AQUIS ENTERTAINMENT LIMITED
ABN 48 147 411 881
Annual Report
for the Period Ended 31 December 2015
CONTENTS
FINANCIAL STATEMENTS
CORPORATE GOVERNANCE STATEMENT
SHAREHOLDER INFORMATION
CORPORATE DIRECTORY
Page
1
47
60
62
AQUIS ENTERTAINMENT LIMITED
ABN 48 147 411 881
Financial Statements
for the Financial Year Ended 31 December 2015
1
The Directors present their report together with the consolidated financial statements for the financial year
ended 31 December 2015. The consolidated financial statements comprise the financial statements of Aquis
Entertainment Limited (“Aquis” or “Company”) and its controlled entities (together referred to as the “Group”
or “Consolidated Entity”).
On 25 August 2015, the Company advised the ASX that it had changed its accounting year end from June to
December. Accordingly, except where otherwise stated, this report considers the activities of the Group from
the end of the previous financial year (30 June 2015) to 31 December 2015.
DIRECTORS
The names and details of the Company’s Directors in office during the financial year and until the date of this
report are set out below:
Tony Fung
Raymond Or Ching Fai
Justin Fung
Alex Chow
Russell Shields
Dr Ken Chapman
Jessica Mellor
Geoff Andres
Tony Adcock
Josh Puckridge
Tom Pickett
Chairman (Appointed 7 Aug 2015)
Vice Chairman (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 7 Sept 2015)
Non-Executive Director (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 14 Aug 2015)
Executive Director (Appointed 14 Aug 2015)
Executive Director and CEO (Appointed 7 Aug 2015 – Resigned 13 Nov 2015)
Non-Executive Chairman (Resigned 7 Aug 2015)
Executive Director/Chief Executive Officer (Resigned 7 Aug 2015)
Non-Executive Director (Resigned 7 Aug 2015)
Current Directors
Tony Fung (Chairman)
Mr Tony Fung is the ultimate owner and controller of the Aquis Group. He has significant experience in
corporate finance and company administration, including running Sun Hung Kai & Co. Ltd, a leading Hong
Kong-based non-bank financial and securities holding company. Mr Fung has significant property
investments in Hong Kong and also in Australia.
Raymond Or Ching-Fai (Deputy Chairman)
Mr Or Ching-Fai is Chairman and Chief Executive of China Strategic Holdings Limited. Mr Or has had a long
career in banking and insurance including as the Chairman of HSBC Insurance Limited, Vice-Chairman and
Chief Executive of Hang Seng Bank, Chairman of Hang Seng Insurance Co Limited and currently he is a
director of Industrial and Commercial Bank of China Limited. Mr Or was previously a director of Cathay
Pacific Airways Limited and Hutchison Whampoa Limited. He was (among other roles) the Vice President
and a Council Member of the Hong Kong Institute of Bankers. He has a bachelor’s degree in economics and
psychology from the University of Hong Kong.
Mr Or is a member of the Remuneration and Nomination Committee.
Justin Fung (non-Executive Director)
Mr Justin Fung is Mr Tony Fung’s son. He is an Australian resident and represents the Fung family’s
interests in Australia. He plays a lead role in day to day operational, management and strategic decisions of
the Aquis Group. Mr Fung has an arts degree from Duke University, North Carolina and a law degree from
Loyola University, Los Angeles and has previously worked in the Fung family’s property/development
businesses.
Alex Chow (Independent Non-Executive Director)
Mr Chow Yu Chun, Alexander, is a senior non-executive director with over 35 years of experience in
commercial, financial and investment management in Hong Kong and Mainland China. He has served as an
lndependent Non-executive Director of Top Form International Limited since February 1993 and is a
Certified Public Accountant of the Hong Kong lnstitute of Certified Public Accountants. Mr. Chow is also
currently an independent non-executive director of Playmates Toys Limited, China Strategic Holdings
Limited and Symphony Holdings Ltd, each of which are listed on the Hong Kong Stock Exchange. Mr. Chow
was previously a non-executive director of New World China Land Limited (also Hong Kong Stock Exchange
listed), until his resignation in December 2012.
Alex is the Chair of the Audit and Risk Committee.
2
Russell Shields (Independent Non-Executive Director)
Russell Shields is a senior non-executive director with more than 35 years’ experience in the financial
services industry. He was Chairman Queensland and Northern Territory of ANZ Bank for 6 years. Prior to
joining ANZ, Mr Shields held senior executive roles with HSBC including Managing Director Asia Pacific –
Transport, Construction and Infrastructure and State Manager Queensland, HSBC Bank Australia. He is
currently also a non-executive director of ASX-listed companies; Eclipx Group Limited and Retail Food
Group Limited. Russell is a member of both the Remuneration and Nomination and Audit and Risk
Committees
Dr Kenneth Chapman (Independent Non-Executive Director)
Ken is a respected company director with diverse business and community interests across tourism, property
development and agribusiness. Ken’s well recognised skills and experience add great depth to complement
the existing composition of the Board, and he will play a vital role as lead independent. Ken is the current
Chair of the Far North Queensland Hospital Foundation, vice president of the Far North Queensland Youth
Assistance Fund, Inc. and a Non-executive Director of Event Hospitality and Entertainment Limited
(ASX:EVT).
Ken’s previous roles include Chairman - Far North Queensland Ports Corporation Ltd, Founding Director and
Deputy Chairman - Queensland Tourism Industry Council (QTIC), Director - Australian Tourism Commission,
Director - Cowboys Leagues Club Ltd
Ken is a Fellow of the Australian Institute of Company Directors, a Fellow of the Australian Institute of
Management and is also an Associate Fellow of the Royal Australasian College of Medical Administrators.
He remains a registered medical practitioner.
Ken is the Chair of the Remuneration Committee, a member of the Audit and Risk Committee and is the lead
independent Director.
Jessica Mellor (Executive Director)
Jessica is a seasoned project manager with experience spanning major infrastructure projects, residential
and commercial development and funds management Jess is responsible for Strategy and Project
Development for the Company.
Jessica was involved in major infrastructure projects with Leighton Contractors in Queensland before moving
into residential development and later funds management. Jessica joined the greater Aquis Group in 2013
where she a played key leadership role in the groups’ ambitious Yorkeys Knob project in Cairns and
following the acquisition of Casino Canberra was appointed as Executive Director, Strategy and Project
Development with responsibility for new projects strategy and growth.
Company Secretary
The Company Secretary in office at the end of the reporting period was Garry Gill. Garry was appointed
Company Secretary on 7 August 2014 and was also appointed as Chief Financial Officer in September
2014. He has more than 30 years’ experience in all facets of corporate financial and administrative functions
and has served in Chief Financial Officer and Company Secretarial positions at a number of listed and
unlisted public companies, private companies and statutory authorities. Garry is a member of Chartered
Accountants Australia and New Zealand, a Fellow of the Governance Institute of Australia and the Institute
of Chartered Secretaries and Administrators and a member of the Australian Institute of Company Directors.
INTERESTS IN SHARES AND OPTIONS
As at the date of this report, the interests of the Directors in the ordinary shares of Aquis were:
Directors
Ordinary Shares
held in Aquis
Unlisted Options
held in Aquis
153,871,874
T Fung
-
R Or Ching Fai
J Fung1
153,871,874
-
A Chow
-
R Shields
10,000
K Chapman
J Mellor
-
1 Interest held as related party to Mr T Fung
5,000,000
-
5,000,000
-
-
-
-
3
NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES
From 7 August 2015 the principal activities of the Consolidated Entity consisted of entertainment, gaming
and leisure activities initially through the ownership of Canberra Casino.
OPERATING AND FINANCIAL REVIEW
Operating Results for the Year
The operating result of the consolidated entity for the year to 31 December 2015 was a loss of $6,019,882
(2014: profit $3,150,288). The 2014 profit included $3,190,517 in other income being the difference between
the fair value of the assets and liabilities of Casino Canberra Limited acquired and the purchase price paid
for the shares of that company.
Background
On 23 December 2014, Aquis Canberra Pty Ltd acquired all of the shares in Casino Canberra Limited, the
owner and operator of Casino Canberra for $6,000,000.
On 10 July 2015, shareholders of Aquis Entertainment Limited (then named Discovery Resources Limited)
voted to change the Company’s focus from its mineral exploration projects to become an entertainment,
gaming and leisure company which would initially own the Casino Canberra business operated by Aquis
Canberra Pty Ltd. On 7 August 2015 (“the Transaction Date”) the Company completed the acquisition of
Aquis Canberra Pty Ltd (ACPL) and its wholly owned subsidiary Casino Canberra Limited (CCL).
Strategy
Aquis has a clear strategy to develop and manage quality destination integrated resorts in underserved
areas of Australia. The Canberra Casino is the first such investment and has been used to demonstrate the
Company’s ability to significantly improve an underperforming operation by a combination of leadership and
targeted investment in the business.
Operations
Since acquiring Casino Canberra, Aquis has focussed on improving the performance of the business by
identifying the existing weaknesses and putting in place plans and action needed to turn the business
around. The key areas of focus to date have been:
•
•
Improving operating and service standards to the level expected by our patrons
Implementing a new marketing focus and
• Refurbishing the property which will include replacing old gaming and other equipment and
introducing Live Terminal games
Within the casino a series of initiatives were implemented to attract local and interstate VIP players including
increasing maximum bet amounts on baccarat and roulette tables, increasing operating hours and hiring
additional dealers to accommodate the increased demand. Poker, blackjack and baccarat tournaments also
proved popular in attracting additional patrons to the casino. Targeted marketing programs aimed at
promoting existing customers and attracting new patrons were successful with increased numbers of patrons
and level of play seen over the year.
In September 2015, the restaurant was rebranded as Natural 9 and relaunched with a new Head Chef,
exciting new menu and most importantly, substantially improved quality of food and levels of service.
These initial programs have seen considerable success with record levels of casino revenue being
generated in the second half of the calendar year. In October casino revenue was $2.4 million, the highest
level of revenue in over 10 years. Revenue from table games for the twelve months to 31 December 2015
was $19.96 million compared with 15.88 million for the previous corresponding period.
In addition to the improvements in the operations, the Board also took the decision to refurbish the casino
and to replace old equipment to increase player comfort and the general appeal of the property. The project
which will cost $13.6 million will include private gaming and dining areas for VIP players, a brighter and more
contemporary casino and new modern gaming tables. On completion it will raise Casino Canberra to the
standard of facility provided by its Australian competitors. The refurbishment activity commenced in February
and is expected to be completed in June 2016.
In September 2015, Aquis lodged a proposal with the ACT Government for a $330 million redevelopment of
Casino Canberra. The proposed redevelopment features a two-stage venture which seeks to rejuvenate
4
and transform the area into a truly world class destination. The redevelopment will include new
accommodation buildings, dining, entertainment. The proposal is subject to further discussions with the ACT
Government, financing, regulatory approvals and consultation with community stakeholders.
Financial Position
At 31 December 2015, the Group held cash of $6.8 million, net assets of $1.3 million and unused borrowing
facilities of $19.1 million. Directors are confident that the improved operating performance which has already
occurred since Aquis’ acquisition of Casino Canberra will continue and will be further enhanced by the
capital investment program which has now commenced.
On 25 August 2015, the Company advised the ASX that it had changed its accounting year end from June to
December. The first financial statements of the Company following the change are for the financial year to
31 December 2015.
Following the receipt of approval from its shareholders at the Annual General Meeting on 26 November 2015
and from ASIC on 23 November 2015, the Company changed its auditors to RSM Australia Pty Ltd.
Employees
The number of people employed by the Consolidated Entity at the reporting date was 254.
DIVIDENDS
The Directors do not recommend the payment of a dividend and no amount has been paid or declared by
way of a dividend to the date of this report.
Directors’ and Committee Meetings
The number of meetings of the Company’s Board of Directors held during the period and the number of
meetings attended by each Director was:
Director
2015
T Fung
R Or Ching Fai
J Fung
A Chow
R Shields
K Chapman
J Mellor
G Andres
Eligible
to Attend
6
6
6
4
6
5
5
4
Attended
6
6
6
4
5
5
5
4
The Audit and Risk Committee and the Remuneration Committee did not formally meet during the period
from the Transaction Date until the end of the financial year.
SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS
On 10 July 2015, shareholders of Aquis (then named Discovery Resources Limited) voted to change the
Company’s principal activity from mineral exploration to entertainment, gaming and leisure through the
acquisition of a casino group then owned by Aquis Canberra Holdings Pty Ltd (ACHPL). On 7 August 2015
(“the Transaction Date”) the Company completed the acquisition of ACHPL subsidiary, Aquis Canberra Pty
Ltd (ACPL) and its wholly owned subsidiary Casino Canberra Limited (CCL) the owner of the Canberra
Casino.
SIGNIFICANT EVENTS AFTER BALANCE DATE
Other than as set out in this report and the attached financial statements, no matters or circumstances have
arisen since 31 December 2015, which significantly affected or may significantly affect the operations of the
Company, the results of those operations, or the state of affairs of the Company in subsequent financial
years.
INDEMNIFICATION OF OFFICERS
The Company is required to indemnify Directors, and other officers of the Company against certain liabilities
which they may incur as a result of or by reason of (whether solely or in part) being or acting as an officer of
the Company.
5
During the financial year, the Company paid a premium to insure the Directors against potential liabilities for
costs and expenses incurred by them in defending legal proceedings arising from their conduct while acting
in the capacity of Director of the Company other than conduct involving wilful breach of duty in relation to the
Company. The amount of the premium is not disclosed as it is considered confidential.
The Company provides no indemnity to any auditor.
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any
proceedings to which the consolidated entity is a party for the purpose of taking responsibility on behalf of
the consolidated entity or any part of those proceedings.
ENVIRONMENTAL REGULATIONS
The Directors are mindful of the regulatory regime in relation to the impact of the organisation’s activities on
the environment.
There have been no known breaches of any environmental regulation by the Consolidated Entity during the
financial period.
FUTURE DEVELOPMENTS, PROSPECTS AND BUSINESS STRATEGIES
Aquis is an entertainment, gaming and leisure company which currently operates a casino business in
Canberra.
As at the date of this report, the Company has commenced a $13.6 million refurbishment and equipment
replacement program under which outdated gaming equipment would be replaced, new LT gaming terminals
will be installed and the casino will be renovated to create a luxuriously contemporary setting including
private gaming and dining facilities for VIP guests.
On 31 August 2015, the Company lodged its confidential proposal for a significant redevelopment of the
Casino Canberra site (Proposed Redevelopment).
It is currently contemplated that the Proposed Redevelopment will be undertaken in two phases. The first
phase would see the completion of matters such as the new casino (including new street access), new 6 star
accommodation and a new forecourt featuring dining and beverage options. Under stage 2, additional
developments such as a new 5 star boutique hotel and further expanded entertainment and bar/dining
options will be completed.
The Company will require funding in addition to its current cash at hand and funding facilities in order to
complete the Proposed Redevelopment.
The Company will continue to focus on the implementation of a number of initiatives including undertaking
the Proposed Redevelopment.
SHARE OPTIONS
As at the date of this report, there were 5,000,000 (30 June 2015: 5,000,000) unissued ordinary Aquis
shares under option.
No options have been issued in the period since year end to the date of this report.
INDEPENDENT PROFESSIONAL ADVICE
Directors of the Company are expected to exercise considered and independent judgement on matters
before them and may need to seek independent professional advice. A director with prior written approval
from the Chairman may, at the Company’s expense obtain independent professional advice to properly
discharge their responsibilities.
NON-AUDIT SERVICES
There were no non-audit services provided by the entity’s auditors, Moore Stephens, Perth, and RSM
Australia Pty Ltd during the financial year.
AUDITOR INDEPENDENCE
A copy of the auditor’s independence declaration as required under section 307C of the Corporations Act
2001 is attached.
6
REMUNERATION REPORT (AUDITED)
This Remuneration Report forms part of the Directors’ Report and has been prepared in accordance with
Section 300A of the Corporations Act 2001and has been audited as required by Section 308(3C) of that Act.
The Remuneration Report is set out under the following key headings:
A
B
C
D
E
Introduction
Principles used to determine the nature and amount of remuneration
Remuneration details
Service agreements
Other KMP disclosures
A.
Introduction
The Remuneration Report sets out information relating to the remuneration of the non-executive Directors,
executive Directors and senior management of the Company - collectively termed Key Management
Personnel (KMP). The KMP are the persons primarily accountable for planning, directing and controlling the
affairs of the Company. For the purposes of this report the executive Directors and senior management are
referred to as Executives.
Details of KMP for whom remuneration disclosures are included in this Report are as follows:
Current Non-Executive Directors
Name
Current and Previous Roles
Relevant Dates
T Fung
Chairman
R Or Ching Fai
Vice Chairman
Appointed 7 Aug 2015
Appointed 7 Aug 2015
J Fung
A Chow
R Shields
Managing Director CCL
to 25 Aug 2015
Managing Director Aquis
7 Aug 2015 - 25 Aug 2015
Non-Executive Director
From 25 Aug 2015
Non-Executive Director
Appointed 7 Sept 2015
Non-Executive Director
Appointed 7 Aug 2015
K Chapman
Non-Executive Director
Appointed 14 Aug 2015
Current Executives
Name
Role
Relevant Dates
A Gomes
CEO
Appointed 16 Nov 2015
Senior Executive CCL
to 14 July 2015
J Mellor
Executive Director CCL
Appointed 14 July 2015
G Gill
R Bach
Executive Director Aquis
Appointed 7 August 2015
Company Secretary CCL
Appointed 14 July 2015
Company Secretary AQS
Appointed 7 Aug 2015
Chief Financial Officer
Appointed 14 Sept 2015
Vice President & General
Manager
Appointed 2 July 2015
7
Previous Directors and Executives
Name
Role
Relevant Dates
G Andres
T Adcock
CEO and Exec Director CCL
and Aquis
Resigned 13 Nov 2015
Non-Executive Chairman
Resigned 7 Aug 2015
J Puckridge
Executive Director and CEO
Resigned 7 Aug 2015
T Pickett
A Wilbers
Non-Executive Director
Resigned 7 Aug 2015
Company Secretary
Resigned 7 Aug 2015
Except where otherwise stated, KMP held office from the commencement of the period under review (1 July
2015).
B.
Principles used to determine the nature and amount of remuneration
Aquis’ corporate goal is to develop and manage quality integrated resorts in Australia. To achieve this, the
Group has sought to engage and retain experienced and talented Directors and Executives. The Group
therefore aims to offer Directors and Executives a competitive remuneration package which reflects
individual duties and responsibilities. The remuneration approach seeks to align Executive reward with the
achievement of strategic objectives and the creation of value for shareholders.
The Remuneration Committee will be responsible for determining and reviewing on-going remuneration
arrangements for its Directors and Executives. This Committee may seek advice of external remuneration
consultants in conducting its duties. Further information regarding the Committee is set out in the Corporate
Governance Statement.
The Group has established differing remuneration structures for Non-Executive Directors and Executives.
Non-Executive Directors
Fees and payments to the Non-Executive Directors reflect the demands which are made on, and the
responsibilities of, these Directors. Non-Executive Director fees comprise a base salary plus statutory
superannuation. Non-Executive Directors are not entitled to receive share based payments or other
performance based incentives.
ASX listing rules require the aggregate non-executive directors remuneration be determined periodically by a
general meeting. The most recent determination was at the Annual General Meeting held on 26 November
2015, where the shareholders approved an aggregate remuneration pool of $600,000.
Executives
Aquis aims to reward executives with a level and mix of remuneration based on their position and
responsibility, which has both fixed and variable components.
Fixed remuneration
Fixed remuneration aims to provide a base level of remuneration and is determined with reference to
available market data, the scope of the executive’s responsibilities and their experience and qualifications.
Fixed remuneration, consists of base salary, superannuation and complementary privileges at Canberra
Casino, and may include other benefits where Executives may elect to sacrifice part of their salary to be
contributed towards any non-cash benefit including motor vehicles, accommodation costs etc.
Fixed remuneration for Executives is reviewed annually and approved by the Remuneration Committee.
Performance based remuneration
The performance based component of Executive remuneration aligns the strategies set by the Board with
the individual targets of the Executives responsible for implementing those strategies.
With the exception of the CEO, Executives are entitled to receive short term incentives based on service and
on the achievement of Key Performance Indicators.
Consolidated entity performance and link to remuneration
Remuneration for certain individuals is directly linked to performance of the consolidated entity. A portion of
short term incentive payments are dependent on achieving defined KPI. For the 2015 year, the KPI’s were
8 set by the Board and related to the achievement of revenue outcomes. These outcomes were to be driven
by the Board’s strategy to improve the overall product offered to customers including service standards and
marketing programs. The improved revenue generating capability will form the basis of providing long term
earnings growth for the Canberra Casino and consequently for shareholder value growth.
Use of remuneration consultants
During the period ended 31 December 2015, the consolidated entity did not engage remuneration
consultants.
C.
Details of Remuneration
Remuneration received or receivable by Key Management Personnel during the reporting period was as
follows. Due to the change in the nature of the business and the change to the financial year, comparative
results have not been included.
Key
Management
Personnel
2015
T Fung
R Or Ching Fai
J Fung1
A Chow
R Shields
K Chapman
J Mellor
A Gomes
R Bach
G Gill2
G Andres3
T Adcock4, 5
J Puckridge4,5
T Pickett4, 5
A Wilbers4
Short-term Benefits
Cash,
Profit
Sharing /
Other
Bonuses
$
Fees
and/or
Salary
$
Other
Benefits
Post-
Employment
Benefits
Super -
annuation
Share
Based
Payment
Total
Performance
based
remuneration
Remun-
eration at
Risk - STI
$
$
$
$
%
%
-
-
51,560
31,667
36,048
40,081
118,462
82,083
102,525
78,768
328,932
2,083
16,660
2,083
7,000
-
-
84,063
39,148
17,918
-
-
-
-
-
-
-
4,898
3,008
3,425
3,808
11,254
7,798
9,740
6,577
31,249
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- 56,458
- 34,675
- 39,473
- 43,888
- 213,778
- 89,881
- 151,413
- 103,263
- 360,181
- 2,083
- 16,660
- 2,083
- 7,000
-
-
-
-
-
-
39%
-
26%
17%
-
-
-
-
-
-
-
-
-
-
-
39%
-
26%
17%
-
-
-
-
-
Totals
1 Represents salary and benefits received as Managing Director from 1 July 2015 to 25 August 2015. Mr Fung receives no
- 1,093,010
141,128
870,126
81,756
-
salary as a non-executive Director.
2 Includes fees received as Company Secretary prior to being engaged as an employee
3 Resigned 13 November 2015
4 Resigned 7 August 2015
5 At the EGM on 10 July 2015, Shareholders voted to make the following share issues to Messrs Adcock, Pickett and
Puckridge:
•
250,000 shares valued at $50,000 at an issue price of $0.20 each to Messrs Adcock and Pickett in consideration of
them resigning as Directors and
1,000,000 shares valued at $200,000 at an issue price of $0.20 each in consideration of his assistance in
implementing the acquisition of ACPL / CCL
The shares are to be issued within 3 Business Days of
•
•
The successful submission of the Redevelopment Proposal, provided the 30 day VWAP as at the date immediately
prior to the submission is at least $A0.25 or
• Such later date within 12 months of the submission of the Redevelopment Proposal on which the 30 day VWAP as at
the date immediately prior to the issue is at least $A0.25.
D.
Service Agreements
Non-Executive Directors
Each Director has signed a letter of appointment which sets out the conditions of the appointment including
the remuneration for the position.
The Chairman, Vice Chairman and Mr Justin Fung have each elected to receive no remuneration for
performing their Director roles. Mr Justin Fung was paid a salary during the period in which he acted as
Managing Director for CCL and Aquis.
9
The remaining Non-Executive Directors are entitled to the following remuneration:
• A base fee of $80,000 per annum
• $20,000 per annum for acting as the Chair of a Board Committee and
• $5,000 per annum for serving on a Board Committee.
• Statutory superannuation where required by law.
Executives
Remuneration and other terms of employment for key management personnel are formalised in service
agreements. Details of these agreements are as follows:
Name
Title
Aaron Gomes
Jessica Mellor
Rhiannon Bach
Garry Gill
CEO
Executive Director
VP and General
Manager
Chief Financial
Officer and Company
Secretary
Commencement Date 16 November 2015
23 December 2014
23 April 2015
14 September 2015
Term of Agreement
1 year
Annual Salary
USD 500,000 paid in
AUD
Open
$186,6671
Open
Open
$228,000
$240,000
Superannuation
Statutory
superannuation
Statutory
superannuation
Statutory
superannuation
Statutory
superannuation
Bonus
nil
Maximum annual bonus = 50% of Remuneration comprising:
• Guaranteed amount of 50% of the maximum annual potential
bonus and
• Amount up to 50% of the maximum annual potential bonus as
determined at the absolute discretion of the Board subject to
KPI’s agreed between the Executive and the Chair of the
Remuneration Committee.
• No bonus payment if Executive gives notice of termination
prior to the payment date of if terminated for cause
Post-employment
restraint
Company may impose restraint for various periods up to 12 months and for various regions
Termination Period
None prior to end of
contract term
6 months either party
3 months either party
6 months either party
1Reduced from $280,000 per annum from 1 October 2015 to reflect split of employment between Aquis and other members of the
greater Aquis group
10
E.
Other KMP disclosures
Movements in share holdings
The movement during the year in the number of ordinary shares in the Company held directly, indirectly or
beneficially by each key management person, including their related parties, follows:
Name
Opening
Balance1
Acquired
on
Market
Disposed
Closing
Balance2
-
-
-
-
-
10,000
-
-
-
-
-
-
153,871,874
-
153,871,874
-
-
-
-
-
-
-
-
-
T Fung
R Or Ching Fai
J Fung3
A Chow
R Shields
K Chapman
J Mellor
A Gomes
R Bach
G Gill
G Andres
T Adcock
J Puckridge
- 153,871,874
-
-
- 153,871,874
-
-
-
-
10,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A Wilbers
1
Opening balance includes balance at beginning of the period or at date of appointment
2 Closing balance includes balance at end of the period or at date of resignation
3 Interest held as related party to Mr T Fung
T Pickett
-
-
-
-
-
-
-
-
-
b) Movement in option holdings
The movement during the year in the number of options over ordinary shares in the Company held directly,
indirectly or beneficially by each key management person, including their related parties, was as follows:
Name
T Fung
R Or Ching Fai
J Fung3
A Chow
R Shields
K Chapman
J Mellor
A Gomes
R Bach
G Gill
G Andres
T Adcock
J Puckridge
T Pickett
Opening
Balance1
Acquired Disposed
Closing
Balance2
5,000,000
-
5,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
5,000,000
-
5,000,000
-
-
-
-
-
-
-
-
-
-
-
A Wilbers
-
1
Opening balance includes balance at beginning of the period or at date of appointment
2 Closing balance includes balance at end of the period or at date of resignation
3 Interest held as related party to Mr T Fung
-
-
-
11
12 AQUIS ENTERTAINMENT LIMITED
STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE
INCOME
for the year ended 31 December 2015
Revenue and Other Income
Revenue
Other income
Total Revenue and Other Income
Expenses from Continuing Operations:
Casino taxes
Employee benefit expenses
Share based payment expense
Other operating expenses
Finance charges
Depreciation
Amortisation
Consolidated
Note
2015
$
2014
$
3
3
19,887,113
236,659
391,339
3,193,744
20,123,772
3,585,083
(2,127,173)
(16,286,276)
(1,119,940)
(6,784,684)
(672,335)
(493,814)
(25,635)
20
4
4
4
4
(41,029)
(334,092)
-
(71,509)
-
(9,470)
(620)
Loss before income tax expense
(7,386,085)
3,128,363
Income tax (expense) / benefit
5
1,366,203
21,925
Loss attributable to members of the consolidated entity
(6,019,882)
3,150,288
Other comprehensive income for the year, net of tax
-
-
Total comprehensive loss for the year attributable to the
members of the consolidated entity
(6,019,882)
3,150,288
Basic and diluted earnings per share (cents per share)
6
(3.66)
2.11
The accompanying notes form part of these financial statements.
13
AQUIS ENTERTAINMENT LIMITED
STATEMENT OF FINANCIAL POSITION
as at 31 December 2015
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Total Current Assets
NON-CURRENT ASSETS
Property, plant and equipment
Capital work-in-progress
Intangible assets
Available for sale financial asset
Deferred tax assets
Other non-current assets
Total Non-Current Assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefit provisions
Loans and borrowings
Total Current Liabilities
NON-CURRENT LIABILITIES
Employee benefit provisions
Loans and borrowings
Consolidated
Note
2015
$
2014
$
7
8
9
10
11
12
13
14
5
10
15
16
17
6,804,470
34,414
586,277
1,158,886
5,071,462
29,968
137,537
250,476
8,584,047
5,489,443
3,829,220
1,590,710
1,945,082
4,106
4,435,051
2,749,954
4,102,774
-
1,970,717
-
3,068,849
-
14,554,123
9,142,340
23,138,170
14,631,783
3,132,978
651,492
1,630,940
1,565,727
613,421
-
5,415,410
2,179,148
16
17
43,008
16,381,394
52,346
9,250,000
Total Non-Current Liabilities
16,424,402
9,302,346
TOTAL LIABILITIES
21,839,812
11,481,494
NET ASSETS
EQUITY
Contributed equity
Accumulated losses
TOTAL EQUITY
1,298,358
3,150,289
18
19
4,167,952
(2,869,594)
1
3,150,288
1,298,358
3,150,289
The accompanying notes form part of these financial statements
14 AQUIS ENTERTAINMENT LIMITED
STATEMENT OF CHANGES IN EQUITY
for the year ended 31 December 2015
2014
Balance at 23 December 2014
Transactions with owners:
Result attributable to members of
the Company
Balance at 31 December 2014
2015
Transactions with owners:
Shares issued on acquisition
Shares issued during the period
Total transactions with owners
Loss attributable to members of
the company
Note Share Capital
Accumulated
Losses
$
$
Total
$
1
-
1
-
1
3,150,288
3,150,288
3,150,288
3,150,289
2,167,951
2,000,000
4,167,951
-
-
2,167,951
2,000,000
4,167,951
-
(6,019,882)
(6,019,882)
Balance at 31 December 2015
4,167,952
(2,869,594)
1,298,358
The accompanying notes form part of these financial statements
15 AQUIS ENTERTAINMENT LIMITED
STATEMENT OF CASH FLOWS
for the year ended 31 December 2015
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers
Payments to suppliers and employees
Interest received
Interest paid
Net cash provided by (used in) operating
activities
CASH FLOWS FROM INVESTING ACTIVITIES
Plant and equipment
Proceeds from disposal of plant and equipment
Payments for capital work-in-progress
Payments in respect of licenses
Investments
Net proceeds from acquisition of controlled entities
Net cash provided by (used in) investing
activities
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Proceeds from borrowings
Net cash provided by (used in) financing
activities
Net increase (decrease) in cash held
Cash at beginning of the period
Consolidated
2015
$
2014
$
22,046,377
(25,265,891)
89,503
-
1,958,095
(1,996,052)
426
-
21
(3,130,011)
(37,531)
(220,790)
-
(1,590,710)
(4,459,385)
(4,106)
1,048,010
(358)
-
-
-
-
-
(5,226,981)
(358)
2,000,000
8,090,000
10,090,000
-
250,001
250,001
1,733,008
5,071,462
212,112
4,859,350
Cash at end of the period
7
6,804,470
5,071,462
The accompanying notes form part of these financial statements
16
1. Statement of Significant Accounting Policies
The financial report covers the consolidated group of Aquis Entertainment Limited (“Aquis” or “Company”)
and its controlled entities (together referred to as the “Consolidated Entity” or “Group). Aquis is a for-profit
company limited by shares incorporated and domiciled in Australia. The Company’s shares are publicly
traded on the Australian Securities Exchange (AQS).
The principal accounting policies adopted in the preparation of the financial report are set out below.
These policies have been consistently applied to all the years presented, unless otherwise stated.
Basis of Preparation
This general purpose financial report has been prepared on a going concern basis in accordance with
Australian Accounting Standards, other authoritative pronouncements of the Australian Accounting
Standards Board and the Corporations Act 2001. Compliance with Australian Accounting Standards
ensures that the financial statements and notes of the Company comply with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board.
Basis of Accounting
These financial statements have been prepared on an accruals basis under the historical cost convention,
except for, where applicable, the revaluation of available-for-sale financial assets, financial assets and
liabilities at fair value through profit or loss, investment properties, certain classes of property, plant and
equipment and derivative financial instruments.
Critical accounting estimates
The preparation of the financial statements requires the use of certain critical accounting estimates. It
also requires management to exercise judgements in the process of applying the consolidated entity's
accounting policies. The areas involving a higher degree of judgement or complexity, or areas where
assumptions and estimates are significant to the financial statements, are disclosed in note 2
Functional and Presentation Currency
The Company’s functional and presentation currency is Australian dollars.
Capital Restructure
On 7 August 2015, Aquis acquired all of the shares in Aquis Canberra Pty Limited (ACPL) the owner of
Casino Canberra Limited (CCL) by issuing 149,421,874 shares in Aquis to ACPL’s shareholder. The
acquisition of Aquis by ACPL cannot be considered to be a business combination, as Aquis could not be
considered to be a business under AASB 3 “Business Combinations”. Thus for accounting purposes, the
consolidation of the two companies was performed on the basis of the continuation of ACPL with no fair
value adjustments, whereby ACPL was deemed to be the accounting parent and Aquis the subsidiary.
Accordingly, the comparative information for Aquis is that of ACPL for the period.
The transaction has therefore been treated as a share based payment under AASB 2 “Share Based
Payments”, whereby ACPL is deemed to have issued shares in exchange for the net assets and listing
status of Aquis. As the deemed acquirer, ACPL has acquisition accounted for Aquis as at the date of the
acquisition (7 August 2015 - the “Transaction Date”). Refer note 20 for further details on the acquisition
accounting treatment.
Comparatives
ACPL acquired all of the issued shares of CCL on 23 December 2014. Prior to that date, ACPL had no
assets or liabilities. Accordingly the comparative financial information in these financial statements is for
the period from 23 December 2014 to 31 December 2014.
Summary of Accounting Policies
The following is a summary of the material accounting policies adopted by the Company in the
preparation of the Financial Statements
17 (a) Principles of Consolidation
Subsidiaries are all those entities over which the consolidated entity has control. The consolidated entity
controls an entity when the consolidated entity is exposed to, or has rights to, variable returns from its
involvement with the entity and has the ability to affect those returns through its power to direct the
activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to
the consolidated entity. They are de-consolidated from the date that control ceases. A list of subsidiaries
is contained at Note 27. All controlled entities have a December year end.
All inter-company balances and transactions between entities in the consolidated entity, including any
unrealised profits or losses, have been eliminated on consolidation. Accounting policies of subsidiaries
have been changed where necessary to ensure consistencies with those policies applied by the parent
entity.
The acquisition of subsidiaries is accounted for using the acquisition method of accounting. A change in
ownership interest, without the loss of control, is accounted for as an equity transaction, where the
difference between the consideration transferred and the book value of the share of the non-controlling
interest acquired is recognised directly in equity attributable to the parent.
Where the consolidated entity loses control over a subsidiary, it derecognises the assets including
goodwill, liabilities and non-controlling interest in the subsidiary together with any cumulative translation
differences recognised in equity. The consolidated entity recognises the fair value of the consideration
received and the fair value of any investment retained together with any gain or loss in profit or loss.
(b) Revenue Recognition
Revenue is recognised when it is probable that the economic benefit will flow to the consolidated entity
and the revenue can be reliably measured. Revenue is measured at the fair value of the consideration
received or receivable.
Gaming Revenue
Gaming Revenue is the net of gaming wins and losses.
Sale of goods
Sale of goods revenue is recognised at the point of sale, which is where the customer has taken delivery
of the goods, the risks and rewards are transferred to the customer and there is a valid sales contract.
Interest
Interest revenue is recognised as interest accrues using the effective interest method. This is a method of
calculating the amortised cost of a financial asset and allocating the interest income over the relevant
period using the effective interest rate, which is the rate that exactly discounts estimated future cash
receipts through the expected life of the financial asset to the net carrying amount of the financial asset.
Other revenue
Other revenue is recognised when it is received or when the right to receive payment is established.
(c) Income Tax
The charge for current income tax expense is based on the result for the period adjusted for non-
assessable or disallowed items. It is calculated using the tax rates that have been enacted or are
substantially enacted by the balance date.
Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences
arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. No deferred income tax will be recognised from the initial recognition of an asset or liability,
excluding a business combination, where there is no effect on accounting or taxable profit or loss.
Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is
realised or liability is settled. Deferred tax is credited in the Statement of Profit or Loss and Other
18 Comprehensive Income except where it relates to items that may be credited directly to equity, in which
case the deferred tax is adjusted directly against equity.
The carrying amount of recognised and unrecognised deferred tax assets are reviewed each reporting
date Deferred income tax assets are recognised to the extent that it is probable that future tax profits will
be available against which deductible temporary differences can be utilised. Previously unrecognised
deferred tax assets are recognised to the extent that it is probable that there are future taxable profits
available to recover the asset.
The amount of benefits brought to account or which may be realised in the future is based on the
assumption that no adverse change will occur in income taxation legislation and the anticipation that the
consolidated entity will derive sufficient future assessable income to enable the benefit to be realised and
comply with the conditions of deductibility imposed by the law.
(d) Goods & Services Tax
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of
GST incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is
recognised as part of the cost of acquisition of the asset or as part of an item of the expense.
Goods & Services Tax (GST) receivable from, or payable to, the Australian Taxation Office has been
accounted for and included as part of receivables or payables in the Statement of Financial Position.
Cash flows are presented in the Statement of Cash Flows on a gross basis except for the GST
component of investing activities, which are disclosed as an operating cash flow.
e) Current and non-current classification
Assets and liabilities are presented in the statement of financial position based on current and non-current
classification.
An asset is current when: it is expected to be realised or intended to be sold or consumed in normal
operating cycle; it is held primarily for the purpose of trading; it is expected to be realised within 12
months after the reporting period; or the asset is cash or cash equivalent unless restricted from being
exchanged or used to settle a liability for at least 12 months after the reporting period. All other assets are
classified as non-current.
A liability is current when: it is expected to be settled in normal operating cycle; it is held primarily for the
purpose of trading; it is due to be settled within 12 months after the reporting period; or there is no
unconditional right to defer the settlement of the liability for at least 12 months after the reporting period.
All other liabilities are classified as non-current
(f) Cash and cash equivalents
Cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other
short-term, highly liquid investments with original maturities of three months or less that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
For the statement of cash flows presentation purposes, cash and cash equivalents also includes bank
overdrafts, which are shown within borrowings in current liabilities on the statement of financial position
g) Trade and other receivables
Trade receivables are initially recognised at fair value and subsequently measured at amortised cost
using the effective interest method, less any provision for impairment. Trade receivables are generally
due for settlement within 30 days
Collectability of trade receivables is reviewed on an ongoing basis. Debts which are known to be
uncollectable are written off by reducing the carrying amount directly. A provision for impairment of trade
receivables is raised when there is objective evidence that the consolidated entity will not be able to
collect all amounts due according to the original terms of the receivables. Significant financial difficulties
of the debtor, probability that the debtor will enter bankruptcy or financial reorganisation and default or
19 delinquency in payments (more than 60 days overdue) are considered indicators that the trade receivable
may be impaired. The amount of the impairment allowance is the difference between the asset's carrying
amount and the present value of estimated future cash flows, discounted at the original effective interest
rate. Cash flows relating to short-term receivables are not discounted if the effect of discounting is
immaterial.
Other receivables are recognised at amortised cost, less any provision for impairment.
(h) Inventories
Inventories are stated at the lower of cost and net realisable value. Net realisable value is the estimated
selling price in the ordinary course of business less any applicable selling expenses.
(i) Property, plant and equipment
Land and buildings are shown at fair value, based on periodic, at least every 3 years, valuations by
external independent valuers, less subsequent depreciation and impairment for buildings. The valuations
are undertaken more frequently if there is a material change in the fair value relative to the carrying
amount. Any accumulated depreciation at the date of revaluation is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset. Increases in the
carrying amounts arising on revaluation of land and buildings are credited in other comprehensive income
through to the revaluation surplus reserve in equity. Any revaluation decrements are initially taken in other
comprehensive income through to the revaluation surplus reserve to the extent of any previous
revaluation surplus of the same asset. Thereafter the decrements are taken to profit or loss.
Plant and equipment is stated at historical cost less accumulated depreciation and impairment. Historical
cost includes expenditure that is directly attributable to the acquisition of the items.
Depreciation
Depreciation is calculated on a straight-line basis to write off the net cost of each item of property, plant
and equipment (excluding land) over their expected useful lives as follows:
Buildings
Plant and equipment
40 years
3-20 years
The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each balance
sheet date.
Leasehold improvements and plant and equipment under lease are depreciated over the unexpired
period of the lease or the estimated useful life of the assets, whichever is shorter.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
An item of property, plant and equipment is derecognised upon disposal or when there is no future
economic benefit to the consolidated entity. Gains and losses on disposals are determined by comparing
proceeds with the carrying amount. These gains or losses are included in the income statement.
(j) Capital Work in Progress
Capital work in progress represents expenditure on the refurbishment and equipment refreshment project.
No depreciation is charged against the assets until such time as they are available for use.
(k) Financial Instruments
Recognition and Initial Measurement
Financial instruments, incorporating financial assets and financial liabilities, are recognised when the
entity becomes a party to the contractual provisions of the instrument. Details of financial instruments
are set out in Note 22. Trade date accounting is adopted for financial assets that are delivered within
timeframes established by marketplace convention.
20 Financial instruments are initially measured at fair value plus transactions costs where the instrument is
not classified as being at fair value through the Statement of Profit or Loss and Other Comprehensive
Income. Transaction costs related to instruments classified as at fair value through profit or loss are
expensed through the Statement of Profit or Loss and Other Comprehensive Income immediately.
Financial instruments are classified and measured as set out below.
Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are
not quoted in an active market and are stated at amortised cost using the effective interest rate method.
Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets, principally equity securities y. After
initial recognition, fair value movements are recognised in other comprehensive income through the
available-for-sale reserve in equity. Cumulative gain or loss previously reported in the available-for-sale
reserve is recognised in profit or loss when the asset is derecognised or impaired.
Impairment of financial assets
The consolidated entity assesses at the end of each reporting period whether there is any objective
evidence that a financial asset or group of financial assets is impaired. Objective evidence includes
significant financial difficulty of the issuer or obligor; a breach of contract such as default or delinquency in
payments; the lender granting to a borrower concessions due to economic or legal reasons that the
lender would not otherwise do; it becomes probable that the borrower will enter bankruptcy or other
financial reorganisation; the disappearance of an active market for the financial asset; or observable data
indicating that there is a measurable decrease in estimated future cash flows.
The amount of the impairment allowance for financial assets carried at cost is the difference between the
asset's carrying amount and the present value of estimated future cash flows, discounted at the current
market rate of return for similar financial assets.
Available-for-sale financial assets are considered impaired when there has been a significant or
prolonged decline in value below initial cost. Subsequent increments in value are recognised in other
comprehensive income through the available-for-sale reserve.
(l) Intangible assets
Intangible assets acquired as part of a business combination, other than goodwill, are initially measured
at their fair value at the date of the acquisition. Intangible assets acquired separately are initially
recognised at cost. Indefinite life intangible assets are not amortised and are subsequently measured at
cost less any impairment. Finite life intangible assets are subsequently measured at cost less
amortisation and any impairment. The gains or losses recognised in profit or loss arising from the de-
recognition of intangible assets are measured as the difference between net disposal proceeds and the
carrying amount of the intangible asset. The method and useful lives of finite life intangible assets are
reviewed annually. Changes in the expected pattern of consumption or useful life are accounted for
prospectively by changing the amortisation method or period.
(m) Impairment of non-financial assets
Goodwill and other intangible assets that have an indefinite useful life are not subject to amortisation and
are tested annually for impairment or more frequently if events or changes in circumstances indicate that
they might be impaired. Other non-financial assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss
is recognised for the amount by which the asset's carrying amount exceeds its recoverable amount
Recoverable amount is the higher of an asset's fair value less costs of disposal and value-in-use. The
value-in-use is the present value of the estimated future cash flows relating to the asset using a pre-tax
discount rate specific to the asset or cash-generating unit to which the asset belongs. Assets that do not
have independent cash flows are grouped together to form a cash-generating unit.
21 (n) Employee Benefits
Provision is made for the Company's liability for employee benefits arising from services rendered by
employees to balance date. Employee benefits expected to be wholly settled within one year, together
with entitlements arising from wages and salaries and annual leave, which will be settled after one year,
have been measured at the amounts expected to be paid when the liability is settled, plus related on
costs. Employee benefits payable later than one year have been measured at the present value of the
estimated future cash outflows to be made for those benefits. Contributions are made by the entity to
employee superannuation funds and are charged as expenses when incurred.
(o) Trade and Other Payables
Liabilities for trade creditors and other amounts are carried at cost which is the fair value of the
consideration to be paid in the future for goods and services received, whether or not billed to the
Company
(p) Borrowings
Borrowings are recorded initially at fair value, net of transaction costs. Subsequent to initial recognition,
borrowings are measured at amortised cost with any difference between the initial recognised amount
and the redemption value being recognised in the Statement of Profit or Loss and Other Comprehensive
Income over the period of the borrowing using the effective interest rate method.
(q) Contributed Equity
Ordinary share capital is recognised at the fair value of the consideration received.
Any transaction costs arising on the issue of shares are recognised (net of tax) directly in equity as a
reduction of the share proceeds received.
(r) Business combinations
The acquisition method of accounting is used to account for business combinations regardless of whether
equity instruments or other assets are acquired
The consideration transferred is the sum of the acquisition-date fair values of the assets transferred,
equity instruments issued or liabilities incurred by the acquirer to former owners of the acquiree and the
amount of any non-controlling interest in the acquiree. For each business combination, the non-controlling
interest in the acquiree is measured at either fair value or at the proportionate share of the acquiree's
identifiable net assets. All acquisition costs are expensed as incurred to profit or loss.
On the acquisition of a business, the consolidated entity assesses the financial assets acquired and
liabilities assumed for appropriate classification and designation in accordance with the contractual terms,
economic conditions, the consolidated entity's operating or accounting policies and other pertinent
conditions in existence at the acquisition-date.
Where the business combination is achieved in stages, the consolidated entity remeasures its previously
held equity interest in the acquiree at the acquisition-date fair value and the difference between the fair
value and the previous carrying amount is recognised in profit or loss.
Contingent consideration to be transferred by the acquirer is recognised at the acquisition-date fair value.
Subsequent changes in the fair value of contingent consideration classified as an asset or liability is
recognised in profit or loss. Contingent consideration classified as equity is not remeasured and its
subsequent settlement is accounted for within equity.
The difference between the acquisition-date fair value of assets acquired, liabilities assumed and any
non-controlling interest in the acquiree and the fair value of the consideration transferred and the fair
value of any pre-existing investment in the acquiree is recognised as goodwill. If the consideration
transferred and the pre-existing fair value is less than the fair value of the identifiable net assets acquired,
being a bargain purchase to the acquirer, the difference is recognised as a gain directly in profit or loss by
the acquirer on the acquisition-date, but only after a reassessment of the identification and measurement
22 of the net assets acquired, the non-controlling interest in the acquiree, if any, the consideration
transferred and the acquirer's previously held equity interest in the acquirer.
Business combinations are initially accounted for on a provisional basis. The acquirer retrospectively
adjusts the provisional amounts recognised and also recognises additional assets or liabilities during the
measurement period, based on new information obtained about the facts and circumstances that existed
at the acquisition-date. The measurement period ends on either the earlier of (i) 12 months from the date
of the acquisition or (ii) when the acquirer receives all the information possible to determine fair value.
(s) Earnings per Share (EPS)
Basic earnings per Share
Basic earnings per share is calculated by dividing the loss attributable to equity holders of the Company,
excluding any costs of servicing equity other than shares, by the weighted average number of shares
outstanding during the financial year, adjusted for any bonus elements in Shares issued during the year.
Diluted earnings per Share
Diluted earnings per share adjusts the figures used in the determination of basic earnings per share to
take into account the after income tax effect of interest and other financing costs associated with dilutive
potential shares and the weighted average number of shares assumed to have been issued for no
consideration in relation to dilutive potential shares.
(t) New Accounting Standards for First Time Application in Subsequent Periods
A number of new standards, amendments to standards and interpretations are effective for annual
periods beginning after 1 January 2016, and have not been applied in preparing these consolidated
financial statements. Details of these new standards are set out below. None of these is expected to have
a significant effect on the consolidated financial statements of the Company.
Reference
Title
Summary
AASB 2015-3
The Standard completes the
AASB’s project to remove
Australian guidance on materiality
from Australian Accounting
Standards.
to
Amendments
Australian
Accounting
Standards arising
the
from
of
Withdrawal
AASB
1031
Materiality
AASB 1057
Application
Australian
Accounting
Standards
of
The AASB moved application
paragraphs in all Australian
Accounting Standards to this new
standard, in order to maintain
consistency with the layout of
IFRS standards.
Expected
Impact
Application
date
(financial
years
beginning)
1 July 2015
expected
No
impact
January
1
2016
expected
No
impact
AASB 2014-3
Amendments
Australian
Accounting
Standards
to
–
This Standard amends AASB 11
to provide guidance on the
accounting for acquisitions of
interests in joint operations in
January
1
2016
expected
No
impact
23 for
Accounting
Acquisitions
of
Interests in Joint
Operations
which the activity constitutes a
business.
AASB 2014-4
to
Amendments
Australian
Accounting
Standards
Clarification
Acceptable
Methods
of
Depreciation and
Amortisation
–
of
AASB 2014-9
to
Amendments
Australian
Accounting
–
Standards
Equity Method in
Separate
Financial
Statements
AASB 2014-10 Amendments
to
Australian
Accounting
Standards – Sale
or Contribution of
Assets between
an Investor and
its Associate or
Joint Venture
AASB 2015-1
–
to
Amendments
Australian
Accounting
Standards
Annual
Improvements to
Australian
Accounting
Standards 2012-
2014 Cycle
This Standard amends AASB 116
and AASB 138 to establish the
principle for the basis of
depreciation and amortisation as
being the expected pattern of
consumption of the future
economic benefits of an asset,
and to clarify that revenue is
generally presumed to be an
inappropriate basis for that
purpose.
This amending standard allows
entities to use the equity method
of accounting for investments in
subsidiaries, joint ventures and
associates in their separate
financial statements.
This amending standard requires
a full gain or loss to be
recognised when a transaction
involves a business (even if the
business is not housed in a
subsidiary), and a partial gain or
loss to be recognised when a
transaction involves assets that
do not constitute a business
(even if those assets are housed
in a subsidiary).
The Standard makes
amendments to various Australian
Accounting Standards arising
from the IASB’s Annual
Improvements process, and
editorial corrections.
January
1
2016
expected
No
impact
January
1
2016
expected
No
impact
January
1
2016
expected
No
impact
January
1
2016
expected
No
impact
AASB 2015-2
Amendments
Australian
Accounting
Standards
to
–
The Standard makes
amendments to AASB 101
Presentation of Financial
Statements arising from the
January
1
2016
Disclosures
Only
24 AASB 15
Disclosure
Initiative:
Amendments
AASB 101
to
Revenue
Contracts
Customers
from
with
IASB’s Disclosure Initiative
project.
This Standard establishes
principles (including disclosure
requirements) for reporting useful
information about the nature,
amount, timing and uncertainty of
revenue and cash flows arising
from an entity’s contracts with
customers.
January
1
2017
expected
No
impact
Consequential amendments
arising from the issuance of
AASB 15.
January
1
2017
expected
No
impact
January
1
2018
Potential
impact
assessed
to be
This Standard supersedes both
AASB 9 (December 2010) and
AASB 9 (December 2009) when
applied. It introduces a “fair value
through other comprehensive
income” category for debt
instruments, contains
requirements for impairment of
financial assets, etc.
Consequential amendments
arising from the issuance of
AASB 9
January
1
2018
Potential
impact
assessed
to be
AASB 2014-5
to
Amendments
Australian
Accounting
Standards arising
from AASB 15
AASB 9
Financial
Instruments
AASB 2014-7
to
Amendments
Australian
Accounting
Standards arising
from AASB 9
(December 2014)
(u) Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity
of normal business activities and the realisation of assets and discharge of liabilities in the normal course
of business.
As disclosed in the financial statements, the consolidated entity incurred a loss of $6,019,882 and had net
cash outflows from operating activities of $3,130,011 (2014: $37,531) for the year ended 31 December
2015. As at that date the consolidated entity had net assets of $1,298,358 and capital commitments
relating to the equipment refreshment and refurbishment project of $11,307,641. Accordingly the
consolidated entity will require additional funds to meet its expenditure program and its operational
commitments.
The Directors believe that it is reasonably foreseeable that the consolidated entity will continue as a going
concern and that it is appropriate to adopt the going concern basis in the preparation of the financial
report after consideration of the following factors:
25 •
•
•
•
•
The consolidated entity has arranged a $20 million loan facility with a company associated with its
major shareholder.
As at the balance date only $890,000 of the facility has been drawn.
The equipment refreshment and refurbishment project is expected to significantly enhance the
consolidated entity’s ability to generate revenue, profit and cash flow to meet its future ongoing
commitments.
The $20 million loan facility is sufficient to meet the consolidated entity’s obligations during the
refurbishment period and until the consolidated entity becomes cash positive.
The Company’s major shareholder has provided the Directors with an undertaking to provide
financial support to the consolidated entity should it be required.
2. Critical accounting judgements, estimates and assumptions
The preparation of the financial statements requires management to make judgements, estimates and
assumptions that affect the reported amounts in the financial statements. Management continually
evaluates its judgements and estimates in relation to assets, liabilities, contingent liabilities, revenue and
expenses. Management bases its judgements, estimates and assumptions on historical experience and
on other various factors, including expectations of future events management believes to be reasonable
under the circumstances. The resulting accounting judgements and estimates will seldom equal the
related actual results. The judgements, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities (refer to the respective notes) within
the next financial year are discussed below
Impairment of Intangibles
The consolidated entity assesses impairment of intangible assets at least on an annual basis. This
requires an estimation of the recoverable amount of the cash generating unit to which the intangible is
allocated. The assumptions and methodology used to assess the recoverable amount are set out in Note
13.
Share Based Payment transaction on acquisition of ACPL
The determination of the consideration for the shares issued to complete the reverse takeover transaction
between Aquis and ACPL and the resultant listing expense, required estimates of the value of ACPL at
the transaction date. Refer Note 20 for further details.
Recovery of deferred tax assets
Deferred tax assets are recognised for deductible temporary differences and unused tax losses only if the
consolidated entity considers it is probable that future taxable amounts will be available to utilise those
temporary differences and losses. Management judgement is required to determine the amount of
deferred tax assets that can be recognised based upon the likely timing and level of future taxable profits
Employee benefits provision
As discussed in note 1, the liability for employee benefits expected to be wholly settled more than 12
months from the reporting date are recognised and measured at the present value of the estimated future
cash flows to be made in respect of all employees at the reporting date. In determining the present value
of the liability, estimates of attrition rates and pay increases through promotion and inflation have been
taken into account.
26 3. Revenue and Other Income
Revenue
Revenue from services
Revenue from sale of goods
Total Revenue
Other Income
Interest
Discount on acquisition (refer note 20)
Other revenue
Total Other Income
4. Expenses from Continuing Operations
(a) Other operating expenses
Cost of sales
Annual casino licence fee
Stamp Duty
Repairs & Maintenance
Utilities
Insurance
Printing & Stationery
Marketing, promotion and associated costs
Legal, accounting and consultants
Travel and associated costs
Rates and taxes
Contracts
Uniform replacement and cleaning
Other expenses
(b) Finance charges
Interest – related parties
(c) Depreciation
Buildings
Plant and equipment
(d) Amortisation
Casino licence and fees
Consolidated
2015
$
2014
$
18,144,522
1,742,591
19,887,113
89,503
-
147,156
236,659
344,278
47,061
391,339
426
3,190,517
2,801
3,193,744
534,513
891,877
385,540
361,047
364,035
215,213
75,868
1,829,183
314,012
127,520
119,103
592,573
116,546
857,654
6,784,684
672,335
672,335
268,834
224,980
493,814
7,582
21,578
-
1,986
6,733
1,690
186
12,650
1,138
-
2,814
-
-
15,152
71,509
-
-
5,707
3,763
9,470
25,635
620
27 5. Income Tax
(a) The components of income tax expense comprise
Current tax
Deferred tax
Adjustment recognised for prior periods
(b) The prima facie tax on loss from ordinary activities before
income tax is reconciled to the income tax as follows:
Net profit/(loss)
Prima facie tax benefit on profit/(loss) from ordinary activities before
income tax at 30%
Add/(less) tax effect of:
Non-deductible amortisation
Other non-deductible expenses
Temporary differences:
Net non-assessable discount on acquisition
Tax losses not available to be carried forward
Net non-allowable expenses
Adjustment for prior periods
Income tax attributable to entity
(c) Unused tax losses and temporary differences for which no
deferred tax asset has been recognised at 30%
The balance comprises temporary differences attributable to:
Amounts recognised in profit or loss
Property, plant and equipment
Accruals
Employee benefits
Net deferred tax assets
Set-off deferred tax liabilities pursuant to set-off provisions
Amounts recognised in profit or loss
Accruals other
Net deferred tax assets
Net deferred tax assets at beginning
Charged to income statement current year
Prior period tax adjustment
Current period tax adjustment
Net deferred tax assets at end of the year
Consolidated
2015
$
2014
$
(2,398,723)
1,035,553
(3,033)
(1,366,203)
(23,694)
3,965
(2,196)
(21,925)
(7,386,085)
3,128,363
(2,215,826)
938,509
7,691
412,354
-
425,345
7,266
(3,033)
186
(1,268)
(957,156)
-
-
(2,196)
(1,366,203)
(21,925)
2,722,627
103,433
456,764
2,730,638
16,144
382,924
3,282,824
3,129,706
(1,270,389)
(84,551)
2,012,435
3,045,155
3,068,849
(1,035,552)
2,832
2,398,922
3,046,924
(3,965)
2,196
23,694
4,435,051
3,068,849
28 6. Earnings Per Share
Consolidated
2015
$
2014
$
No.
No.1
Weighted average number of ordinary shares outstanding during the period
used in the calculation of basic and diluted EPS
149,421,874
1 The weighted average number of shares and resulting basic and diluted loss per share for 2014 has been
adjusted to reflect the impact of the group restructure as at The Transaction Date.
164,300,556
Options are considered potential ordinary shares. For the years ended 31 December 2015 , their conversion
to ordinary shares would have had the effect of reducing the loss per share (from continuing operations.
Accordingly the options were not included in the determination of diluted earnings per share for that period.
Details relating to options are set out at notes 18(b).
7. Cash and Cash Equivalents
Cash at bank and on hand
6,804,470
5,071,462
Pursuant to the Deed between the ACT Gambling and Racing Commission, the Company and the Australian
Capital Territory dated 23 December 2014, the Company is required to maintain at all times a minimum of $3
million in Liquid assets that are not unless with the prior written consent of the Commission otherwise used in
the day to day operations of the business.
8. Trade and Other Receivables
Trade receivables
Other receivables
9. Inventories
Consumable stores - at cost
Goods for resale – at cost
10. Other Assets
Current
Prepaid casino licence fee
Prepayments and deferrals
Other
Non-current
Prepaid casino licence fee
25,982
8,432
34,414
516,416
69,861
586,277
10,114
19,854
29,968
97,018
40,519
137,537
891,877
261,974
5,035
-
247,619
2,857
1,158,886
250,476
2,749,954
-
In February 2015, the consolidated entity prepaid 5 years of annual casino licence fees to the ACT Gambling
and Racing Commission. The fees totalled $4,459,385 and are amortised on a straight line basis. The amount
of the prepayment that is to be amortised over the following 12 months is treated as a current asset. The
remainder of the prepayment is treated as a non-current asset. The recoverable value of the prepayment is
reviewed annually for potential impairment (refer Note 13).
29 11. Property Plant and Equipment
Building and leasehold improvements
Building at cost
Accumulated depreciation
Accumulated impairment
Plant and equipment
Plant and equipment at cost
Accumulated depreciation
Accumulated impairment
Balance
Movements in property plant and equipment:
Building and leasehold improvements
Opening written down value
Additions
Depreciation
Carrying value at 31 December
Plant and equipment
Opening written down value
Additions
Loss on disposal of plant and equipment
Disposals and zero value assets written off
Depreciation expense
Depreciation written back on disposal or write off of zero value assets
Carrying value at 31 December
12. Capital work-in-progress
Consolidated
2015
$
2014
$
20,764,271
(8,828,885)
(8,418,579)
3,516,807
20,672,923
(8,560,051)
(8,418,579)
3,694,293
889,562
(439,045)
(138,104)
312,413
6,196,341
(4,754,187)
(1,033,673)
408,481
3,829,220
4,102,774
3,694,294
91,346
(268,833)
3,700,001
-
(5,707)
3,516,807
3,694,294
408,481
129,443
(531)
(4,533,360)
(143,727)
4,452,107
312,413
411,886
358
-
-
(3,763)
-
408,481
Refurbishment and equipment refreshment project at cost
1,590,710
-
13. Intangible assets
Casino Licence and associated costs
At cost
Accumulated amortisation and impairment
Carrying value at 31 December
Movements in intangible assets
Opening written down value
Amortisation
Carrying value at 31 December
19,000,000
(17,054,918)
19,000,000
(17,029,283)
1,945,082
1,970,717
1,970,717
(25,635)
1,945,082
1,996,352
(25,635)
1,970,717
30 Consolidated
2015
$
2014
$
13. Intangible assets (continued)
The Casino Canberra licence is tested annually for impairment.
Casino Canberra is considered a cash-generating unit (CGU) for the purpose of impairment testing. The
recoverable value of the casino CGU was based on its fair value less costs to sell, determined by discounting
the future cash flows to be generated from the continuing use of the CGU and adjusting for the likely cost to
sell the CGU. The fair value less costs to sell of the CGU was determined to be higher than its carrying value
at 31 December 2015 of $10,062,309 and accordingly no impairment loss was recognised in 2015.
Fair value less costs to sell was determined by discounting the future cash flows generated from the
continuing use of the CGU for five years and a terminal growth rate thereafter and adjusting the result for the
likely costs to sell the CGU. The calculation of the fair value less costs of disposal was based on the following
key assumptions.
Cash flows are based primarily on a five year forecast extrapolated using average annual growth rates of
approximately 2 – 2.5%.
A post-tax discount rate of 12.27% was applied in determining the recoverable amount of the unit. The
discount rate was determined by using the weighted average cost of capital applicable to the CGU.
Forecast after tax cash flow was based on expectations of future outcomes taking into account the likely
effects of the refurbishment and equipment renewal project commenced during the reporting period.
Sensitivity
Judgements and estimates have been applied in respect of impairment testing of the CGU. Should these
judgements and estimates not occur the resulting carrying amount may decrease. The key sensitivities are as
follows:
o Revenue would need to decrease by more than 1% from the forecast levels (with all other
assumptions remaining constant) before the carrying value of the CGU would need to be impaired,
o Expenses would need to increase by more than 1% from the forecast levels (with all other
o
assumptions remaining constant) before the carrying value of the CGU would need to be impaired,
The discount rate would be required to increase to approximately 13.6% (with all other assumptions
remaining constant) before the carrying value of the CGU would need to be impaired,
2014
For the period ended 31 December 2014, the assessment of the potential impairment of the CGU was
undertaken using the fair value less costs to sell based on the purchase price paid by Aquis Canberra Pty Ltd
for the acquisition of all shares of Casino Canberra Limited as the basis of the CGU’s recoverable amount.
The recoverable amount of $6 million was determined to be higher than carrying amount of the CGU at 31
December 2014 of $ 5,242,276, and therefore, no impairment loss was recognised in 2014.
14 Available for Sale Financial Assets
Listed equities – at fair value
4,106
-
The fair values of listed investments are determined by reference to published price quotations in an active
market.
31 15. Trade and Other Payables
Current unsecured:
Trade payables
Annual Leave
Sundry payables and accrued expenses
Total payables (unsecured)
364,741
791,604
1,976,633
94,615
603,795
867,317
3,132,978
1,565,727
Trade and other payables are non-interest bearing and have maturity dates of less than 90 days. The fair
value of the liabilities is determined in accordance with the accounting policies disclosed in Note 1.
16. Employee Benefit Provisions
Long Service Leave
Movement in the provision was as follows:
Opening balance
Current
Non-Current
Entitlements
Payments
Closing balance
Current
Non-Current
17 Loans and Borrowings
Current
Interest bearing loans from related party (unsecured)
Closing balance
Non- Current
Non- interest bearing loan from related party (unsecured)
Interest bearing loans from related party (unsecured)
Closing balance
694,500
665,768
613,422
52,346
37,941
(9,209)
612,400
52,266
1,102
-
651,492
43,008
613,422
52,346
1,630,940
1,630,940
-
-
-
16,381,394
9,250,000
-
18,012,334
9,250,000
32 17 Loans and Borrowings (continued)
Financing Facilities:
The Group had the following unsecured financing facilities in place at 31 December 2015:
Lender
Principle
Drawn
Available
Convertible
Interest Rate
Amount
Amount
13,750,000 13,750,000
2,000,000
2,000,000
700,000
700,000
-
-
-
20,000,000
890,000 19,110,000
Yes
Yes
No
No
8%
8%
8%
BBSY + 2%
n/a
672,335
n/a
n/a
n/a
ACHPL
(Shareholder
Loan)
Newberth
(Shareholder
Loan)
Newberth
(Newberth Loan)
Newberth
(Working Capital
Facility)
Interest
capitalised
Totals
36,450,000 18,012,334 19,110,000
Newberth = Newberth Limited, a wholly owned Company of Mr Tony Fung
ACHPL = Aquis Canberra Holdings (Aus) Pty Ltd, a wholly owned Company of Mr Tony Fung
Key terms of the financing facilities are as follows:
Shareholder Loans
The Shareholder Loans for $2.0 million and $13.75 million have a maturity date of 5 years from the date
the Company was reinstated for trading on the ASX. Repayment may be made in any of the following
ways:
At the election of the ACHPL, by conversion into the Company’s shares (Shares) at an issue price
of $0.20 per share provided that the entire amount outstanding must be converted at once and as
conversion must not result in ACHPL and its associates having a voting power in excess of
89.59%;
At the election of the Company, repaid in cash at any time prior to the maturity date;
At the election of the Company by notice no later than 5 business days prior to the maturity date,
by conversion into shares at an issue price of $0.20 per share on the maturity date
Repayment in cash on either the Maturity Date, provided that the volume weighted average price
(VWAP) of the Company’s shares in the 30 day period immediately prior to the Maturity Date is
equal to or greater than $0.25 or 5 business after ACHPL issues a repayment notice and the
VWAP of the Company’s shares in the 30 day period immediately prior to the giving of the notice
is equal to or greater than $0.25.
33 17 Loans and Borrowings (continued)
Other Loans (Current)
The Newberth Loan is repayable within 6 months of the receipt of written demand of the Lender.
The Working Capital Facility is repayable on the receipt of 3 months’ written notice provided that
repayment is only to the extent it does not result in an insolvency event in respect of the Company.
18. Contributed Equity
(a) Fully paid ordinary shares
4,167,952
1
The share capital of the Company consists only of fully paid ordinary shares, which do not have a par
value. All shareholders participate in dividends and the proceeds on winding up of the parent entity in
proportion to the number of shares held. At shareholders' meetings each ordinary share is entitled to one
vote when a poll is called, otherwise each shareholder has one vote on a show of hands.
Balance at the beginning of the reporting period
Reverse acquisition refer Note 20
Issued for $0.20 each pursuant to underwritten Rights Issue
Total shares issued during the financial year
Balance at reporting date
1
2,167,951
2,000,000
4,167,952
4,167,952
1
-
-
-
1
In accordance with the reverse acquisition procedure, the equity balance recognised in the consolidated
financial statements is the equity balance of the legal subsidiary Aquis Canberra Pty Ltd immediately before
the business combination. The amount recognised as contributed equity in the consolidated financial
statements has been determined by adding the cost of the acquisition to the contributed equity of the legal
subsidiary ACPL.
Number at the beginning of the reporting period
Reverse acquisition refer Note 20
Issued for $0.20 each pursuant to underwritten Rights Issue
Balance at reporting date
Consolidated
2015
No.
25,719,176
149,421,874
10,000,000
185,141,050
2014
No.
25,719,176
-
-
25,719,176
The number of shares outstanding is that of Aquis Entertainment Limited (previously Discovery Resources
Limited). The comparative figure presented is also that of Discovery Resources Limited.
(b) Unlisted Options
Balance at the beginning and end of the reporting period
5,000,000
5,000,000
Consolidated
2015
No.
2014
No.
34 19. Retained Earnings
Opening balance
Comprehensive profit / (loss) for the period
Balance at 31 December
20. Acquisition of Controlled Entities
Aquis / ACPL (2015)
Consolidated
2015
$
2014
$
3,150,288
(6,019,882)
-
3,150,288
(2,869,594)
3,150,288
On 7 August 2015, Aquis (formerly Discovery Resources Limited), the legal parent and legal acquirer,
completed the acquisition of ACPL. The acquisition did not meet the definition of a business combination in
accordance with AASB 3: Business Combinations. Instead the acquisition has been treated as a share
based payment under AASB 2 “Share Based Payments to be the accounting parent whereby ACPL is
deemed to have issued shares to Aquis Shareholders in exchange for the net assets held by Aquis. The
transaction is measured at the fair value of the equity instruments that would have been given by ACPL to
have exactly the same percentage holding in the new structure at the date of the transaction which was
assessed at $2,167,952.
The excess of the deemed consideration over the pre-acquisition equity balances of Aquis was deemed to
be the amount paid for the listing status of Aquis, being $1,119,941 (recognised as a share based payment
in the statement of profit or loss) as set out below:
Purchase consideration -149,421,874 shares issued at fair value
2,167,952
$
Less
Cash and cash equivalents
Trade and other receivables
Other current assets
Trade and other payables
Identifiable net assets
Share based payment expense
1,137,888
15,458
1,703
(107,038)
1,048,010
1,119,941
The equity structure in the consolidated financial statements (the number and type of equity instruments
issued) at the date of the acquisition reflects the equity structure of Aquis, including the equity instruments
issued by Aquis to effect the acquisition.
The results for the year ended 31 December 2014 and 31 December 2015 comprise the results of ACPL and
the results of Aquis subsequent to the acquisition.
ACPL / CCL (2014)
On 22 December 2014 (Acquisition Date), ACPL acquired CCL for a consideration of $6 million. The fair
value of the net assets of CCL at the Acquisition Date was $9,190,517 giving rise to a “bargain purchase”
difference of $3,190,517. After identifying all of the assets and liabilities acquired, the excess of the net
assets acquired over the purchase price has been recognised in profit or loss on the acquisition date.
Accordingly the $3,190,517 has been recognised in the consolidated profit and loss at 31 December 2014 as
a “Discount on acquisition”.
35 20. Acquisition of Controlled Entities (continued)
The fair value of the assets and liabilities of CCL at the acquisition date were as follows:
Purchase consideration
Less
Cash and cash equivalents
Trade and other receivables
Inventory
Other current assets
Property, Plant and Equipment
Intangible assets
Deferred tax assets
Trade and other payables
Provisions
Identified assets acquired and liabilities assumed
Discount on acquisition
$
6,000,000
1,859,350
38,044
139,632
286,801
4,111,886
1,971,337
3,046,924
(1,005,669)
(1,257,789)
9,190,516
3,190,516
21. Cash Flow Information
Reconciliation of Cash Flow from Operations with Loss after Income
Tax:
Loss from ordinary activities after income tax
Non-cash flows in profit from ordinary activities:
Depreciation
Discount on consolidation
Interest on loan
Casino licenses
Share based payment
Employee provisions - current
Employee provisions – non current
Changes in operating assets and liabilities:
(Increase)/Decrease in receivables
(Increase)/Decrease in inventory
Decrease / (Increase) in other assets
Decrease / (Increase) in deferred tax asset
(Decrease)/Increase in creditors and accruals
Cash flows from operations
22. Financial Instruments
a) General objectives, policies and processes
Consolidated
2015
$
2014
$
(6,019,882)
3,150,288
519,980
-
672,335
817,554
1,119,940
38,070
(9,338)
(4,446)
(448,740)
(16,534)
(1,366,202)
1,567,252
(3,130,011)
10,090
(3,190,517)
-
-
-
1,022
80
5,309
2,095
36,327
(19,729)
(32,496)
(37,531)
The consolidated entity’s financial instruments consist mainly of deposits with banks, accounts receivable,
accounts payable and loans from related parties. The consolidated entity’s business exposes it to market
risk (interest rates), credit risk and liquidity risk.
36 22. Financial Instruments (continued)
The Board has overall responsibility for the determination of the Company’s risk management objectives
and policies and, whilst retaining ultimate responsibility for them, it has delegated the authority for
designing and operating processes that ensure the effective implementation of the objectives and policies
to the Company’s finance function. The Company’s risk management objectives are therefore designed
to minimise the potential impacts of these risks on the results of the Company where such impacts may
be material. The overall objective of the Board is to set polices that seek to reduce risk as far as possible
without unduly affecting the Company’s competitiveness and flexibility.
(b) Credit Risk
The Company has exposure to credit risk on the receivables in the balance sheet. However the
Company has no significant concentrations of credit risk. The Company has policies in place to ensure
that sales of products and services are made to customers with an appropriate credit history, and as
such collateral is not requested. Cash at bank is held with the ANZ Banking Group Limited,
The maximum exposure to credit risk at balance date is as follows:
Cash at bank
Trade and other receivables
2015
$
2014
$
5,341,342
3,800,471
34,414
29,968
5,375,756
3,830,439
(c) Liquidity risk
The consolidated entity manages liquidity risk by monitoring forecast cash flows.
Maturity Analysis - 2015
Financial Liabilities
Trade Creditors
Intercompany loans
Other creditors and accruals
Total
Carrying
amount
$
< 6 months
6-12
months
1-3 years
> 3 years
$
$
$
$
364,741
18,012,334
1,976,633
364,741
-
1,976,633
20,353,708
2,341,374
-
1,630,940
-
1,630,940
-
-
-
-
-
16,381,394
-
16,381,394
Intercompany loans are repayable within 6 months of receipt of written notice. At the date of this report no
notice had been received
Maturity Analysis - 2014
Financial Liabilities
Trade Creditors
Other creditors and accruals
Total
Carrying
amount
$
< 6 months
6-12
months
1-3 years
> 3 years
$
$
$
$
94,615
867,317
961,932
94,615
867,317
961,932
-
-
-
-
-
-
-
-
-
37 22. Financial Instruments (continued)
(d) Market Risk
Market risk arises from the use of interest bearing, tradable and foreign currency financial instruments. It is
the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in
interest rates (interest rate risk), foreign exchange rates (currency risk) or other market factors (other price
risk).
(i) Interest rate risk
The Company’s exposure to market interest rates relates to both the Company’s long-term (interest bearing)
loan obligation as set out in note 17 and the company’s future cash flows from its cash holdings. The
Company’s exposure to interest rate risk and the effective weighted average interest rate by maturity periods
is set out in the tables below:
Fixed / Floating
Interest Rate
Maturing
Within 1
Year
1 to 5
Years
Non-
Interest
Bearing
Total
Amount
Weighted
Average
Effective
Interest
Rate
%
$
$
1.9%
6,804,470
5,295,487
34,414
-
6,838,884
5,295487
$
-
-
-
$
$
1,508,983
6,804,470
34,414
34,414
1,543,397
6,838,884
364,741
14,195,656
-
-
- 14,195,656
736,148
736,148
-
2,185,738
-
2,185,738
8%
8%
8%
364,741
364,741
- 14,195,656
-
736,148
-
-
2,185,738
894,792
Working capital facility
4.3%
894,792
894,792
-
Total Financial Liabilities
18,377,075 1,630,940 16,381,394
364,741 18,377,075
At 31 December 2014
%
$
$
Financials Assets
Cash & Cash Equivalents
Trade & Other Receivable
Total Financial Assets
Financial Liabilities
Trade Creditors
Shareholder loan
Total Financial Liabilities
2.5%
5,071,462
747,650
-
-
-
29,968
-
5,101,430
747,650
94,615
9,250,000
9,344,615
-
-
-
$
-
-
-
-
-
-
$
$
4,323,812
5,071,462
29,968
29,968
4,353,780
5,101,430
94,615
94,615
9,250,000
9,250,000
9,344,615
9,344,615
At 31 December 2015
Financial Assets
Cash & Cash Equivalents
Trade & Other Receivable
Total Financial Assets
Financial Liabilities
Trade Creditors
Shareholder loan
Newberth loan
Newberth loan
38
22. Financial Instruments (continued)
ii) Net Fair Values
The carrying amount of financial assets and financial liabilities recorded in the financial statements
represents their respective net fair values, determined in accordance with the accounting policies
disclosed in Note 1 to the financial statements.
iii) Sensitivity Analysis
The group has performed sensitivity analysis relating to its exposure to interest rate risk at balance date.
The sensitivity analysis demonstrates the effect on the current year results and equity which could result
from a change in these risks.
Interest Rate Sensitivity Analysis
At 31 December 2015, the effect on profit and equity as a result of changes in the interest rate, with all
other variables remaining constant would be as follows:
Consolidated Group
2014
2015
$
$
(254,337)
259,632
14,953
(14,953)
(254,337)
259,632
14,953
(14,953)
Change in profit:
Increase in interest rate by 2%
Decrease in interest rate by 2%
Change in Equity
Increase in interest rate by 2%
Decrease in interest rate by 2%
(ii) Other Price Risk
The Company is not subject to other price risk
23. Key Management Personnel Disclosures
(a) Key Management Personnel
Directors
T Fung
R Or Ching Fai
J Fung
A Chow
R Shields
K Chapman
J Mellor
G Andres
T Adcock
J Puckridge
T Pickett
Executives
A Gomes
J Mellor
G Gill
R Bach
A Wilbers
Chairman (Appointed 7 Aug 2015)
Vice Chairman (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 7 Sept 2015)
Non-Executive Director (Appointed 7 Aug 2015)
Non-Executive Director (Appointed 14 Aug 2015)
Executive Director (Appointed 14 Aug 2015)
Executive Director and CEO (Appointed 7 Aug 2015 – Resigned 13 Nov 2015)
Non-Executive Chairman (Resigned 7 Aug 2015)
Executive Director/Chief Executive Officer (Resigned 7 Aug 2015)
Non-Executive Director (Resigned 7 Aug 2015)
CEO appointed 16 November 2015
Senior Executive to 14 July 2015
CFO and Company Secretary appointed 7 August 2015
VP and General Manager appointed 2 July 2015
Company Secretary resigned 7 August 2015
39 23. Key Management Personnel Disclosures (continued)
Transactions with Key Management Personnel
Key management personnel remuneration includes the following:
Short term employee benefits:
Post-employment benefits:
Total remuneration
Further details are included in the Remuneration Report.
24 Related Party Transactions
(a) Controlling entities
2015
$
1,513,993
129,780
1,643,773
2014
$
-
-
-
The ultimate parent is TF Reef – Canberra Holdings Limited (incorporated in BVI. The ultimate Australian
parent entity is Aquis Entertainment Canberra Holdings (Aus) Pty Ltd
(b) Key Management Personnel
Disclosures relating to KMP are included in Note 23 and the Remuneration report.
(c) Transaction with Related Parties
The Group received loans from related parties during the year. Details of the loans are set out at Note 17.
25. Expenditure Commitments
Capital Expenditure Commitments
Not later than one year
26. Contingent Liabilities
2015
2014
11,707,484
-
Pursuant to the Deed between the ACT Gambling and Racing Commission, CCL and the Australian
Capital Territory dated 23 December 2014, CCL granted the Commission and the Territory:
•
•
First ranking mortgage over the casino land and
First ranking security interest over all other property.
CCL can replace the mortgage with a bank guarantee for $3 million should it raise debt finance in
connection with improvements or redevelopment of the business.
40
27. Investment in Controlled Entities
Interests in controlled entities are set out below. All entities are incorporated and domiciled in Australia.
Name
Principal Activity
Incorporated
Aquis Canberra Pty Ltd
Casino Canberra Limited1
Gaming and entertainment
Gaming and entertainment
Australia
Australia
1 Shares held by ACPL
For details of the acquisition of controlled entities refer Note 20.
Ownership
Interest
2015
100%
100%
2014
100%
100%
28. Parent Entity Information
Statement of Financial Position
Current assets
Non-current assets
Total assets
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Share option reserve
Accumulated losses
Total equity
Statement of Profit or Loss and Other Comprehensive
Income
Income
(Loss) for the year
1 Comparative is for ACPL at 31 December 2014
2015
$
20141
$
1,947,835
1,305,089
3,252,924
(281,297)
(894,792)
(1,176,089)
1
-
6,000,001
-
(6,000,000)
2,076,835
1
4,727,776
127,713
(2,778,654)
1
-
-
2,076,835
1
17,397
(971,175)
-
-
Commitments for the parent entity are the same as those for the consolidated entity and are set out at Note
25.
The parent entity has not entered into a deed of cross guarantee nor are there any contingent liabilities at
year end.
29. Subsequent Events
Other than as disclosed in this report, there has not arisen in the interval between the end of the reporting
period and the date of this report any item, transaction or event of a material and unusual nature likely, in
the opinion of the Directors, to significantly affect the operations of the entity, the results of those operations
or the state of affairs of the Company in future financial years.
41 30. Segment Information
The consolidated entity has identified its operating segments based on the internal reports that are
reviewed and used by the Board of Directors (chief operating decision makers) in assessing performance
and determining the allocation of resources. The consolidated entity operates in a single operating
segment: that of the gaming and entertainment industry in Australia.
31 Auditor Information
The following fees were paid or payable for services provided by the Group’s auditors:
2015
$
2014
$
53,750
-
Audit of the Financial Statements
RSM Australia Pty Ltd
32. Company Information
The registered office and principal place of business is as follows:
21 Binara Street
Canberra ACT 2601
33. Authorisation of Financial Statements
The consolidated financial statements for the year ended 31 December 2015 (including comparatives) were
approved and authorised for issue by the Board of Directors on 26 February 2016.
42 43 AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the financial report of Aquis Entertainment Limited for the year ended 31 December
2015, I declare that, to the best of my knowledge and belief, there have been no contraventions of:
(i)
(ii)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit; and
any applicable code of professional conduct in relation to the audit.
RSM AUSTRALIA PARTNERS
Canberra, Australian Capital Territory
Dated: 29 February 2016
RODNEY MILLER
Partner
44 INDEPENDENT AUDITOR’S REPORT
TO THE MEMBERS OF
AQUIS ENTERTAINMENT LIMITED
Report on the Financial Report
We have audited the accompanying financial report of Aquis Entertainment Limited, which comprises the
consolidated statement of financial position as at 31 December 2015, and the consolidated statement of
comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows
for the year then ended, notes comprising a summary of significant accounting policies and other explanatory
information, and the directors' declaration of the consolidated entity comprising the company and the entities it
controlled at the year’s end or from time to time during the financial year.
Directors’ Responsibility for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that is free from
material misstatement, whether due to fraud or error. In Note 1, the directors also state, in accordance with
Accounting Standard AASB 101 Presentation of Financial Statements, that the financial statements comply with
International Financial Reporting Standards.
Auditor’s Responsibility
Our responsibility is to express an opinion on the financial report based on our audit. We conducted our audit in
accordance with Australian Auditing Standards. These Auditing Standards require that we comply with relevant
ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable
assurance about whether the financial report is free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the
financial report. The procedures selected depend on the auditor's judgement, including the assessment of the
risks of material misstatement of the financial report, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of
the financial report in order to design audit procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates
made by the directors, as well as evaluating the overall presentation of the financial report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit
opinions.
45 Independence
In conducting our audit, we have complied with the independence requirements of the Corporations Act 2001.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given to
the directors of Aquis Entertainment Limited, would be in the same terms if given to the directors as at the time
of this auditor's report.
Opinion
In our opinion:
(a) the financial report of Aquis Entertainment Limited is in accordance with the Corporations Act 2001,
including:
(i) giving a true and fair view of the consolidated entity’s financial position as at 31 December 2015 and of
its performance for the year ended on that date; and
(ii) complying with Australian Accounting Standards and the Corporations Regulations 2001; and
(b) the financial report also complies with International Financial Reporting Standards as disclosed in Note 1.
Report on the Remuneration Report
We have audited the Remuneration Report included on page 5 of the directors’ report for the year ended 31
December 2015. The directors of the company are responsible for the preparation and presentation of the
Remuneration Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
Opinion
In our opinion the Remuneration Report of Aquis Entertainment Limited for the year ended 31 December 2015
complies with section 300A of the Corporations Act 2001.
RSM AUSTRALIA PARTNERS
Canberra, Australian Capital Territory
Dated: 29 February 2016
RODNEY MILLER
Partner
46 AQUIS ENTERTAINMENT LIMITED
ACN 147 411 881
(Company)
CORPORATE GOVERNANCE STATEMENT
This Corporate Governance Statement is current as at 27 April 2016 and has been approved by the Board of Directors on that date.
This Corporate Governance Statement discloses the extent to which the Company follows the recommendations set by the ASX Corporate
Governance Council
(Recommendations). The
its publication Corporate Governance Principles and Recommendations
Recommendations are not mandatory, however the Recommendations that will not be followed have been identified and reasons
provided for not following them along with what (if any) alternative governance practices the Company intends to adopt in lieu of the
recommendation.
in
The Company has adopted a Corporate Governance Plan which provides the written terms of reference for the Company’s corporate
governance duties.
The Company’s Corporate Governance Plan is available on the Company’s website at www.aquisentertainment.com.
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Principle 1: Lay solid foundations for management and oversight
Recommendation 1.1
A listed entity should have and disclose a charter which
sets out the respective roles and responsibilities of the
Board, the Chair and management, and includes a
description of those matters expressly reserved to the
Board and those delegated to management.
Yes
responsibilities of
The Company has a Board Charter which sets out the respective
roles and
the Chair and
management, and includes a description of those matters
expressly reserved to the Board and those delegated to
management. A copy of the Charter can be viewed on the
Company’s website.
the Board,
47
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 1.2
A listed entity should:
(a) undertake appropriate checks before appointing a
person, or putting forward to security holders a
candidate for election, as a Director; and
(b) provide security holders with all material information
relevant to a decision on whether or not to elect or re-
elect a Director.
Recommendation 1.3
A listed entity should have a written agreement with each
Director and senior executive setting out the terms of their
appointment.
Recommendation 1.4
Yes
The Company:
•
•
including character
undertakes appropriate checks
references, criminal history and insolvency checks before
appointing or putting forward to security holders a
candidate for election, as a Director
security holders are provided with all material information
relevant to a decision on whether or not to elect or re-
elect a Director. The information is included in the
Company’s Annual Reports, Notices of Meeting and
website.
Yes
The Company has written agreements with each Director and
senior executive setting out the terms of their appointment.
The company secretary of a listed entity should be
accountable directly to the Board, through the Chair, on
all matters to do with the proper functioning of the Board.
Yes
The Board Charter establishes that the Company Secretary is
accountable directly to the Board through the Chair on all
matters to do with the proper functioning of the Board.
Recommendation 1.5
A listed entity should:
(a) have a diversity policy which includes requirements for
the Board or a relevant committee of the Board to set
measurable objectives for achieving gender diversity
and to assess annually both the objectives and the
entity’s progress in achieving them;
(b) disclose that policy or a summary or it; and
Yes - Partly
Aquis Entertainment acknowledges the positive outcomes that
can be achieved through a diverse workforce and recognises
and utilises the diverse skills and talent from its directors, officers
and employees. To this end the Company has developed a
diversity policy which can be viewed on the Company’s website.
Yes
The Remuneration & Nomination Committee will be responsible
for reviewing and making recommendations to the Board on the
effectiveness of the Diversity Policy. If the Committee considers
48 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
(c) disclose as at the end of each reporting period:
(i)
the measurable objectives for achieving gender
diversity set by the Board in accordance with the
entity’s diversity policy and its progress towards
achieving them; and
Yes
(ii) either:
(A)
the respective proportions of men and
women on the Board, in senior executive
positions and across the whole organisation
(including how the entity has defined
“senior executive” for these purposes); or
(B)
if the entity is a “relevant employer” under
the Workplace Gender Equality Act, the
recent “Gender Equality
entity’s most
Indicators”, as defined in the Workplace
Gender Equality Act.
Recommendation 1.6
A listed entity should:
(a) have and disclose a process for periodically evaluating
the performance of the Board, its committees and
individual Directors; and
(b) disclose, in relation to each reporting period, whether
a performance evaluation was undertaken in the
reporting period in accordance with that process.
Yes
yes
necessary, it will advise the Board on the establishment of
measurable objectives set to achieve gender diversity to enable
the Board to annually assess and report the Company’s progress
in achievement of its objectives. If developed, the measureable
objectives will be included in either the Annual Corporate
Governance Statement or the Company’s Annual Report.
At 31 March 2016, the respective proportions of men and women
on the Board, in senior executive positions and across the whole
organisation were as follows:
Board (including Executive Directors)
Senior Executives (excl. Executive Directors)1
Management and staff
Total
Female Male
Total
1
1
86
88
6
2
157
165
7
3
243
253
1 For the purposes of this statement, Senior Executives are defined as Key
Management Personnel (excluding Directors).
The Board Charter establishes the requirement and process to
conduct an annual evaluation of the performance of the Board,
its committees and individual Directors. The Remuneration &
Nomination Committee will be responsible for the conduct of the
evaluation.
Due to the short time frame between the date of formation of
the Board (August 2015 and the end of the reporting period
(December 2015), the Board considers that a performance
evaluation at this time would be premature.
49 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 1.7
A listed entity should:
(a) have and disclose a process for periodically evaluating
Yes
the performance of its senior executives; and
(b) disclose, in relation to each reporting period, whether
a performance evaluation was undertaken in the
reporting period in accordance with that process.
yes
Principle 2: Structure the Board to add value
Recommendation 2.1
The Board of a listed entity should:
(a) have a nomination committee which:
Yes
(i) has at least three members, a majority of whom
are independent Directors; and
(ii)
is chaired by an independent Director,
and disclose:
(iii)
the charter of the committee;
(iv) the members of the committee; and
(v) as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of the
members at those meetings; or
(b) if it does not have a nomination committee, disclose
that fact and the processes it employs to address
The Board is responsible for reviewing the performance of senior
management against strategies established by the Board. To this
end
the
the Board has established KPI’s against which
performance of its senior executives will be assessed.
Due to the short time frame between the date of formation of
the Board (August 2015 and the end of the reporting period
(December 2015), the Board considers that a performance
evaluation of executives at this time would be premature.
The Remuneration and Nomination Committee has three
members the majority of whom are independent Directors. The
Committee is chaired by an independent Director.
The names of the Committee Members are as follows:
• Dr Kenneth Chapman (Chair)
• Mr Raymond Or Ching-Fai
• Mr Russell Shields
A copy of the Committee Charter may be viewed on the
Company website.
The qualifications and experience of the members of the
Committee are set out on the Company’s website and in the
Annual Reports. The number of times the committee met
throughout a period and the individual attendances of the
members at those meetings are disclosed in the Annual Report.
50 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Board succession issues and to ensure that the Board
has the appropriate balance of skills, experience,
independence and knowledge of the entity to enable
it to discharge its duties and responsibilities effectively.
Recommendation 2.2
A listed entity should have and disclose a Board skill matrix
setting out the mix of skills and diversity that the Board
currently has or is looking to achieve in its membership.
Yes
Recommendation 2.3
A listed entity should disclose:
The Remuneration and Nomination Committee will be tasked
with developing a Board Skills Matrix to assist in identifying the
experience, skills, expertise and diversity required for the Board to
discharge
its mandate to maintain the necessary mix of
expertise.
(a) the names of the Directors considered by the Board to
Yes
be independent Directors;
The names of the Directors considered to be independent are as
follows:
Governance
(b) if a Director has an interest, position, association or
relationship of the type described in Box 2.3 of the ASX
Corporate
and
Recommendation (3rd Edition), but the Board is of the
opinion
the
independence of the Director, the nature of the
interest, position, association or relationship in question
and an explanation of why the Board is of that opinion;
and
it does not compromise
Principles
that
(c) the length of service of each Director
• Mr Alex Chow and
• Mr Russell Shields
• Dr Kenneth Chapman
Yes
The names of the Directors who are not considered independent
are:
• Mr Tony Fung
• Mr Raymond Or Ching-Fai
• Mr Justin Fung
• Ms Jessica Mellor
Ms Mellor and Dr Chapman were appointed on 14 August 2015.
Yes
Mr Chow was elected at the EGM on 10 July 2015 and was
formally appointed on 7 September 2015 following the receipt of
51 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 2.4
A majority of the Board of a listed entity should be
independent Directors.
all necessary Government approvals for his appointment.
All other Directors were appointed at the EGM with the
appointments taking affect from 7 August 2015.
Yes
At the date of this report, the Board comprises 7 members, 3 of
whom are independent and 4 of whom are non-independent
Directors.
The Company considers this to be an appropriate balance given
its majority shareholder and the importance to the company at
this time to have 1 Executive Directors, who is not considered
independent.
Recommendation 2.5
The Chair of the Board of a listed entity should be an
independent Director and, in particular, should not be the
same person as the CEO of the entity.
No
The Chair of the Board is Mr Tony Fung who is also the owner of
the majority shareholder and therefore is not independent. Mr
Fung is a highly experienced Director and Chairman. The
Company considers that, reflective of the majority shareholding,
the Board will function more effectively with Mr Fung as
Chairman.
Recommendation 2.6
A listed entity should have a program for inducting new
Directors and providing appropriate professional
development opportunities for continuing Directors to
develop and maintain the skills and knowledge needed to
perform their role as a Director effectively.
Principle 3: Act ethically and responsibly
Yes
The Company has an induction program for new Directors and
encourages ongoing professional development of directors and
senior management.
52
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 3.1
A listed entity should:
(a) have a code of conduct for its Directors, senior
Yes
executives and employees; and
(b) disclose that code or a summary of it.
The Company has a Code of Conduct for its Directors, senior
executives and employees. A copy of the Code of Conduct
may be viewed on the Company’s website.
Principle 4: Safeguard integrity in financial reporting
Recommendation 4.1
The Board of a listed entity should:
(a) have an audit committee which:
Yes
(i)
(ii)
has at least three members, all of whom are
non-executive Directors and a majority of
whom are independent Directors; and
is chaired by an independent Director, who is
not the Chair of the Board,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the relevant qualifications and experience of
the members of the committee; and
in relation to each reporting period, the number
of times the committee met throughout the
period and the individual attendances of the
members at those meetings; or
(b) if it does not have an audit committee, disclose that
fact and the processes it employs that independently
verify and safeguard the integrity of its financial
reporting, including the processes for the appointment
The Audit and Risk Management Committee has three members
all of whom are independent Directors. The Committee is
chaired by an independent Director.
The names of the Committee Members are as follows:
• Mr Alex Chow (Chair)
• Dr Kenneth Chapman and
• Mr Russell Shields
A copy of the Committee Charter may be viewed on the
Company website. The qualifications and experience of the
members of the Committee are set out on the Company’s
website and in the Annual Report. The number of times the
committee met
individual
attendances of the members at those meetings are disclosed in
the Annual Report.
throughout a period and
the
53
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
and removal of the external auditor and the rotation of
the audit engagement partner.
Recommendation 4.2
The Board of a listed entity should, before it approves the
entity’s financial statements for a financial period, receive
from its CEO and CFO a declaration that the financial
records of the entity have been properly maintained and
that the financial statements comply with the appropriate
accounting standards and give a true and fair view of the
financial position and performance of the entity and that
the opinion has been formed on the basis of a sound
system of risk management and internal control which is
operating effectively.
Recommendation 4.3
Yes
The Audit and Risk Management Charter requires the CEO and
CFO to provide to the Board prior to the Company’s financial
statements being approved, a declaration that the financial
records have been properly maintained and that the financial
statements comply with the appropriate accounting standards
and give a true and fair view of the financial position and
performance of the entity and that the opinion has been formed
on the basis of a sound system of risk management and internal
control which is operating effectively.
A listed entity that has an AGM should ensure that its
external auditor attends its AGM and is available to
answer questions from security holders relevant to the
audit.
Yes
The Shareholder Communications Policy of the Company states
that the external auditor will attend the AGM and will be
available to answer questions from security holders relevant to
the audit.
Principle 5: Make timely and balanced disclosure
Recommendation 5.1
A listed entity should:
(a) have a written policy for complying with its continuous
Yes
disclosure obligations under the Listing Rules; and
(b) disclose that policy or a summary of it.
The Company has a Disclosure Policy which sets out the process
by which the Company complies with its continuous disclosure
obligations under the Listing Rules.
A copy of the Policy may be viewed on the Company’s website.
54
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Principle 6: Respect the rights of security holders
Recommendation 6.1
A listed entity should provide information about itself and
its governance to investors via its website.
Yes
The Company’s Corporate Governance Statement, Charters
and Corporate Governance Policies are included on its website.
Recommendation 6.2
A listed entity should design and implement an investor
two-way
relations program
communication with investors.
facilitate effective
to
Recommendation 6.3
A listed entity should disclose the policies and processes it
has in place to facilitate and encourage participation at
meetings of security holders.
Recommendation 6.4
A listed entity should give security holders the option to
receive communications from, and send communications
to, the entity and its security registry electronically.
Principle 7: Recognise and manage risk
Recommendation 7.1
The Board of a listed entity should:
(a) have a committee or committees to oversee risk, each
of which:
Yes
Yes
Yes
The Company has a Shareholder Communication policy which is
aimed at to facilitating effective two-way communication with
investors. A copy of the Policy can be viewed on the Company’s
website.
The Shareholder Communications Policy sets out the policies and
processes the Company’s has
in place to facilitate and
encourage participation at meetings of security holders.
The Shareholder Communications Policy establishes
the
Company’s commitment to receive communications from, and
send communications to, the entity and its security registry
electronically
The Audit and Risk Management Committee has three members
all of whom are independent Directors. The Committee is
chaired by an independent Director. A copy of the Committee
55 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
(i)
has at least three members, a majority of whom
are independent Directors; and
(ii)
is chaired by an independent Director,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
the committee met
number of
times
individual
throughout the period and the
those
attendances of
meetings; or
the members at
(b) if it does not have a risk committee or committees that
satisfy (a) above, disclose that fact and the process it
employs for overseeing the entity’s risk management
framework.
Recommendation 7.2
The Board or a committee of the Board should:
Yes
(a) review the entity’s risk management framework with
management at least annually to satisfy itself that it
continues to be sound; and
(b) disclose in relation to each reporting period, whether
such a review has taken place.
Charter may be viewed on the Company website.
The names of the Committee Members are as follows:
• Mr Alex Chow (Chair)
• Dr Kenneth Chapman and
• Mr Russell Shields
The qualifications and experience of the members of the
Committee are set out on the Company’s website and in the
Annual Report. The number of times the committee met
throughout a period and the individual attendances of the
members at those meetings are disclosed in the Annual Report.
framework
risk management
The Audit and Risk Management Committee Charter tasks the
Committee with the responsibility for reviewing and monitoring
the Company’s
to provide
assurance that major business risks are identified, consistently
assessed and appropriately addressed. The Charter requires the
Committee to undertake a review of the Company’s risk
management framework with management (at least once
risk
annually)
management framework continues to be sound, to determine
whether there have been any changes in the material business
risks the entity faces and to ensure that they remain with the risk
appetite set by the Board.
that Aquis Entertainment’s
satisfy
itself
to
56
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 7.3
A listed entity should disclose:
No
(a) if it has an internal audit function, how the function is
structured and what role it performs; or
(b) if it does not have an internal audit function, that fact
and the processes it employs for evaluating and
continually
risk
management and internal control processes.
improving the effectiveness of
its
Due to the short time frame between the date of formation of
the Board (August 2015 and the end of the reporting period
(December 2015), the Board considers that a review of the
Company’s risk management framework at this time would be
premature.
The Company does not, at this stage, have an Internal Audit
function. The Board is of the view that he Company’s’ size and
scale does not currently support an independent internal audit
function. The Board from time to time may utilise external parties
to undertake internal audit control reviews.
The Audit and Risk Management Committee Charter sets out the
processes the Committee employs to oversee the Company’s risk
management framework. The Company’s proposed operational
subsidiary, Casino Canberra Limited, also maintains a robust risk
management framework related to all operational matters as
required under the relevant casino legislation. This includes the
maintenance of a risk register identifying relevant operational
risks and recording proposed solutions and risk management
procedures where appropriate.
Recommendation 7.4
A listed entity should disclose whether it has any material
exposure
social
sustainability risks and, if it does, how it manages or intends
to manage those risks.
to economic, environmental and
Principle 8: Remunerate fairly and responsibly
Recommendation 8.1
The Board of a listed entity should:
Yes
The Company’s exposure to economic, environmental and
social sustainability risks and the way it manages or intends to
manage mitigate those risks is set out in the Annual Report.
57
RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
(a) have a remuneration committee which:
(i)
has at least three members, a majority of whom
are independent Directors; and
(ii)
is chaired by an independent Director,
and disclose:
(iii)
(iv)
(v)
the charter of the committee;
the members of the committee; and
as at the end of each reporting period, the
number of times the committee met throughout
the period and the individual attendances of
the members at those meetings; or
(b) if it does not have a remuneration committee, disclose
that fact and the processes it employs for setting the
level and composition of remuneration for Directors
and senior executives and ensuring that such
remuneration is appropriate and not excessive.
Recommendation 8.2
Yes
A listed entity should separately disclose its policies and
practices regarding the remuneration of non-executive
Directors and the remuneration of executive Directors and
other senior executives and ensure that the different roles
and responsibilities of non-executive Directors compared
to executive Directors and other senior executives are
reflected
their
in
remuneration.
level and composition of
the
The Remuneration and Nomination Committee has three
members the majority of whom are independent Directors. The
Committee is chaired by an independent Director.
The names of the Committee Members are as follows:
• Dr Kenneth Chapman (Chair)
• Mr Raymond Or Ching-Fai
• Mr Russell Shields
A copy of the Committee Charter may be viewed on the
Company website.
The qualifications and experience of the members of the
Committee are set out on the Company’s website and in the
Annual Report. The number of times the committee met
throughout a period and the individual attendances of the
members at those meetings are disclosed in the Annual Report.
The Remuneration and Nomination Committee is tasked with
developing policies and practices regarding the remuneration of
non-executive Directors and the remuneration of executive
Directors and other senior executives and ensure that the
different roles and responsibilities of non-executive Directors
compared to executive Directors and other senior executives are
reflected in the level and composition of their remuneration.
These policies and practices are disclosed in the Company’s
Annual Report.
58 RECOMMENDATIONS (3RD EDITION)
COMPLY
EXPLANATION
Recommendation 8.3
A listed entity which has an equity-based remuneration
scheme should:
Yes
(a) have a policy on whether participants are permitted to
enter into transactions (whether through the use of
derivatives or otherwise) which limit the economic risk
of participating in the scheme; and
(b) disclose that policy or a summary of it.
submitted equity–based
The Company has
remuneration
scheme (Plan) to its Shareholders for consideration at the 2016
AGM. The Plan rules specifically prohibit participants from
entering into transactions (whether through the use of derivatives
or otherwise) which limit the economic risk of participating in the
Plan.
The Company’s Securities
Trading Policy also prohibits
participants in any such scheme from entering into transactions
(whether through the use of derivatives or otherwise) which limit
the economic risk of participating in the scheme.
A copy of the Securities Trading Policy can be viewed on the
Company’s website.
59 SHAREHOLDER INFORMATION AT 15 APRIL 2016
1.
TWENTY LARGEST SHAREHOLDERS
Holder Name
1 AQUIS CANBERRA HOLDINGS (AUS) PTY LTD
2 RIVA ADMINISTRATION PTY LTD
3 TARALAKE PTY LTD
4 MANLAM PTY LTD
5 MR PAUL JOSEPH MANKA
6 LANDSEC PTY LTD
7 PROSPERO CAPITAL PTY LTD
8 LIFE IN VERSE PTY LTD
9 CHANCERY HOLDINGS PTY LTD
10 KOBIA HOLDINGS PTY LTD
11 MR JOHN HAMILTON
12 MRS JODIE LEE MAXTED
13 MR HONGHAO SUN
%
Shares
163,871,874 88.51%
0.43%
0.43%
0.36%
0.36%
0.35%
0.32%
0.29%
0.27%
0.27%
0.24%
0.24%
0.23%
797,999
790,329
662,540
662,539
646,800
597,999
545,153
500,000
500,000
449,000
437,154
420,000
14
MR MARK JOHN BAHEN & MRS MARGARET PATRICIA BAHEN
15 HAMMERHEAD HOLDINGS PTY LTD
16 MR ANTHONY MICHAEL MALYNIAK
17 CONFIDO SUPERANNUATION PTY LTD
18 MR DAVID RICHARD HAINSWORTH
19 HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
20
MR GARY STANLEY SWIFT & MRS KAYLEEN LESLIE SWIFT
Total
400,000
0.22%
300,000
300,000
260,000
239,451
231,879
0.16%
0.16%
0.14%
0.13%
0.13%
220,000
0.12%
172,832,717 93.35%
DISTRIBUTION OF SHAREHOLDERS
2.
Range
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and above
Total
Unmarketable Parcels
Total Holders
Shares
% Issued Capital
5
6
113
364
30
518
4
1,030
19,935
1,102,125
9,805,767
174,212,193
185,141,050
30
0.00%
0.01%
0.60%
5.30%
94.10%
100.000
0.00%
3.
SUBSTANTIAL SHAREHOLDERS
Name
Aquis Canberra Holdings (Aus) Pty Ltd
4.
VOTING RIGHTS
No. of Shares % Issued Capital
88.51
163,871,874
Ordinary Shares
Every holder of ordinary shares has the right to receive notices of, to attend and to vote at general
meetings of the Company. On a show of hands every shareholder present at a meeting in person or
by proxy, attorney or representative is entitled to one vote and upon a poll each share is entitled to
one vote.
Options
Options are unlisted and holders have no voting rights
60
.
5.
RESTRICTED SECURITIES
Security
Number of Restricted
Securities
Date of Cessation of
Restriction
Ordinary Shares
149,421,874
25 August 2017
6.
USE OF CASH AND CONVERTIBLE ASSETS
During the period from admission to the official list of the Australian Stock Exchange to the date of this
statement, the company has used cash and assets readily convertible to cash in a manner consistent
with its business activities. The company is involved in the ownership and management of gaming
and waging assets in Australia.
61
CORPORATE DIRECTORY
Company
Aquis Entertainment Limited
ABN 48 147 411 881
21 Binara Street
Canberra ACT 2601
www.aquisentertainment.com
Registered Office and place of business
21 Binara Street
CANBERRA ACT 2601
Telephone: +61 2 6257 7074
Facsimile: +61 2 6257 7079
Directors
Mr Tony Fung (Chairman)
Mr Raymond Or Ching-Fai (Deputy Chairman
Mr Justin Fung (Non-executive Director)
Mr Alex Chow (Independent Non-executive Director)
Mr Russell Shields (Independent Non-executive Director)
Dr Kenneth Chapman (Independent Non-executive Director)
Ms Jessica Mellor (Executive Director)
Company Secretary
Garry Gill
Auditors
RSM Australia Partners
GPO Box 200
Canberra ACT 2601
Share Registry
Boardroom Pty Limited
GPO Box 3993
Sydney NSW 2001
Stock Exchange Listing
Australian Securities Exchange Limited
Home Exchange – Melbourne
ASX code: AQS
62