details of consultancies under $10,000 new jobs were created); and • a total of two positions for apprentices/trainees were committed, including the creation In 2017-18, there were no consultancies engaged during the year, where the total fees of one new apprenticeship/traineeship, and the retention of one existing payable to the individual consultancies was less than $10 000. apprenticeship/traineeship.

c. Members’ Meetings During 2017-18, the Corporation completed two Local Jobs First – VIPP applicable projects, collectively valued at about $10.60 million. Both of these contracts were located in The number of Members’ meetings and the number of meetings attended by each of the metropolitan Melbourne representing an average of 98 per cent of estimated local content. Members of the Corporation during the financial year were: No projects were concluded that occurred statewide.

No. of No. of The outcomes reported from the implementation of the policy, where information was Meetings Meetings provided, were as follows: attended held* • an average of 98 percent per cent of local content outcome was recorded; Mr John Harnden AM (Chair) 8 8 • a total of one hundred and fifty one (AEE) positions were committed, including the Ms Gillian Franklin (Deputy Chair) 8 8 creation of thirty five new jobs and the retention of one hundred and sixteen existing jobs Ms Laura Anderson 8 8 (AEE); and Ms Kimberley Brown 5 5 • two new apprenticeship/traineeship was created and three existing apprenticeships/ Mr Michael Doohan AM 6 8 traineeships retained. Mr Mark Green 4 4 Ms Kate Lundy 8 8 Disclosure of Major Contracts

Mr Alan Oxley 3 3 The Corporation did not enter into a contract greater than $10.0 million dollars in total value Mr Trent Smyth 8 8 during the year ended 30 June 2018. Mr Mark Webber AO 4 5 *Number of meetings held during Member tenure f. Available Information

Information contained in this report has been prepared in accordance with the Financial d. Building Act 1993 (Vic) Management Act 1994 (Vic) and is available to the Minister for Tourism and Major Events, The Honourable John Eren MP, the public on request and from the Corporation’s web site In accordance with Section 48(1) of the Australian Grands Prix Act 1994 (Vic), nothing in the www.grandprix.com.au. Building Act 1993 (Vic) applies to the carrying out of works authorised by and in accordance with the Australian Grands Prix Act 1994 (Vic) or at the request of the Corporation in the declared area.

The Corporation has however undertaken to comply with the specifications of the Building Act 1993 (Vic) wherever practicable.

e. Local Jobs First - Victorian Industry Participation Policy

The Victorian Industry Participation Policy Act 2003 (Vic) requires Departments and public sector bodies to report on the implementation of the Local Jobs First – Victorian Industry Participation Policy (Local Jobs First – VIPP). Departments and public sector bodies are required to apply the Local Jobs First – VIPP in all procurement activities valued at $3 million or more in metropolitan Melbourne and for statewide projects, or $1 million or more for procurement activities in regional Victoria.

26 Australian Grand Prix Corporation Annual Report 2018 b. Consultancy Services During 2017-18, the Corporation commenced four Local Jobs First – VIPP applicable procurements totalling $10.34 million. Of those projects, two were located in regional Details of consultancies over $10,000 Victoria, with an average commitment of 92 per cent of local content, and one in metropolitan Melbourne, with a commitment of 100 per cent local content. One project occurred statewide with a commitment of 82.5 per cent local content. Total approved Expenditure Future Purpose of project fee 2017-18 expenditure The outcomes expected from the implementation of the Local Jobs First – VIPP to these Consultant consultancy ($’000s exc. GST) ($’000s exc. GST) (exc. GST) projects, where information was provided, are as follows: KPMG Accounting advice 13 13 - KPMG Derivatives advice 15 15 - • 82.5 per cent of local content commitment was made; • a total of twenty one jobs (annualised employee equivalent (AEE)) were retained (no Details of consultancies under $10,000 new jobs were created); and • a total of two positions for apprentices/trainees were committed, including the creation In 2017-18, there were no consultancies engaged during the year, where the total fees of one new apprenticeship/traineeship, and the retention of one existing payable to the individual consultancies was less than $10 000. apprenticeship/traineeship. c. Members’ Meetings During 2017-18, the Corporation completed two Local Jobs First – VIPP applicable projects, collectively valued at about $10.60 million. Both of these contracts were located in The number of Members’ meetings and the number of meetings attended by each of the metropolitan Melbourne representing an average of 98 per cent of estimated local content. Members of the Corporation during the financial year were: No projects were concluded that occurred statewide.

The Corporation has however undertaken to comply with the specifications of the Building Act 1993 (Vic) wherever practicable. e. Local Jobs First - Victorian Industry Participation Policy

Australian Grand Prix Corporation Annual Report 2018 27

g. Details of advertising expenditure (campaigns with a media spend of $100,000 or greater) Further information

($’000s, exc. GST) The Protected Disclosure Policy and Procedures, which outline the system for reporting disclosures of improper conduct or detrimental action by the Australian Grand Prix Creative and Research Advertising campaign and Print and Other Corporation or any of its employees and/or officers, are available on the Department of Name of Start/End (Media) developmen Evaluation collateral Campaign Economic Development, Jobs, Transport and Resources’ website. Campaign Campaign summary date Expenditure t Expenditure Expenditure Expenditure Expenditure

® Formula 1 Television capital October j. Compliance with the Disability Discrimination Act 1992 (Cth) 2018 Rolex cities and regional, 2017 –

Australian print, magazines, June Grand Prix radio and outdoor, 2018 The Australian Grand Prix Corporation recognises and seeks to meet the diverse needs of its 2,005 473 42 31 74 public relations, patrons inclusive of people with disabilities. communications and digital web The Corporation, as a proactive initiative to the Disability Discrimination Act 1992 (Cth) (DDA), has developed a Disability Discrimination Act Action Plan in response to the Michelin Television capital July legislation. The Corporation, whilst acknowledging the complexity of providing access for Australian cities and regional, 2017 - all patrons in settings using temporary infrastructure, is committed to providing all people a Motorcycle print, magazines, October quality experience at both the Formula 1® and Motorcycle Grand Prix events, taking into Grand Prix radio and outdoor, 2017 403 218 24 21 45 account feasible financial constraints. 2017 public relations, communications This Action Plan is a long-term plan, which is in line with the Corporation’s corporate and digital web objectives, aiming to continually enhance facilities and services for all patrons, inclusive of those with disabilities. The Plan through its circulation promotes an ongoing consideration h. Information and Communication Technology Expenditure and awareness within the Corporation of the requirements of patrons with disabilities and assist the Corporation in being responsive to the changing expectations and needs of In 2017-18, the Corporation had a total ICT expenditure of $694,000, with details as shown people with disabilities. below: In recognition of such changes, the Corporation will monitor and review this Action Plan Business As Usual (BAU) Non- Business As Usual (non- Operational annually, ensuring that the objectives and strategies documented address issues relevant ICT Expenditure BAU) ICT expenditure Expenditure Capital Expenditure to existing community standards. $’000s $’000s $’000s $’000 541 153 0 153 The Corporation also engages a disability consultant year round to assist in planning and catering for the needs to patrons with a disability for both events. ICT expenditure refers to the Corporation’s costs in providing business enabling ICT services within the current reporting period. It comprises Business As Usual (BAU) ICT expenditure and k. Attestation for financial management compliance with Ministerial Standing Direction 5.1.4 Non-Business As Usual (Non-BAU) ICT expenditure. Non-BAU ICT expenditure relates to extending or enhancing the Department’s current ICT capabilities. BAU ICT expenditure is all I, John Harnden, on behalf of the Responsible Body, certify that the Australian Grand Prix remaining ICT expenditure which primarily relates to ongoing activities to operate and Corporation has complied with the applicable Standing Directions of the Minister for maintain the current ICT capability. Finance under the Financial Management Act 1994 (Vic) and Instructions.

i. Disclosures under the Protected Disclosure Act 2012 (Vic)

2017-18 2016-17

The number of assessable disclosures made to the Corporation and notified to IBAC: Assessable disclosures - - John Harnden AM Chairman Employees and/or officers of the Australian Grand Prix Corporation have been made aware Australian Grand Prix Corporation of the Protected Disclosure Act 2012 (Vic) through internal communication processes as well 16 August 2018 as the guidelines on how to report disclosures to the Independent Broad-based Anti- Corruption Commission.

Disclosures of improper conduct or detrimental action by the Australian Grand Prix Corporation or any of its employees and/or officers may be made directly to the Independent Broad-based Anti-Corruption Commission:

Level 1, North Tower, 459 Collins Street Melbourne, VIC 3000 Phone: 1300 735 135 Internet: www.ibac.vic.gov.au

28 Australian Grand Prix Corporation Annual Report 2018 g. Details of advertising expenditure (campaigns with a media spend of $100,000 or greater) Further information

® Formula 1 Television capital October j. Compliance with the Disability Discrimination Act 1992 (Cth) 2018 Rolex cities and regional, 2017 –

2017-18 2016-17

Level 1, North Tower, 459 Collins Street Melbourne, VIC 3000 Phone: 1300 735 135 Internet: www.ibac.vic.gov.au

Australian Grand Prix Corporation Annual Report 2018 29

l. Disclosure Index

The Annual Report of the entity is prepared in accordance with all relevant Victorian legislations and pronouncements. This index has been prepared to facilitate identification of compliance with statutory disclosure requirements. AUSTRALIAN GRAND PRIX CORPORATION Legislation Requirement Page ABN 86 947 927 465

Ministerial Directions Report of Operations Charter and Purpose FRD 22H Manner of establishment and Relevant Ministers 8 FRD 22H purpose, functions, powers and duties 8 FRD 22H Nature and range of services provided 8 Management & Structure Financial Statements FRD 22H Organisational structure 11 Financial & other information FRD 10A Disclosure index 30 For the Year Ended 30 June 2018 FRD 12B Disclosure of major contracts 27 FRD 22H Employment and conduct principles 20 FRD 22H Occupational health and safety 21 FRD 22H Summary of financial results for the year 23 FRD 22H Significant changes in financial position during the year 23 FRD 22H Major changes or factors affecting achievement of objectives 23 FRD 22H Subsequent events 76 FRD 22H Application and operation of the Freedom of Information Act 1982 (Vic) 25 FRD 22H Compliance with building and maintenance provisions of Building Act 1993 (Vic) 26 FRD 22H Details of consultancies over and under $10,000 26 FRD 22H Disclosure of ICT expenditure 28 FRD 22H Statement of availability of other information 27 FRD 22H Application and operating of the Protected Disclosure Act 2012 (Vic) 28 FRD 25C Victorian Industry Participation Policy disclosures 26 FRD 29C Workforce data disclosures 19 Compliance attestation and declaration SD 5.1.4 Attestation for compliance with Ministerial Standing Direction 29

SD 5.2.3 Declaration in report of operations 2

Financial Statements Financial statements required under Part 7 of the FMA SD 5.2.2 Accountable officer’s declaration 81 SD 5.2.1(a) Compliance with Australian Accounting Standards and other authoritative 81 pronouncements SD 5.2.1(a) Compliance with Ministerial Directions 81

Other disclosures as required by FRDs in notes to the financial statements

FRD 11A Disclosure of Ex Gratia Expenses 76 FRD 21C Disclosures of responsible persons, executive officers and other personnel 73 FRD 103G Non-Financial Physical Assets 60 FRD 110A Cash flow statements 35 FRD 112D Defined Benefit Superannuation Obligations 76

Legislation Freedom of Information Act 1982 (Vic) 25 Building Act 1993 (Vic) 26 Victorian Industry Participation Policy Act 2003 (Vic) 26

Protected Disclosure Act 2012 (Vic) 28 Disability Discrimination Act 1992 (Cth) 29 Financial Management Act 1994 (Vic) 29

Dated at Melbourne on 16 August 2018 John Harnden AM Signed in accordance with a resolution of Members Chairman

30 Australian Grand Prix Corporation Annual Report 2018 l. Disclosure Index

SD 5.2.3 Declaration in report of operations 2

Other disclosures as required by FRDs in notes to the financial statements

Legislation Freedom of Information Act 1982 (Vic) 25 Building Act 1993 (Vic) 26 Victorian Industry Participation Policy Act 2003 (Vic) 26

Protected Disclosure Act 2012 (Vic) 28 Disability Discrimination Act 1992 (Cth) 29 Financial Management Act 1994 (Vic) 29

Dated at Melbourne on 16 August 2018 John Harnden AM Signed in accordance with a resolution of Members Chairman

Australian Grand Prix Corporation Annual Report 2018 31

Comprehensive Operating Statement Balance Sheet as at 30 June 2018 For the Financial Year Ended 30 June 2018 Notes 2018 2017 Notes 2018 2017 $000’s $000’s $000’s $000’s Assets Financial assets Cash and cash equivalents 5 8,502 19,091

Receivables 6 2,471 2,033 Income from transactions Derivatives 13 13,680 16,829 Formula 1® Grand Prix 111,759 104,133 Other financial assets 7 14,431 - Motorcycle Grand Prix 15,345 14,157 Total financial assets 39,084 37,953 Future Grand Prix 5,847 5,619

Total income from transactions 2 132,951 123,908 Non-financial assets

Prepayments 1,765 1,870 Expenses from transactions Infrastructure, plant and equipment 8 13,783 13,056 Formula 1® Grand Prix (105,538) (101,185) Intangible assets 9 75 101 Motorcycle Grand Prix (21,228) (19,211) Total non-financial assets 15,623 15,027 Total expenses from transactions 2,3 (126,766) (120,397)

Total assets 54,707 52,980 Net result from transactions (Net operating balance) 6,185 3,512

Liabilities Other economic flows included in net result Payables 10 4,216 3,272 Net gain/(loss) on financial instruments 19 26 Provisions 11 922 829 Net gain/(loss) on sale/disposal of non-financial assets 3 2 Deferred income 12 4,947 7,303 Total other economic flows included in net result 2,3 22 28 Derivatives 13 22,219 21,182

Total liabilities 32,304 32,585 Net result 6,207 3,539

Net assets 22,403 20,396

Other economic flows - other comprehensive income Equity Contributed capital 14a 10,739 10,739 Items that will not be reclassified to net result Cash Flow Hedge Reserve 14b (8,512) (4,312) Change in fair value of derivatives recognised through cash 14 (4,200) (30,648) Asset Revaluation Reserve 14c 10,075 10,744 flow hedge reserve Accumulated surplus 14d 10,101 3,225 Change in asset revaluation reserve (669) - Net worth 22,403 20,396 Total other economic flows – other comprehensive income (4,869) (30,648)

Comprehensive result 1,338 (27,109)

The comprehensive operating statement is to be read in conjunction with the notes to and The balance sheet is to be read in conjunction with the notes to and forming part of the forming part of the financial statements set out in pages 37 to 80 financial statements set out in pages 37 to 80

32 Australian Grand Prix Corporation Annual Report 2018

Total income from transactions 2 132,951 123,908 Non-financial assets

Total assets 54,707 52,980 Net result from transactions (Net operating balance) 6,185 3,512

Total liabilities 32,304 32,585 Net result 6,207 3,539

Net assets 22,403 20,396

Comprehensive result 1,338 (27,109)

Australian Grand Prix Corporation Annual Report 2018 33

Statement of Changes in Equity Cash Flow Statement For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Cash flow Asset Contributed Accumulated Notes 2018 2017 Notes hedge revaluation Total capital surplus $000’s $000’s reserve reserve Cash flows from operating activities

$000’s $000’s $000’s $000’s $000’s Receipts Receipts from customers, sponsors and commercial entities 58,080 55,434 Balance at 30 June 2016 14 26,336 10,744 10,739 (314) 47,505 Interest received 1,170 1,075

Government contributions – Formula 1® Grand Prix 64,263 57,561 Net result for year 14d - - - 3,539 3,539 Government contributions – Motorcycle Grand Prix 6,180 5,425

Government contributions – Future Grands Prix 6,432 6,181 Change in fair value of Government contributions – non-recurrent 7,388 12,304 derivatives recognised 14b (30,648) - - - (30,648) Total receipts 143,513 137,979 through cash flow hedge reserve Payments

Payments to suppliers and employees (129,785) (121,222) Change in asset revaluation 14c - - - - - GST paid to the ATO* (6,688) (7,427) reserve Total payments (136,473) (128,649) Balance at 30 June 2017 14 (4,312) 10,744 10,739 3,225 20,396

Net cash flows from/(used in) operating activities 19 7,040 9,330 Net result for year 14d - - - 6,207 6,207

Cash flows from investing activities Change in fair value of derivatives recognised 14b (4,200) - - - (4,200) Payments for other financial assets (105,802) (70,767) through cash flow hedge Redemption of other financial assets 91,371 70,767 reserve Payments for furniture and equipment (150) (7)

Change in asset revaluation 14c - (669) - 669 - Payments for intangibles (26) (10) reserve Payments for Grand Prix infrastructure, plant and equipment (2,440) (1,976) Payments for capital works subsequently transferred to Parks Balance at 30 June 2018 14 (8,512) 10,075 10,739 10,101 22,403 Victoria (590) (292)

Proceeds from the sale of Property, Plant & Equipment 3 2

Net cash flows from/(used in) investing activities (17,634) (2,283)

Cash flows from financing activities

Realised Forex Gain 5 33

Cash flows from financing activities 5 33

Net increase/(decrease) in cash & cash equivalents (10,589) 7,080

Cash & cash equivalents at the beginning of the year 19,091 12,011

Cash & cash equivalents at the end of financial year 5 8,502 19,091

*Goods and Services Tax paid to the ATO is presented on a net basis.

The statement of changes in equity is to be read in conjunction with the notes to and forming The cash flow statement is to be read in conjunction with the notes to and forming part of the part of the financial statements set out on pages 37 to 80 financial statements set out on pages 37 to 80

34 Australian Grand Prix Corporation Annual Report 2018

Statement of Changes in Equity Cash Flow Statement For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Cash flow Asset Contributed Accumulated Notes 2018 2017 Notes hedge revaluation Total capital surplus $000’s $000’s reserve reserve Cash flows from operating activities

Government contributions – Formula 1® Grand Prix 64,263 57,561 Net result for year 14d - - - 3,539 3,539 Government contributions – Motorcycle Grand Prix 6,180 5,425

Net cash flows from/(used in) operating activities 19 7,040 9,330 Net result for year 14d - - - 6,207 6,207

Proceeds from the sale of Property, Plant & Equipment 3 2

Net cash flows from/(used in) investing activities (17,634) (2,283)

Cash flows from financing activities

Realised Forex Gain 5 33

Cash flows from financing activities 5 33

Net increase/(decrease) in cash & cash equivalents (10,589) 7,080

Cash & cash equivalents at the beginning of the year 19,091 12,011

Cash & cash equivalents at the end of financial year 5 8,502 19,091

*Goods and Services Tax paid to the ATO is presented on a net basis.

Australian Grand Prix Corporation Annual Report 2018 35 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Note 1. Summary of significant accounting policies 37 The annual financial statements represent the audited general purpose financial statements for the Australian Grand Prix Corporation (the Corporation) for the year ended 30 June 2018. Note 2. Revenue and expenses from ordinary activities 57 The purpose of the report is to provide users with information about the Corporation’s stewardship of Note 3. Expenses from transactions 58 resources entrusted to it.

Note 4. Auditors’ remuneration 59 1. Summary of significant accounting policies

Note 5. Cash and cash equivalents 59 (a) Statement of compliance

Note 6. Receivables 59 The Corporation’s financial statements are a general purpose financial report which has been prepared in accordance with the Financial Management Act 1994 and applicable Australian Note 7. Other financial assets 59 Accounting Standards (AASs) which include interpretations issued by the Australian Accounting Standards Board (AASB). Note 8. Infrastructure, plant and equipment 60 In complying with AASs, the Corporation has, where relevant, applied those paragraphs Note 9. Intangible assets 63 applicable to not-for-profit entities.

Note 10. Payables 63 Accounting policies are selected and applied in a manner which ensures that the resulting financial information satisfies the concepts of relevance and reliability, thereby ensuring that Note 11. Provisions 64 the substance of the underlying transactions or other events is reported.

Note 12. Deferred income 64 To gain a better understanding of the terminology used in this report, a glossary of terms and style conventions can be found in Note 27. Note 13. Derivatives 65 The annual financial statements were authorised for issue by the Chairman of the Board on 16 Note 14. Equity 65 August 2018.

Note 15. Financial instruments 66 (b) Basis of accounts preparation and measurement

Note 16. Leases 72 The accrual basis of accounting has been applied in the preparation of these financial statements whereby assets, liabilities, equity, income and expenses are recognised in the Note 17. Commitments for expenditure 72 reporting period to which they relate, regardless of when cash is received or paid. The exception is Government contributions which are recognised in the reporting period they are Note 18. Contingent assets and liabilities 72 received.

Note 19. Cash flow information 73 In the application of AASs, management is required to make judgements, estimates and assumptions about carrying values of assets and liabilities that are not readily apparent from Note 20. Responsible persons 73 other sources. The estimates and associated assumptions are based on professional judgement derived from historical experience and various other factors that are believed to be reasonable Note 21. Executive officer remuneration 74 under the circumstances. Actual results may differ from these estimates. The estimates and assumptions that have a risk of causing a material adjustment to the carrying amounts of assets Note 22. Related party transactions 74 and liabilities within the next financial year are discussed below.

Note 23. Superannuation 76  Estimated impairment of non-financial assets

Note 24. Ex-gratia expenses 76 The Corporation assesses impairment of all assets at each reporting date by evaluating conditions specific to the Corporation and to the particular asset that may lead to Note 25. Events subsequent to balance sheet date 76 impairment. These may include asset performance, economic and political environments and future expectations. Given the specific nature of the Corporation’s assets, Note 26. Economic dependency 77 management considered that the indicators of impairment were significant enough and as such have been tested for impairment in this financial period. Note 27. Glossary of terms 78

36 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Note 4. Auditors’ remuneration 59 1. Summary of significant accounting policies

Note 5. Cash and cash equivalents 59 (a) Statement of compliance

Note 15. Financial instruments 66 (b) Basis of accounts preparation and measurement

Note 23. Superannuation 76  Estimated impairment of non-financial assets

Australian Grand Prix Corporation Annual Report 2018 37 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

 Useful lives and fair value of non-financial assets For the purpose of fair value disclosures, the Corporation has determined classes of assets and liabilities on the basis of the nature, characteristics and risks of the asset or liability and the level The Valuer-General Victoria is the Corporation’s independent valuation agency. The of the fair value hierarchy as explained above. Corporation’s management, with the assistance of the Valuer-General Victoria, determines the estimated useful lives and related depreciation charges and fair value for its The accounting policies set out below have been applied in preparing the financial statements infrastructure, furniture, plant and equipment and intangible assets. (Refer Note 1(j)). for the year ended 30 June 2018 and the comparative information presented for the year Management will increase the depreciation charge where useful lives are less than previous ended 30 June 2017. estimated useful lives, or will write-off or write-down obsolete assets or those that are no longer considered useful. (c) Reporting entity

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to The Corporation is a statutory authority established pursuant to the Australian Grands Prix Act accounting estimates are recognised in the period in which the estimate is revised if the revision 1994 (as amended) (“AGP Act”). affects only that period or in the period of the revision, and future periods if the revision affects both current and future periods. Judgements made by management in the application of AASs The principal address is: that have significant effects on the financial statements and estimates, with a risk of material adjustments in the subsequent reporting period, are disclosed throughout the notes to the Australian Grand Prix Corporation financial statements. Level 5, 616 St Kilda Road Melbourne VIC 3004 These financial statements are presented in Australian dollars, the functional and presentation currency of the Corporation, and prepared in accordance with the historical cost convention The Corporation is subject to the direction and control of the Minister administering the AGP except for: Act. At the time of this report this was the Minister for Tourism and Major Events, The Honourable John Eren MP.  Non-financial physical assets which, subsequent to acquisition, are measured at a revalued amount being the fair value at the date of the revaluation less any subsequent Objectives and Funding accumulated depreciation and subsequent impairment losses. Revaluations are made with a sufficient regularity to ensure that the carrying amounts do not materially differ from their The Corporation’s overall objective is to provide Melbourne and Victoria with the best fair value and the fair value of an asset is generally based on its current replacement cost; international event experiences that deliver increased promotional and economic benefits to the State of Victoria.  Derivative financial instruments, which, after recognition are measured at fair value through the profit and loss and balance sheet. The Corporation is predominantly funded by ticket sales and sponsorship of the events and contributions provided by the Victorian Government. Consistent with AASB 13 Fair Value Measurement, the Corporation determines the policies and procedures for both recurring fair value measurements such as property, plant and equipment (d) Scope and presentation of financial statements and financial instruments, in accordance with the requirements of AASB 13 and the relevant Financial Reporting Directions (FRDs). Comprehensive operating statement

All assets and liabilities for which fair value is measured or disclosed in the financial statements The comprehensive operating statement comprises three components, being ‘net result from are categorised within the fair value hierarchy, described as follows, based on the lowest level transactions’ (or termed as ‘net operating balance’), ‘other economic flows included in net input that is significant to the fair value measurement as a whole: result’, as well as ‘other economic flows – other comprehensive income’. The sum of the first two components represents the net result.  Level 1 – Quoted (unadjusted) market prices in active markets for identical assets or liabilities. The net result is equivalent to profit or loss derived in accordance with AASs.

 Level 2 – Valuation techniques for which the lowest level input that is significant to the fair ‘Other economic flows’ are changes arising from market re-measurements. They include: value measurement is directly or indirectly observable.  Gains or losses from disposals of non-financial assets;  Revaluations and impairments of non-financial physical and intangible assets; and  Level 3 – Valuation techniques for which the lowest level input that is significant to the fair  Fair value changes of financial instruments. value measurement is unobservable. This classification is consistent with the whole of government reporting format and is allowed In addition, the Corporation determines whether transfers have occurred between levels in the under AASB 101 Presentation of Financial Statements. hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. Balance sheet

Assets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financial assets.

38 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Assets and liabilities are presented in liquidity order with assets aggregated into financial assets and non-financial assets.

Australian Grand Prix Corporation Annual Report 2018 39 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Current and non-current assets and liabilities (non-current being those assets or liabilities (h) Income tax expected to be recovered or settled beyond 12 months) are disclosed in the notes, where relevant, except for the provisions of employee benefits, which are classified as current liabilities The Corporation is exempt from income tax under Section 24AR of Division 1B of the Income Tax if the Corporation does not have the unconditional right to defer the settlement of liabilities Assessment Act, 1936. within 12 months after the end of the reporting period. (i) Income from transactions Cash flow statement Income is recognised to the extent that it is probable that the economic benefits will flow to Cash flows are classified according to whether or not they arise from operating, investing or the Corporation and the income can be reliably measured. financing activities. This classification is consistent with requirements under AASB 107 Statement of Cash Flows. Sales and sponsorship/commercial/other operating revenue

Statement of changes in equity Sales and sponsorship revenues are not controlled by the Corporation until the event has occurred. Hence, such revenues are recognised in the financial year in which an event is The statement of changes in equity presents reconciliations of each non-owner and owner conducted. Until the event has occurred, the amounts received are recognised as deferred changes in equity from opening balance at the beginning of the reporting period to the closing income. balance at the end of the reporting period. It also shows separately changes due to amounts recognised in the ‘Comprehensive result’, which includes amounts recognised in ‘Other Interest revenue economic flows - other movements in equity’ related to ‘Transactions with owner in its capacity as owner’. Interest includes interest received or receivable on bank deposits and other investments. Interest income is recognised using the effective interest method which allocates the interest Rounding of amounts over the relevant period.

Amounts in the financial statements (including the notes) have been rounded to the nearest Government contributions – Recurrent thousand dollars, unless otherwise stated. Figures in the accounts may not equate due to rounding. Government contributions are recognised as revenue when the Corporation gains control of the underlying assets. The Corporation is deemed to have assumed control when the (e) Changes in accounting standards contributions are received.

There have been no accounting standards issued that have become effective for 2017-18. Government contributions – Non-recurrent

(f) Subsequent events The Corporation undertakes works within Albert Park under licence from Parks Victoria in its capacity as the Committee of Management for Albert Park. Government contributions in Assets, liabilities, income or expenses arise from past transactions or other past events. relation to capital works have been recognised as revenue in the financial year in which they Disclosure is made about events between the reporting date and the date the financial are received. These capital works have been transferred to Parks Victoria free of charge. statements are authorised for issue where the events relate to conditions which arose after the reporting date and are considered to be of material interest. (j) Expenses from transactions

(g) Goods and services tax (GST) Expenses are recognised and reported in the financial year to which they relate.

Income, expenses and assets are recognised net of the amount of associated GST, unless the Event management and staging and recurrent engineering GST incurred is not recoverable from the taxation authority. In this case it is recognised as part of the cost of acquisition of the asset or as part of the expense. Event management and staging includes costs relating to venue and event operations. Recurrent engineering expenses include those costs relating to the assembly, dismantling and Receivables and payables are stated inclusive of the amount of GST receivable or payable. servicing of event infrastructure. It includes any non-capital expenditure on areas in and around The net amount of GST recoverable from, or payable to, the taxation authority is included with the Albert Park and Phillip Island circuits. other receivables or payables in the balance sheet. Administration expenses Cashflows are presented on a gross basis. The GST components of cash flows arising from investing or financing activities which is recoverable from, or payable to, the taxation authority Depreciation and amortisation are presented as operating cash flow. All items of infrastructure, plant and equipment that have finite useful lives are depreciated. Depreciation is calculated on a straight-line basis, at rates that allocate the asset’s value, less any estimated residual value, over its estimated useful life.

40 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

There have been no accounting standards issued that have become effective for 2017-18. Government contributions – Non-recurrent

(g) Goods and services tax (GST) Expenses are recognised and reported in the financial year to which they relate.

Australian Grand Prix Corporation Annual Report 2018 41 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

The estimated useful lives, residual values and depreciation method are reviewed at the end Impairment of non-financial assets of each reporting period, and adjustments made when necessary. All assets are assessed annually for indications of impairment. Intangible assets are amortised on a straight-line basis over the useful lives of the assets. Refer to Note 1(n) in relation to the recognition and measurement of non-financial assets. The following are typical useful lives for the different asset classes for current and prior years. Net gain/(loss) on financial instruments Asset Class Useful Life 2017-18 Useful Life 2016-17 Computer Equipment 3 years 3 years Net gain/(loss) on financial instruments includes: Furniture and Equipment 3 – 5 years 3 – 5 years Grand Prix Infrastructure 3 – 50 years 3 – 50 years  realised and unrealised gains and losses from revaluations of financial instruments at fair Intangible Assets 3 – 6 years 3 – 6 years value;  impairment and reversal of impairment for financial instruments at amortised cost (refer to Refer to Note 1(m) Impairment of financial assets. Note 1(l)); and  disposals of financial assets and deregulation of financial liabilities. Marketing/promotion and catering Revaluations of financial instruments at fair value Marketing and promotion expenses are those costs incurred in ensuring that the event is promoted to the general public and corporate clients thereby increasing sales revenue. Refer to Note 1(l) Financial Instruments Catering costs are predominantly incurred in the provision of high class facilities to corporate and VIP clients. Other gains/(losses) from other economic flows

Employee benefits Other gains/(losses) from other economic flows include the gains or losses from:

Employee expenses are recognised when incurred. These expenses include all costs related to  transfer of amounts from reserves and/or accumulated surplus to net result due to disposal employment including wages and salaries, fringe benefits tax, leave entitlements, termination or derecognition of reclassification; and payments and WorkCover premiums.  the revaluation of the present value of the long service leave liability due to changes in Superannuation the bond interest rates.

Contributions are made by the Corporation to an employee superannuation fund and are (l) Financial instruments charged as expenses when incurred (Refer note 23). Financial instruments arise out of contractual agreements that give rise to a financial asset of (k) Other economic flows included in net result one entity and a financial liability or equity instrument of another entity. Due to the nature of the Corporation’s activities, certain financial assets and financial liabilities arise under statute Other economic flows measure the change in volume or value of assets or liabilities that do not rather than a contract. Such financial assets and financial liabilities do not meet the definition result in transactions. of financial instruments in AASB 132 Financial Instruments: Presentation. For example, statutory receivables arising from taxes, fines and penalties do not meet the definition of financial Gain/(loss) on non-financial assets instruments as they do not arise under contract.

Net gain/loss on non-financial assets and liabilities includes realised and unrealised gains and Where relevant, for note disclosure purposes, a distinction is made between those financial losses as follows: assets and financial liabilities that meet the definition of financial instruments in accordance with AASB 132 and those that do not. Net gain/(loss) on disposal of non-financial assets The following refers to financial instruments unless otherwise stated. Any gain or loss on the sale of non-financial assets is recognised at the date that control of the asset is passed to the buyer and is determined by deducting the proceeds of sale from the Categories of non-derivative financial instruments carrying value of the assets at the time of sale. Loans and receivables Revaluations gain/(loss) of non-financial physical assets Loans and receivables are financial instrument assets with fixed and determinable payments Refer to Note 1(n) under ‘Revaluation of non-financial physical assets’. that are not quoted on an active market. These assets are initially recognised at fair value plus any directly attributable transaction costs. Subsequent to initial measurement, loans and receivables are measured at amortised cost using the effective interest method, less any impairment.

42 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Employee benefits Other gains/(losses) from other economic flows include the gains or losses from:

Australian Grand Prix Corporation Annual Report 2018 43 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Loans and receivables category includes cash and deposits (refer to Note 1(m)), term deposits (m) Financial assets with maturity greater than three months, trade receivables, loans and other receivables, but not statutory receivables. Cash and cash equivalents

Financial assets and liabilities at fair value through profit and loss Cash and cash equivalents recognised on the balance sheet comprise cash on hand and cash at bank, deposits at call with Treasury Corporation of Victoria and other financial institutions. Financial assets are categorised as fair value through profit and loss at trade date if they are classified as held for trading or designated as such upon initial recognition. Financial assets are For the purpose of the Cash Flow Statement, cash and cash equivalents include cash on hand, designated at fair value through profit or loss on the basis that the financial assets form part of cash at bank and deposits with an original maturity of three months or less, which are readily a group of financial assets that are managed by the Corporation based on their fair values, convertible to cash on hand and are subject to insignificant risk of changes in value. and have their performance evaluated in accordance with documented risk management and investment strategies. Receivables

Financial instruments at fair value through profit or loss are initially measured at fair value and Receivables consist predominantly of debtors in relation to goods and services and accrued attributable transaction costs are expensed as incurred. Subsequently, any changes in fair investment income. value are recognised in the net result as other economic flows. Any dividend or interest on a financial asset is recognised in the net result from transactions. Receivables that are contractual are classified as financial instruments. Statutory receivables are not classified as financial instruments. Financial liabilities at amortised cost Receivables are initially recognised at fair value plus any attributable transaction cost and Financial instrument liabilities are initially recognised on the date they are originated. They are subsequently measured at amortised cost less an allowance for impairment. initially measured at fair value plus any directly attributable transaction costs. Subsequent to initial recognition, these financial instruments are measured at amortised cost with any A provision for doubtful receivables is made when there is objective evidence that the debts difference between the initial recognised amount and the redemption value being recognised may not be collected and bad debts are written off when identified. in the profit and loss over the period of the interest-bearing liability, using the effective interest rate method. Other financial assets

Financial instrument liabilities measured at amortised cost include all payables, deposits held Other financial assets recognised on the balance sheet comprise cash deposits > 90 days with and advances received, and interest-bearing arrangements other than those designated at Treasury Corporation of Victoria. fair value through profit or loss. For the purpose of the Cash Flow Statement, other financial assets include deposits with an Derivative financial instruments original maturity of greater than three months.

Derivative financial instruments are classified as financial assets and liabilities. They are Impairment of financial assets recognised at fair value both initially and on an ongoing basis. Derivatives are carried as assets when their fair value is positive and as liabilities when their fair value is negative. Any gains or At the end of each reporting period, the Corporation assesses whether there is objective losses arising from changes in the fair value of derivatives after initial recognition are recognised evidence that a financial asset or group of financial assets is impaired. All financial instrument in the comprehensive operating statement as other economic flows. assets, except those measured at fair value through profit and loss, are subject to annual review for impairment. From time to time certain derivative financial instruments do not qualify for hedge accounting, notwithstanding that the derivatives are held to hedge identified exposures. Any changes in Receivables are assessed for bad and doubtful debts on a regular basis. Those bad debts the fair value of a derivative instrument or part of a derivative instrument that do not qualify for considered as written off by mutual consent are classified as a transaction expense. Bad debts hedge accounting are classified as ‘ineffective’ and recognised immediately in the not written off by mutual consent and the allowance for doubtful receivables are classified as Comprehensive Operating Statement. other economic flows in the net result.

Offsetting financial instruments The amount of the allowance is the difference between the financial asset’s carrying amount and the present value of the estimated future cash flows, discounted at the effective interest Financial instrument assets and liabilities are offset and the net amount presented in the rate. balance sheet when, and only when, the Corporation has the legal right to offset the amounts and intend either to settle on a net basis or to realise the asset and settle the liability In assessing impairment of statutory (non-contractual) financial assets, which are not financial simultaneously. instruments, professional judgement is applied in assessing materiality using estimates, averages and other computational methods in accordance with AASB 136 Impairment of Assets.

44 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Australian Grand Prix Corporation Annual Report 2018 45 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(n) Non-financial assets Capital Works

Infrastructure, plant and equipment All fixed capital works constructed within Albert Park have been transferred to a third party, Parks Victoria, free of charge, in accordance with the licence agreements. Items of non-financial physical assets are measured initially at cost and subsequently re-valued at fair value less accumulated depreciation and impairment. Where an asset is received for no Intangible assets or nominal consideration, the cost is the asset’s fair value at the date of acquisition. The fair value of infrastructure, plant and equipment is normally determined by reference to the Purchased intangible assets are initially recorded at cost. Subsequently, intangible assets with asset’s current replacement cost. For plant and equipment, existing depreciated historical cost finite useful lives are carried at cost less accumulated amortisation and accumulated is generally a reasonable proxy for current replacement cost because of the short lives of the impairment losses. Costs incurred subsequent to initial acquisition are capitalised when it is assets concerned. expected that additional future economic benefits will flow to the Corporation.

For the accounting policy on impairment of non-financial physical assets, refer to impairment When recognition criteria in AASB 138 Intangible Assets are met, internally generated intangible of non-financial assets under Note 1(k) Impairment of non-financial assets. assets are recognised at cost less accumulated amortisation and impairment.

Non-financial physical assets constructed by the Corporation Refer to Note 1(j) Depreciation and Amortisation and Note 1(k) Impairment of non-financial assets. The cost of constructed non-financial physical assets includes the cost of all materials used in construction, direct labour on the project, and an appropriate proportion of variable and fixed Other non-financial assets overheads. Other non-financial assets include prepayments which represent payments in advance of Revaluation of non-financial physical assets receipt of goods or services or that part of expenditure made in one accounting period covering a term extending beyond that period. Non-financial physical assets are measured at fair value on a cyclical basis in accordance with Financial Reporting Directions (FRDs) issued by the Minister of Finance. A full revaluation of assets (o) Liabilities normally occurs every five years and is based on the asset’s government purpose classifications. The last valuation occurred during the 2015-16 financial year. Independent valuers are used to Payables conduct scheduled revaluations. Payables consist of: Revaluation increases and decreases arise from differences between an asset’s carrying value and fair value.  contractual payables, such as accounts payable. Accounts payable represent liabilities for goods or services provided to the Corporation prior to the end of the financial year that are Net revaluation increases (where the carrying amount of a class of assets is increased as a result unpaid, and arise when the Corporation becomes obliged to make future payments in of a revaluation) are recognised in ‘Other economic flows– comprehensive income’ and respect of the purchases of goods and services; and accumulated in equity under the asset revaluation surplus. However, the net revaluation increase is recognised in the net result to the extent that it reverses a net revaluation decrease  statutory payables, such as goods and services tax and fringe benefits tax payables. in respect of the same class of infrastructure, plant and equipment previously recognised as an expense (other economic flows) in the net result. Contractual payables are classified as financial instruments and categorised as financial liabilities at amortised cost (refer to Note 1(l)). Statutory payables are recognised and measured Net revaluation decreases are recognised immediately as expenses (other economic flows) in similarly to contractual payables, but are not classified as financial instruments and not included the net result, except that the net revaluation decrease shall be recognised in other in the category of financial liabilities at amortised cost, because they do not arise from a comprehensive income to the extent that a credit balance exists in the revaluation surplus in contract. respect of the same class of infrastructure, plant and equipment. Provisions The net revaluation decrease recognised in other comprehensive income reduces the amount accumulated in equity under revaluation surplus. Provisions are recognised when the Corporation has a present obligation, the future sacrifice of economic benefits is probable, and the amount of the provision can be measured reliably. Revaluation increases and decreases relating to individual assets within a class of infrastructure, plant and equipment, are offset against one another within that class but are The amount recognised as a provision is the best estimate of the consideration required to settle not offset in respect of assets in different classes. Any revaluation surplus is not normally the present obligation at reporting date, taking into account the risks and uncertainties transferred to accumulated funds on de-recognition of the relevant asset. surrounding the obligation. Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying amount is the present value of those cash flows, using discount rate that reflects the time value of money and risks specific to the provision.

46 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(n) Non-financial assets Capital Works

Australian Grand Prix Corporation Annual Report 2018 47 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

When some or all of the economic benefits required to settle a provision are expected to be (p) Leases received from a third party, the receivable is recognised as an asset if it is virtually certain that recovery will be received and the amount of the receivable can be measured reliably. A lease is a right to use an asset for an agreed period of time in exchange for payment.

Wages and salaries and annual leave Leases are classified at their inception as either operating or finance leases based on the economic substance of the agreement so as to reflect the risks and rewards incidental to Liabilities for wages and salaries, including non-monetary benefits and annual leave are ownership. recognised in the provision for employee benefits as current liabilities, because the Corporation does not have an unconditional right to defer settlements of these liabilities. Operating Lease

Depending on the expectation of the timing of settlement, liabilities for wages and salaries, and Operating lease payments are recognised as an expense in the comprehensive operating annual leave are measured at: statement on a straight-line basis over the lease term, except where another systematic basis is more representative of the time pattern of the benefits derived from the use of the asset. The  nominal value - if the Corporation expects to wholly settle within 12 months; or leased asset is not recognised in the balance sheet.  present value - if the Corporation does not expect to wholly settle within 12 months. The cost of leasehold improvements is capitalised as an asset and depreciated over the Long Service Leave remaining term of the lease or the estimated useful life of the improvements, whichever is the shorter. Liability for long service leave (LSL) is recognised in the provision for employee benefits. All incentives for the agreement of a new or renewed operating lease are recognised as an Unconditional LSL is disclosed in the notes to the financial statements as a current liability even integral part of the net consideration agreed for the use of the leased asset, irrespective of the where the Corporation does not expect to settle the liability within 12 months because it will not incentive’s nature or form or the timing of payments. have the unconditional right to defer the settlement should an employee take leave within 12 months. In the event that lease incentives are received to enter into operating leases, the aggregate cost of incentives are recognised as a reduction of rental expenses over the term on a straight- The components of this current LSL liability are measured at: line basis, unless another more systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.  nominal value – component that the Corporation expects to wholly settle within 12 months  present value – component that the Corporation does not expect to wholly settle within 12 Finance lease months Leases of property, plant and equipment are classified as finance leases whenever the terms Conditional LSL is disclosed as a non-current liability. There is an unconditional right to defer the of the lease transfer substantially all the risks and rewards of ownership to the lessee. All other settlement of the entitlement until the employee has completed the requisite years of service. leases are classified as operating leases. The non-current liability is measured at present value. (q) Foreign currency transactions and balances Any gain or loss following revaluation of the present value of the non-current LSL liability is recognised as a transaction, except to the extent that a gain or loss arises due to changes in All foreign currency transactions during the financial year are brought to account using the bond interest rates, for which it is then recognised as an ‘other economic flow’ (refer note 1 (k)). exchange rate in effect at the date of the transaction. Foreign monetary items existing at the end of the reporting period are translated at the closing rate at the date at the end of the Employee benefits on-costs reporting period. Non-monetary assets carried at fair value that are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value was Employee benefits on-costs such as payroll tax, worker’s compensation and superannuation determined. are recognised separately from the provision for employee benefits. Foreign currency translation differences are recognised in ‘other economic flows’ and Deferred income accumulated in the cash flow hedge reserve in the period in which they arise.

Deferred income consists of amounts received during the year which relates to activities to be (r) Equity conducted in future financial years. Also, revenue is recognized only to the extent earned and the remaining revenue has been deferred until earned. Additions to net assets which have been designated as contributions by owners are recognised as contributed capital. Other transfers that are in the nature of contributions to or distributions by owners have also been designated as contributions by owners.

Transfers of net assets arising from administrative restructurings are treated as distributions to or contributions by owners. Transfers of net liabilities arising from administrative restructurings are treated as distributions to owners.

48 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Australian Grand Prix Corporation Annual Report 2018 49 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(s) Commitments Standard/ Summary Applicable for Impact on public sector entity

Interpretation annual reporting financial statements Commitments for future expenditure include operating and capital commitments arising from periods contracts. These commitments are disclosed by way of a note at their nominal value and beginning on or inclusive of the GST payable. after

AASB 2014-5 Amends the measurement of 1 Jan 2018, The assessment has indicated (t) Contingent assets and liabilities Amendments trade receivables and the except that there will be no significant

to Australian recognition of dividends as amendments to impact for the public sector. Contingent assets and contingent liabilities are not recognised in the balance sheet, but are Accounting follows: AASB 9 (Dec disclosed by way of a note (refer to Note 18) and if quantifiable are measured at nominal value. Standards 2009) and Contingent assets and liabilities are presented inclusive of GST.  Trade receivables that do arising from AASB 9 (Dec not have a significant AASB 15 2010) apply from (u) New accounting standards and interpretations financing component, are 1 Jan 2018 to be measured at their Certain new Australian Accounting Standards (AAS) and interpretations have been published transaction price, at initial that are not mandatory for the 30 June 2018 reporting period. The Department of Treasury and recognition. Finance has assessed the impact of the new standards and has advised the Corporation of  Dividends are recognised their applicability and early adoption where applicable. in the profit and loss only As at 30 June 2018, the following standards and interpretations have been issued but were not when: effective. They become effective for the first financial statements for the reporting periods i) the entity’s right to commencing after the stated operative dates as follows. receive payment of the dividend is established;

ii) it is probable that the Standard/ Summary Applicable for Impact on public sector entity economic benefits Interpretation annual reporting financial statements associated with the periods dividend will flow to the beginning on or entity; and after the amount can be measured AASB 9 The key changes include the 1 Jan 2018 The assessment has identified that reliably. Financial simplified requirements for the the financial impact of available AASB 2014-7 Amends various AASs to 1 Jan 2018 The assessment has indicated Instruments classification and for sale (AFS) assets will now be Amendments incorporate the that there will be no significant measurement of financial reported through other to Australian consequential amendments impact for the public sector. assets, a new hedging comprehensive income (OCI) and Accounting arising from the issuance of accounting model and a no longer recycled to the profit revised impairment loss model and loss. Standards AASB 9. arising from to recognise impairment AASB 9 losses earlier, as opposed to While the preliminary assessment AASB 15 The core principle of AASB 15 1 Jan 2018 The changes in revenue the current approach that has not identified any material Revenue from requires an entity to recognise recognition requirements in recognises impairment only impact arising from AASB 9, it will Contracts with revenue when the entity AASB 15 may result in changes to when incurred. continue to be monitored and Customers satisfies a performance the timing and amount of assessed. obligation by transferring a revenue recorded in the financial AASB 2014-1 Amends various AASs to 1 Jan 2018 This amending standard will defer promised good or service to a statements. The Standard will also Amendments reflect the AASB’s decision to the application period of AASB 9 customer. Note that require additional disclosures on to Australian defer the mandatory to the 2018-19 reporting period in amending standard service revenue and contract Accounting application date of accordance with the transition AASB 2015-8 Amendments to modifications. Standards [Part requirements. AASB 9 to annual reporting Australian Accounting E Financial periods beginning on or after Standards – Effective Date of Instruments] 1 January 2018 as a AASB 15 has deferred the consequence of Chapter 6 effective date of AASB 15 to Hedge Accounting, and to annual reporting periods amend reduced disclosure beginning on or after requirements. 1 January 2018, instead of 1 January 2017.

50 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(s) Commitments Standard/ Summary Applicable for Impact on public sector entity

AASB 2014-5 Amends the measurement of 1 Jan 2018, The assessment has indicated (t) Contingent assets and liabilities Amendments trade receivables and the except that there will be no significant

ii) it is probable that the Standard/ Summary Applicable for Impact on public sector entity economic benefits Interpretation annual reporting financial statements associated with the periods dividend will flow to the beginning on or entity; and after the amount can be measured AASB 9 The key changes include the 1 Jan 2018 The assessment has identified that reliably. Financial simplified requirements for the the financial impact of available AASB 2014-7 Amends various AASs to 1 Jan 2018 The assessment has indicated Instruments classification and for sale (AFS) assets will now be Amendments incorporate the that there will be no significant measurement of financial reported through other to Australian consequential amendments impact for the public sector. assets, a new hedging comprehensive income (OCI) and Accounting arising from the issuance of accounting model and a no longer recycled to the profit Standards AASB 9. revised impairment loss model and loss. arising from to recognise impairment AASB 9 losses earlier, as opposed to While the preliminary assessment AASB 15 The core principle of AASB 15 1 Jan 2018 The changes in revenue the current approach that has not identified any material Revenue from requires an entity to recognise recognition requirements in recognises impairment only impact arising from AASB 9, it will Contracts with revenue when the entity AASB 15 may result in changes to when incurred. continue to be monitored and Customers satisfies a performance the timing and amount of assessed. obligation by transferring a revenue recorded in the financial AASB 2014-1 Amends various AASs to 1 Jan 2018 This amending standard will defer promised good or service to a statements. The Standard will also Amendments reflect the AASB’s decision to the application period of AASB 9 customer. Note that require additional disclosures on to Australian defer the mandatory to the 2018-19 reporting period in amending standard service revenue and contract Accounting application date of accordance with the transition AASB 2015-8 Amendments to modifications. Standards [Part requirements. AASB 9 to annual reporting Australian Accounting E Financial periods beginning on or after Standards – Effective Date of Instruments] 1 January 2018 as a AASB 15 has deferred the consequence of Chapter 6 effective date of AASB 15 to Hedge Accounting, and to annual reporting periods amend reduced disclosure beginning on or after requirements. 1 January 2018, instead of 1 January 2017.

Australian Grand Prix Corporation Annual Report 2018 51 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Standard/ Summary Applicable for Impact on public sector entity Standard/ Summary Applicable for Impact on public sector entity Interpretation annual reporting financial statements Interpretation annual reporting financial statements periods periods beginning on or beginning on or after after AASB 1058 AASB 1058 standard will 1 Jan 2019 The current revenue recognition AASB 2015-8 This Standard defers the 1 Jan 2018 This amending standard will defer Income of Not- replace the majority of for grants is to recognise revenue Amendments mandatory effective date of the application period of AASB 15 for-Profit Entities income recognition in relation up front upon receipt of the to Australian AASB 15 from 1 January 2017 for for-profit entities to the 2018- to government grants and funds. Accounting to 1 January 2018. 19 reporting period in other types of contributions This may change under AASB Standards – accordance with the transition requirements relating to 1058, as capital grants for the Effective Date requirements. public sector not-for-profit construction of assets will need to of AASB 15 entities, previously in AASB be deferred. Income will be AASB 2016-3 This Standard amends 1 Jan 2018 The assessment has indicated 1004 Contributions. recognised over time, upon Amendments AASB 15 to clarify the that there will be no significant The restructure of completion and satisfaction of to Australian requirements on identifying impact for the public sector, administrative arrangement performance obligations for Accounting performance obligations, other than the impact identified will remain under AASB 1004 assets being constructed, or Standards – principal versus agent in AASB 15. and will be restricted to income will be recognised at a Clarifications to considerations and the timing government entities and point in time for acquisition of AASB 15 of recognising revenue from contributions by owners in a assets. granting a licence. The public sector context, amendments require: AASB 1058 establishes The revenue recognition for  A promise to transfer to a principles for transactions that operating grants will need to be customer a good or are not within the scope of analysed to establish whether the service that is ‘distinct’ to AASB 15, where the requirements under other be recognised as a consideration to acquire an applicable standards need to be separate performance asset is significantly less than considered for recognition of obligation; fair value to enable not-for- liabilities (which will have the profit entities to further their effect of deferring the income  For items purchased online, objective. associated with these grants). the entity is a principal if it Only after that analysis would it obtains control of the good be possible to conclude whether or service prior to there are any changes to transferring to the operating grants. customer; and

 For licences identified as The impact on current revenue being distinct from other recognition of the changes is the goods or services in a phasing and timing of revenue recorded in the profit and loss contract, entities need to statement. determine whether the AASB 1059 This standard applies to 1 Jan 2019 As AGPC has no such licence transfers to the Service arrangements that involve an arrangements, no impact is customer over time (right Concession operator providing a public expected. to use) or at a point in time Arrangements: service on behalf of a public (right to access).

Grantor sector grantor. It involves the AASB 2016-7 This Standard defers the 1 Jan 2019 This amending standard will defer use of a service concession Amendments mandatory effective date of the application period of AASB 15 asset and where the operator to Australian AASB 15 for not-for-profit for not-for-profit entities to the manages at least some of the Accounting entities from 1 January 2018 to 2019-20 reporting period. public service at its own Standards – 1 January 2019. direction. Deferral of AASB 15 for Not-for-Profit Entities

52 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Australian Grand Prix Corporation Annual Report 2018 53 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Standard/ Summary Applicable for Impact on public sector entity Standard/ Summary Applicable for Impact on public sector entity Interpretation annual reporting financial statements Interpretation annual reporting financial statements periods periods beginning on or beginning on or after after AASB 2016-8 AASB 2016-8 inserts Australian 1 Jan 2019 This standard clarifies the AASB 16 Leases The key changes introduced 1 Jan 2019 The assessment has indicated Amendments requirements and application of AASB 15 and AASB by AASB 16 include the that most operating leases, with to Australian authoritative implementation 9 in a not-for-profit context. The recognition of most operating the exception of short term and Accounting guidance for not-for-profit- areas within these standards that leases (which are current not low value leases will come on to Standards – entities into AASB 9 and AASB are amended for not-for-profit recognised) on balance the balance sheet and will be Australian 15. application include: sheet. recognised as right of use assets Implementation This Standard amends AASB 9 AASB 9 with a corresponding lease Guidance for and AASB 15 to include  Statutory receivables are liability. Not-for-Profit requirements to assist not-for- recognised and measured Entities profit entities in applying the similarly to financial assets In the operating statement, the respective standards to operating lease expense will be AASB 15 particular transactions and replaced by depreciation events.  The “customer” does not expense of the asset and an need to be the recipient of interest charge. goods and/or services;  The “contract” could include There will be no change for an arrangement entered lessors as the classification of into under the direction of operating and finance leases another party; remains unchanged. AASB 17 The new Australian standard 1 January 2021 The assessment has indicated  Contracts are enforceable if Insurance eliminates inconsistencies and that there will be no significant they are enforceable by Contracts weaknesses in existing impact for the public sector. legal or “equivalent means”; practices by providing a  Contracts do not have to single principle-based have commercial substance, framework to account for all only economic substance; types of insurance contracts, and including reissuance contract that an insurer holds. It also  Performance obligations provides requirements for need to be “sufficiently presentation and disclosure to specific” to be able to apply enhance comparability AASB 15 to these between entities. transactions. This standard does not apply to the not-for-profit public sector entities. The AASB is undertaking further outreach to consider the application of this standard to the not-for- profit public sector.

In addition to the new standards and amendments above, the AASB has issued a list of other amending standards that are not effective for the 2017-18 reporting period (as listed below). In general, these amending standards include editorial and references changes that are expected to have insignificant impacts on public sector reporting.

 AASB 2016-5 Amendments to Australian Accounting Standards – Classification and Measurements of Share-based Payment Transactions  AASB 2016-6 Amendments to Australian Accounting Standards – Applying AASB 9 Financial Instruments with AASB 4 Insurance Contracts

54 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Standard/ Summary Applicable for Impact on public sector entity Standard/ Summary Applicable for Impact on public sector entity Interpretation annual reporting financial statements Interpretation annual reporting financial statements periods periods beginning on or beginning on or after after AASB 2016-8 AASB 2016-8 inserts Australian 1 Jan 2019 This standard clarifies the AASB 16 Leases The key changes introduced 1 Jan 2019 The assessment has indicated Amendments requirements and application of AASB 15 and AASB by AASB 16 include the that most operating leases, with to Australian authoritative implementation 9 in a not-for-profit context. The recognition of most operating the exception of short term and Accounting guidance for not-for-profit- areas within these standards that leases (which are current not low value leases will come on to Standards – entities into AASB 9 and AASB are amended for not-for-profit recognised) on balance the balance sheet and will be Australian 15. application include: sheet. recognised as right of use assets Implementation This Standard amends AASB 9 AASB 9 with a corresponding lease Guidance for and AASB 15 to include  Statutory receivables are liability. Not-for-Profit requirements to assist not-for- recognised and measured Entities profit entities in applying the similarly to financial assets In the operating statement, the respective standards to operating lease expense will be AASB 15 particular transactions and replaced by depreciation events.  The “customer” does not expense of the asset and an need to be the recipient of interest charge. goods and/or services;  The “contract” could include There will be no change for an arrangement entered lessors as the classification of into under the direction of operating and finance leases another party; remains unchanged. AASB 17 The new Australian standard 1 January 2021 The assessment has indicated  Contracts are enforceable if Insurance eliminates inconsistencies and that there will be no significant they are enforceable by Contracts weaknesses in existing impact for the public sector. legal or “equivalent means”; practices by providing a  Contracts do not have to single principle-based have commercial substance, framework to account for all only economic substance; types of insurance contracts, and including reissuance contract that an insurer holds. It also  Performance obligations provides requirements for need to be “sufficiently presentation and disclosure to specific” to be able to apply enhance comparability AASB 15 to these between entities. transactions. This standard does not apply to the not-for-profit public sector entities. The AASB is undertaking further outreach to consider the application of this standard to the not-for- profit public sector.

Australian Grand Prix Corporation Annual Report 2018 55 Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 2016-17 Financial  AASB 2017-1 Amendments to Australian Accounting Standards – Transfers of Investment Year Total Property, Annual Improvements 2014-16 Cycle and Other Amendments  AASB 2017-3 Amendments to Australian Accounting Standards – Clarifications to AASB 4  AASB 2017-4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax Prix Prix Future Treatments Grand  AASB 2017-5 Amendments to Australian Accounting Standards – Effective Date of Amendments

to AASB 10 and AASB 128 and Editorial Corrections

 AASB 2017-6 Amendments to Australian Accounting Standards – Prepayment Features with Negative Compensation  AASB 2017-7 Amendments to Australian Accounting Standards – Long-term Interests in 2016 Grand Prix Associates and Joint Ventures Motorcycle  AASB 2018-1 Amendments to Australian Accounting Standards – Annual Improvements 2015 – Year Financial 2016-17

2017 Cycle ®

 AASB 2018-2 Amendments to Australian Accounting Standards – Plan Amendments, Curtailment 2 - - 2 26 - - 26 28 - - 28 895 895 180 - 1,075 or Settlement 2,975 (5,055) 5,619 3,539 6,402 6,402 1,765 - 8,167 1,197 328 - 1,525 5,729 2,027 - 7,756 2,947 (5,055) 5,619 3,512 32,126 32,126 6,952 - 39,078 52,328 4,932 11,185 5,619 62,879 - - 11,185 58,172 11,376 26,539 4,054 - 69,548 10,745 1,755 - 30,593 - 12,500 104,133 14,157 5,619 123,908 101,185 19,211 - 120,397 Grand Prix Formula 1

$000’s $000’s $000’s $000’s 2017 2017

2017-18 Financial Year Total - 13,767 - 3,584 - 42,118 - 19 - 31,822 - 9,477 - 1,170 Prix Future Future Grand - 350 2017 Grand Prix Motorcycle FinancialYear 2017-18 ®

3 - - 3 19 22 - - 22

Grand Prix do not include resources provided and consumed free of charge from Public Transport Victoria relating to the the to Victoria relating Transport from Public of charge free consumed provided and include resources not Prixdo Grand 5,747 2,092 - 7,839 6,716 6,716 - 6,716 - ® 6,243 (5,883) 5,847 6,207 6,243 (5,883) 5,847 2018 970 200 $000’s $000’s $000’s $000’s 34,903 7,215 12,006 1,761 58,421 58,421 5,618 5,847 69,886 7,515 1,962 3,234 28,024 3,798 59,761 59,761 13,577 - 73,338 111,759 111,759 15,345 132,951 5,847 105,538 105,538 21,228 126,766 - 6,221 (5,883) 5,847 6,185 Grand Prix Formula 1

Revenue and Expenses from Ordinary Activities

Income from transactions Sales revenue

Government recurrent* Contributions – Interest Interest revenue income from transactionsTotal Marketing/Promotion and Catering

Sponsorship/Commercial revenue non-recurrentGovernment Contributions – Other operating revenue Engineering**Recurrent Administration*** Total expensesfrom transactions Other economicflows included in net result

Net gain/loss on sale of non-financial assets Net resultNet from transactions(net operating balance) Net gain/loss on financial instruments result Net Expenses from transactions ManagementEvent Staging*** and 2.

* Includes $5,847,000 for recurrent spending on the 2018 Motorcycle Grand Prix received in the 2017-18 financial year (2017: $5,619,000 for the 2017 Motorcycle event) event) Motorcycle 2017 for the $5,619,000 year (2017: financial in the 2017-18 Prix received Motorcycle Grand the 2018 on spending recurrent for $5,847,000 * Includes infrastructure event of servicing dismantle and assembly, the associated with costs ** Includes amortization and depreciation *** Includes 1 Formula the to above relating incomeexpenses and the Note: provision of free public transport. Refer note 22 for further details. details. for further 22 note Refer transport. of public free provision Notes to and Financial Statements Forming Partofthe Notes and to 30 June 2018Financial YearEnded For the

56 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 2016-17 Financial  AASB 2017-1 Amendments to Australian Accounting Standards – Transfers of Investment Year Total Property, Annual Improvements 2014-16 Cycle and Other Amendments  AASB 2017-3 Amendments to Australian Accounting Standards – Clarifications to AASB 4  AASB 2017-4 Amendments to Australian Accounting Standards – Uncertainty over Income Tax Prix Prix Future Treatments Grand  AASB 2017-5 Amendments to Australian Accounting Standards – Effective Date of Amendments

to AASB 10 and AASB 128 and Editorial Corrections

2017 Cycle ®

$000’s $000’s $000’s $000’s 2017 2017

2017-18 Financial Year Total - 13,767 - 3,584 - 19 - 42,118 - 31,822 - 9,477 - 1,170 Prix Future Future Grand - 350 2017 Grand Prix Motorcycle FinancialYear 2017-18 ®

3 - - 3 19 22 - - 22

Grand Prix do not include resources provided and consumed free of charge from Public Transport Victoria relating to the the to Victoria relating Transport from Public of charge free consumed provided and include resources not Prixdo Grand 5,747 2,092 - 7,839 6,716 6,716 - 6,716 - ® 6,243 (5,883) 5,847 6,207 6,243 (5,883) 5,847 2018 970 200 $000’s $000’s $000’s $000’s 34,903 7,215 12,006 1,761 7,515 1,962 58,421 58,421 5,618 5,847 69,886 3,234 28,024 3,798 59,761 59,761 13,577 - 73,338 111,759 111,759 15,345 132,951 5,847 105,538 21,228 126,766 - 6,221 (5,883) 5,847 6,185 Grand Prix Formula 1

Revenue and Expenses from Ordinary Activities

Interest Interest revenue Marketing/Promotion and Catering Sponsorship/Commercial revenue Other operating revenue Engineering**Recurrent 2. Income from transactions Sales revenue Government recurrent* Contributions – non-recurrentGovernment Contributions – income from transactionsTotal Expenses from transactions ManagementEvent Staging*** and Administration*** Total expensesfrom transactions resultNet from transactions(net operating balance) Net gain/loss on financial instruments Net gain/loss on sale of non-financial assets result Other economicflows included in net result Net * Includes $5,847,000 for recurrent spending on the 2018 Motorcycle Grand Prix received in the 2017-18 financial year (2017: $5,619,000 for the 2017 Motorcycle event) event) Motorcycle 2017 for the $5,619,000 year (2017: financial in the 2017-18 Prix received Motorcycle Grand the 2018 on spending recurrent for $5,847,000 * Includes infrastructure event of servicing dismantle and assembly, the associated with costs ** Includes amortization and depreciation *** Includes 1 Formula the to above relating incomeexpenses and the Note: provision of free public transport. Refer note 22 for further details. details. for further 22 note Refer transport. of public free provision Notes to and Financial Statements Forming Partofthe Notes and to 30 June 2018Financial YearEnded For the

Australian Grand Prix Corporation Annual Report 2018 57 58 Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018

3. Expenses from Transactions 2018 2017 2017-18 2017 2016 2016-17 Formula 1® Motorcycle Financial Year Formula 1® Motorcycle Financial Year Grand Prix Grand Prix Total Grand Prix Grand Prix Total $000’s $000’s $000’s $000’s $000’s $000’s Disclosure Items of expenses from transactions included in the comprehensive

operating statement requiring specific disclosure:

Bad and doubtful debts ------

Depreciation and amortisation  Amortisation – intangibles 42 11 53 48 12 60  Depreciation - furniture & 155 51 90 30 120 equipment 206  Depreciation - Grand Prix 1,580 48 1,628 2,979 91 3,070 infrastructure

Loss on impairment of assets 30 - 30 - - - Australian Grand Prix Corporation Annual Report 2018Australian GrandPrixCorporation AnnualReport Employee Benefits  Salaries, wages, annual leave, 7,513 304 7,817 7,029 297 7,326 long service leave  Superannuation contributions* 731 731 620 - 620 -  Termination benefits 154 - 154 112 - 112

Operating lease expenses 839 - 839 818 - 818

Assets provided free of charge to Parks 590 - 590 292 - 292 Victoria

*See Note 23 Superannuation

For the Financial Year Ended 30 June 2018 Statements the Financial Part of andForming to Notes

Total otherfinancial assets Australian term deposits dollar < 3 months Deposits Term atcallCash Australian term deposits dollar > 3 months Term deposits atAs 30 of (2017$0 June 2018, of was thereceivables impaired Corporation recoverable tax GST input Statutory debtors Other 6. hand on Cash 5. 7. follows: as is receivables these of analysis ageing The default. for relatea to amounts whom customers These there is number of of independent recent no history $280,000 (2017: of $1,878,000 debtors trade 2018, June ofAs 30 $0 $0). (2017: is therefore provision statements financial the audit of for Office Auditor-General’s Victorian Total cash anddeposits Current: Current: Less than 60 days debtors Trade Contractual Current: Current:

60 to 120 days Over 120 days days 120 Over receivables current Total activities audit internal for payable or paid Amount Amounts paid or payable topayable the orpaid Amounts 4.

Receivables Receivables Cash andcash equivalents Other financialassets

Auditors’ remuneration Auditors’

) are past due but not impaired. impaired. duepast not but are) $000’s $000’s 14,431 14,431 14,431 $000’s $000’s $000’s $000’s 2018 2018 2018 2018 2018 2018 1,878 280 280 1,878 1,483 2,471 8,502 1,500 7,000 2,260 175 175 220 211

86 84 2 2 - : $0). The amount of the the ofamount : The $0).

2017 2017

$000’s $000’s 19,091 19,091 17,089 $000’s $000’s $000’s $000’s 2017 2017 2017 2017 1,432 1,432 2,000 2,000 2,033 2,033 232 232 542 542 47 59 75 66 1 2 8 - -

Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018

operating statement requiring specific disclosure:

Bad and doubtful debts ------

Loss on impairment of assets 30 - 30 - - -

Employee Benefits  Salaries, wages, annual leave, 7,513 304 7,817 7,029 297 7,326 long service leave  Superannuation contributions* 731 731 620 - 620 -  Termination benefits 154 - 154 112 - 112

Operating lease expenses 839 - 839 818 - 818

Assets provided free of charge to Parks 590 - 590 292 - 292 Victoria

*See Note 23 Superannuation

Australian Grand Prix Corporation Annual Report 2018Australian GrandPrixCorporation AnnualReport For the Financial Year Ended 30 June 2018 Statements the Financial Part of andForming to Notes

Total otherfinancial assets Australian term deposits dollar < 3 months Deposits Term atcallCash Cash on hand hand on Cash Australian term deposits dollar > 3 months Term deposits recoverable tax GST input Statutory debtors Other 7. follows: as is receivables these of analysis ageing The default. for relatea to amounts whom customers These there is number of of independent recent no history $280,000 (2017: of $1,878,000 debtors trade 2018, June ofAs 30 $0 $0). (2017: is therefore provision atAs 30 of (2017$0 June 2018, of was thereceivables impaired Corporation 6. 5. statements financial the audit of for Office Auditor-General’s Victorian Total cash anddeposits Current: Current: Less than 60 days debtors Trade Contractual Current: Current: 60 to 120 days Over 120 days days 120 Over receivables current Total activities audit internal for payable or paid Amount Amounts paid or payable topayable the orpaid Amounts 4.

Other financialassets Receivables Cash andcash equivalents Auditors’ remuneration Auditors’

) are past due but not impaired. impaired. duepast not but are) $000’s $000’s 14,431 14,431 14,431 $000’s $000’s $000’s $000’s 2018 2018 2018 2018 2018 2018 2018 8,502 1,500 7,000 1,878 280 280 1,878 1,483 2,471 2,260 211 211 175 175 220

86 84 2 2 - : $0). The amount of the the ofamount : The $0).

2017 2017

$000’s $000’s 19,091 19,091 17,089 $000’s $000’s $000’s $000’s 2017 2017 2017 2017 1,432 1,432 2,000 2,000 2,033 2,033 232 232 542 542 59 75 66 47 2 8 1 - -

59 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

8. Infrastructure, plant and equipment Gross carrying amount and accumulated depreciation

(a) Classification by ‘Public safety and environment’ purpose group – movements in carrying Gross carrying Accumulated Net carrying amounts amount depreciation amount Furniture and Grand Prix 2018 2017 2018 2017 2018 2017 equipment at fair infrastructure at fair $’000s $’000s $’000s $’000s $’000s $’000s value value Work in Progress Total 2018 2017 2018 2017 2018 2017 2018 2017 Furniture and equipment at fair value 2,878 2,327 (2,396) (2,198) 482 129 $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s Grand Prix infrastructure at fair value 17,021 15,004 (4,090) (3,126) 12,931 11,878 Opening Work in Progress 370 1,050 - - 370 1,050 balance 129 242 11,878 13,982 1,050 40 13,057 14,264 20,269 18,380 (6,486) (5,324) 13,783 13,057 Additions 150 7 2,164 - 866 2,268 3,180 2,275 Disposals (7) - (437) (7,309) - - (444) (7,309) (b) Fair value measurement hierarchy for assets as at 30 June 2018 Revaluation of Grand Prix ------Carrying amount Fair value measurement at end of Infrastructure as at 30 June 2018 reporting period using: Transfer to Parks Victoria - - - - (590) (292) (590) (292) Level 1** Level 2** Level 3** $’000s $’000s $’000s $’000s Transfer in/out of WIP 409 - 547 966 (956) (966) - - Furniture and Equipment 482 - - 482 Depreciation (206) (120) (1,628) (3,070) - - (1,834) (3,190) GP Infrastructure 12,931 - - 12,931 Impairment - - (30) - - - (30) - Closing balance 13,413 - - 13,413 Write back of accumulated 7 - 437 7,309 - - 444 7,309 Carrying amount Fair value measurement at end of depreciation as at 30 June 2017 reporting period using: Closing 482 129 12,931 11,878 370 1,050 13,783 13,057 balance Level 1** Level 2** Level 3** $’000s $’000s $’000s $’000s

Classification by ‘Purpose Group’ – Carrying amount* Furniture and Equipment 129 - - 129 2018 2017 GP Infrastructure 11,878 - - 11,878 Public safety and environment $’000s $’000s Closing balance 12,007 - - 12,007

Furniture and Equipment – at fair value 482 129 **Classified in accordance with fair value hierarchy, see Note 1(b).

Grand Prix infrastructure – at fair value 12,931 11,878 There have been no transfers between levels during the year. Work in Progress 370 1,050 Net carrying amount of infrastructure, 13,783 13,057 There were no changes in valuation techniques throughout the year. (Note: the Valuer General plant and equipment Victoria is the Corporation’s independent valuation agency and is used wherever valuations are required.) *Infrastructure, plant and equipment are classified primarily by the ‘purpose’ for which the assets are used, according to one of six purpose groups based upon government purpose classifications (GPC). All assets within For all assets measured at fair value, the current use is considered the highest and best use. a purpose group are further sub categorised according to the asset’s nature (i.e. buildings, plant and equipment, etc.) with each sub category being classified as a separate class for financial reporting purposes.

60 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

8. Infrastructure, plant and equipment Gross carrying amount and accumulated depreciation

Furniture and Equipment – at fair value 482 129 **Classified in accordance with fair value hierarchy, see Note 1(b).

Australian Grand Prix Corporation Annual Report 2018 61 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

2018 2017 Computer software Work in Progress Total Furniture and Grand Prix Furniture and Grand Prix 2018 2017 2018 2017 2018 2017 equipment Infrastructure equipment Infrastructure $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s $’000s Opening balance 83 143 19 9 102 152 Opening balance 129 11,878 242 13,982 Additions 35 - (9) 10 27 10 Disposals ------Additions/(disposals) 552 2,274 7 (6,343) Transfers 10 - (10) - - - Transfers in/(out) of Level 3 - - - - Gains or losses recognised in Closing balance 128 143 - 19 129 162 - - - - net result Amortisation (53) (60) - - (53) (60) Depreciation (199) (1,191) (120) 4,239 Closing balance 75 83 - 19 76 102 Impairment losses - (30) - - Sub-total 482 12,931 129 11,878 Significant intangible assets

Gains or losses recognised in other economic flows – other comprehensive income The cost of the Corporation’s website, Customer Relationship Management system and accounting Revaluation - - - 7,520 system have been capitalised and will be fully amortised by 2019, when replacement of these assets Sub-total - - - 7,520 will be assessed. The carrying amount of these significant assets is $32,782 (2017: $83,000). Closing balance 482 12,931 129 11,878

10. Payables

Infrastructure assets are valued using the current replacement cost method. Replacement costs relate Current: 2018 2017 to costs to replace the current service capacity of the asset. Economic obsolescence has also been Contractual $000’s $000’s factored into the current replacement cost calculation. Supplies and other services 4,121 3,209

Furniture and equipment is held at fair value. When furniture and equipment is specialised in use, such Statutory that it is rarely sold other than as part of a going concern, fair value is determined using the current GST payable 32 - replacement cost method. FBT payable 63 63

Other taxes payable - - For all assets measured at fair value, the current use is considered the highest and best use. Total current payables 4,216 3,272

technique unobservable measurement to changes in (b) Nature and extent of risks arising from contractual payables inputs significant unobservable inputs Refer to Note 15 for the nature and extent of risks arising from contractual payables Plant and Current Cost per unit $500-$750,000 A significant increase or decrease equipment replacement per unit in cost per unit would result in a cost significantly higher or lower fair value.

Useful life of 3 - 5 years A significant increase or decrease plant and in the estimated useful life of the equipment asset would result in a significantly higher or lower valuation.

Infrastructure Current Cost per unit $500-$464,000 A significant increase or decrease replacement per unit in cost per unit would result in a cost significantly higher or lower fair value.

Useful life of 3 - 50 years A significant increase the or decrease in the estimated infrastructure useful life of the asset would result in a significantly higher or lower valuation.

62 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

10. Payables

Other taxes payable - - For all assets measured at fair value, the current use is considered the highest and best use. Total current payables 4,216 3,272

Description of significant unobservable inputs to Level 3 valuations for 2018: (a) Maturity analysis of contractual payables Please refer to Note 15 for maturity analysis of contractual payables Valuation Significant Range Sensitivity of fair value technique unobservable measurement to changes in (b) Nature and extent of risks arising from contractual payables inputs significant unobservable inputs Refer to Note 15 for the nature and extent of risks arising from contractual payables Plant and Current Cost per unit $500-$750,000 A significant increase or decrease equipment replacement per unit in cost per unit would result in a cost significantly higher or lower fair value.

Useful life of 3 - 5 years A significant increase or decrease plant and in the estimated useful life of the equipment asset would result in a significantly higher or lower valuation.

Infrastructure Current Cost per unit $500-$464,000 A significant increase or decrease replacement per unit in cost per unit would result in a cost significantly higher or lower fair value.

Useful life of 3 - 50 years A significant increase the or decrease in the estimated infrastructure useful life of the asset would result in a significantly higher or lower valuation.

Australian Grand Prix Corporation Annual Report 2018 63 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

11. Provisions 13. Derivatives 2018 2017 2018 2017 $’000s $’000s $’000s $’000s Current provisions Foreign exchange forward contract assets - Current 7,271 5,964 Employee benefits* – annual leave: Foreign exchange forward contract assets - Non Current 6,409 10,865 Unconditional and expected to settle within 12 months 416 365 Total Foreign exchange forward contract assets 13,680 16,829 Unconditional and expected to settle after 12 months - - Foreign exchange forward contract liabilities - Current (13) (237) Employee benefits* – long service leave: Foreign exchange forward contract liabilities - Non Current (22,206) (20,945) Unconditional and expected to settle after 12 months** 312 282 Total Foreign exchange forward contract liabilities (22,219) (21,182) Total employee benefits 728 647

Total Foreign exchange forward contracts (8,539) (4,353) Provision related to employee benefit on-costs: Unconditional and expected to settle within 12 months 81 71 Unconditional and expected to settle after 12 months 51 46 Total employee benefit on-costs 132 117 Foreign exchange contracts were entered into at the request of the Victorian Government’s Department of Treasury and Finance and are held with Treasury Corporation of Victoria.

Total current provisions 860 764 14. Equity

2018 2017 Non-current provisions Employee benefits - long service leave ** 53 55 $’000s $’000s Employee benefit on-costs 9 9 (a) Contributed Capital Total Non-Current Provisions 62 64 Contributed Capital at the beginning of the year 10,739 10,739 Contributed Capital at the end of the year 10,739 10,739 Total provisions 922 829 (b) Cashflow hedge reserve * Provisions for employee benefits consist of amounts for annual leave and long service leave accrued by Reserve at the beginning of the year (4,312) 26,336 employees, not including on-costs. Change in fair value of derivatives recognised through cash (4,200) (30,648) ** Employee benefit amounts disclosed are discounted to present values. flow hedge reserve Reserve at the end of the year (8,512) (4,312) (b) Movement in provisions Employee benefits On-costs Total

(c)Asset revaluation reserve 2018 2018 2018 Reserve at the beginning of the year 10,744 10,744 $’000s $’000s $’000s Write back on disposal of assets (669) - Opening balance 703 126 829 Net movement in provision 78 15 93 Reserve at the end of year (10,075) 10,744 Closing balance 781 141 922 (d) Accumulated surplus Current 728 132 860 Accumulated surplus at the beginning of the year 3,225 (314) Non-current 53 9 62 Current year net surplus 6,207 3,539 781 141 922 Transfers from Asset Revaluation Reserve 669 - Accumulated surplus at the end of the year 10,101 3,225

12. Deferred income 2018 2017 $’000s $’000s Current: Advance commercial income 160 719 Income received in advance 4,787 6,584 4,947 7,303

64 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Total current provisions 860 764 14. Equity

12. Deferred income 2018 2017 $’000s $’000s Current: Advance commercial income 160 719 Income received in advance 4,787 6,584 4,947 7,303

Australian Grand Prix Corporation Annual Report 2018 65 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

15. Financial instruments 2017 Contractual Contractual Contractual Total

financial financial assets financial The Corporation’s financial instruments comprise of: assets/liabilities – loans and liabilities at  Cash assets; designated at receivables and amortised cost  Term deposits; fair value or cash  Receivables; held for trading  Payables; and $’000s $’000s $’000s $’000s  Derivatives Contractual financial assets:

Cash and deposits - 19,091 - 19,091 Details of the significant accounting policies and methods adopted, including the criteria for Other financial assets - - - - recognition, the basis of measurement, and the basis on which income and expenses are Receivables: * recognised, with respect to each class of financial asset, financial liability and equity instrument are Trade and other debtors - 1,448 - 1,448 disclosed in Note 1 to the financial statements. Financial derivatives 16,829 - - 16,829

Total contractual financial The main purpose in holding financial instruments is to prudentially manage the Corporation’s financial assets 16,829 20,539 - 37,368 risks within government policy parameters. Contractual financial

The Corporation’s activities expose it to a variety of financial risks including interest rate risk, foreign liabilities: exchange risk, liquidity risk and credit risk. The Corporation manages these financial risks in Trade and other payables - - 3,209 3,209 Financial derivatives 21,182 - - 21,182 accordance with the financial risk policy. The Corporation uses different methods to measure different types of risk to which it is exposed. Primary responsibility for the identification and management of Total contractual financial financial risks rests with the Audit, Finance and Risk Committee of the Corporation. liabilities 21,182 - 3,209 24,391

(a) Categorisation of financial instruments * The total amounts disclosed here exclude statutory amounts (e.g. amounts owing from Victorian Government and GST input tax credit recoverable and taxes payable).

2018 Contractual Contractual Contractual Total (b) Net holding gain/(loss) on financial instruments by category financial financial assets financial

assets/liabilitie – loans and liabilities at 2018 Net holding Total interest Total s designated receivables amortised cost gain/(loss) income at fair value or and cash $’000s $’000s $’000s held for trading Contractual financial assets $’000s $’000s $’000s $’000s Financial assets – loans, receivables and other - 1,170 1,170 Contractual financial assets: Financial assets – derivatives (4,200) - (4,200) Cash and cash equivalents - 8,502 - 8,502 Hedge ineffectiveness 14 - 14 Other financial assets - 14,431 - 14,431 Other 5 - 5 Receivables: * Trade and other debtors - 2,471 - 2,471 Total contractual financial assets (4,181) 1,170 (3,011) Financial derivatives 13,680 - - 13,680 Total contractual financial 2017 Net holding Total interest Total assets 13,680 25,404 - 39,084 gain/(loss) income $’000s $’000s $’000s Contractual financial Contractual financial assets liabilities: Financial assets – loans, receivables and other - 1,075 1,075 Trade and other payables - - 4,121 4,121 Financial assets – derivatives (30,648) - (30,648) Financial derivatives 22,219 - - 22,219 Hedge ineffectiveness (7) - (7) Total contractual financial Other 33 - 33 liabilities 22,219 - 4,121 26,340 Total contractual financial assets (30,622) 1,075 (29,547)

The net holding gains and losses disclosed above are determined as follows:

 for cash and cash equivalents, loans, receivables and other financial assets, the net gain or loss is calculated by taking the movement in the fair value of the asset, the interest income, plus or minus foreign exchange gains or losses arising from revaluation of financial assets, and minus any impairment recognised in the net result.

66 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

15. Financial instruments 2017 Contractual Contractual Contractual Total

2018 Contractual Contractual Contractual Total (b) Net holding gain/(loss) on financial instruments by category financial financial assets financial assets/liabilitie – loans and liabilities at 2018 Net holding Total interest Total s designated receivables amortised cost gain/(loss) income at fair value or and cash $’000s $’000s $’000s held for trading Contractual financial assets $’000s $’000s $’000s $’000s Financial assets – loans, receivables and other - 1,170 1,170 Contractual financial assets: Financial assets – derivatives (4,200) - (4,200) Cash and cash equivalents - 8,502 - 8,502 Hedge ineffectiveness 14 - 14 Other financial assets - 14,431 - 14,431 Other 5 - 5 Receivables: * Trade and other debtors - 2,471 - 2,471 Total contractual financial assets (4,181) 1,170 (3,011) Financial derivatives 13,680 - - 13,680 Total contractual financial 2017 Net holding Total interest Total assets 13,680 25,404 - 39,084 gain/(loss) income $’000s $’000s $’000s Contractual financial Contractual financial assets liabilities: Financial assets – loans, receivables and other - 1,075 1,075 Trade and other payables - - 4,121 4,121 Financial assets – derivatives (30,648) - (30,648) Financial derivatives 22,219 - - 22,219 Hedge ineffectiveness (7) - (7) Total contractual financial Other 33 - 33 liabilities 22,219 - 4,121 26,340 Total contractual financial assets (30,622) 1,075 (29,547)

The net holding gains and losses disclosed above are determined as follows:

Australian Grand Prix Corporation Annual Report 2018 67 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(c) Credit risk The Corporation’s exposure to liquidity risk is deemed insignificant based on prior periods’ data and current assessment of risk. Adequate controls and processes are in place to ensure sufficient cash is Credit risk arises from contractual financial assets of the Corporation, which comprise cash and available when debts fall due. deposits, non-statutory receivables, and derivative instruments. Credit risk represents the loss that would be recognised if counterparties failed to perform as contracted. Credit risk is measured at fair The following table discloses the contractual maturity analysis for the Corporation’s contractual value and is monitored on a regular basis. financial liabilities.

Credit risk associated with the Corporation’s contractual financial assets is minimal because the main Maturity analysis of contractual financial liabilities debtor is the Victorian Government. For debtors other than government, it is the Corporation’s policy to only deal with creditworthy counterparties. Credit risk is controlled through the Corporation’s risk Carrying Nominal management policies which deal with credit exposure limits and counterparty limits (refer Note 6). amount Amount Maturity dates Less than 1 1 – 3 3 months – Provision of impairment for contractual financial assets is recognised when there is objective evidence month months 1 year that the Corporation will not be able to collect a receivable. Objective evidence includes financial $’000s $’000s $’000s $’000s $’000s difficulties of the debtor, default payments, debts which are more than 60 days overdue, and changes in debtor credit ratings. 2018 Payables 4,121 4,121 3,254 854 13

The maximum credit risk exposure on foreign currency contracts is the full amount of the foreign 2017 Payables 3,209 3,209 3,015 158 36 currency the Corporation pays when settlement occurs should the counterparty fail to pay the amount which it is committed to pay to the Corporation. (e) Market risk

As the Corporation transacts all foreign currency contracts with the Treasury Corporation of Victoria The Corporation’s exposures to market risk are primarily through foreign currency risk and interest rate the credit risk is minimal. risk. Objectives, policies and processes used to manage each of these risks are disclosed below.

Credit quality of contractual financial assets that are neither past due nor impaired Foreign currency risk

Government Financial The Corporation has entered into forward foreign exchange contracts and foreign exchange options Agencies institutions to hedge certain commitments denominated in US dollars. These contracts extend to 2026. Current Triple-A Double-A Other derivatives relate to forward contracts that fall due within the next 12 months and non-current credit rating credit rating Credit rating Total derivatives relate to forward contracts that fall due after this date. 2018 $’000s $’000s $’000s $’000s Cash and cash equivalents 1,500 7,000 2 8,502 These forward foreign exchange contracts have been entered into with full compliance of guidelines Receivables - - 2,471 2,471 from, and with the approval of, the Treasurer of Victoria in accordance with the requirements of Other financial assets 14,431 - - 14,431 Section 24(2) of the Australian Grands Prix Act 1994. Total contractual financial assets 15,931 7,000 2,473 25,404 The Corporation has not disclosed the gross value payable and receivable under the foreign currency 2017 contracts and is exempted from doing so under Section 49 of the Australian Grands Prix Act 1994. Cash and deposits 12,305 6,784 2 19,091 Disclosure of this information would constitute a breach of the international agreements as defined in Receivables 542 - 1,448 1,990 Note 26. Other financial assets - - - - Total contractual financial assets 12,847 6,784 1,450 21,081 The Corporation’s sensitivity to foreign currency movements is set out below.

(d) Liquidity risk -15% +15% Carrying amount Net Result Net Result 2018 Liquidity risk arises when the Corporation is unable to meet its financial obligations as they fall due. The $’000s $’000s $’000s Corporation operates under the Government fair payments policy of settling financial obligations Derivative Assets 13,680 36,530 (13,361) within 30 days and in the event of a dispute, make payments within 30 days from the date of resolution. Derivative Liabilities (22,219) 22,088 (31,118) Total Derivatives (8,539) 58,618 (44,479) The Corporation manages its liquidity risk by:

 maintaining an adequate level of uncommitted funds that can be drawn at short notice to meet -15% +15% its short-term obligations; and Carrying amount Net Result Net Result 2017 $’000s $’000s $’000s  careful maturity planning of financial obligations based on forecasts of future cash flows. Derivative Assets 16,829 46,315 (16,829) Derivative Liabilities (21,182) 21,182 (30,969) Total Derivatives (4,353) 67,496 (47,797)

68 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Credit quality of contractual financial assets that are neither past due nor impaired Foreign currency risk

Australian Grand Prix Corporation Annual Report 2018 69 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Interest rate risk

2017 Interest rate exposure The Corporation has an interest rate risk with respect of monies held on account and on term deposit Weighted Carrying Fixed interest Variable Non- interest with the bank (at floating interest rate) and Treasury Corporation of Victoria (at fixed and floating average amount rate interest rate Bearing interest rates). effective $’000s $’000s $’000s

interest rate $’000s The Corporation manages this risk by mainly undertaking fixed rate financial instruments with relatively % even maturity profiles, with only minimised amounts of financial instruments at floating rates. The

Corporation has concluded that these financial assets can be left at floating interest rates without Financial assets exposing the Corporation to significant bad risk. The Corporation monitors movements in interest rates Cash at bank 1.44% 17,089 - 17,089 - on a regular basis. Cash on deposit

< 90 days 1.70% 2,000 2,000 - - The Corporation does not have any material interest rate risk in respect of financial liabilities. > 90 days - - - - -

Receivables - 1,448 - - 1,448 The Corporation’s exposure to interest rate risk is set out following: Derivatives - 16,829 - - 16,829

Total financial 2018 Interest rate exposure assets 37,366 2,000 17,089 18,277 Weighted Carrying Fixed interest Variable Non- average amount rate interest rate interest Financial liabilities effective $’000s $’000s $’000s Bearing Payables - 3,209 - - 3,209 interest rate $’000s Derivatives - 21,182 21,182 % Total financial Financial assets liabilities - 24,391 - - 24,391 Cash at bank 1.32% 7,000 - 7,000 - Cash on deposit (f) Sensitivity disclosure analysis < 90 days 1.78% 1,500 1,500 - - > 90 days 1.78% 14,431 14,431 - - The Corporation’s sensitivity to market risk is determined based on the observed range of actual Receivables 2,471 - - 2,471 historical data for the preceding five year period, with all variables other than the primary risk variable Derivatives 13,680 - - 13,680 held constant. Taking into account past performance, future expectations, economic forecasts, and Total financial management’s knowledge and experience of financial markets, the Corporation believes the assets 39,082 15,931 7,000 16,151 following movements are reasonably possible over the next 12 months (base rates are sourced from Treasury Corporation of Victoria): a parallel shift of +1.0 per cent and -1.0 per cent in the market interest rates from year-end rates. Financial liabilities

Payables - 4,121 - - 4,121 The impact on net operating result and equity for each category of financial instrument, other than Derivatives - 22,219 - - 22,219 derivatives, held by the Corporation at year-end as presented to key management personnel, if the Total financial above movements were to occur, is immaterial for the 2017 and 2018 years. For financial derivatives, liabilities - 26,340 - - 26,340 the Corporation is exempt from disclosing gross values (refer Note 15 (e)).

(g) Fair value

Valuation approach The fair values and net fair values of financial instrument assets and liabilities are determined as follows:

 Level 1 – the fair value of financial instruments with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;

 Level 2 – the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and

 Level 3 – the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

70 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Interest rate risk

< 90 days 1.70% 2,000 2,000 - - The Corporation does not have any material interest rate risk in respect of financial liabilities. > 90 days - - - - -

Receivables - 1,448 - - 1,448 The Corporation’s exposure to interest rate risk is set out following: Derivatives - 16,829 - - 16,829

market interest rates from year-end rates. Financial liabilities

(g) Fair value

Valuation approach The fair values and net fair values of financial instrument assets and liabilities are determined as follows:

 Level 1 – the fair value of financial instruments with standard terms and conditions and traded in active liquid markets are determined with reference to quoted market prices;

 Level 2 – the fair value is determined using inputs other than quoted prices that are observable for the financial asset or liability, either directly or indirectly; and

 Level 3 – the fair value is determined in accordance with generally accepted pricing models based on discounted cash flow analysis using unobservable market inputs.

Australian Grand Prix Corporation Annual Report 2018 71 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

The Corporation considers that the carrying amount of financial instrument assets and liabilities 19. Cash flow information recorded in the financial statements is a fair approximation of their fair values because of the short- term nature of the financial instruments and the expectation that they will be paid in full. Reconciliation of net results for the year to net cash flows from operating activities:

Off – Balance Sheet financial instruments 2018 2017 $000’s $000’s The Corporation has not disclosed the net fair value payable for forward future commitments under Net Result for the Year 6,207 3,539 foreign exchange forward contracts and is exempted from doing so under Section 49 of the Australian Non-cash movements Grands Prix Act 1994. Disclosure of this information would constitute a breach of the international Capital works transferred to Parks Victoria 590 292 agreements as defined in Note 26. (Gain)/loss on sale of non-current assets (3) (2) Depreciation and amortisation of non-current assets 1,886 3,250 16. Leases Impairment of non-current assets 30 -

an option to extend up to a further 3 years. The lease of the storage yard will expire on 30 June 2025. Movements in assets and liabilities All operating lease contracts contain market review clauses in the event that the Corporation Decrease/(Increase) in receivables and prepayments (376) (1,999) exercises its option to renew. The lessees do not have an option to purchase the property at the expiry (Decrease)/Increase in payables 988 533 of the lease period. (Decrease)/Increase in provisions 93 64

(Decrease)/Increase in deferred income (2,356) 3,680 2018 2017 Net cash flows from/(used in) operating activities 7,040 9,330 $000’s $000’s

Operating leases relate to office and storage facilities Non-cancellable operating leases payable: 20. Responsible persons  Not longer than one year 1,047 790  Longer than one year but not longer than five years 2,897 2,769 (a) Responsible persons  Longer than five years 849 1,248 4,793 4,807 Persons who hold the position of Responsible Persons in relation to the Corporation during the year are: 17. Commitments for expenditure Responsible Minister - The Honourable John Eren MP, Minister for Tourism and Major Events The Corporation has commitments associated with foreign exchange forward contracts (refer Note 14). The Corporation has not disclosed the gross value payable and receivable under the foreign Accountable Officer - Mr Andrew Westacott 1 July 2017 to 30 June 2018 currency contracts and is exempted from doing so under Section 49 of the Australian Grands Prix Act 1994. Members of the Board - Mr John Harnden AM (Chair) 1 July 2017 to 30 June 2018 - Ms Gillian Franklin (Deputy Chair) 1 July 2017 to 30 June 2018 - Ms Laura Anderson 1 July 2017 to 30 June 2018 18. Contingent Assets and Liabilities - Ms Kimberly Brown 22 November 2017 to 30 June 2018 There are no contingent assets or liabilities for the year ended 30 June 2018 (2017: Nil) - Mr Michael Doohan AM 1 July 2017 to 30 June 2018 - Mr Mark Green 1 July 2017 to 10 January 2018 - Ms Kate Lundy 1 July 2017 to 30 June 2018 - Mr Alan Oxley 1 July 2017 to 1 November 2017 - Mr Trent Smyth 1 July 2017 to 30 June 2018 - Mr Mark Webber AO 22 November 2017 to 30 June 2018

(b) Remuneration of responsible persons

Members of the Board act in an honorary capacity.

The total remuneration package of the Accountable Officer, including superannuation contributions, in connection with the management of the Corporation during the reporting period was in the range $500,000 – $509,999 (2017: $450,000 – $459,999). The remuneration of the Responsible Minister is reported within the Department of Parliamentary Services financial report.

72 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Provision of doubtful debts - - Operating leases relate to office accommodation and storage facilities and equipment. The lease Net gain/loss on financial instruments (19) (26) relating to office accommodation has been executed with a term of 5 years to 31 March 2021 with an option to extend up to a further 3 years. The lease of the storage yard will expire on 30 June 2025. Movements in assets and liabilities All operating lease contracts contain market review clauses in the event that the Corporation Decrease/(Increase) in receivables and prepayments (376) (1,999) exercises its option to renew. The lessees do not have an option to purchase the property at the expiry (Decrease)/Increase in payables 988 533 of the lease period. (Decrease)/Increase in provisions 93 64

(Decrease)/Increase in deferred income (2,356) 3,680 2018 2017 Net cash flows from/(used in) operating activities 7,040 9,330 $000’s $000’s

(b) Remuneration of responsible persons

Members of the Board act in an honorary capacity.

Australian Grand Prix Corporation Annual Report 2018 73 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

(c) Other transactions of responsible persons and their related entities  Victoria Auditor-Generals Office (VAGO);  Victorian Managed Insurance Authority (VMIA); and A total of 16 tickets (retail value: $36k ex. GST) for the 2018 Formula 1® Grand Prix (2017: 80 tickets)  Country Fire Authority and 15 tickets (retail value: $4k ex. GST) for the 2017 Motorcycle Grand Prix (2016: 106 tickets) were either used by Responsible Persons free of charge or were provided to entities related The Corporation has identified the following person/s to be Key Management Personnel: to Responsible Persons under contractual obligations.  Board members of the Corporation; 21. Executive officer remuneration  The Accountable Officer; and  General managers The number of executive officers, other than ministers and accountable officers, and their total remuneration during the reporting period are shown in the table below. Total annualised employee All related party transactions have been entered into on an arm’s length basis. equivalents provides a measure of full time equivalent executive officers over the reporting period. The compensation detailed below excludes the salaries and benefits the Portfolio Minister receives. Remuneration comprises employee benefits in all forms of consideration paid, payable or provided The Minister’s remuneration and allowances is set by the Parliamentary Salaries and Superannuation by the entity, or on behalf of the entity, in exchange for services rendered, and is disclosed in the Act 1968 and is reported within the Department of Parliamentary Services’ Financial Report. following categories. 2018 2017 Short-term employee benefits include amounts such as wages, salaries, annual leave or sick leave Compensation of KMPs $’000s $’000s that are usually paid or payable on a regular basis, as well as non-monetary benefits such as Short-term employee benefits 1,727 1,875 allowances and free or subsidised goods or services. Post-employment benefits 156 183 Other long-term benefits 41 46 Post-employment benefits include pensions and other retirement benefits paid or payable on a Termination benefits - - discrete basis when employment has ceased. Share-based payments - - Total remuneration(a) 1,924 2,103 Other long-term benefits include long service leave, other long service benefits or deferred compensation. (a) Note that KMPs are also reported in the disclosure of remuneration of executive officers (Note 21).

Significant transactions with government-related entities Remuneration of executive officers Total remuneration (including Key Management Personnel disclosed in Note 24) 2018 2017 The Australian Grand Prix Corporation received funding of $81.2 million (2017: $84.3 million), from the $’000’s $’000’s Department of Economic Development, Jobs, Transport and Resources. Short-term employee benefits 1,277 1,412 Post-employment benefits 112 142 The Australian Grand Prix Corporation also has a term deposit with the Treasury Corporation of Victoria. Other long-term benefits 29 35 The balance of this term deposit as at 30 June 2018 is reported in Note 5. Total remuneration(a) 1,418 1,589 Total number of executives 5 8 The Australian Grand Prix Corporation has an arrangement with Public Transport Victoria (PTV) for the Total annualised employee equivalents(b) 4.9 6.7 provision of free tram shuttle services from the City to the Albert Park Grand Prix Circuit for patrons attending the Formula 1® Grand Prix. PTV receive a payment of $800,000 directly from the Department (a) The total number of executive officers includes persons who meet the definition of Key Management of Treasury and Finance for this arrangement. Personnel (KMP) of the entity under AASB 124 Related Party Disclosures and are also reported within the related parties note disclosure (Note 22). Transactions and balances with key management personnel and other related parties

(b) Annualised employee equivalent is based on the time fraction worked over the reporting period. During the financial year, in respect of the Formula 1® Grand Prix and the Australian Motorcycle Grand Prix, the Corporation entered into the following types of transactions with related parties, entities of 22. Related party transactions which Key Management Personnel of the Corporation are Directors, and entities related to Key Management Personnel including entities under the significant influence or control of people directly The Australian Grand Prix Corporation (Corporation) is a wholly owned and controlled entity of the related to the Key Management Personnel: State of Victoria. Related parties of The Australian Grand Prix Corporation include: Ticket sales (Corporate Hospitality / Grandstand / General Admission)  all key management personnel and their close family members and personal business interests  Ferrari Club Australia (Trent Smyth) (controlled entities, joint ventures and entities they have significant influence over);  the Portfolio Minister, the Hon. John Eren MP and close family members; Expenditure  the Department of Economic Development, Jobs, Transport and Resources (DEDJTR);  Victoria Police  the Department of Premier and Cabinet (DPC);  Ambulance Service Victoria  Public Transport Victoria (PTV);  VMIA  Department of Treasury and Finance (DTF);  APP Corporation Pty Ltd (Ashley Davies)  Victoria Police;  Ambulance Service Victoria;

74 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

Australian Grand Prix Corporation Annual Report 2018 75 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

The above transactions were entered into under normal trading terms and conditions. Total 26. Economic dependency aggregate ticket sales were $0.4 million, and total aggregate expenditure was $3.9 million. The ongoing activities of the Corporation are dependent upon the Corporation being able to exercise 23. Superannuation its rights and perform its obligations under the Australian Grands Prix Act 1994 and the continued existence of certain contracts with international bodies concerning the staging of the Formula 1® Employees of the Corporation are entitled to receive superannuation benefits. Superannuation Grand Prix at Albert Park and the staging of the Motorcycle Grand Prix at Phillip contributions are included as part of employee benefits in the comprehensive operating statement Island. The contract in respect of the Formula 1® Grand Prix runs until 2023. The contract in respect of of the Corporation. the Motorcycle Grand Prix runs until 2026.

Contributions were made on behalf of employees to IOOF Superannuation (the Corporation’s The Corporation is economically dependent upon funding from the Victorian State Government. employer nominated fund), or to a superannuation fund nominated by the employee. These contributions are based on the requirements of the Superannuation Guarantee (Administration) Act 1992 and its regulations. This fund is an accumulation type fund. The Corporation therefore has no exposure to any unfunded liabilities.

Paid Contribution for the year Contribution outstanding at year end 2018 2017 2018 2017 $’000s $’000s $’000s $’000s Defined contribution plans: IOOF Superannuation 170 208 - - HostPlus 105 61 - - Australian Super 42 51 - - Other* 338 313 - - Total 655 633 - -

*None of the individual superannuation funds under ‘Other’ had an amount exceeding $50,000 contributed to them.

The superannuation amount of $654,869 for 2017-18 is less than the defined contribution superannuation expense disclosed at Note 3 ($731,306) by $76,437. This relates to an amount provided for in the 2017-18 financial year in relation to accrued wages and salaries.

The superannuation amount of $632,806 for 2016-17 exceeds the defined contribution superannuation expense disclosed at Note 3 ($620,203) by $12,603. This relates to an amount provided for in the 2015-16 financial year in relation to accrued wages and salaries.

Contributions were also made to 37 other eligible superannuation funds where employees exercised a choice of fund. This was in accordance with the statutory superannuation contribution rate of 9.5% (2017: 9.5%).

24. Ex-gratia expenses

2018 2017 $’000s $’000s Employment Termination Payment 2 6 Total ex-gratia expenses 2 6

25. Events subsequent to balance date

There has not arisen in the interval between the end of the financial year and the date of signing these financial statements, any item, transactions or event of a material and unusual nature likely to affect significantly the operations of the Corporation, the results of those operations, or the state of affairs of the Corporation, in subsequent financial years.

76 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

*None of the individual superannuation funds under ‘Other’ had an amount exceeding $50,000 contributed to them.

24. Ex-gratia expenses

2018 2017 $’000s $’000s Employment Termination Payment 2 6 Total ex-gratia expenses 2 6

25. Events subsequent to balance date

Australian Grand Prix Corporation Annual Report 2018 77 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

27. Glossary of terms Financial liability

Amortisation A financial liability is any liability that is:

Amortisation is the expense which results from the consumption, extraction or use over time of a non- (a) A contractual obligation: produced physical or intangible asset. This expense is classified as an ‘other economic flow’. i. To deliver cash or another financial asset to another entity; or ii. To exchange financial assets or liabilities with another entity under conditions that are Commitments potentially unfavourable to the entity; or

Commitments include those operating, capital and other outsourcing commitments arising from (b) A contract that will or may be settled in the entity’s own equity instruments and is: non-cancellable contractual or statutory sources. i. A non-derivative for which the entity is or may be obliged to deliver a variable number of the entity’s own equity instruments; or Comprehensive result ii. A derivative that will or may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments. For this Total comprehensive result is the change in equity for the period other than changes arising from purpose, the entity’s own equity instruments do not include instruments that are themselves transactions with owners. It is the aggregate of net result and other non-owner changes in equity. contracts for the future receipt or delivery of the entity’ own equity instruments.

Depreciation Financial statements

Depreciation is an expense that arises from the consumption through wear or time of a produced Depending on the context of the sentence where the term ‘financial statements’ is used, it may physical or intangible asset. This expense is classified as a ‘transaction’ and so reduces the ‘net result include only the main financial statements (i.e. comprehensive operating statement, balance sheet, from transaction’. cash flow statements and statement of changes in equity); or it may also be used to replace the old term ‘financial report’ under the revised AASB 101 (September 2007), which means it may include the Ex-gratia expenses main financial statements and the notes.

Ex gratia expenses are the voluntary payments of money or other non-monetary benefit (e.g. a write Grants off) that is not made either to acquire goods, services or other benefits for the entity or to meet a legal liability, or to settle or resolve a possible legal liability of or claim against the entity. Grants can either be operating or capital in nature. Grants can be paid as general purpose grants which refer to grants that are not subject to conditions regarding their use. Alternatively, they may be Employee benefits expenses paid as specific purpose grants which are paid for a particular purpose and/or have conditions attached regarding their use. Employee benefits expenses include all costs related to employment including wages and salaries, leave entitlements, termination payments and superannuation contributions. Intangible assets

Financial asset Intangible assets represent identifiable non-monetary assets without physical substance.

A financial asset is any asset that is cash or a cash equivalent. Interest income

Financial instrument Interest revenue includes interest received on bank term deposits, interest from investments and other interest received. A financial instrument is any contract that gives rise to a financial asset of one entity and a liability or equity instrument of another entity. Financial assets or liabilities that are not contractual (such Net acquisition of non-financial assets (from transactions) as statutory receivables or payables that arise as a result of statutory requirements imposed by governments) are not financial instruments. Purchases (and other acquisitions) of non-financial assets less sales (or disposals) of non-financial assets less depreciation plus changes in other movements in non-financial assets. Includes only those increases or decreases in non-financial assets resulting from transactions and therefore excludes write-offs, impairment write-downs and revaluations.

Net result

Net result is a measure of financial performance of the operations for the period. It is the net result of items of revenue, gains and expenses (including losses) recognised for the period, excluding those that are classified as ‘other non-owner changes in equity’.

78 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018 For the Financial Year Ended 30 June 2018

27. Glossary of terms Financial liability

Amortisation A financial liability is any liability that is:

Depreciation Financial statements

Financial asset Intangible assets represent identifiable non-monetary assets without physical substance.

A financial asset is any asset that is cash or a cash equivalent. Interest income

Net result

Australian Grand Prix Corporation Annual Report 2018 79 Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018

Net result from transactions / net operating balance

Net result from transactions or net operating balance is a key fiscal aggregate and is revenue from transactions minus expenses from transactions. It is a summary measure of the ongoing sustainability of operations. It excludes gains and losses resulting from changes in price levels and other changes in the volume of assets. It is the component of the change in net worth that is due to transactions and can be attributed directly to government policies.

Net worth

Assets less liabilities, which is an economic measure of wealth.

Non-financial assets

Non-financial assets are all assets that are not ‘financial assets’.

Other economic flows

Other economic flows are changes in the volume or value of an asset or liability that do not result from transactions. It includes gains and losses from disposals, revaluations and impairments of non- current physical and intangible assets. In simple terms, other economic flows are changes arising from market re-measurements.

Payables

Includes short and long-term trade debt and accounts payable, grants and interest payable.

Receivables

Includes short and long-term trade credit and accounts receivable, grants, taxes and interest receivable.

Sales of goods and services

Refers to revenue from the direct provision of goods and services and includes fees and charges for services rendered, sales of goods and services and fees from regulatory services. User charges includes sale of goods and services revenue.

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred in the normal operations of the Corporation.

Transactions

Transactions are those economic flows that are considered to arise as a result of policy decisions, usually an interaction between two entities by mutual agreement. They also include flows within an entity such as depreciation where the owner is simultaneously acting as the owner of the depreciating asset and as the consumer of the service provided by the asset. Taxation is regarded as mutually agreed interactions between the government and taxpayers. Transactions can be in kind (e.g. assets provided/given free of charge or for nominal consideration) or where the final consideration is cash. In simple terms, transactions arise from the policy decisions of the government.

80 Australian Grand Prix Corporation Annual Report 2018 Notes to and Forming Part of the Financial Statements For the Financial Year Ended 30 June 2018

Net result from transactions / net operating balance

Net worth

Assets less liabilities, which is an economic measure of wealth.

Non-financial assets

Non-financial assets are all assets that are not ‘financial assets’.

Other economic flows

Payables

Includes short and long-term trade debt and accounts payable, grants and interest payable.

Receivables

Includes short and long-term trade credit and accounts receivable, grants, taxes and interest receivable.

Sales of goods and services

Supplies and services

Supplies and services generally represent cost of goods sold and the day-to-day running costs, including maintenance costs, incurred in the normal operations of the Corporation.

Transactions

Australian Grand Prix Corporation Annual Report 2018 81

Independent Auditor’s Report To the Members of the Board of the Australian Grand Prix Corporation

pinion I have audited the financial report of the Australian Grand Prix Corporation (the Corporation) which comprises the:

• balance sheet as at 30 June 2018 • comprehensive operating statement for the year then ended • statement of changes in equity for the year then ended • cash flow statement for the year then ended • notes to the financial statements, including significant accounting policies • statement by members of the board and officers. In my opinion the financial report presents fairly, in all material respects, the financial position of the corporation as at 30 June 2018 and their financial performance and cash flows for the year then ended in accordance with the financial reporting requirements of Part 7 of the Financial Management Act 1994 and applicable Australian Accounting Standards.

sis or I have conducted my audit in accordance with the Audit Act 1994 which incorporates the pinion Australian Auditing Standards. I further describe my responsibilities under that Act and those standards in the Auditor’s Responsibilities for the Audit of the Financial Report section of my report. My independence is established by the Constitution Act 1975. My staff and I are independent of the corporation in accordance with the ethical requirements of the Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional Accountants (the Code) that are relevant to my audit of the financial report in Victoria. My staff and I have also fulfilled our other ethical responsibilities in accordance with the Code. I believe that the audit evidence I have obtained is sufficient and appropriate to provide a basis for my opinion.

eers o The Members of the Board are responsible for the preparation and fair presentation of the te ord’s financial report in accordance with Australian Accounting Standards and the Financial responsiiities Management Act 1994, and for such internal control as the Members of the Board or te determines is necessary to enable the preparation and fair presentation of a financial report inni that is free from material misstatement, whether due to fraud or error. report In preparing the financial report, the Members of the Board are responsible for assessing the corporation’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless it is inappropriate to do so.

82 Australian Grand Prix Corporation Annual Report 2018 Auditor’s As reuired by the Audit Act y resonsibility is to eress an oinion on the financial rsosiiitis reort based on the audit y obecties for the audit are to obtain reasonable assurance or t udit about hether the financial reort as a hole is free fro aterial isstateent hether o t ii due to fraud or error, and to issue an auditor’s report that includes my opinion. Reasonable rort assurance is a high leel of assurance but is not a guarantee that an audit conducted in accordance ith the Australian Auditing Standards ill alays detect a aterial isstateent hen it eists isstateents can arise fro fraud or error and are considered aterial if indiidually or in the aggregate they could reasonably be eected to influence the econoic decisions of users taen on the basis of this financial reort As art of an audit in accordance ith the Australian Auditing Standards eercise rofessional udgeent and aintain rofessional sceticis throughout the audit also

• identify and assess the riss of aterial isstateent of the financial reort hether due to fraud or error design and erfor audit rocedures resonsie to those riss and obtain audit eidence that is sufficient and aroriate to roide a basis for y oinion he ris of not detecting a aterial isstateent resulting fro fraud is higher than for one resulting fro error as fraud ay inole collusion forgery intentional oissions isreresentations or the oerride of internal control • obtain an understanding of internal control releant to the audit in order to design audit rocedures that are aroriate in the circustances but not for the urose of eressing an oinion on the effectieness of the cororation’s internal control • ealuate the aroriateness of accounting olicies used and the reasonableness of accounting estiates and related disclosures ade by the ebers of the Board • conclude on the aroriateness of the ebers of the Board’s use of the going concern basis of accounting and based on the audit eidence obtained hether a aterial uncertainty eists related to eents or conditions that ay cast significant doubt on the cororation’s ability to continue as a going concern. If I conclude that a material uncertainty exists, I am required to draw attention in my auditor’s report to the related disclosures in the financial reort or if such disclosures are inadeuate to odify y oinion y conclusions are based on the audit eidence obtained u to the date of my auditor’s report. However, future events or conditions may cause the cororation to cease to continue as a going concern • ealuate the oerall resentation structure and content of the financial reort including the disclosures and hether the financial reort reresents the underlying transactions and eents in a anner that achiees fair resentation counicate ith the ebers of the Board regarding aong other atters the lanned scoe and tiing of the audit and significant audit findings including any significant deficiencies in internal control that identify during y audit

EBE Sione Bohan 1 August 01 as deleate for the Auditoreneral of ictoria

Australian Grand Prix Corporation Annual Report 2018 83 The Australian Grand Prix Corporation proudly acknowledges its supporters and suppliers of the Formula 1® 2018 Rolex Australian Grand Prix

84 Australian Grand Prix Corporation Annual Report 2018 The Australian Grand Prix Corporation proudly acknowledges its supporters and suppliers of the Michelin® Australian Motorcycle Grand Prix 2017

Australian Grand Prix Corporation Annual Report 2018 85

AUSTRALIAN GRAND PRIX CORPORATION Level 5, 616 St Kilda Road, Melbourne, VIC 3004, Australia