ANNUAL
REPORT
2016
YEAR ENDED 30 JUNE
2
AnnuAl Repo Rt | Year ended 30 June 2016
Contents
General
Chairman and Interim Chief Executive Officer’s Review 4
Our Community Involvement
Our Major Growth Projects
Corporate Social Responsibility
Brand Campaign
Award-Winning Staff and Business
Our Board
Our Management
FInanCIal STaTeMenTS
Independent Auditor's Report
Income Statement
Statement of Comprehensive Income
Balance Sheet
Statement of Changes in Equity
Statement of Cash Flows
Notes to the Financial Statements
Reconciliation of Normalised Results
to Reported Results
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12
14
16
18
22
24
28
30
31
32
33
34
35
61
COrPOraTe GOVernanCe STaTeMenT
anD OTHer DISClOSUreS
Corporate Governance Statement
Shareholder Information
Bondholder Information
director and employee remuneration
Directors’ Disclosures
Company Disclosures
Other Information
directory
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87
annUal MeeTInG
The 2016 annual meeting of SKYCITY entertainment Group
Limited will be held on Friday 21 October 2016 in the
SKYCITY Theatre, Level 3, SKYCITY auckland, Corner of
Wellesley and Hobson Streets, Auckland, commencing at
10.00am (New Zealand time).
This annual report is dated 10 August 2016 and is signed on
behalf of the board of directors of SKYCITY Entertainment
Group Limited by:
Chris Moller
Chairman
Bruce Carter
deputy Chairman
Unless otherwise stated, all dollar amounts in this annual report are expressed in New Zealand dollars. An electronic copy of
this annual report is available in the Investor Centre section of the company’s website at www.skycityentertainmentgroup.com.
3
Skycity entertainment group limited | skycityentertainmentgroup.com
Chairman and interim Chief exeCutive offiCer’s review
A successful period of
The 2016 financial year (FY16) has been a
successful one for SKYCITY, following on
from the momentum achieved during the
2015 financial year (FY15).
Strong financial results were achieved across
most parts of the business and good progress
was made on our major growth projects in
Auckland and Adelaide.
The main features of our FY16 result were:
• Record normalised revenue and earnings
for the group for a full year period
• Record normalised net profit after tax
(NPAT) of $152.7 million, up 13.9% on
the previous corresponding period
• Record reported NPAT of $145.7 million,
up 13.1%
• Continued strong growth at
SKYCITY Auckland, with the property
benefiting from recent investment,
supportive external factors and the
new gaming concessions
• Record group-wide International Business
activity with turnover
up 32.7% to $12.4 billion
• Further strong growth at
SKYCITY Hamilton and the
combined Queenstown properties
4
JOHN MORTENSEN
InterIm ChIef exeCutIve OffICer
AnnuAl RepoRt | Year ended 30 June 2016 Chairman and interim Chief exeCutive offiCer’s review
• Improved performance by Adelaide Casino
underpinned by an increase in
International Business activity and
improved operating margins
• Disappointing result for SKYCITY
Darwin, which was adversely impacted by
challenging trading conditions
• Significant progress on the New Zealand
International Convention Centre (NZICC)
and Hobson Street hotel projects following
signing of construction contracts with
Fletcher Construction in November 2015
• Good progress on the Adelaide Casino
expansion and new hotel development
with an early works agreement signed
with the South Australian Government in
May 2016
• Successful raising of $263 million of new
equity in May/June 2016 to support the
funding of our major growth projects
• Full year dividend of 21.0 cents per share,
up 1.0 cent per share on FY15, reflecting
our improved profitability
SKYCItY AuCKlAnd
SKYCITY Auckland, our flagship property,
celebrated its 20-year anniversary in
February 2016 and continues to be a standout
performer. Our Auckland property delivered
record results for the second year in a row,
with revenue (excluding International
Business) increasing 6.9% to $557.5 million
over the period and earnings before interest,
taxation, depreciation and amortisation
(EBITDA) (excluding International Business)
increasing 10.0% to $251.2 million.
The continued momentum at
SKYCITY Auckland reflects the significant
investment in the property over the past
few years, initiatives to drive incremental
visitation through customer segmentation
and positive external factors which remain
supportive of the business. The property is also
benefiting from the new gaming concessions
that were activated in November 2015. As a
result, SKYCITY Auckland has now delivered
ten consecutive quarters of EBITDA growth
on previous corresponding periods – an
excellent achievement.
Revenue and EBITDA growth at
SKYCITY Auckland was achieved across
all business activities. Strong growth was
achieved in the gaming machines business,
which benefited from increased capacity
and the roll-out of cashless gaming and
ticket-in-ticket-out technology.
cHRiS MOllER
ChaIrman
5
Skycity entertainment group limited | skycityentertainmentgroup.com Chairman and interim Chief exeCutive offiCer’s review
Table games delivered a solid performance
across both the main gaming floor and
premium rooms, despite a relatively strong
comparative period.
The Federal Street dining precinct and our
Auckland hotels continued to be very popular
and enable SKYCITY Auckland to offer
world-class integrated casino and
entertainment facilities. Federal Street has
become a major dining and entertainment hub
in Auckland and, with a new Cantonese
restaurant planned for 2017, the precinct will
continue to go from strength-to-strength.
Both the SKYCITY Hotel and the
SKYCITY Grand Hotel continue to
outperform local competitors in terms of
occupancy and average room rates. This strong
operating performance from our existing
hotels, plus the favourable hotel sector trends
in Auckland and New Zealand’s strong
tourism growth, bode well for our new
Hobson Street hotel which we have decided
to retain ownership of post completion.
SKYCITY has continued to invest in the
Auckland property over the past year to
enhance the customer experience and drive
further growth. We have completed a major
refurbishment of our main atrium area, the first
since SKYCITY Auckland opened in February
1996. This included creating direct escalator
access to the casino, a partial infill of the atrium
to expand the main gaming floor, and the
opening of ‘Andy’s Burgers & Bar’. We have
also significantly enhanced our International
Business offering with the opening of the
‘Grand Horizon’ gaming salons.
SKYCItY HAmIlton
SKYCITY Hamilton delivered another strong
performance in FY16 with the positive
momentum exhibited during FY15
continuing. Revenue (excluding International
Business) was up 6.7% to $53.9 million and
EBITDA (excluding International Business)
was up 15.1% to $22.9 million.
The improved performance was driven by
solid gaming revenue growth, the opening
of new bars and restaurants during the period,
favourable local macroeconomic conditions,
and further cost efficiencies across the property.
SKYCITY Hamilton opened the ‘City Co-Op’,
comprising five new food and beverage outlets,
in late 2015. These new outlets have been well
received by local customers and the community,
and have increased visitation to the property.
The medium-term outlook for Hamilton
remains positive, underpinned by strategic
initiatives to drive incremental visitation to
the property and to leverage positive
macroeconomic drivers.
SKYCItY QueenStown And
SKYCItY wHARf
The combined Queenstown operations
have delivered record results for the period,
driven by significant growth in International
Business volumes and local gaming activity,
and an increased focus on cost control.
Revenue (excluding International Business)
was up 10.9% to $13.2 million and EBITDA
(excluding International Business) up 63.2%
to $3.1 million.
Queenstown remains an iconic location with
strong tourism growth expected over the
long-term.
AdelAIde CASIno
Adelaide Casino delivered an improved
performance during the period. EBITDA
(excluding International Business) was up
19.1% to A$25.6 million despite revenue
(excluding International Business) being down
1.1% to A$151.8 million.
Adelaide Casino’s improved performance was
primarily influenced by significant growth in
International Business activity, improved
performance of the food and beverage outlets,
and a strong focus on cost control driving
margin improvement.
Disappointingly, Adelaide Casino experienced
a decline in local gaming revenue (down
4.3%).
SKYCITY remains firmly focused on
delivering sustained revenue and earnings
growth at Adelaide Casino. While we are
pleased with the improved performance at
Adelaide Casino, challenges remain delivering
local gaming growth in a soft market. Growing
our share of the local gaming machine market
in South Australia is a key focus for FY17.
6
AnnuAl Repo Rt | Year ended 30 June 2016
Chairman and interim Chief exeCutive offiCer’s review
SKYCItY dARwIn
SKYCITY Darwin achieved disappointing
results which were adversely impacted by
challenging trading conditions in the
Northern Territory. Revenue (excluding
International Business) was down 5.3% to
A$116.2 million and EBITDA (excluding
International Business) down 9.4% to
A$33.9 million.
The decline in SKYCITY Darwin’s
performance was primarily driven by weaker
hotel demand and reduced food and beverage
covers. Local gaming revenue was soft having
been adversely impacted by increased
competition from pubs and clubs.
Despite the near-term external challenges,
SKYCITY remains confident with the
medium-to-long-term outlook for our Darwin
property. Darwin’s strategic location close to
Asia, the potential for significant growth in
International Business activity, and the strong
market position of our local business means
SKYCITY Darwin continues to be a core asset
for SKYCITY.
SKYCITY Darwin has recently applied to
extend its casino licence for a further five years
out to 2036. This would provide additional
regulatory certainty for stakeholders and
investors, following on from confirmation by
the Northern Territory Government at the
start of FY16 of our gaming tax rates out to
June 2025.
InteRnAtIonAl BuSIneSS
SKYCITY’s International Business delivered
record activity during FY16, with group-wide
turnover up 32.7% to $12.4 billion. The average
win rate for the financial year was 1.49%, which
is slightly above the theoretical win rate of
1.35%, and an improvement on the FY15 win
rate of 1.36%.
Normalised EBITDA was up 26.6% to
$33.5 million, reflecting stable operating
margins, underpinned by increased operating
efficiencies but offset by marginally higher
commissions and higher bad debt provisions.
Growth in our International Business
continues to be supported by the increased
recognition of our first-class service offering
amongst Asian VIP customers, a continued
focus on direct relationships and increased play
at higher table differentials.
SKYCITY has continued to invest in the
International Business over the past year
through the development of new facilities and
the expansion of our customer service team.
The new gaming salon in Adelaide, which
opened in December 2015, has been very well
utilised and the new ‘Grand Horizon’ gaming
salons recently opened in Auckland provide a
new world-class offering for our VIP
customers. Both new facilities will also ease
capacity constraints during peak periods such
as Chinese New Year and Golden Week.
There is potential for further significant
growth in SKYCITY’s International Business
over the medium-term. Accordingly,
SKYCITY intends to continue to invest
prudently in the business to deliver
market-leading customer experiences
and attractive returns for shareholders.
nZICC And HoBSon StReet
Hotel pRojeCtS
Significant progress has been achieved on the
NZICC and Hobson Street hotel projects
during the period.
Construction contracts for the NZICC
and Hobson Street hotel were signed in
November 2015 with Fletcher Construction,
triggering the activation of the new gaming
concessions. These concessions included an
extension of SKYCITY Auckland's casino
licence out to 30 June 2048 and a 30% increase
in gaming capacity for our Auckland property.
The overall development programme is
progressing well and remains on-budget.
Excavation commenced in June 2016 and
completion of both the NZICC and
Hobson Street hotel is expected in the
first quarter of 2019.
SKYCITY concluded the Hobson Street hotel
sale process in May 2016 and elected to retain
this valuable asset. Given the favourable
outlook for the Auckland hotel market,
SKYCITY is comfortable retaining ownership
of the Hobson Street hotel and expects it to
deliver significant revenue and earnings for
SKYCITY Auckland post opening.
7
Skycity entertainment group limited | skycityentertainmentgroup.com Chairman and interim Chief exeCutive offiCer’s review
The NZICC and Hobson Street hotel
developments are together one of the most
significant building projects in Auckland in a
generation, and will help stimulate significant
tourism, employment and broader economic
growth for Auckland and New Zealand.
AdelAIde CASIno expAnSIon And
Hotel development
SKYCITY remains committed to the
expansion of Adelaide Casino and the
development of a new hotel given we continue
to believe in the significant growth potential
of the property following completion of the
broader redevelopment of Adelaide's
Riverbank Precinct.
Design and planning approval for the
expansion was received in January 2016
and an early works agreement with the
South Australian Government was signed
in May 2016.
SKYCITY welcomed the announcement
in May 2016 that the South Australian
Government and Walker Corporation had
reached an agreement for the development of
Festival Plaza. Walker Corporation plans to
construct a car park (of which SKYCITY will
exclusively lease 750 spaces), a retail precinct
and office building over the next three years.
SKYCITY expects that the new equity will
provide sufficient funding capacity and
headroom for the company to fund its major
growth projects and maintain its BBB- credit
rating from Standard & Poor's. The new
equity should also allow SKYCITY to
continue to invest prudently in the business.
Following the equity raising, our existing debt
facilities are expected to be sufficient to meet
future funding requirements out to the middle
of FY18. SKYCITY currently intends to
secure additional debt funding through an
extension of and potential increases in existing
bank facilities, further New Zealand bond
issues, and/or further US private placement
note issues.
dIvIdend
SKYCITY has announced a final dividend
of 10.5 cents per share, 5% up on the final
dividend for FY15, which is payable on
16 September 2016. The company’s Dividend
Reinvestment Plan will be available for this
dividend, with a 2% discount applying.
This takes the full year dividend for FY16 to
21.0 cents per share, up 1.0 cent per share on
the prior year and in-line with our stated
dividend policy of distributing at least 80% of
normalised NPAT to shareholders each year.
SKYCITY continues to expect a total
development cost for the Adelaide Casino
expansion of around A$300 million.
Main construction works on the expansion are
expected to commence in the second-half of
2017, with completion expected in early 2020.
The increased full year dividend enables
shareholders to benefit from our improved
operating performance and profitability.
We believe our dividend policy continues to
offer our shareholders an attractive yield and
is sustainable over the medium-term.
fundIng
SKYCITY finalised the key elements of its
long-term funding plan in June 2016 following
the successful completion of our pro-rata
equity offer which raised $263 million.
The equity raising received strong support
from both existing and new shareholders.
The net proceeds of the raising have been used
to repay bank debt and reduce gearing in
order to support the funding of our major
growth projects.
8
AnnuAl RepoRt | Year ended 30 June 2016 Chairman and interim Chief exeCutive offiCer’s review
Finally, our thanks go to the wider SKYCITY
executive team for their guidance and
leadership across the business during the year
and, in particular, to every one of our staff
members across the group for their ongoing
commitment, customer focus and teamwork.
Thank you for all that you do for
SKYCITY – it is greatly appreciated.
cHRiS MOllER
ChaIrman
nOrMalISeD reVenUe
JOHN MORTENSEN
InterIm ChIef e xeCutIve OffICer
UP
to $1.1 billion
FUll year DIVIDenD
rePOrTeD nPaT
up 5%
UP
to $145.7 million
CHIef exeCutIve offICeR And
dIReCtoR CHAngeS
We farewelled Nigel Morrison during
April 2016 following his resignation as Chief
Executive Officer. Nigel left with the Board’s
best wishes and thanks after eight years of
dedicated service. Nigel's legacy at SKYCITY
is significant, having presided over the
extension of the company’s exclusive casino
licences in Auckland and Adelaide, the
negotiation of the NZICC transaction and
commencement of development, the
unprecedented growth of SKYCITY’s
International Business, and the transformation
of the Federal Street precinct.
The search for a new Chief Executive Officer
is progressing well with the Board having
engaged global search firm Spencer Stuart.
Until a new Chief Executive Officer is
appointed, it is very much "business as usual"
across the company. SKYCITY is fortunate to
have a strong senior management team in place
that is focused on delivering improved
financial performance across the group and
progressing our major growth projects.
Following the resignations of Peter Cullinane
and Nigel Morrison from the Board during
FY16, the Board has made good progress on its
search for up to two new non-executive
directors. The Board’s intention is that at least
one of the new appointments will be female.
tHAnKS
We would like to thank the members of the
SKYCITY Board for their ongoing wisdom,
advice and support throughout what has been
a very busy and, at times, challenging year.
The Board would like to thank
John Mortensen, who has stepped in as
Interim Chief Executive Officer. John has
extensive experience in the gaming industry,
has done an outstanding job improving the
performance of SKYCITY Auckland and our
other New Zealand properties in his roles as
General Manager SKYCITY Auckland and
Chief Operating Officer New Zealand, and
has earned the respect and trust of the Board
during his time at SKYCITY.
9
Skycity entertainment group limited | skycityentertainmentgroup.com our Community involvement
making meaningful
Since SKYCITY opened its first casino in
1996, it has strived not only to provide
sustainable total shareholder returns but also
to be a responsible corporate citizen and an
effective community leader, wherever it
operates. We are proud of the significant
contributions each of our properties has made
in their communities across New Zealand
and Australia.
Our financial contributions include donations,
fundraising, sponsorships, in-kind support and
Community Trust grants for a wide range of
community groups and activities, as well as
contributions through rates, taxes and
spending on salaries and wages, goods
and services.
fundRAISIng CASe StudY –
leuKAemIA & Blood CAnCeR
fIRefIgHteR CHAllenge
Hosted by SKYCITY, firefighters from over
234 brigades across the country have set another
new fundraising record for the Firefighter
Sky Tower Stair Challenge on 28 May 2016
raising just over $1.161 million for Leukaemia
& Blood Cancer New Zealand (LBC).
The event hit the million dollar milestone
for the first time in 2015.
“The wonderful fundraising events we hold at
SKYCITY are hugely important to us. The
use of their fantastic venues, and most notably
access to the Sky Tower, has been invaluable to
our events becoming iconic and successful in
New Zealand. The thing that always stays with
me, and that we appreciate so much, is the
massive amount of care, enthusiasm and
dedication that is invested into supporting
LBC by SKYCITY staff across the many
different teams within the organisation.”
Pru Etcheverry, Chief Executive Officer,
Leukaemia & Blood Cancer New Zealand
We actively participate in local business
activities and tourism promotions as well as
civic, state and national development.
Our Collaborative Leadership programme,
facilitated by Auckland Communities
Foundation and the New Zealand Leadership
Institute, focused on developing the not-for-
profit sector’s understanding of, and capacity
for, collaborative leadership. The 15-month
programme concluded with two collaborative
groups completing the programme and putting
forward applications for full project funding to
build capacity in their communities.
We work closely with community groups and
support local events and activities. We are
increasingly prioritising grants to collaborative
organisations and initiatives for the greater
community benefit. Our partnerships with
local organisations continue to grow in every
community in which we operate.
exAmpleS of ouR CommunItY
SuppoRt
• SPCA Otago & Victim Support
Wakatipu: A fundraiser evening was hosted
by SKYCITY Queenstown.
• Ronald McDonald House - Hamilton
Supper Club event: SKYCITY Hamilton was
the major supporter of this event which
included hosting the event as well as two group
dinners. The event raised over $60,000 which
is a record for a Supper Club event.
• SKYCITY Hamilton has shown its support
to hundreds of local children’s winter sports
teams through the Player of the Day
programme, where SKYCITY supplies
certificates and bowling vouchers for the
weekly winners.
• Darwin Masters Rugby Tournament:
In-kind use of Little Mindil for the
tournament.
• Cooking4Change: The SKYCITY
Breakers came in to cook with chef
Sean Connolly in The Grill in support of
Dick Frizzell’s Cooking4Change charity
project where all proceeds from cookbooks
created go to charity.
• Cancer Council Biggest Morning Tea:
A fundraising morning tea was held at
SKYCITY Darwin in conjunction with
Cancer Council and Territory FM.
• More than $20,000 was raised for Variety –
The Children’s Charity at the Jimmy Choo
Charity Auction hosted by SKYCITY.
• Foodbank NT: SKYCITY Darwin staff
donated food items at Christmas which were
donated to FoodBank Darwin.
• Lunar New Year Street Party and
VIP Dinner: A large scale community event
attended by 20,000 people to celebrate the
Lunar New Year in and around the
Chinatown precinct of Adelaide (Gouger
Street). Adelaide Casino was a gold sponsor.
• Kidz First Christmas party: SKYCITY
hosted more than 120 children and their
families from the children’s ward at
Middlemore Hospital for their annual
Christmas party at SKYCITY Auckland.
Kids got to meet some famous faces from the
SKYCITY Breakers, Vodafone Warriors,
SKYCITY Mystics and Blues rugby team.
Since 1996, SKYCITY Community Trusts
have been proud to distribute more than
$46.4 million to more than 4,150 community
groups and organisations, large and small,
through our three Community Trusts in
Auckland, Hamilton and Queenstown.
CommunItY tRuSt CASe StudY –
tHe mIddlemoRe foundAtIon
foR HeAltH InnovAtIon
“Summarising SKYCITY’s support is no
easy task, given that support stretches back
10
AnnuAl RepoRt | Year ended 30 June 2016 our Community involvement
CONNECTED TO
COMMUNITIES
SKYCITY lights the Sky Tower to show support for a
number of organisations and special events, including
charities and community initiatives that we support
financially or to mark national holidays, milestones,
other celebrations or significant events.
Red, orange and yellow
SKYCITY Breakers finals weekend Blue
Federal Street Festival Federal Street projection
with burnt orange
St Patrick’s Day Green
All Blacks Black with white stripes
Matariki
30th Anniversary of Homosexual Law Reform Bill
Rainbow colours
American Independence Day Red, white and blue
World Vision 40-Hour Famine Orange
Leukaemia & Blood Cancer New Zealand
Firefighter Sky Tower Stair Challenge Red
Mother’s Day Pink
Earth Hour Lights off
Auckland RSA Poppy Day Anzac Day
Poppy projection with red
Chinese New Year Gold and red
Pride Festival Black with rising rainbow
Christmas Green and red
Heart Kids New Zealand Red with
pulsating top
White Ribbon Appeal
pulsating top
New Zealand Breast Cancer Foundation
Pink during Pink October
Prostate Cancer Foundation Blue for Blue September
Cure Kids Red top for Red Nose Day
White with
A number of tragic world events occurred
in 2015/2016, including attacks in Brussels,
Turkey, Orlando and France. The Sky Tower
was lit in solidarity with those communities.
fiREfigHTER Sky TOwER STaiR cHallENgE
17 years. Money in the form of sponsorship
and Trust grants have been invested in
community dental programmes, school clinics,
child protection services, insulation schemes,
mobile ear clinics, Kidz First Children’s
Hospital, the National Burn Centre, spinal
care, in critically-ill premature babies, and
even in hi-tech training dummies for staff ”.
Middlemore Foundation Executive Director
Pam Tregonning says the relationship is
critical.
“We’re not going to pretend the financial
support isn’t vital, but it’s also the openness,
the willingness to go above and beyond. That’s
shown in the effort that goes into giving
disadvantaged children a Christmas party each
year. It’s hosted, it’s catered, it’s staffed by
volunteers, who are amazing with our kids
whatever their disability, and without that, it
just wouldn’t happen,” she said.
“Working in the charity sector can be tough,
because you are always asking, but with
SKYCITY, while you can’t guarantee you’ll
always get a yes, you can guarantee you’ll be
listened to, people will truly seek to
understand, and that you’ll be treated with
respect. That’s been the basis for a relationship
that is nearly two decades old, and one which
we hope will continue well into the future.”
Pam Tregonning, Executive Director,
Middlemore Foundation for Health Innovation
11
Skycity entertainment group limited | skycityentertainmentgroup.com
our major growth projeCts
our major growth
aRTiST'S iMpRESSiON Of Nzicc aNd HObSON STREET HOTEl
aRTiST'S iMpRESSiON Of adElaidE caSiNO REdEvElOpMENT
12
nZICC And HoBSon StReet
Hotel pRojeCtS
SKYCITY is investing approximately
$700 million in Auckland to deliver the
NZICC, a new 300-room, five-star hotel on
Hobson Street, a retail laneway to house a range
of restaurants and bars, and an expansion of
available car park facilities by over 1,300 spaces.
The NZICC will be a landmark and
iconic building for Auckland, enabling
New Zealand to host major conventions for
around 3,000 delegates, and compete in the
international conventions market for the
first time.
Significant progress has been achieved on the
NZICC and Hobson Street hotel projects
during the year:
• Construction contracts were signed
in November 2015 with Fletcher
Construction;
• Demolition and site preparation has
been completed; and
• Excavation of the car park commenced in
June 2016.
The overall development programme is
progressing on-time and on-budget with
expected completion in early 2019.
AdelAIde CASIno expAnSIon
And Hotel development
SKYCITY has a vision to transform
Adelaide Casino into an integrated world-class
entertainment complex. A major opportunity
exists to grow market share locally and with
international VIP customers, and to
significantly improve Adelaide Casino’s
financial performance.
SKYCITY remains committed to the
expansion of Adelaide Casino and has achieved
significant progress during the year:
AnnuAl RepoRt | Year ended 30 June 2016 our major growth projeCts
• Design and planning approval was received
in January 2016; and
• An early works agreement with the South
Australian Government was signed in
May 2016.
SKYCITY is pleased to see progress made on
the broader development of the Riverbank
Precinct, of which the Adelaide Casino
expansion forms an important part.
SKYCITY continues to expect a total
development cost for the Adelaide Casino
expansion of around A$300 million. Main
construction works on the expansion are
expected to commence in the second-half of
2017, with completion expected in early 2020.
AuCKlAnd AtRIum
RefuRBISHment
SKYCITY has continued to invest in the
Auckland property over the past year to
enhance the customer experience and drive
further growth.
We have completed a major refurbishment
of our main atrium area, the first time since
SKYCITY Auckland opened in February 1996.
The refurbishment works have included
improving the general “look-and-feel” of the
atrium entry and foyer, creating direct
escalator access to the casino, a partial infill of
the atrium to expand the main gaming floor,
and the opening of ‘Andy’s Burgers & Bar’.
The new atrium has been well received by
both local and international customers.
InteRnAtIonAl BuSIneSS
SKYCITY has continued to invest in
International Business over the past year
through the development of new facilities and
the expansion of our customer service team.
The new gaming salon in Adelaide, which
opened in December 2015, has been very well
utilised. SKYCITY plans to open a further
two new salons in Adelaide over the next
six months. We also recently opened the
‘Grand Horizon’ gaming salons in Auckland
to provide a new, contemporary, world-class
offering for our VIP customers.
It is anticipated that these new International
Business facilities will ease capacity constraints
experienced during peak periods such as
Chinese New Year and Golden Week.
aucklaNd aTRiuM REfuRbiSHMENT
gRaNd HORiz ON
13
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate soCial responsibility
Corporate social
SKYCITY ENTERTAINMENT GROUP LIMITED
Corporate Social Responsibility Report
IT ALL
STARTS
HERE
At the heart of SKYCITY’s business lies
a commitment to social responsibility,
to tackle issues that are important to our
customers, staff, investors and communities.
This commitment defines us as a business.
As an entertainment provider and host,
SKYCITY is constantly trying to strike the
right balance between excitement, reward and
responsibility. This balance is crucial to our
reputation within the communities in which
we operate and to the diverse relationships
we foster.
Underpinning our corporate social
responsibility (CSR) policies are five pillars
of excellence:
• Responsible Gaming;
• Environment;
• Fair Operating Practices;
• Labour Practices and Human Rights; and
• Community Involvement and
Development.
It’s important to SKYCITY that our
stakeholders and communities are aware of
these priority areas and the actions we take
within them, to earn and maintain our
regulatory and social licence to operate.
Social sustainability, through our Responsible
Gaming pillar, is at the core of our CSR
strategy. SKYCITY is committed to promoting
responsible gaming and consumption of alcohol
on our sites. We benchmark against not just the
CSR strategies of our competitors, but also
other corporates around the world we admire.
14
AnnuAl RepoRt | Year ended 30 June 2016 Corporate soCial responsibility
Our Host Responsibility programmes are the
most comprehensive across Australasia and are
recognised as amongst the best of any casino
in the world. Through our world-class
programmes, we provide safe places for
our customers to play, eat, drink and stay.
We invest more than $5 million a year on
Host Responsibility and all staff receive
Host Responsibility training.
We see environmental education and capacity
building as fundamental to promoting the
development of sustainable societies and
lifestyles and to helping us maintain our
reputation in communities. Each of our sites
across New Zealand and Australia is
continually managing our environmental
footprint, eg. upgrading our lighting systems,
reducing overall operating energy costs for
heating, ventilation and air-conditioning and
commissioning an indepth waste audit.
Because our businesses revolve around people,
it is vital that everyone who works at
SKYCITY feels included, valued and,
above all, supported in their work. One of
SKYCITY’s great strengths has always been
that we are an employer of diversity – we have
people from 85 different ethnicities working
for us. We are also proud to welcome
customers from many different backgrounds
and cultures to our sites and we want each of
them to feel at-home with our people.
We have made some huge strides and
commitments to improving our CSR
programme in the past year, including a
reassessment of our materiality matrix with
internal and external stakeholders, publishing
our first CSR Report, appointing an
Environmental Manager and developing
organisational goals for each of our pillars.
We know that being a truly sustainable and
responsible business means a long-term
commitment, where we are willing to listen,
learn, evolve and when required, be brave.
Our CSR Charter and Report are
available on our website at
www.skycityentertainmentgroup.com/
our-commitment/corporate-responsibility.
CASe StudY – lABouR pRACtICeS
And HumAn RIgHtS pIllAR
SKYCITY has been leading work around the
Sustainable Business Council’s Welfare to
Work programme, which aims to increase
the number of young, sole parents in work.
Employing young, sole parents makes sense
for SKYCITY. The company is focused on
growing future talent and SKYCITY’s Group
Manager of Talent Acquisition and
Development, Amanda Tolley, says the
Welfare to Work programme fits nicely with
the business’ work on sustainability.
“We needed to find a way to get more young
people thinking about hospitality in a different
way. We wanted to encourage more young
people to understand their career prospects.”
In the initial period of the Welfare to Work
programme, SKYCITY recruited five people
into jobs.
She says the company and staff are beginning
to understand more about young people not in
employment, education or training (NEETS).
“We are now looking at young, sole parents as
a new channel for talent.”
“We’ve got a group of young women in
employment with real talent and they’re
showing their strengths in the workplace."
With about five new hotels opening in
Auckland over the next five years, Amanda
says hospitality is a very competitive labour
market. But working with young, sole parents
hasn’t been without its challenges.
“You need to change your processes to
overcome some of the barriers to bringing
this group into work.”
Working with government has also been a
learning curve for SKYCITY.
“We’ve developed the way we relate to
government. We needed to be more flexible in
how we recruit. As a result, the Ministry of
Social Development has done a fantastic job in
screening candidates. They now provide good
volume, regularly, and the candidates are
absolutely ready and fully understand what the
expectations of them will be before walking
through the door. That has saved us plenty of
time on candidates who might not be right for
the role.”
15
Skycity entertainment group limited | skycityentertainmentgroup.com brand Campaign
It all starts here
SKYCITY’s brand campaign 'It All Starts Here' continued this year, running on television once again and throughout various print media.
The second phase of the campaign saw a number of well-known Kiwi personalities providing their views on SKYCITY – how it has
contributed to Auckland and New Zealand, its transformation over time and what they enjoy about coming to SKYCITY. These views
were portrayed through highly visual and creative artwork presented in many different formats, including through magazine print and in
several bus stop adshels throughout Auckland.
dicky kiRi kiRi
skyCIty frOnt servICe representatIve
Eva MiTcHEll
eIght years Old, starshIp hOspItal
gREg MuRpHy
v8 raCeCar drIver
paul HENRy
tv/radIO persOnalIty
pETER gORdON
CelebrIty Chef
valERiE adaMS
OlympIC shOt put ChampIOn
16
AnnuAl RepoRt | Year ended 30 June 2016 brand Campaign
dick fRizzEll
artIst
17
Skycity entertainment group limited | skycityentertainmentgroup.com award-winning staff and business
Award-winning
SKYCITY Entertainment Group employs
more than 6,000 staff across our properties
in New Zealand and Australia. We play a
significant role in our communities, including
being a large employer in each of the five cities
we operate in – Auckland, Hamilton,
Queenstown, Adelaide and Darwin.
SKYCITY is committed to being a good
employer, providing our staff with excellent
opportunities and sustainable careers.
SKYCITY is an award-winning business not
only through our restaurants and hotels, but
also with our talented staff winning many
individual and team awards in their own right.
We are proud of the contribution we make to
the communities we operate in, and our staff
continue to do us proud, year-on-year.
SKyCITy aUCKlanD
emploYment
• SKYCITY Auckland Irene Turner
Memorial Award 2015, Milika Funaki
• Quest for the Best 2015:
o Team of the Year: Connect Team
o Leader of the Year: Tracey Baxter,
Accounts Payable Team Leader
CHefS
NZChefs National Salon 2015 medals:
•
•
•
Subhashini Sathanantham - bronze
medal in the open class of the
Cheese/Main/Dessert - Chef of the Year
competition, bronze medal in the open
class of the Cold Seafood Platter category
and silver medal in the open class of The
Curry Cup
Sunok Ha - bronze medal in the open class
of the New Zealand Beef category
Dwip Oza - bronze medal in the open
class of the New Zealand Pork category
Hotel StAff
•
•
New Zealand Hotel Industry Conference
Awards, Outstanding Young Hotel
Executive of the Year Award 2016 - Brad
Garnett, Hotels Revenue Manager
New Zealand Hotel Industry Conference
Awards, Sales and Marketing Employee of
the Year Award 2016 - Elizabeth Burrett,
Marketing Manager - Hotels,
Conventions, Sky Tower
SKyCITy QUeenSTOwn &
SKyCITy wHarF
o Employee of the Year: Richard Bakker,
Quest for the Best winners:
Mobile Support Administrator
food And BeveRAge StAff
• Metro Restaurant Personality of the Year
2016 – Nick Gallagher, Assistant Manager,
Depot
•
•
December 2015: Victor Vouga, Namie
Tokushima, Hwal Kim, Jeremy Lenton
June 2016: Kyle Thomson, Dave Orpin,
Mie Fukui, Ana Souza, Gerrit Heezen
aDelaIDe CaSInO
Quest for the Best 2016:
•
Leader of the Year: Matt Edwards,
Premier Rewards
18
•
Employee of the Year: Queenie Perry,
International Business
SKyCITy DarwIn
•
Best Human Resources Employee at the
Australian Hotels Association Awards
(NT Branch) - Avril Vaughan, Executive
Manager Human Resources and Food
and Beverage
SkyciTy daRwiN
bEST HuMaN RESOuRcES EMplOyEE
aHa awaRdS (NT bRaNcH )
avrIl vaughan
SkyciTy aucklaNd
NEw zEalaNd cHEfS NaTiONal SalON 2015
OrbIt Chefs
AnnuAl RepoRt | Year ended 30 June 2016 award-winning staff and business
Quest for the Best celebrates outstanding
SKYCITY employees who are nominated
by their peers for going above and beyond
in their roles. Special awards ceremonies
are held regularly at each SKYCITY site
to celebrate the achievements of teams and
individuals. Quest for the Best winners
not only do their jobs well, but inspire,
encourage, share knowledge and time
willingly, lead by example and take
initiative. They live and breathe
SKYCITY’s values every day: Play Hard,
Play Fair, Play Time, Play Safe and
Play a Part.
adElaidE caSiNO
adElaidE caSiNO
lEadER Of THE yEaR 2016
EMplOyEE Of THE yEaR 2016
matt edwards
queenIe perry
SkyciTy aucklaNd
TEaM Of THE yEaR 2015
COnneCt team
SkyciTy aucklaNd
lEadER Of THE yEaR 2015
traCey baxter
SkyciTy aucklaNd
EMplOyEE Of THE yEaR 2015
rIChard bakker
SkyciTy aucklaNd
iRENE TuRNER MEMORial awaRd
mIlIka funakI
SkyciTy aucklaNd
OuTSTaNdiNg yOuNg HOTEl
ExEcuTivE Of THE yEaR 2016
brad garnett
SkyciTy aucklaNd
SalES aNd MaRkETiNg
EMplOyEE Of THE yEaR 2016
elIzabeth burrett
19
Skycity entertainment group limited | skycityentertainmentgroup.com award-winning staff and business
Award-winning
SKyCITy aUCKlanD
•
World Travel Awards 2015 - Australasia’s
Leading Casino Resort
mARKetIng
• New Zealand Marketing Awards – Best
Entertainment and Tourism Campaign
(Chinese New Year) 2015
• Romero Awards for International Casino
Marketing 2016 - Gold Award Casino
Floor Promotion Large Casino
(Buzzing Blackjack)
• Romero Awards for International Casino
Marketing 2016 - Diamond Award Casino
Floor Promotion Large Casino (Spy City)
ROMERO awaRdS fOR iNTERNaTiONal
MaRkETiNg 2016: diaMONd awaRd
caSiNO flOOR pROMOTiON laRgE
spy CIty
NEw zEalaNd MaRkETiNg awaRd S:
bEST ENTERTaiNMENT aNd
TOuRiSM caMpaigN 2015
ChInese new year
20
AnnuAl RepoRt | Year ended 30 June 2016 award-winning staff and business
CommunICAtIonS
mASu BY nIC wAtt
SKyCITy HaMIlTOn
• PRINZ Awards 2016 - Winner of the
Best Issues, Crisis or Emergency
Management Communications campaign
• PRINZ Awards 2016 - Highly
commended in Corporate Public
Relations category
emploYment
• YWCA Equity Awards 2015 – Silver
Commended
• ATEED Young at Heart Awards
2015 - Innovative Youth Employer
Award category
• Commendation from Diplomatic
Protection Services for ongoing
professionalism, assistance and cooperation
by SKYCITY Management, Staff and
Security Team
fedeRAl StReet ReStAuRAntS
•
Depot, Federal Delicatessen, The Grill
by Sean Connolly, Gusto at the Grand,
MASU by Nic Watt and The Sugar Club
all featured in the Metro Restaurant of the
Year Awards 2016 Top 50
depot
•
•
New Zealand Commercial Project Awards
2015 – National Category Winner and
Silver Award Winner
Metro Best Cafés 2015 - Best Special-
Occasion Brunch (Nichiyo Brunch)
fedeRAl delICAteSSen
•
Metro Restaurant of the Year Awards 2016
Best All-Day Restaurant
SKYCItY Hotel
•
•
TripAdvisor Certificate of Excellence 2015
Orbitz Worldwide, Best in Stay Award
Winner (Auckland Market) 2015
• TripAdvisor GreenLeaders Programme
- Gold Level
SKYCItY gRAnd Hotel
•
•
TripAdvisor GreenLeaders Programme
- Gold Level
TripAdvisor Travellers' Choice Award
2016 - Top 25 Hotels New Zealand
eASt dAY SpA
•
Oceania’s Best Hotel Spa and
New Zealand’s Best Hotel Spa in
World Spa Awards 2015
•
Metro Restaurant of the Year Awards 2016
Best Inner-City Bistro
SKY toweR
• Best Established Venue at 2016 Lewisham
• TripAdvisor Traveller's Choice
Awards
Award 2016 - Top 10 Landmarks
New Zealand
•
ExperienceOZ+NZ Top 10 Things to do
in Auckland 2016
•
•
•
•
•
Hospitality and Tourism Business of the
Year 2015 in the Westpac Waikato
Business Excellence Awards
Bowlevard - runner-up for the Hamilton
Central Business Association Business
Award in the Specialty Business Category
Bowlevard – Entertainment Book Gold
Award - Arts, Sports and Attractions
Category
City Co-Op was a finalist in the We are
Waikato Awards 2015 (New Zealand
Property Council Waikato)
City Co-Op was a finalist in the
New Zealand Property Council
National Awards 2016
SKyCITy aDelaIDe
•
Sean’s Kitchen - Best Established
Restaurant at the 2016 City Awards
SKyCITy DarwIn
•
Evoo was awarded the only NT Judges
Choice Chefs Hat Award from the
Australian Good Food Guide Awards
21
Skycity entertainment group limited | skycityentertainmentgroup.com our board
our
The SKYCITY board draws on the diverse skills of highly-respected directors with years
of experience in leadership and governance across a range of sectors.
1
3
5
22
2
4
6
AnnuAl RepoRt | Year ended 30 June 2016 our board
1 CHrIS MOller - Chairman
3 BrenT HarMan - Director
5 rICHarD DIDSBUry - Director
member of the Audit and financial Risk Committee
member of the Remuneration and Human Resources
Committee
member of the Corporate Social Responsibility
Committee
Chair of the governance and nominations Committee
Appointed a director of SKYCItY in december 2008
Chris Moller is currently Chairman of
Meridian Energy Limited and the
New Zealand Transport Agency and a
director of Westpac New Zealand Limited.
In his previous role as CEO of the
New Zealand Rugby Union, Chris jointly
led New Zealand’s successful bid to host the
2011 Rugby World Cup. Chris’ career has
included senior posts with the New Zealand
Dairy Board, including global Chief Financial
Officer and Managing Director of NZMP,
the international ingredients business of the
New Zealand Dairy Board and subsequently
Fonterra, where he also held the position of
Deputy Chief Executive of Fonterra.
His early career was in the finance and
banking sectors. He is a Fellow of the
Institute of Chartered Accountants and
was appointed as a Companion of the
New Zealand Order of Merit in January 2015
for services to business and sport.
2 BrUCe CarTer - Deputy Chairman
Chair of the Audit and financial Risk Committee
member of the governance and nominations
Committee
Appointed a director of SKYCItY in october 2010
Based in Adelaide, Australia, Bruce Carter is
a Consultant to Ferrier Hodgson in Adelaide
and was one of the founding partners of the
Adelaide practice in 1992. He was formerly
a partner at Ernst & Young and has more
than 30 years’ experience in corporate
restructuring and insolvency. Bruce is
currently Chairman of ASC Pty Ltd
(Australian Submarine Corporation) and
Aventus Capital Limited and a director of
Bank of Queensland Limited as well as a
number of private companies and government
bodies. He is a Fellow of the Institute of
Chartered Accountants.
Chair of the Remuneration and Human Resources
Committee
member of the governance and nominations
Committee
Appointed a director of SKYCItY in december 2008
member of the Corporate Social Responsibility
Committee
member of the governance and nominations
Committee
Appointed a director of SKYCItY in july 2012
Brent Harman is an experienced broadcaster
and company director with a background in
managing publicly listed companies in
Australia and the United Kingdom. Brent has
held senior executive and board positions in
the broadcast and new media industries in
New Zealand, the United Kingdom and
Australia.
4 SUe SUCKlInG - Director
member of the Remuneration and Human
Resources Committee
Chair of the Corporate Social Responsibility
Committee
member of the governance and nominations
Committee
Appointed a director of SKYCItY in may 2011
Sue Suckling is responsible for leading the
board’s agenda on health and safety and ensuring
that health and safety is monitored and that
appropriate issues are addressed as necessary.
Sue is a director and consultant with over
25 years’ experience in corporate governance.
Sue is currently the Chair of the
New Zealand Qualifications Authority,
Callaghan Innovation Research Limited,
Jacobsen Holdings Limited, the Lincoln Hub
Establishment Board and ECL Group Limited.
She is a director of Restaurant Brands
New Zealand Limited and a trustee of the
Ministry of Awesome. Previous governance
roles include chairing NIWA, AgriQuality
Limited, and as a director of Westpac
Investments Limited and the New Zealand
Dairy Board. In 1996, she was awarded an
OBE for her contribution to New Zealand
business. Sue is a Fellow of the New Zealand
Institute of Directors and a Companion of the
Royal Society of New Zealand.
Richard Didsbury graduated as an Engineer
from Auckland University and has enjoyed a
distinguished career in property investment
and development. Richard founded, and is
currently a director of, the Kiwi Property
Group Limited (KPG), which is now the
largest property vehicle listed on the NZX.
He is well known for his work as a past
president of the Property Council of
New Zealand and was previously Chairman
of Committee for Auckland Limited. He is a
director of Auckland International Airport
Limited and Hobsonville Land Company
Limited, which is developing a major new
waterfront community in Auckland’s
north-west. His previous governance roles
include being a director of Infrastructure
Auckland and Tourism Auckland.
6 rICHarD TSIanG - Director
member of the Audit and financial Risk Committee
member of the governance and nominations
Committee
Appointed a director of SKYCItY in december 2014
Based in both Melbourne, Australia, and
Hong Kong, Richard Tsiang is a consultant
and Advisory Board Member to The Hong
Kong Jockey Club. He was formerly Chief
Development Officer of Melco Crown
Entertainment in Macau from 2007 to 2011
and Group Chief Financial Officer of MGM
Grand Macau from 2006 to 2007. Prior to that
time, he was Managing Director of Cendant
Corporation in Asia, a US Fortune 500
company, involved in real estate, travel
distribution, hospitality and vehicle rental
companies, Avis and Budget. From 2000 to
2004, Richard was Chief Financial Officer and
Head of Strategy for Yahoo Asia, based in
Hong Kong. His early career was spent in
Australia as a qualified chartered accountant
working for PricewaterhouseCoopers.
23
Skycity entertainment group limited | skycityentertainmentgroup.com our management
our
SenIOr leaDerSHIP TeaM
2
4
1
3
24
1 JOHn MOrTenSen
Interim Chief Executive Officer
2 rOB HaMIlTOn
Chief Financial Officer
3 PeTer TreaCy
General Counsel and
Chief Risk Officer
4 GrÁInne TrOUTe
General Manager
Corporate Services
AnnuAl RepoRt | Year ended 30 June 2016 SITe anD BUSIneSS General ManaGerS
our management
5
8
10
6
9
11
7
5 MaTTHew BalleSTy
Acting General Manager
SKYCITY Auckland
6 MICHelle BaIllIe
General Manager
SKYCITY Hamilton
7 JOnaTHan BrOwne
General Manager
SKYCITY Queenstown
8 DaVID CHrISTIan
General Manager
SKYCITY Darwin
9 TOny MCnaMara
Acting General Manager
Adelaide Casino
10 eJaaz Dean
President International Business
11 SIMOn JaMIeSOn
Group General Manager
New Zealand International Convention
Centre Development and Tourism
25
Skycity entertainment group limited | skycityentertainmentgroup.com finanCial statements and notes
and notes
for the year ended 30 june 2016
26
AnnuAl RepoRt | Year ended 30 June 2016 finanCial statements and notes
27
Skycity entertainment group limited | skycityentertainmentgroup.com independent auditor's report
InDePenDenT aUDITOr'S rePOrT
to the shareholders of SKYCITY Entertainment Group Limited
Our opinion
In our opinion the consolidated financial statements of SKYCITY Entertainment Group Limited (the Company), including
its subsidiaries (the Group), present fairly, in all material respects, the financial position of the Group as at 30 June 2016,
its financial performance and its cash flows for the year then ended in accordance with New Zealand Equivalents to
International Financial Reporting Standards (NZ IFRS) and International Financial Reporting Standards (IFRS).
what we have audited
SKYCITY Entertainment Group Limited’s consolidated financial statements comprise:
•
•
•
•
•
•
the balance sheet as at 30 June 2016;
the income statement for the year then ended;
the statement of comprehensive income for the year then ended;
the statement of changes in equity for the year then ended;
the statement of cash flows for the year then ended; and
the notes to the consolidated financial statements, which include a summary of significant accounting policies.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs NZ) and International
Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s responsibilities
for the audit of the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the Group in accordance with Professional and Ethical Standard 1 (Revised) Code of Ethics for
Assurance Practitioners (PES 1) issued by the New Zealand Auditing and Assurance Standards Board and the International
Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code), and we have fulfilled
our other ethical responsibilities in accordance with these requirements.
Our firm carries out other services for the Group in the areas of accounting assistance, tax, and other advisory services.
The provision of these other services has not impaired our independence as auditors of the Group.
Information other than the financial statements and auditor’s report
The directors are responsible for the other information. The other information comprises the annual report (but does not
include the consolidated financial statements and our auditor’s report thereon).
Our opinion on the consolidated financial statements does not cover the other information and we do not and will not express
any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information identified
above and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial
statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have
performed on the other information that we obtained prior to the date of this auditor’s report, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
28
AnnuAl RepoRt | Year ended 30 June 2016 independent auditor's report
responsibilities of the directors for the consolidated financial statements
The directors are responsible on behalf of the Company for the preparation and fair presentation of the consolidated financial
statements in accordance with NZ IFRS and IFRS, and for such internal control as the directors determine is necessary to enable
the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the directors are responsible for assessing the Group’s ability to continue as
a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative but to do so.
auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements, as a whole, are free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable
assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs NZ and ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the
basis of these consolidated financial statements.
A further description of our responsibilities for the audit of the financial statements is located at the External Reporting Board’s
website at: https://xrb.govt.nz/Site/Auditing_Assurance_Standards/Current_Standards/Page5.aspx
This description forms part of our auditor’s report.
who we report to
This report is made solely to the Company’s shareholders, as a body. Our audit work has been undertaken so that we might
state those matters which we are required to state to them in an auditor’s report and for no other purpose. To the fullest extent
permitted by law, we do not accept or assume responsibility to anyone other than the Company and the Company’s
shareholders, as a body, for our audit work, for this report or for the opinions we have formed.
The engagement partner on the audit resulting in this independent auditor’s report is Leo Foliaki.
For and on behalf of:
Chartered Accountants
10 August 2016
Auckland
29
Skycity entertainment group limited | skycityentertainmentgroup.com inCome statement
foR t He Y eAR ended 30 j une 2016
Total receipts including GST
Less non-gaming GST
Gaming win plus non-gaming revenue
Less gaming GST
Revenue
Other income
Employee benefits expense
Other expenses
Directors fees
Restructuring costs
Gaming taxes and levies
Direct consumables
Marketing and communications
earnings before interest, taxes, depreciation
and amortisation expenses (eBItdA)
Depreciation and amortisation expense
earnings before interest and tax (eBIt)
Net finance costs
profit before income tax
Income tax expense
profit for the year attributable to shareholders of the company
earnings per share for profit attributable to the
shareholders of the company
Basic and diluted earnings per share
The above income statement should be read in conjunction with the accompanying notes.
ConSolIdAted
noteS
2016
$’0 0 0
2015
$’0 0 0
3
3
3
3
3
4
5
5
8
11
noteS
6
1,131,526
(31,314)
1,100,212
(101,519)
998,693
954
(315,189)
(181,396)
(1,124)
(1,553)
(60,212)
(76,987)
(29,259)
333,927
(104,070)
229,857
(32,588)
197,269
(51,597)
145,672
CentS
24.3
1,036,966
(29,259)
1,007,707
(91,620)
916,087
1,356
(302,748)
(137,772)
(1,179)
(4,316)
(56,676)
(75,327)
(35,348)
304,077
(89,292)
214,785
(43,927)
170,858
(42,114)
128,744
CentS
22.0
30
AnnuAl RepoRt | Year ended 30 June 2016
statement of Comprehensive inCome
foR t He Y eAR ended 30 j une 2016
profit for the year
other comprehensive income
Items that may be reclassified subsequently to profit or loss
Exchange differences on translation of overseas subsidiaries
Cash flow hedges – revaluations
Cash flow hedges – transfer to finance costs
Cash flow hedges – income tax
other comprehensive (expense)/income for the year, net of tax
total comprehensive income for the year attributable to shareholders of the company
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
ConSolIdAted
2016
$’0 0 0
2015
$’0 0 0
145,672
128,744
(22,952)
(16,833)
11,950
1,256
(26,579)
119,093
11,719
57,467
(60,272)
768
9,682
138,426
31
Skycity entertainment group limited | skycityentertainmentgroup.com
balanCe sheet
AS A t 30 j une 2016
aSSeTS
Current assets
Cash and bank balances
Receivables and prepayments
Derivative financial instruments
Inventories
Tax prepayment
Total current assets
non-current assets
Property, plant and equipment
Intangible assets
Derivative financial instruments
Tax prepayment
Total non-current assets
total assets
LIaBILITIeS
Current liabilities
Payables
Interest-bearing liabilities
Derivative financial instruments
Total current liabilities
non-current liabilities
Interest-bearing liabilities
Provisions
Derivative financial instruments
Deferred tax liabilities
deferred licence value
Total non-current liabilities
total liabilities
net assets
eQuITY
Share capital
Reserves
Retained earnings
total equity
The above balance sheet should be read in conjunction with the accompanying notes.
32
ConSolIdAted
noteS
2016
$’0 0 0
2015
$’0 0 0
18
17
21
12
15
16
21
12
19
9
21
10
21
13
16
20
90,309
36,538
1,943
7,705
6,915
53,232
16,654
32
8,362
45,227
143,410
123,507
1,223,062
923,257
65,189
–
2,211,508
2,354,918
137,918
38,028 –
1,471
177,417
389,032
4,125
38,218
78,688
554,396
1,064,459
1,241,876
1,113,042
1,055,737
(65,473)
122,778
1,113,042
1,174,248
556,029
70,998
779
1,802,054
1,925,561
130,085
675
130,760
699,092
3,739
33,513
80,613
160,922
977,879
1,108,639
816,922
758,800
(38,894)
97,016
816,922
AnnuAl RepoRt | Year ended 30 June 2016
statement of Changes in equity
foR t He Y eAR ended 30 j une 2016
noteS
SHARe
CApItAl
$’0 0 0
HedgIng
ReSeR ve
$’0 0 0
foReIgn
CuRRenCY
tRAnSl AtIon
ReSeR ve
$’0 0 0
RetAIned
eARn IngS
$’0 0 0
totAl eQuItY
$’0 0 0
COnSOLIdaTed
Balance as at 1 july 2014
total comprehensive income/(expense)
Dividends provided for or paid
Shares issued under dividend reinvestment plan
Share rights issued for employee service
Net purchase of treasury shares
Balance as at 30 june 2015
Balance as at 1 july 2015
total comprehensive income/(expense)
Dividends provided for or paid
Shares issued under dividend reinvestment plan
Share rights issued for employee service
Net purchase of treasury shares
Issue of new share capital
737,546
(8,766)
(39,810)
84,915
773,885
–
–
19,254
1,245
755
(2,037)
–
–
–
–
11,719
–
–
–
–
128,744
(116,643)
–
–
–
138,426
(116,643)
19,254
1,245
755
758,800
(10,803)
(28,091)
97,016
816,922
758,800
(10,803)
(28,091)
97,016
816,922
–
–
39,352
1,275
(375)
256,685
(3,627)
–
–
–
–
–
(22,952)
–
–
–
–
–
145,672
(119,910)
–
–
–
–
119,093
(119,910)
39,352
1,275
(375)
256,685
7
7
20
Balance as at 30 june 2016
1,055,737
(14,430)
(51,043)
122,778
1,113,042
The above statement of changes in equity should be read in conjunction with the accompanying notes.
33
Skycity entertainment group limited | skycityentertainmentgroup.com
statement of Cash flows
foR t He Y eAR ended 30 j une 2016
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Gaming taxes and levies paid
Income taxes paid
net cash inflow from operating activities
Cash flows from investing activities
Purchase of/proceeds from property, plant and equipment
Payments for intangible assets
net cash outflow from investing activities
Cash flows from financing activities
Issue of new share capital
Cash flows associated with derivatives
New borrowings
Repayment of borrowings
Net purchase of treasury shares
Dividends paid to company shareholders
Interest paid
net cash outflow from financing activities
net increase / (decrease) in cash and bank balances
Cash and bank balances at the beginning of the year
Cash and cash equivalents at end of year
The above statement of cash flows should be read in conjunction with the accompanying notes.
ConSolIdAted
noteS
2016
$’0 0 0
2015
$’0 0 0
978,683
(599,995)
378,688
(60,469)
(13,062)
305,157
(147,955)
(8,562)
(156,517)
256,685 –
2,839
125,000
(372,369)
(375)
(80,558)
(42,785)
(111,563)
37,077
53,232
90,309
918,251
(541,871)
376,380
(56,646)
(29,059)
290,675
(106,310)
(5,724)
(112,034)
4,839
128,074
(168,751)
755
(97,389)
(46,989)
(179,461)
(820)
54,052
53,232
28
20
21
10
10
20
7
18
34
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
1 SUMMary OF SIGnIFICanT aCCOUnTInG POlICIeS
SKYCITY Entertainment Group Limited (SKYCITY or the company and its subsidiaries or the Group) operates in the gaming/entertainment,
hotel and convention, hospitality, recreation, and tourism sectors. The Group has operations in New Zealand and Australia.
SKYCITY is a limited liability company incorporated and domiciled in New Zealand. The address of its registered office is Federal House,
86 Federal Street, Auckland. The company is dual listed on the New Zealand and Australian stock exchanges.
These consolidated financial statements were approved for issue on 10 August 2016 by the board of directors.
In preparing these financial statements SKYCITY has adopted "streamlined" reporting. Streamlined reporting aims to present the financial
statements in a more logical manner and eliminate unnecessary information. This approach is supported by the New Zealand Financial
Markets Authority.
(a) Basis of Preparation
The financial statements of the Group have been prepared in accordance with Generally Accepted Accounting Practice in New Zealand
(‘NZ GAAP’). They comply with New Zealand equivalents to International Financial Reporting Standards (‘NZ IFRS’) and other applicable
Financial Reporting Standards, as applicable for profit oriented entities. The financial statements also comply with International Financial
Reporting Standards (‘IFRS’).
entities Reporting
The Group has a negative working capital balance as US$27 million of United States private placement notes matures in March 2017 (refer to
note 9). The Group has significant available undrawn banking facilities totalling $582 million as at 30 June 2016 (refer to note 10) and has the
ability to fully pay all debts as they fall due.
The Group is designated as a profit oriented entity for financial reporting purposes.
The consolidated financial statements incorporate the assets and liabilities of all subsidiaries of the Group as at 30 June 2016 and the results of all
subsidiaries for the year then ended.
Statutory Base
SKYCITY Entertainment Group Limited is a company registered under the Companies Act 1993 and is an FMC reporting entity under Part 7 of
the Financial Markets Conduct Act 2013. The financial statements of the Group have been prepared in accordance with the requirements of Part 7
of the Financial Markets Conduct Act 2013 and the NZX Main Board Listing Rules.
measurement Basis
These financial statements have been prepared under the historical cost convention, as modified by the revaluation of available for sale financial
assets, financial assets and liabilities (including derivative instruments) at fair value through profit or loss.
Critical accounting estimates
The preparation of financial statements requires the use of certain critical accounting estimates. It also requires the company to exercise its
judgement in the process of applying the Group’s accounting policies. Judgement is used in the following areas: estimated impairment of goodwill
and indefinite useful life casino licences and valuation of the Auckland regulatory reforms.
The Group tests annually whether goodwill and indefinite useful life licences have suffered any impairment, in accordance with the accounting policy
stated in note 16. The recoverable amounts of cash generating units have been determined based on value in use calculations. These calculations require
the use of estimates.
There is sufficient headroom between the value in use calculations and the carrying value of the remaining assets that significant changes in the
assumptions used would not require an impairment.
35
Skycity entertainment group limited | skycityentertainmentgroup.com notes to the finanCial statements
(b) Principles of Consolidation
Subsidiaries
Subsidiaries are all entities (including structured entities) over which the Group has control. The Group controls an entity when the Group is
exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that
control ceases.
Inter company transactions, balances and unrealised gains on transactions between Group companies are eliminated. Unrealised losses are also
eliminated. When necessary, amounts reported by subsidiaries have been adjusted to conform with the Group's accounting policies.
(c) Foreign Currency Translation
(i) functional and presentation Currency
Items included in the financial statements of each of the company's operations are measured using the currency that best reflects the economic
substance of the underlying events and circumstances relevant to that operation (functional currency). The consolidated financial statements are
presented in New Zealand dollars which is the Group's presentation currency.
(ii) transactions and Balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign
exchange gains and losses resulting from the settlement of such transactions and from the translation at year end exchange rates of monetary assets
and liabilities denominated in foreign currencies are recognised in the Income Statement, except when deferred in equity as qualifying cash flow
hedges and qualifying net investment hedges.
Translation differences on non-monetary financial assets and liabilities such as equities held at fair value through profit or loss are recognised in
profit or loss as part of the fair value gain or loss. Translation differences on non-monetary financial assets, such as equities classified as available for
sale,
are included in other comprehensive income.
(iii) foreign operations
The results and financial position of foreign entities (none of which has the currency of a hyperinflationary economy) that have a functional
currency different from the presentation currency are translated into the presentation currency below:
• assets and liabilities for each Balance Sheet presented are translated at the closing rate at the date of that balance sheet;
•
income and expenses for each Income Statement are translated at average exchange rates; and
• all resulting exchange differences are recognised as a separate component of equity.
Exchange differences arising from the translation of any net investment in foreign entities, and of borrowings and other currency instruments
designated as hedges of such investments, are taken to shareholders' equity.
(d) Goods and Services Tax (GST)
The Income Statement, Statement of Cash Flows and Statement of Changes in Equity have been prepared so that all components are stated exclusive
of GST. All items in the Balance Sheet are stated net of GST, with the exception of receivables and payables, which include GST invoiced.
(e) Statement of Cash Flows
Cash flows associated with derivatives that are part of a hedging relationship are off set against cash flows associated with the hedged item.
(f) new accounting Standards adopted in the year
There have been no significant changes in accounting policies during the current year. Accounting policies have been applied on a basis consistent
with prior year.
36
AnnuAl RepoRt | Year ended 30 June 2016 notes to the finanCial statements
(g) Standards, amendments and Interpretations to existing Standards that are not yet effective
Certain new standards, amendments and interpretations to existing standards have been published that are mandatory for the Group’s accounting
periods beginning on or after 1 July 2016 or later periods, but which the Group has not early adopted. The significant items are:
• NZ IFRS 9, Financial Instruments
(Effective date: periods beginning on or after 1 January 2018). NZ IFRS 9, ‘Financial instruments’, addresses the classification, measurement
and recognition of financial assets and financial liabilities. The complete version of NZ IFRS 9 was issued in September 2014. It replaces the
guidance in NZ IAS 39 that relates to the classification and measurement of financial instruments. NZ IFRS 9 retains but simplifies the mixed
measurement model and establishes three primary measurement categories for financial assets: amortised cost, fair value through other
comprehensive income and fair value through profit or loss. The basis of classification depends on the entity's business model and the contractual
cash flow characteristics of the financial asset. Investments in equity instruments are required to be measured at fair value through profit or loss
with the irrevocable option at inception to present changes in fair value in other comprehensive income and not reflected in the Income
Statement. There is now a new expected credit losses model that replaces the incurred loss impairment model used in NZ IAS 39. For financial
liabilities there were no changes to classification and measurement except for the recognition of changes in own credit risk in other
comprehensive income, for liabilities designated at fair value through profit or loss. NZ IFRS 9 relaxes the requirements for hedge effectiveness
by replacing the bright line hedge effectiveness tests. It requires an economic relationship between the hedged item and hedging instrument and
for the ‘hedged ratio’ to be the same as the one management actually use for risk management purposes. Contemporaneous documentation is
still required but is different to that currently prepared under NZ IAS 39. The standard is effective for accounting periods beginning on or after
1 January 2018. Early adoption is permitted. The Group intends to adopt NZ IFRS 9 from 1 July 2016 and it is not expected to significantly
impact the Group.
• NZ IFRS 15, Revenue from Contracts with Customers
(Effective date: periods beginning on or after 1 January 2018). NZ IFRS 15, 'Revenue from contracts with customers', deals with revenue
recognition and establishes principles for reporting useful information to users of financial statements about the nature, amount, timing and
uncertainty of revenue and cash flows arising from an entity’s contracts with customers. Revenue is recognised when a customer obtains control
of a good or service and thus has the ability to direct the use and obtain the benefits from the good or service. The standard replaces NZ IAS 18
'Revenue' and NZ IAS 11 'Construction contracts' and related interpretations. The standard is effective for annual periods beginning on or after
1 January 2018 and earlier application is permitted. The Group intends to adopt NZ IFRS 15 from 1 July 2018 and is currently assessing its
full impact.
• NZ IFRS 16, Leases
(Effective date: periods beginning on or after 1 January 2019). NZ IFRS 16, ‘Leases’, replaces the current guidance in NZ IAS 17. Under
NZ IFRS 16, a contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. Under NZ IAS 17, a lessee was required to make a distinction between a finance lease (on balance sheet) and an
operating lease (off balance sheet). NZ IFRS 16 now requires a lessee to recognise a lease liability reflecting future lease payments and a ‘right
of use asset’ for virtually all lease contracts. Included is an optional exemption for certain short term leases and leases of low value assets; however,
this exemption can only be applied by lessees. For lessors, the accounting for leases under NZ IFRS 16 is almost the same as NZ IAS 17.
However, because the guidance on the definition of a lease has been updated (as well as the guidance on the combination and separation of
contracts), lessors will also be affected by the new standard. The standard is effective for accounting periods beginning on or after
1 January 2019. Early adoption is permitted but only in conjunction with NZ IFRS 15, Revenue from Contracts with Customers.
The Group intends to adopt NZ IFRS 16 on its effective date and has yet to assess its full impact.
37
Skycity entertainment group limited | skycityentertainmentgroup.com notes to the finanCial statements
2 SeGMenT InFOrMaTIOn
accounting policy
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision maker. The chief
operating decision maker has been identified as the Chief Executive Officer.
(a) Primary reporting format – business segments
SKYCItY
AuCKl And
$’0 0 0
ReS t of
new ZeAl And
$’0 0 0
Adel AIde
CASIno
$’0 0 0
SKYCItY
dARwIn
$’0 0 0
InteR-
nAtIonA l
BuSIneSS
$’000
CoR poRAte/
gRoup
$’0 0 0
totAl
$’0 0 0
2016
Revenue from external customers and other income
Expenses
Depreciation and amortisation
507,021
(255,862)
(55,961)
59,370
(34,826)
(8,310)
152,993
(125,001)
(18,603)
117,872
(80,779)
(14,591)
162,391
(125,052)
–
–
(44,200)
(6,605)
999,647
(665,720)
(104,070)
Segment profit/EBIT
Net finance costs
Profit before income tax
Segment assets
195,198
16,234
9,389
22,502
37,339
(50,805)
229,857
(32,588)
197,269
1,139,778
60,337
465,962
336,931
Net additions to non-current assets
(other than financial assets and deferred tax)
84,486
2,331
20,940
10,961
2015
Revenue from external customers and other income 473,725
(245,540)
Expenses
(47,759)
Depreciation and amortisation
56,157
(34,288)
(5,489)
152,291
(129,069)
(16,319)
123,170
(82,738)
(13,782)
112,100
(82,217)
–
–
(39,514)
(5,943)
180,426
16,380
6,903
26,650
29,883
(45,457)
–
–
351,910
2,354,918
52,170
170,888
917,443
(613,366)
(89,292)
214,785
(43,927)
170,858
Segment profit/EBIT
Net finance costs
Profit before income tax
Segment assets
700,918
58,321
493,749
364,967
Net additions to non-current assets
(other than financial assets and deferred tax)
32,330
3,913
20,023
16,945
(b) Secondary reporting format – geographical segments
–
–
307,606
1,925,561
29,872
103,083
New Zealand
Australia
(c) Description of segments
Segment R evenueS
non- CuRRent ASS etS
exCludI ng fInAnCIA l
InStR umentS
2016
$’0 0 0
2015
$’0 0 0
2016
$’0 0 0
2015
$’000
672,522
326,171
602,074 1,385,937
760,382
314,013
914,156
816,900
998,693
916,087 2,146,319
1,731,056
Management has determined the operating segments based on the reports reviewed by the Chief Executive Officer that are used to assess
performance and allocate resources.
38
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
The Group is organised into the following main operating segments:
SKYCItY Auckland
SKYCITY Auckland includes casino operations, hotels and convention, food and beverage, carparking, Sky Tower and a number of other
related activities, and excludes International Business customers.
Rest of new Zealand
Rest of New Zealand includes the Group's operations at SKYCITY Hamilton, SKYCITY Queenstown and SKYCITY Wharf, and excludes
International Business customers.
Adelaide Casino
Adelaide Casino includes casino operations and food and beverage, and excludes International Business customers.
SKYCItY darwin
SKYCITY Darwin includes casino operations, food and beverage and hotel, and excludes International Business customers.
International Business
The International Business segment is made up of international customers sourced mainly from Asia. The revenue is generated at SKYCITY’s
Auckland, Darwin, Adelaide, Queenstown and Hamilton locations. The results of the segment includes commission and complimentary play.
Corporate/group
Head office and group wide functions including legal and regulatory, group finance, human resources, information technology, innovation, the
Chief Executive Officer's office and directors. The Group's interest in the New Zealand International Convention Centre is also included here.
3 reVenUe
accounting policy
Revenues include casino, hotel, food and beverage, Sky Tower, carparking and other revenues. Casino revenues represent the net win to the casino
from gaming activities, being the difference between amounts wagered and amounts won by casino patrons.
Revenues exclude the retail value of rooms, food, beverage and other promotional allowances provided on a complimentary basis to customers.
Total receipts including GST
Less non-gaming GST
Gaming win plus non-gaming revenue
Less gaming GST
total revenue
Gaming
Non-gaming
total revenue
2016
$’0 0 0
2015
$’0 0 0
1,131,526
(31,314)
1,100,212
(101,519)
998,693
773,074
225,619
998,693
1,036,966
(29,259)
1,007,707
(91,620)
916,087
704,066
212,021
916,087
Gaming win represents the gross cash inflows associated with gaming activities and includes GST. “Total receipts including GST” and “Gaming
win plus non-gaming revenue” do not represent revenue as defined by NZ IAS 18 Revenue. The Group has decided to disclose these amounts as
they give shareholders and interested parties a better appreciation for the scope of the Group’s gaming activities and is consistent with industry
practice adopted by casino operations in Australia.
39
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
4 OTHer InCOMe
Net gain on disposal of property, plant and equipment
dividend income
5 eXPenSeS
other expenses includes:
Utilities, insurance and rates
Community Trust donations
Other property expenses
Other items (including International Business commissions)
Minimum lease payments relating to operating leases
Provision for bad and doubtful debts
depreciation and amortisation
depreciation
Casino licence amortisation (Adelaide)
Computer software amortisation
Total depreciation and amortisation
auditor's fees
2016
$’0 0 0
944
10 8
954
2015
$’0 0 0
1,348
1,356
2016
$’0 0 0
2015
$’0 0 0
24,173
4,079
14,673
130,507
4,876
3,088
181,396
91,467
5,696
6,907
104,070
23,014
3,762
14,023
92,197
4,675
101
137,772
78,909
4,402
5,981
89,292
During the year the following fees were paid or are payable for services provided by the auditor of the parent entity and its related practices.
The Group employs PricewaterhouseCoopers on assignments additional to their statutory audit duties where PricewaterhouseCoopers’ expertise
and experience with the Group are important and auditor independence is not impaired. These assignments are principally tax advice. For other
work, the company's External Audit Independence Policy requires that advisers other than PricewaterhouseCoopers should be engaged
wherever practical.
Tax advisory services relates to ad hoc queries covering a range of tax related matters.
40
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
2016
$’0 0 0
856
856
27
95
122
978
324
71
395
2015
$’0 0 0
766
766
27
89
116
882
248
30
278
1,373
1,160
(a) assurance services
Audit services
Group audit
Total remuneration for audit services
other assurance services
Accounting advice and assistance
Tax compliance services
Total remuneration for other assurance services
Total remuneration for assurance services
(b) Other services
Taxation advisory services
Executive benchmarking assistance
Total remuneration for taxation services
Total remuneration for all services
6 earnInGS Per SHare
accounting policy
(i) Basic earnings per share
Basic earnings per share is calculated by dividing the profit attributable to equity holders of the company by the weighted average number of
ordinary shares outstanding during the financial year, adjusted for bonus elements in ordinary shares issued during the year.
(ii) 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 ordinary shares, and the weighted average number of shares assumed to have
been issued for no consideration in relation to dilutive potential ordinary shares.
There are no dilutive potential ordinary shares and therefore basic and diluted earnings per share are the same.
Weighted average number of ordinary shares used as the denominator
in calculating basic and diluted earnings per share
2016
numB eR
2015
numB eR
598,489,211
586,071,258
41
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
7 DIVIDenDS
accounting policy
Provision is made for the amount of any dividend declared on or before the end of the financial year but not distributed at balance date.
Prior year final dividend
Current year interim dividend
Total dividends provided for or paid
Cents per share
Prior year final dividend (per share)
Current year interim dividend (per share)
2016
$’0 0 0
58,216
61,694
119,910
2015
$’0 0 0
58,042
58,601
116,643
10.0
10.5
10.0
10.0
On 9 August 2016, the directors resolved to declare a final dividend of 10.5 cents per share in respect of the year ended 30 June 2016
(refer to note 29 for further details).
8 neT FInanCe COSTS
Finance costs
Exchange (gains)/losses
Interest income
Capitalised interest (refer Property, Plant and Equipment note)
Net finance costs
9 CUrrenT lIaBIlITIeS – InTereST-BearInG lIaBIlITIeS
2016
$’0 0 0
43,501
(709)
(1,529)
(8,675)
32,588
2015
$’0 0 0
49,421
(1,077)
(2,324)
(2,093)
43,927
accounting policy
Borrowings are classified as current liabilities unless the Group has an unconditional right to defer settlement of the liability for at least 12 months
after the balance sheet date.
United States private placement notes
Refer note 10 for details concerning the US private placement notes.
2016
$’0 0 0
38,028
2015
$’0 0 0
–
42
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
10 nOn-CUrrenT lIaBIlITIeS – InTereST-BearInG lIaBIlITIeS
accounting policy
Interest-bearing liabilities are recognised initially at fair value, net of transaction costs incurred. Interest-bearing liabilities are subsequently carried
at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statements
over the period of the borrowings using the effective interest method.
unsecured
United States private placement notes
Syndicated bank facility
New Zealand bonds
Deferred funding expenses
Total non-current interest-bearing liabilities
2016
$’0 0 0
2015
$’0 0 0
267,606
–
125,000
(3,574)
389,032
317,228
383,808
–
(1,944)
699,092
(a) United States Private Placement (USPP) notes
As at 30 June 2016, SKYCITY had US$202.0 million and NZ$21.1 million of USPP notes outstanding:
• US$27.0 million maturing 15 March 2017
• US$75.0 million maturing 15 March 2018
• NZ$21.1 million maturing 15 March 2020
• US$100.0 million maturing 15 March 2021
Movements in the outstanding balance relate to foreign exchange rate movements.
The US dollar USPP notes have been hedged to New Zealand dollars or Australian dollars by way of cross-currency interest rate swaps to eliminate
foreign exchange exposure to the US dollar. The offsetting changes in the value of the cross-currency interest rate swaps are included within
derivative financial instruments in note 21.
Fair value of USPP debt is estimated at NZ$344.4 million compared to a carrying value of NZ$305.6 million. Fair value has been calculated
based on the present value of future principal and interest cash flows, using market interest rates and credit margins at balance date.
Fair value is calculated using inputs other than quoted prices that are observable for the liability, either directly (that is, as prices) or indirectly
(that is, derived from prices). This is a level 2 valuation.
(b) Syndicated Bank Facility
The syndicated banking facility is provided by ANZ (New Zealand and Australia), Commonwealth Bank of Australia, Bank of New Zealand,
National Australia Bank and Westpac (New Zealand and Australia).
As at 30 June 2016, SKYCITY had in place revolving credit facilities of:
• A$250.0 million maturing 30 June 2019
• NZ$200.0 million maturing 30 June 2020
• NZ$120.0 million maturing 15 March 2021
(c) new zealand Bond
$125 million of unsubordinated, unsecured, redeemable fixed rate bonds were issued on 28 September 2015 with a maturity of seven years.
The bonds are quoted on the NZDX. As at 30 June 2016, the closing price was $1.04208 per $1 bond. The bonds are carried at amortised cost.
The total fair value is $130.3 million and is a level 1 valuation as they are listed securities.
43
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
(d) weighted average interest rate as at 30 June
2016
2015
weI gHted
AveRA ge
InteReSt
RAte
BAl An Ce
$’000
weI gHted
AveRA ge
InteReSt
RAte
BAl An Ce
$’0 0 0
Interest-bearing liabilities*
6.61%
430,634
6.06%
701,036
*The weighted average debt interest rate includes the impact of interest rate hedging.
11 InCOMe TaX eXPenSe
accounting policy
The income tax expense for the period is the tax payable on the current period’s taxable income, based on the income tax rate for each jurisdiction.
This is then adjusted by changes in deferred tax assets and liabilities attributable to temporary differences between the tax bases of assets and
liabilities and their carrying amounts in the financial statements, and changes in unused tax losses.
Deferred income tax is recognised, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and
their carrying amounts in the financial statements. However, deferred tax liabilities are not recognised if they arise from the initial recognition of
goodwill. Deferred income tax is not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business
combination that at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax
rates (and laws) that have been enacted or substantively enacted by the balance sheet date and are expected to apply when the related deferred
income tax asset is realised or the deferred income tax liability is settled.
Deferred income tax assets are recognised only to the extent that it is probable that future taxable profit will be available against which the
temporary differences can be utilised.
(a) Income Tax expense
Current tax
deferred tax
Income tax expense
(b) numerical reconciliation of Income Tax expense to Prima Facie Tax Payable
Profit from continuing operations before income tax expense
Prima facie income tax @ 28%
Tax effects of:
Expenses not deductible for tax purposes
Foreign exchange rate differences
Share of partnership expenditure
Differences in overseas tax rates
Non-deductible loss on disposal
Under provision in prior years
Income tax expense
The weighted average applicable tax rate was 26.2% (2015: 24.6%).
4 4
2016
$’0 0 0
2015
$’0 0 0
52,519
(922)
51,597
197,269
55,235
959
(307)
(6,549)
111
2,106
42
51,597
35,976
6,138
42,114
170,858
47,840
165
(948)
(7,045)
742
–
1,360
42,114
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
12 neT TaX PrePayMenTS
Tax prepayment – current
Tax prepayment – non-current
2016
$’0 0 0
6,915
–
6,915
2015
$’0 0 0
45,227
779
46,006
Tax was previously paid in advance in New Zealand to ensure the Group had a positive imputation credit account balance as at 31 March
of each year.
13 DeFerreD TaX lIaBIlITIeS
the balance comprises temporary differences attributable to:
Provision and accruals
depreciation
Foreign exchange differences
Other
Cash flow hedges
Net deferred tax liabilities
movements:
Balance at the beginning of the year
Charged to the income statement (note 11)
Debited to equity reserves
Foreign exchange differences
Closing balance at 30 June
expected maturity of deferred tax liabilities
Deferred tax to be settled within 12 months
Deferred tax to be settled after more than 12 months
14 IMPUTaTIOn anD FranKInG CreDITS
Balances available for use in subsequent reporting periods
Imputation credit account (New Zealand)
Franking credit account (Australia)
As required by relevant tax legislation, the imputation credit account had a credit balance as at 31 March 2016.
2016
$’0 0 0
2015
$’0 0 0
(15,747)
103,694
(3,387)
(422)
(5,450)
78,688
80,613
(922)
(1,256)
253
78,688
(27,672)
106,360
78,688
2016
$’0 0 0
15,534
6,106
(18,358)
102,813
734
(282)
(4,294)
80,613
75,715
6,138
(768)
(472)
80,613
(25,360)
105,973
80,613
2015
$’0 0 0
14,966
3,915
45
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
15 PrOPerTy, PlanT anD eQUIPMenT
accounting policy
Property, plant and equipment is stated at historical cost less depreciation. Historical cost includes expenditure that is directly attributable to the
acquisition of the items. Cost may also include transfers from equity of any gains/losses on qualifying cash flow hedges of foreign currency
purchases of property, plant and equipment.
Land is not depreciated. Depreciation on other assets is calculated using the straight line method to allocate their cost, net of their residual values,
over their estimated useful lives, as below:
Buildings and fitout
Plant, equipment and motor vehicles
Fixtures and fittings
5–75 years
2–75 years
3–20 years
The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each balance sheet date.
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.
lAnd
$’0 0 0
BuIld IngS
And f Itout
$’0 0 0
plAnt,
eQuIpment
And motoR
veHIC leS
$’0 0 0
fIxtuReS And
fIttIngS
$’0 0 0
CA pItAl
woRK In
pRog ReSS
$’0 0 0
totAl
$’0 0 0
189,607
–
913,655
(252,464)
383,063
(265,531)
112,352
(64,605)
125,870
–
1,724,547
(582,600)
189,607
661,191
117,532
47,747
125,870
1,141,947
189,607
1,318
787
–
661,191
8,402
33,620
(27,359)
117,532
1,875
38,154
(40,718)
47,747
528
14,295
(10,832)
125,870
1,728
10,503
–
1,141,947
13,851
97,359
(78,909)
191,712
675,854
116,843
51,738
138,101
1,174,248
191,712
–
956,334
(280,480)
401,285
(284,442)
124,221
(72,483)
138,101
–
1,811,653
(637,405)
191,712
675,854
116,843
51,738
138,101
1,174,248
191,712
(1,941)
–
–
675,854
(12,908)
44,498
(38,769)
116,843
(3,124)
61,956
(40,864)
51,738
(996)
12,410
(11,834)
138,101 1,174,248
(22,046)
162,327
(91,467)
(3,077)
43,463
–
189,771
668,675
134,811
51,318
178,487 1,223,062
189,771
–
962,623
(293,948)
384,212
(249,401)
121,093
(69,775)
178,487 1,836,186
(613,124)
–
189,771
668,675
134,811
51,318
178,487 1,223,062
COnSOLIdaTed
At 1 july 2014
Cost
Accumulated depreciation
Net book amount
Year ended 30 june 2015
Opening net book amount
Exchange differences
Net additions/transfers
Depreciation charge
Closing net book amount
At 30 june 2015
Cost
Accumulated depreciation
Net book amount
Year ended 30 june 2016
Opening net book amount
Exchange differences
Net additions/transfers
depreciation charge
Closing net book amount
At 30 june 2016
Cost
accumulated depreciation
Net book amount
46
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
(a) Capitalised borrowing costs
Borrowing costs of $8,674,989 have been capitalised in the current year relating to capital projects (2015: $2,092,270) using the Group's weighted average
cost of debt of 6.03% (2015: 6.71%).
(b) Capital commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities was $477.6 million (2015: $10.5 million). The majority of the
2016 capital commitment relates to the construction of the New Zealand International Convention Centre and the Hobson Street hotel.
(c) encumbrances
A memorandum of encumbrance is registered against the title of land for the Auckland casino in favour of Auckland Council. Auckland Council requires
prior written consent before any transfer, assignment or disposition of the land. The intent of the covenant is to protect the Council's rights under the
resource consent, relating to the provision of the bus terminus, public car park and the provision of public footpaths around the complex.
A further encumbrance records the Council's interest in relation to the sub soil areas under Federal and Hobson Streets used by SKYCITY as car parking
and a vehicle tunnel. The encumbrance is to notify any transferee of the Council's interest as lessor of the sub soil areas.
There are four encumbrances relating to the NZICC site land. One encumbrance projects the rights of the Crown under the NZICC Project and
Licensing Agreement, two relate to firewalls between buildings that have now been demolished and the final encumbrance protects the underground
vehicle entrance to the car park on the main Auckland casino site. The NZICC site land is also subject to a covenant in favour of the Crown which
restricts the subdivision and use of the site to that permitted under the NZICC Project and Licensing Agreement.
16 InTanGIBle aSSeTS
accounting policy
(i) goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired
business/associate at the date of acquisition. Goodwill on acquisitions of businesses is included in Intangible Assets. Goodwill acquired in business
combinations is not amortised. Instead, goodwill is tested for impairment annually or more frequently if events or changes in circumstances indicate
that it might be impaired, and is carried at cost less accumulated impairment losses.
Goodwill is allocated to cash generating units for the purpose of impairment testing.
(ii) Casino licences
The Group's casino licences that have a finite useful life are carried at cost less accumulated amortisation. Amortisation of these casino licences is
calculated on a straight line basis so as to expense the cost of the licences over their legal life.
The casino licences that have been determined to have an indefinite useful life for amortisation purposes are not amortised but are reviewed for
impairment on an annual basis.
Judgement is exercised in determining whether a casino licence has a finite or indefinite useful life. Consideration is given to the terms and
conditions of the relevant licence and in particular the renewal terms.
(iii) Regulatory reforms associated with casino licences
Regulatory reforms granted which are specific to the Group are initially recognised at their fair value where there is a reasonable assurance that the
reforms will be received and the Group will comply with all conditions attached.
Regulatory reforms are recognised as an intangible asset and included within the value of casino licences. Where a regulatory reform is related to
property, plant and equipment, once constructed the carrying value of that property, plant and equipment is reduced by the value of the regulatory
reforms. Prior to construction of the related property, plant and equipment, the value of the regulatory reforms is accounted for as deferred
licence value.
47
Skycity entertainment group limited | skycityentertainmentgroup.com notes to the finanCial statements
(iv) Aquired software
Acquired computer software licences are capitalised on the basis of the costs incurred to acquire and bring to use the specific software. These costs
are amortised over their estimated useful life (three to seven years).
goodwIll
$’000
CASIno
lICenCeS
$’000
ComputeR
SoftwARe
$’000
totAl
$’000
137,290
–
410,219
(35,541)
74,635
(48,955)
622,144
(84,496)
137,290
374,678
25,680
537,648
4,946
–
–
17,842
–
(4,402)
252
5,724
(5,981)
23,040
5,724
(10,383)
142,236
388,118
25,675
556,029
142,236
–
429,994
(41,876)
79,054
(53,379)
651,284
(95,255)
142,236
388,118
25,675
556,029
(7,298)
–
–
(26,081)
405,000
(5,696)
(352)
8,562
(6,907)
(33,731)
413,562
(12,603)
134,938
761,341
26,978
923,257
134,938
–
805,818
(44,477)
86,670
(59,692)
1,027,426
(104,169)
134,938
761,341
26,978
923,257
At 1 july 2014
Cost
Accumulated amortisation
Net book amount
movements in the year ended 30 june 2015
Exchange differences
Additions
Amortisation charge
Closing net book amount
At 30 june 2015
Cost
Accumulated amortisation
Net book amount
movements in the year ended 30 june 2016
Exchange differences
Additions
Amortisation charge
Closing net book amount
At 30 june 2016
Cost
Accumulated amortisation
Net book amount
48
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
Casino licence
Contract Term
SKYCITY
Auckland Casino
(indefinite useful life)
SKYCITY Auckland Limited holds a Casino Premises Licence for the Auckland premises. The Casino Premises Licence
was for an initial 25-year term from 2 February 1996.
The initial licence was granted in 1996 for nil consideration, and hence there was no associated initial carrying value.
Pursuant to the terms of the New Zealand International Convention Centre Project and Licensing Agreement between
Her Majesty the Queen in Right of New Zealand and the Company dated 5 July 2013 (“Agreement”), the initial term
of the licence was extended to 30 June 2048 on 11 November 2015. This was the date the Company executed a building
works contract with The Fletcher Construction Company Limited to construct the NZICC.
In addition to the licence extension, the Casino Premises Licence was amended to (a) permit the implementation of
account based cashless gaming and ticket in ticket out (“TITO”) gaming systems; (b) permit an increase in the number
of gaming machines, gaming tables and automated table games; and (c) implement various other operational
improvements. Under the Agreement, the Company has agreed to construct the NZICC for a total cost of at least
$430 million.
The reforms (a to c above) are exclusive to the Group and were recorded at fair value based on the estimated incremental
benefit over the life of the reforms. The fair value has been determined using a discounted cash flow model falling
within level 3 of the fair value hierarchy over the life of the reforms.
Key assumptions used in determining the fair value are as follows:
• A discount rate of 9.5% pre tax
• An additional 230 single terminal gaming machines
• An additional 40 gaming tables
• An additional 12 gaming tables that can each be substituted for 20 additional automated table game terminals
• The introduction of TITO and cashless gaming
• Up to 359 gaming machines being permitted to accept bank notes with a denomination up to $100
• Operating margins (net of labour costs, direct costs, comps/commissions and marketing) are calculated based on
an internal view of the structural changes to the cost base required to support the incremental revenue
The assumptions underpinning the model are inherently uncertain and require the exercise of significant judgement
about the future expected benefits of the reforms to the Group.
The asset will not be amortised but will be reviewed for impairment annually.
The carrying value of the casino licence is $405.0 million (FY15: nil).
49
Skycity entertainment group limited | skycityentertainmentgroup.com notes to the finanCial statements
Adelaide Casino
(finite useful life)
The casino and associated operations are carried out by SKYCITY Adelaide Pty Limited under a casino licence
(the Approved Licensing Agreement (ALA)) dated October 1999 (as amended). Unless terminated earlier, the expiry
date of the ALA is 30 June 2085. The term of the ALA can be renewed for a further fixed term pursuant to section 9
of the Casino Act 1997 (SA). The carrying value of the casino licence is amortised over the life of the ALA.
Effective 14 February 2014, the ALA and associated agreements were amended to (a) extend Adelaide Casino’s
exclusivity period for casino gaming in South Australia for a further 20 years until 30 June 2035 (during which period
no other casino gaming is permitted, except for interactive gambling); (b) permit the implementation of account based
cashless gaming and ticket in ticket out gaming systems in relevant areas; (c) permit an increase in the number of both
gaming machines and gaming tables; (d) reflect new taxation rates; and (e) implement various other operational
improvements. As part of the agreement with the South Australian Government, SKYCITY Adelaide made a
A$20 million payment to the South Australian Government and agreed to undertake a casino expansion and hotel
development project.
These reforms are exclusive to the Group and have therefore been recorded at fair value based on the estimated
incremental benefit of the reforms over the life of the reforms. The asset is amortised over 20 years or 71 years
depending on whether the incremental benefit is associated with the exclusivity period or the full licence period.
The carrying value of the casino licence is A$304.0 million (FY15: A$309.2 million).
SKYCITY
Darwin Casino
(indefinite useful life)
The casino and associated operations are carried out by SKYCITY Darwin Pty Limited under a casino licence/operator
agreement (the Casino Operator's Agreement) with the Northern Territory Government. The current licence term was
extended in 2011 and now expires on 30 June 2031. The Casino Operator's Agreement is subject to extension for a
further 5 years once its period to maturity reaches 15 years. These licence extensions apply on a continuing 5-year basis
so that, subject to certain criteria being met, the licence period is never less than 15 years. The carrying value of the
casino licence is A$31.7 million (FY15: A$31.7 million).
SKYCITY
Hamilton Casino
(indefinite useful life)
SKYCITY Hamilton Limited holds a Casino Premises Licence for the Hamilton premises. The Casino Premises Licence
is for an initial 25-year term from 19 September 2002. The licence can be renewed for further periods of
15 years pursuant to section 138 of the Gambling Act 2003 (NZ). As the licence was initially granted for nil
consideration, there is no associated carrying value.
SKYCITY
Queenstown Casino
(indefinite useful life)
Queenstown Casinos Limited holds a Casino Premises Licence for these Queenstown premises. The Casino Premises
Licence is for an initial 25-year term from 7 December 2000. The licence can be renewed for further periods of 15 years
pursuant to section 138 of the Gambling Act 2003 (NZ). As the licence was initially granted for nil consideration, there
is no associated carrying value.
SKYCITY
Wharf Casino
(Queenstown)
(indefinite useful life)
Otago Casinos Limited holds a Casino Premises Licence for these Queenstown premises. The Casino Premises Licence
is for an initial 25-year term from 11 September 1999. The licence can be renewed for further periods of 15 years
pursuant to section 138 of the Gambling Act 2003 (NZ). The carrying value of the casino licence which arose on
SKYCITY's aquisition of Otago Casinos Limited is $4.4 million (FY15: $4.4 million).
The asset is not amortised but will be reviewed for impairment annually.
The Deferred Licence Value relating to Auckland ($405.0 million) and Adelaide (NZ$149.4 million, FY15: NZ$160.9 million) included within
non-current liabilities will be transferred and offset against property, plant and equipment when the New Zealand International Convention Centre
and Adelaide redevelopment, respectively, have been completed. During the current year A$0.5 million of Deferred Licence Value associated with
Adelaide was transferred to Adelaide propety, plant and equipment, the remaining movement in the Adelaide balance related to exchange
differences.
50
AnnuAl RepoRt | Year ended 30 June 2016 (a) Impairment Tests for Intangibles with Indefinite Lives
201 6
Goodwill
Casino Licence
Total
2015
Goodwill
Casino Licence
Total
notes to the finanCial statements
SKYCItY
AuCKlAnd
$’000
otAgo CASInoS
lImIted*
$’000
SKYCItY
HAmIlton*
$’000
SKYCItY
dARwIn
$’000
totAl
$’000
–
405,000
405,000
–
–
–
–
4,391
4,391
–
4,391
4,391
35,786
–
99,152
33,262
134,938
442,653
35,786
132,414
577,591
35,786
–
106,450
35,710
142,236
40,101
35,786
142,160
182,337
The recoverable amount of a cash generating unit is determined based on value in use calculations. These calculations use cash flow projections
approved by directors. There is a surplus between the calculated value in use and the carrying value for each asset.
*SKYCITY Hamilton and Otago Casino Limited are included within the "Rest of New Zealand" segment in note 2.
(b) Key assumptions used for Value in Use Calculations of Cash Generating Units
SKYCITY auckland
SKYCITY Hamilton
SKYCITY Darwin
eBItdA mARgIn
gRowtH RAte
dISCount RAte
2016
2015
2016
2015
2016
2015
41.4%
42.6%
28.1%
–
39.3%
28.3%
2.0%
2.0%
2.0%
–
2.0%
3.0%
9.5%
9.5%
9.5%
–
9.5%
9.5%
These assumptions are consistent with past experience adjusted for economic indicators. The discount rates are post tax and reflect specific risks
relating to the relevant operating segment.
17 reCeIVaBleS anD PrePayMenTS
accounting policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less provision for doubtful debts.
Trade receivables (net)
Sundry receivables
Due to the short term nature of these receivables, their carrying value is assumed to be equal to their fair value.
2016
$’0 0 0
30,627
5,911
36,538
2015
$’0 0 0
10,226
6,428
16,654
51
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
18 CaSH anD BanK BalanCeS
Cash at bank
Cash in-house
19 PayaBleS
accounting policy
Payables are stated at fair value or estimated liability where accrued.
Trade payables
deferred income
Accrued expenses
Employee benefits
20 SHare CaPITal
Opening balance of ordinary shares issued
Issue of new share capital
Share rights issued for employee services
Employee share entitlements issued
Treasury shares issued
Net issue/(purchase) of treasury shares
Shares issued under dividend reinvestment plan
2016
$’0 0 0
40,358
49,951
90,309
2016
$’0 0 0
23,789
2,075
65,322
46,732
2015
$’0 0 0
12,302
40,930
53,232
2015
$’0 0 0
20,125
2,174
59,869
47,917
137,918
130,085
2016
SHAReS
2015
SHAReS
2016
$’000
2015
$’000
587,472,741 582,088,094
–
–
76,617
(76,617)
–
5,384,647
59,720,271
–
979,177
(979,177)
–
9,793,749
758,800
256,685
1,275
–
–
(375)
39,352
737,546
–
1,245
–
–
755
19,254
Closing balance of ordinary shares issued
656,986,761 587,472,741
1,055,737
758,800
All ordinary shares rank equally with one vote attached to each fully paid ordinary share.
Included within the number of shares is 5,720,530 treasury shares (2015: 6,699,707) held by the company. The movement in treasury shares during
the year related to the issuance of shares under the employee incentive plans and purchases of shares by an external trustee as part of the executive
long term incentive plan (refer note 23). Treasury shares may be used to issue shares under the company's employee incentive plans or upon the
exercise of share rights/options.
During May and June 2016 the company completed a 1 for 10 entitlement offer of ordinary shares. This offer raised net proceeds of $256.7 million
(gross proceeds of $262.8 million less transaction costs of $6.1 million).
52
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
21 DerIVaTIVe FInanCIal InSTrUMenTS
accounting policy
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and are subsequently re measured at their fair value.
The method of recognising the resulting gain or loss depends on whether the derivative is designated as a hedging instrument, and if so, the nature
of the item being hedged. The group designates certain derivatives as either:
(1) hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedge); or
(2) hedges of exposures to variability in cash flows associated with recognised assets or liabilities or highly probable forecast transactions
(cash flow hedges).
(i) fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in the Income Statement, together with
any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk.
(ii) Cash flow hedge
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash flow hedges is recognised in equity in the
hedging reserve. The gain or loss relating to the ineffective portion is recognised immediately in the Income Statement.
Amounts accumulated in equity are recycled in the Income Statement in the periods when the hedged item will affect profit or loss (for instance
when the forecast sale that is hedged takes place).
When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative
gain or loss existing in equity at that time remains in equity and is recognised in the Income Statement when the forecast transaction is ultimately
recognised in the Income Statement. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in
equity is transferred to the Income Statement.
(iii) derivatives that do not qualify for hedge accounting
Changes in the fair value of any derivative instrument that does not qualify for hedge accounting are recognised in the Income Statement.
Current assets
Cross-currency interest rate swaps cash flow hedges
Forward foreign exchange contracts
Total current derivative financial instrument assets
non-current assets
Cross-currency interest rate swaps – cash flow hedges
Total non-current derivative financial instrument assets
Current liabilities
Forward foreign currency contracts
Interest rate swaps – cash flow hedges
Total current derivative financial instrument liabilities
non-current liabilities
Interest rate swaps – cash flow hedges
Total non-current derivative financial instrument liabilities
2016
$’000
1,492
451
1,943
65,189
65,189
176
1,295
1,471
38,218
38,218
2015
$’000
–
32
32
70,998
70,998
327
348
675
33,513
33,513
53
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
22 FInanCIal rISK ManaGeMenT
The Group’s activities expose it to a variety of financial risks: market risks (interest rate, currency and electricity price), liquidity risk, and credit
risk. The Group’s overall risk management programme recognises the nature of these risks and seeks to minimise potential adverse effects on the
Group’s financial performance. The Group uses derivative financial instruments to hedge certain risk exposures.
Risk management is carried out by a central treasury department under a formal Treasury Policy approved by the board of directors.
The Treasury Policy sets out written principles for overall risk management, as well as policies covering specific areas such as foreign exchange risk,
interest rate risk, credit risk, use of derivative financial instruments and non-derivative financial instruments, and investment of excess funds.
The Treasury Policy sets conservative limits for allowable risk exposures which are formally reviewed at least annually.
(a) Market risk
(i) Currency risk
The Group operates internationally and is exposed to currency risk, primarily with respect to Australian and US dollars. Exposure to the Australian
dollar arises from the Group’s investment in its Australian operations. Exposure to the US dollar arises from funding denominated in that currency.
The Group utilises natural hedges wherever possible with forward foreign exchange contracts used to manage any significant residual risk to the
Income Statement.
The Group’s exposure to the US dollar (refer to US private placement notes detailed in note 10) has been fully hedged by way of
cross-currency interest rate swaps (CCIRS), hedging US dollar exposure on both principal and interest. The CCIRS correspond in amount
and maturity to the US dollar borrowings with no residual US dollar exposure.
(ii) Interest rate risk
The Group's interest rate risk arises from long term borrowings.
Interest rate swaps (IRS) and CCIRS are utilised to modify the interest repricing profile of the Group’s debt to match the profile required by
Treasury Policy. All IRS and CCIRS are in designated hedging relationships that are highly effective.
As the Group has no significant interest-bearing assets, the Group’s revenue is substantially independent of changes in market interest rates.
(iii) Summarised sensitivity analysis
SKYCITY manages its interest rate and foreign exchange rate exposure to minimise the impact of fluctuations in the market. The residual exposure
is not considered material or significant.
(b) Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its financial obligations.
SKYCITY is largely a cash based business and its material credit risks arise mainly from financial instruments utilised in funding and from
International Business activity.
Financial instruments (other than International Business discussed below) that potentially create a credit exposure can only be entered into with
counterparties that are explicitly approved by the board. Maximum credit limits for each of these parties are approved on the basis of long term
credit rating (Standard and Poor’s or Moody’s). A minimum long term rating of A+ (S&P) or A1 (Moody’s) is required to approve individual
counterparties.
The maximum credit risk of any financial instrument at any time is the fair value where that instrument is an asset. All derivatives are carried at fair
value in the balance sheet. Trade receivables are presented net of an allowance for estimated doubtful receivables.
International Business activity is managed in accordance with accepted industry practice. Settlement risk associated with International Business
customers is minimised through credit checking and a formal review and approval process.
There are no significant concentrations of credit risk in the Group.
54
AnnuAl RepoRt | Year ended 30 June 2016 notes to the finanCial statements
(c) liquidity risk
Liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of unutilised committed
credit facilities. The Group manages liquidity risk by continuously monitoring forecast and actual cash flows and maintaining flexibility in funding
by keeping committed credit lines available with a variety of counterparties and maturities.
maturities of Committed funding facilities
Debt maturities are detailed in note 10.
(d) Fair value estimation
The financial instruments are measured in the balance sheet at fair value by level of the fair value measurement hierarchy:
• Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1).
• Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (that is, as prices) or indirectly
(that is, derived from prices) (level 2).
• Inputs for the asset or liability that are not based on observable market data (that is, unobservable inputs) (level 3).
All SKYCITY financial instrutments, which includes cross-currency interest rate swaps, interest rate swaps and forward foreign currency contracts,
are valued using level two in the above fair value measurement hierarchy.
The fair value of financial instruments that are not traded in an active market (for example, over the counter derivatives) is determined by using
valuation techniques. These valuation techniques maximise the use of observable market data where it is available and rely as little as possible on
entity specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
Specific valuation techniques used to value financial instruments include:
• The fair value of interest rate swaps and cross-currency interest rate swaps is calculated as the present value of the estimated future cash flows
based on observable yield curves.
• The value of forward foreign exchange contracts is determined using forward exchange rates at the balance sheet date, with the resulting value
discounted back to present value.
Further details on derivatives are provided in note 21.
(e) Capital risk management
The Group’s objectives when managing capital are to safeguard its ability to continue as a going concern and to maximise returns for shareholders
and benefits for other stakeholders over the long term.
In order to optimise its capital structure, the Group manages actual and forecast operational cash flows, capital expenditure and equity distributions.
The Group primarily manages capital on the basis of gearing measured as a ratio of net debt (debt at hedged exchange rates less cash at bank)
to EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) and interest coverage (EBITDA relative to net interest cost).
The primary ratios were as follows at 30 June:
Gearing ratio
Interest coverage
2016
1.1 x
7.9 x
2015
2.1 x
7.8 x
These types of ratios are consistent with the financial covenants in the Group’s various funding facilities. Actual gearing as at 30 June 2016 was
within covenant limits on funding facilities.
The Group does not have any externally imposed capital requirements.
55
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
23 SHare-BaSeD PayMenTS
accounting policy
SKYCITY operates an equity settled, share-based compensation plan. The fair value of the employee services received in exchange for the grant of
the share rights is recognised as an expense. The total amount to be expensed over the vesting period is determined by reference to the fair value of
the share rights granted, excluding the impact of any non-market vesting conditions (for example, profitability and sales growth targets). At each
balance sheet date, the entity revises its estimates of the number of shares expected to be distributed. It recognises the impact of the revision of
original estimates, if any, in the Income Statement, and a corresponding adjustment to equity over the remaining vesting period.
2013 Chief Executive Officer and 2009 Executive Long Term Incentive Plans
Under these plans, executives purchase SKYCITY shares funded by an interest-free loan from a subsidiary of the company. The shares purchased by
the executives are held by a trustee company with executives entitled to exercise the voting rights attached to the shares and receive dividends, the
proceeds of which are used to repay the interest-free loan.
At the end of the restricted period (3 to 4 years), the Group will pay a bonus to each executive to the extent their performance targets have been
met which is sufficient to repay the initial interest-free loan associated with the shares which vest. The shares upon which performance targets have
been met will then fully vest to the executives. The loan owing on shares upon which performance targets have not been met (the forfeited shares)
will be novated from the executives to the trustee company and will be fully repaid by the transfer of the forfeited shares. Performance targets relate
to total shareholder return.
At 30 June 2016, the interest-free loan on the CEO Long Term Incentive Plan is nil (2015: $4,709,538) and the interest-free loans on the
Executive Long Term Incentive Plan total $9,155,468 (2015: $11,051,650).
Movements in the number of share options outstanding and their related weighted average exercise prices are as follows:
gRAnt dAte
expIRY dAte
BAlAnCe
At StARt of
tHe YeAR
numBeR
gRAnted
duRIng
tHe YeAR
numBeR
ConveRted
duRIng
tHe YeAR
numBeR
expIRed
duRIng
tHe YeAR
numBeR
BAlAnCe
At end of
tHe YeAR
numBeR
2016
31/08/11
29/08/12
28/08/13
27/08/14
26/08/15
Total
2015
31/08/10
02/03/11
31/08/11
29/08/12
28/08/13
27/08/14
Total
31/08/15
29/08/16
28/08/17
27/08/18
28/08/19
31/08/14
02/03/15
31/08/15
29/08/16
28/08/17
27/08/18
545,200
667,300
2,398,008
880,000
–
–
–
–
–
620,000
–
–
(979,177)
–
–
(545,200)
(267,200)
(600,081)
(100,000)
–
–
400,100
818,750
780,000
620,000
4,490,508
620,000
(979,177) (1,512,481) 2,618,850
319,903
1,144,291
670,200
764,800
2,566,758
–
–
–
–
–
–
880,000
(76,866)
–
–
–
–
–
(243,037)
(1,144,291)
(125,000)
(97,500)
–
–
545,200
667,300
(168,750) 2,398,008
880,000
–
5,465,952
880,000
(76,866)
(1,778,578) 4,490,508
The weighted average remaining contractual life of options and rights outstanding at the end of the period was 1.79 years (2015: 1.97 years).
56
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
fair value of share rights granted
The assessed fair value at grant date of the rights granted on 26 August 2015 was $1.10 (27 August 2014 was $1.00). This was calculated using the
single index model by Ernst & Young Transaction Advisory Services Limited.
The valuation inputs for the rights granted on 26 August 2015 included:
(a) rights are granted for no consideration
(b) exercise price: nil (2015: nil)
(c) share price at grant date: $4.05 (2015: $3.75)
The expected price volatility is derived by analysing the historic volatility over a recent historical period similar to the term of the right.
expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee benefit expense were as follows:
Rights issued under Share Rights Plans
24 relaTeD ParTy TranSaCTIOnS
2016
$’0 0 0
1,275
2015
$’0 0 0
1,245
There are no bad or doubtful debts associated with any related party of the Group (2015: nil).
(a) Key management personnel compensation
Key management compensation is set out below. The key management personnel are all the directors of the company, the Chief Executive Officer,
the Interim Chief Executive Officer and the key direct reports to the Chief Executive Officer with a group wide role.
2016
2015
SHoRt-teRm
BenefItS
$’000
SHARe-BASed
pAYmentS
$’000
12,191
8,928
900
792
totAl
$’000
13,091
9,720
(b) Other transactions with key management personnel or entities related to them
Certain directors and management have relevant interests in a number of companies with which SKYCITY has transactions in the normal course
of business. A number of SKYCITY directors are also non-executive directors of other companies, and a register of directors' interests is
maintained. Any transactions undertaken with these entities have been entered into on an arm's length commercial basis.
(c) Subsidiaries
Interests in subsidiaries are set out in note 25.
57
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
25 SUBSIDIarIeS
The consolidated financial statements incorporate the assets, liabilities and results of the following subsidiaries in accordance with the accounting
policy described in note 1(b).
All wholly-owned subsidiary companies and significant partly-owned subsidiaries have balance dates of 30 June.
pRInCIpAl
plACe of BuSIneSS
ClASS of
SHAReS
2016
2015
eQuItY HoldIng
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
New Zealand
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
Hong Kong
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
Ordinary
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100% –
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
nAme of entItY
New Zealand International Convention Centre Limited
Otago Casinos Limited
Queenstown Casinos Limited
Sky Tower Limited
SKYCITY Action Management Limited
SKYCITY Auckland Holdings Limited
SKYCITY Auckland Limited
SKYCITY Casino Management Limited
SKYCITY Hamilton Limited
SKYCITY International Holdings Limited
SKYCITY Investments Australia Limited
SKYCITY Investments Queenstown Limited
SKYCITY Management Limited
SKYCITY Metro Limited
SKYCITY Wellington Limited
SKYCITY Adelaide Pty Limited
SKYCITY Australia Finance Pty Limited
SKYCITY Australian Limited Partnership
SKYCITY Australia Pty Limited
SKYCITY Darwin Pty Limited
SKYCITY Treasury Australia Pty Limited
Horizon Tourism Limited
SKYCITY Investment Holdings Limited
26 COnTInGenCIeS
There are no significant contingencies at year end (2015: nil).
58
AnnuAl RepoRt | Year ended 30 June 2016
notes to the finanCial statements
27 COMMITMenTS
Operating lease Commitments
The Group leases various offices and other premises under non-cancellable operating leases. These leases have varying terms, escalation clauses and
renewal rights. On renewal, the terms of the leases are renegotiated.
Commitments for minimum lease payments in relation to non-cancellable operating leases are payable as follows:
Within one year
Later than one year but not later than five years
Later than five years
Commitments not recognised in the financial statements
2016
$’000
4,923
14,110
288,822
307,855
2015
$’000
7,472
18,023
309,902
335,397
The above operating lease summary includes a large number of leases, the most significant of which are:
• SKYCITY Auckland Hobson and Federal Streets sub soil lease. This lease is for a period of 999 years from 31 January 1996 with rent reviews
every five years.
• Adelaide Casino building lease. The initial lease term is until 3 March 2025 with three further rights of renewal for 20 years each and annual
rent reviews.
28 reCOnCIlIaTIOn OF PrOFIT aFTer InCOMe TaX TO neT CaSH InFlOw FrOM
OPeraTInG aCTIVITIeS
Profit for the year
Depreciation and amortisation
Finance costs net
Current period employee share expense
Gain on sale of fixed assets
Change in operating assets and liabilities
Change in receivables and prepayments
Change in inventories
Change in payables
Change in deferred tax liability
Change in tax receivable – current
Change in provisions
Change in tax receivable – term
Capital items included in working capital movements
Net cash inflow from operating activities
2016
$’000
145,672
104,070
32,588
1,275
(944)
(19,884)
657
7,833
(1,925)
38,312
386
779
(3,662)
2015
$’000
128,744
89,292
43,927
1,245
(1,348)
2,156
(491)
10,585
4,898
8,335
3,739
–
(407)
305,157
290,675
59
Skycity entertainment group limited | skycityentertainmentgroup.com
notes to the finanCial statements
29 eVenTS OCCUrrInG aFTer THe BalanCe SHeeT DaTe
(a) Dividend
On 9 August 2016, the directors resolved to provide for a final dividend to be paid in respect of the year ended 30 June 2016. The 50% imputed,
unfranked dividend of 10.5 cents per share will be paid on 16 September 2016 to all shareholders on the company's register at the close of business
on 2 September 2016.
60
AnnuAl RepoRt | Year ended 30 June 2016 reConCiliation of normalised results to reported results
2016
2015
Revenue
$m
eBItdA
$m
eBIt
$m
npAt
$m
Revenue
$m
eBItdA
$m
eBIt
$m
npAt
$m
normalised
1,084.1
330.1
236.4
152.7
1,007.7
304.9
216.4
134.1
International Business at Theoretical
International Business Adjustments
17.1
17.1
Adelaide redevelopment costs
NZICC interest and other costs
Asset write-offs
Darwin pre-opening costs
Restructuring costs
Auckland project costs
total other Adjustments
–
–
–
–
–
–
–
3.9
3.9
–
–
–
–
–
–
–
3.9
3.9
–
–
(10.4)
–
–
–
(10.4)
2.8
2.8
–
–
(9.8)
–
–
–
(9.8)
1.3
1.3
–
–
–
–
–
–
–
3.5
3.5
(1.7)
(0.6)
–
(0.1)
(1.6)
(0.3)
(4.3)
3.5
3.5
(1.7)
(0.6)
–
(0.1)
(1.6)
(1.1)
(5.1)
2.3
2.3
(1.2)
(4.6)
–
(0.1)
(1.1)
(0.7)
(7.7)
Reported
1,101.2
333.9
229.9
145.7
1,009.1
304.1
214.8
128.7
SKYCITY’s objective of producing normalised financial information is to provide data that is useful to the investment community in understanding
the underlying operations of the group.
Total revenue shown is gaming win plus non-gaming revenue.
During 2016 the application of the Group’s non-GAAP financial information policy was tightened to further restrict the number of adjustments
between reported and normalised results.
2016 adjustments:
• Write-off of the Hamilton hotel project costs as this project is no longer proceeding ($2.7 million of capitalised costs incurred over 2011
to 2014)
• Write-off of 101 Hobson Street and the Nelson Street Car Park to make way for the NZICC ($7.6 million book value).
2015 adjustments:
• Adelaide redevelopment costs – structural redundancies and launch costs for new facilities (Sean’s Kitchen and Madame Hanoi)
• NZICC – interest on purchase of NZICC land bank (calculated using the Group’s average cost of debt of 6.7% on an average balance of
$85 million) and other costs specific to this project
• Restructuring costs – costs associated with changing the staffing structures under an approved restructuring plan
• Auckland project costs – Federal Street launch and Federal Street fire costs
• Darwin pre-opening costs – costs associated with launch of new facilities.
The actual win rate on International Business was 1.49% for 2016 (2015: 1.36%).
61
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
Statement and
other disclosures
for the year ended 30 june 2016
62
AnnuAl RepoRt | Year ended 30 June 2016 Corporate governanCe statement
63
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
SKYCITY Entertainment Group Limited is committed to maintaining
the highest standards of corporate behaviour and responsibility, and has
adopted governance policies and procedures reflecting this.
In establishing its governance policies and procedures, the SKYCITY
board has adopted eleven governance parameters as the cornerstone
principles of its corporate governance charter as set out in the
Company’s Board Charter (available in the Governance section of the
company’s website at www.skycityentertainmentgroup.com).
As a New Zealand company listed on the Australian and New Zealand
stock exchanges, these cornerstone principles, detailed below and on the
following pages, reflect the Listing Rules and Corporate Governance
Best Practice Code of NZX Limited (NZX), the Listing Rules of
ASX Limited (ASX), the Corporate Governance Principles and
Recommendations (Third Edition) of the ASX Corporate Governance
Council, and the New Zealand Financial Markets Authority’s
Corporate Governance Principles and Guidelines.
SKYCITY has taken advantage of recent changes to the ASX Listing
Rules, which enable companies that are dual-listed on the ASX with a
primary listing on a foreign exchange to comply with a limited set of
ASX Listing Rules in addition to the rules of its home exchange, and
changed its ASX listing category from a ‘Standard Listing’ to a ‘Foreign
Exempt Listing’ effective from 7 January 2016. The ASX Foreign
Exempt Listing category is based on a principle of substituted
compliance recognising that, for secondary listings, the primary
regulatory role and oversight rest with the home exchange and the
supervisory regulator in that jurisdiction.
As a company with ASX Foreign Exempt Listing status, SKYCITY
is not required to comply with ASX Listing Rule 4.10, which requires
entities to include certain prescribed information in their annual reports,
or the Corporate Governance Principles and Recommendations
(Third Edition) of the ASX Corporate Governance Council.
Notwithstanding, SKYCITY has included all the information required
under ASX Listing Rule 4.10 in this annual report and followed a
majority of the recommendations set by the ASX Corporate Governance
Council, in addition to all the corporate governance principles set out
in the NZX’s Corporate Governance Best Practice Code, during the
financial year ended 30 June 2016. In addition, as mentioned above,
the cornerstone principles set out in SKYCITY’s Board Charter
(available in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) continue to reflect the
principles in the Corporate Governance Principles and Recommendations
(Third Edition) of the ASX Corporate Governance Council.
1. RoleS And ReSponSIBIlItIeS of tHe BoARd And
mAnAgement
SKYCITY’s procedures are designed to:
• enable the board to provide strategic guidance for the company and
effective oversight of management;
• clarify the respective roles and responsibilities of board members
and senior executives in order to facilitate board and management
accountability to both the company and its shareholders; and
64
• ensure a balance of authority so that no single individual has
unfettered powers.
The Board Charter details the board’s role and responsibilities.
The board establishes the company’s objectives, the major strategies
for achieving those objectives and the overall policy framework within
which the business of the company is conducted, and monitors
management’s performance with respect to these matters.
The board is also responsible for ensuring that the company’s assets are
maintained under effective stewardship, that decision making authorities
within the organisation are clearly defined, that the letter and intent of
all applicable company and casino laws and regulations are complied
with, and that the company is well managed for the benefit of its
shareholders and other stakeholders.
Specific responsibilities of the board include:
•
•
•
•
•
•
•
•
oversight of the company, including its control and accountability
procedures and systems;
appointment, performance, and removal of the Chief Executive
Officer;
confirmation of the appointment and removal of the senior
executive group (being the direct reports to the Chief Executive
Officer);
setting the remuneration of the Chief Executive Officer and
approval of the remuneration of the senior executive group;
approval of the corporate strategy and objectives and oversight of
the adequacy of the company’s resources required to achieve the
strategic objectives;
approval of, and monitoring of actual results against, the annual
business plan and budget (including the capital expenditure plan);
review and ratification of the company’s systems of risk
management and internal compliance and control, codes of conduct
and legal compliance; and
approval and monitoring of the progress of capital expenditures,
capital management initiatives, acquisitions and divestments.
The board has responsibility for the affairs and activities of the company,
which in practice is achieved through delegation to the Chief Executive
Officer and others (including SKYCITY appointed directors on
subsidiary company boards) who are charged with the day-to-day
leadership and management of the company. The board maintains a
formal set of delegated authorities that detail the extent to which
employees can commit the company. These delegated authorities are
approved by the board and are subject to annual review by the board.
The Chief Executive Officer also has the responsibility to manage and
oversee the interfaces between the company and the public and to act as
the principal representative of the company.
Each director and senior executive has a written agreement with the
company setting out their terms of appointment and responsibilities.
AnnuAl RepoRt | Year ended 30 June 2016 Corporate governanCe statement
2. StRuCtuRe tHe BoARd to Add vAlue
Board effectiveness requires the efficient discharge of the duties imposed
on the directors by law and the addition of value to the company.
To achieve this, the SKYCITY board is structured to:
•
•
•
have a sound understanding of, and competence to deal with,
the current and emerging issues of the business;
effectively review and challenge the performance of management
and exercise independent judgement; and
assist in the selection of candidates to stand for election by
shareholders at annual meetings.
Board Composition and Skills matrix
As at 30 June 2016, the board comprised six non-executive directors.
Biographical details of individual directors are set out on page 23 of
this annual report.
The board ensures that it is of an effective composition and size to
adequately discharge its responsibilities and duties and to add value to
the company’s decision-making.
In order to meet these requirements, the board membership comprises
a range of skills and experience to ensure that it has a proper
understanding of and competence to deal with the current and
emerging issues of the business, to effectively review and challenge the
performance of management, and to exercise independent judgement.
The areas of expertise and experience determined by the board as being
the key competencies required to meet these objectives include:
• governance and strategy;
•
infrastructure experience;
• gaming industry experience and understanding;
• understanding of Asia and Asian consumers;
•
•
•
local market knowledge of Auckland;
local market knowledge of Adelaide;
local market knowledge of Darwin;
• government relations;
• public relations and communications;
•
investment banking;
• property and real estate acumen;
• hospitality industry experience and understanding;
•
legal;
• finance and accounting;
• mathematical fluency;
• human resources;
• occupational health and safety; and
• marketing.
As at the date of this annual report, the board comprises individuals
with expertise and experience in the specific areas listed above other
than legal. Details of individual expertise and experience of the
directors are set out on page 23 of this annual report.
Appointment
The board has established the Governance and Nominations
Committee to:
•
identify and recommend to the board suitable persons for
nomination as members of the board and its committees (taking
into account such factors as experience, qualifications, judgement,
and the ability to work with other directors);
• annually review the overall composition and structure of the board
and its committee memberships and, if appropriate, the removal of
a director from the board and/or its committees;
• monitor the succession and rotation of board and committee
members;
• monitor the outside directorships and other business interests of
directors with a view to ensuring independence/no conflicts of
interest, and director capability and time availability to effectively
undertake the requirements of their SKYCITY board and
committee positions;
• monitor related parties, conflicts of interest, and independence
issues;
• ensure that potential candidates understand the role of the board
and the time commitment involved when acting as a member of the
board;
• oversee the evaluation of the board; and
• review the board’s succession planning.
External consultants are engaged to access a wide base of potential
candidates and to review the suitability of candidates for appointment.
The procedures for the appointment and removal of directors are
prescribed in the company’s constitution, which, amongst other things,
requires all potential directors to have satisfied the extensive probity
requirements of each jurisdiction in which the company holds gaming
licences.
Subject to satisfaction of the probity requirements, the board may
appoint directors to fill casual vacancies that occur or to add persons to
the board up to the maximum number (currently 10) prescribed by the
constitution. If the board appoints a new director during the year, that
person will stand for election by shareholders at the next annual
meeting. Shareholders are provided with relevant information on any
candidate standing for election in the company’s notice of meeting.
Directors are appointed under the company’s Terms of Appointment
and Reference for Directors and Board Charter (both available
in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) for a term of three years
and subject to re-election by shareholders in accordance with the
rotation requirements of NZX and ASX and as prescribed in the
company’s constitution.
65
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
director Independence
The Board Charter and the company’s constitution require that the
board contains a majority of its number who are independent directors.
SKYCITY also supports the separation of the role of board chairperson
from the Chief Executive Officer position. The Board Charter requires
the board chairperson and (where appointed) deputy chairperson to be
independent directors and prohibits the company’s Chief Executive
Officer from filling either of these roles.
Directors are required to ensure all relationships and appointments
bearing on their independence are disclosed to the Governance and
Nominations Committee on a timely basis. In determining the
independence of directors, the board has adopted the definition of
independence set out in the NZX’s Corporate Governance
Best Practice Code and has taken into account the independence
guidelines as recommended in the ASX Corporate Governance
Council’s Corporate Governance Principles and Recommendations
(ASX Independence Guidelines).
At its June 2016 meeting, the board reviewed the status of each director
in accordance with the independence specification of the NZX’s
Corporate Governance Best Practice Code and taking into account
the ASX Independence Guidelines and determined that all current
non-executive directors were independent at the balance date.
Access to Information and Advice
New directors participate in an individual induction programme,
tailored to meet their particular information requirements.
Directors receive regular reports and comprehensive information on
the company’s operations before each board and committee meeting
and have unrestricted access to any other information they require.
Senior management is also available at and outside each meeting to
address queries.
Directors are expected to maintain an up-to-date knowledge of the
company’s business operations and of the industry sectors within which
the company operates. Directors are provided with updates on industry
developments and undertake regular visits to the company’s key
operations. The board also undertakes periodic educational trips to
observe and receive briefings from other companies in the gaming and
entertainment industries.
Directors are entitled to obtain independent professional advice (at the
expense of the company) on any matter relating to their responsibilities
as a director or with respect to any aspect of the company’s affairs,
provided they have previously notified the board chairperson of their
intention to do so.
Indemnities and Insurance
The company provides a deed of indemnity in favour of each director
and member of senior management and provides professional indemnity
insurance cover for directors and executives acting in good faith in the
conduct of the company’s affairs.
Board Committees
The board has four formally appointed committees - the Audit and
Financial Risk Committee, Governance and Nominations Committee,
Remuneration and Human Resources Committee and Corporate Social
Responsibility Committee.
The members of each of the committees are non-executive directors
and the non-executive directors of the board appoint the chairperson
of each committee.
The current members and chairperson of each committee, and their
respective qualifications and experience, are set out on page 23 of this
annual report and in the People section of the company’s website at
www.skycityentertainmentgroup.com.
Each committee operates under a formal charter document as agreed
by the board. Each charter sets out the role and responsibilities of the
relevant committee and is available in the Governance section of the
company’s website at www.skycityentertainmentgroup.com.
Each committee charter and the performance of each committee
are subject to formal review by the board on an annual basis.
meeting Attendance
The following table shows attendances at board and committee
meetings by directors during the financial year ended 30 June 2016.
Seven board meetings were scheduled during the year.
AppoIntment
to offICe
BoARd
SCHeduled
BoARd
unSCHeduled
BoARd
totAl
AudIt And
fInAnCIAl
RISK
RemuneRAtIon
And HumAn
ReSouRCeS
goveRnAnCe
And
nomInAtIonS
CoRpoRAte
SoCIAl
ReSponSIBIlItY
NUMBER OF MEETINGS HELD
Chris Moller
Bruce Carter
Brent Harman
Peter Cullinane(1)
Sue Suckling
Richard Didsbury
Richard Tsiang
Nigel Morrison(2)
18 December 2008
12 October 2010
18 December 2008
26 March 2008
9 May 2011
20 July 2012
17 December 2014
18 December 2008
7
7
6
7
2
7
7
7
5
4
4
4
4
2
2
4
4
4
11
11
10
11
4
9
11
11
9
3
3
3
–
–
–
–
3
–
5
5
–
5
–
5
–
–
–
1
1
–
1
–
1
1
1
–
3
3
–
–
1
2
3
–
–
(1) Peter Cullinane retired as a director effective from 13 November 2015.
(2) Nigel Morrison resigned as Managing Director and Chief Executive Officer effective from 29 April 2016.
66
AnnuAl RepoRt | Year ended 30 June 2016
Corporate governanCe statement
3. IntegRItY, etHICAl BeHAvIouR And dIveRSItY
Code of Business practice
For SKYCITY, it is important to be a good corporate citizen, whilst
operating a sustainable and successful business model. SKYCITY
expects its board, management and employees to act in accordance
with the company’s values, policies and legal obligations and actively
promotes ethical and responsible behaviour and decision-making by:
• clarifying and promoting observance of its guiding values; and
• clarifying the standards of ethical behaviour required of company
directors and key executives (that is, officers and employees who
have the opportunity to materially influence the integrity, strategy
and operations of the business and its financial performance) and
encouraging the observance of those standards.
Training and information on the company’s values, policies and legal
obligations are provided to all employees on induction and continually
throughout their time at SKYCITY.
Corporate Social Responsibility
To help the company define its responsibilities and the effectiveness
of its activities, SKYCITY maintains operational supervision of its
Corporate Social Responsibility (CSR) activities through management
as well as governance-level oversight through the board’s Corporate
Social Responsibility Committee. This Committee directs all the
company’s commitment to care activities and is responsible for
developing and maintaining SKYCITY’s CSR policies.
The Corporate Social Responsibility Committee focuses on the
five pillars of the company’s CSR strategy, being: responsible gaming,
the environment, fair operating practices, labour practices and
human rights, and community involvement and development.
The guiding principles that underpin SKYCITY’s CSR activities are
set out in the Corporate Social Responsibility Committee Charter
(available in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) and are as follows:
• Accountability: SKYCITY is accountable for its impacts on society,
the economy and the environment;
• Transparency: SKYCITY will be transparent in its decisions
and activities that impact on society, the economy and the
environment;
• Ethical behaviour: SKYCITY will behave ethically;
The Corporate Social Responsibility Committee is responsible for
monitoring the organisational integrity of business operations to ensure
the maintenance of a high standard of ethical behaviour. This includes
ensuring that SKYCITY operates in compliance with its Code of
Business Practice (available in the Governance section of the company’s
website at www.skycityentertainmentgroup.com), which sets out the
guiding principles of its relationships with stakeholder groups such as
regulators, shareholders, suppliers, customers, community groups and
employees.
Compliance with the Code of Business Practice is monitored through
education and notification by individuals who become aware of any
breach. In addition, all senior managers are required annually to provide
a confirmation to the company that to the best of their knowledge all
business matters undertaken within their areas of responsibility have
been conducted in accordance with the Code of Business Practice.
trading in Securities
The company maintains a Securities Trading Policy (available
in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) for directors and employees
that sets out guidelines in respect of trading in, or giving
recommendations concerning, the company’s securities, including
derivatives of such listed securities.
Prior consent must be obtained from the Company Secretary (or any
other authorised person) before directors and certain employees who
may have access to material information undertake any trading in the
company’s securities, grant security over SKYCITY securities,
enter into any margin loan or similar instrument in respect of such
securities or enter into any hedging arrangements which reduce the risk
elements essential to effective employee incentive schemes.
Details of any securities trading by directors or executives who are
subject to the company’s Securities Trading Policy are notified to the
board. In addition, directors and officers of the company must comply
with the disclosure obligations under subpart 6 of the New Zealand
Financial Markets Conduct Act 2013 and the NZX Listing Rules and
formally disclose their SKYCITY shareholdings and other securities
holdings to the NZX and, consequently, ASX within prescribed
timeframes.
• Respect for stakeholder interests: SKYCITY will respect, consider
and respond to the interests of its stakeholders;
Conflicts of Interest
• Respect for the Rule of Law: SKYCITY will accept that respect for
the rule of law is mandatory;
• Respect for international norms of behaviour: SKYCITY will
respect international norms of behaviour, while adhering to the
principle of respect for the rule of law; and
• Respect for human rights: SKYCITY will respect human rights
and recognise both their importance and their universality.
Further details of SKYCITY’s CSR activities are included on pages 14
and 15 of this annual report.
SKYCITY expects its directors and employees to avoid conflicts of
interest in their decisions and to avoid any direct or indirect interest,
investment, association, or relationship which is likely to, or appears to,
interfere with the exercise of their independent judgement.
Where conflicts of interest may arise (or where potential conflicts of
interest may arise), directors must formally advise the company or,
in the case of an employee, their manager about any matter relating to
that conflict (or potential conflict) of interest.
67
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
gaming prohibition
pRogReSS mAde
Directors and employees are not permitted to participate in any gaming
or wagering activity at SKYCITY operated properties.
diversity and Inclusion
SKYCITY is proud to have a diverse workforce and believes it offers
an opportunity to enhance the company’s competitive advantage and
provide long term sustainable business success. The company is
committed to an inclusive workplace that enhances and promotes
workplace diversity across the business.
The company recognises that to deliver outstanding service and
breakthrough solutions to its diverse customer community, it too must
be diverse. SKYCITY values and respects the contributions, ideas and
experiences of people from all backgrounds.
The company has a Diversity and Inclusion Policy (available
in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) that provides a framework
for SKYCITY’s current and future diversity and inclusion initiatives.
The company is committed to providing opportunities and initiatives
that assist all to reach their potential on merit, unhindered by
individual differences, and regularly benchmarks and reports on
its diversity position, policy and objectives.
SKYCITY has several objectives to advance diversity and inclusion in
the workplace. These include:
40% of senior management roles recruited for in the past financial year
had a successful female candidate and 55% had at least one female
included on the short list of applicants.
The Request for Proposal (RFP) for the board recruitment process
during the past financial year explicitly specified that SKYCITY
required female candidates to be identified wherever possible.
Several significant female appointments have been made during the past
financial year, including the Chief Innovation Officer, Group General
Manager Project Management, Group General Manager Risk and
Group General Manager Human Resources.
oBjeCtIve
Conduct a detailed review of staff engagement by diversity group
(age, gender, ethnicity and Rainbow) and identify initiatives to further
improve staff inclusion.
pRogReSS mAde
A detailed review of staff engagement by diversity group was completed
during the past financial year with the analysis showing little overall
variation for any single group. However, Maori and Chinese staff did
indicate some concerns with their ability to progress their careers within
SKYCITY. Consequently, SKYCITY intends to introduce more
targeted development programmes in the current financial year.
• continuing to build a workforce that reflects the diversity of the
markets in which the company operates;
oBjeCtIve
• continuing to strive to ensure strong female candidates are
identified in the recruitment process for all board and senior
executive roles;
•
implementing an annual audit of gender pay parity as a core
function of the company’s annual remuneration review cycle; and
•
inclusiveness training for all management.
Each year, SKYCITY’s board sets measurable objectives to promote
diversity, including gender diversity and inclusion. At the end of each
financial year, the objectives are reviewed along with the company’s
progress in achieving them.
SKYCITY performed well against the measurable objectives set by the
board for the 2015/2016 financial year (as reported in the company’s
2015 annual report) as follows:
oBjeCtIve
Continue to strive to ensure strong female candidates are identified in
the recruitment process for all board and senior executive roles.
Monitor the participation of under-represented groups in our leadership
training and talent programmes.
pRogReSS mAde
During the past financial year, 133 staff attended one or more of the
internal leadership modules - 83 (62%) of whom were male and
50 (38%) of whom were female.
Michelle Baillie, General Manager SKYCITY Hamilton, graduated
from the 2015 Breakthrough Leaders Programme facilitated by
New Zealand Global Women.
The measurable objectives for the 2016/2017 financial year are to:
• continue to strive to ensure strong female candidates are identified
in the recruitment process for all board and senior executive roles;
•
in New Zealand, obtain Rainbow Tick certification for both
SKYCITY Hamilton and SKYCITY Queenstown and retain
Rainbow Tick certification for SKYCITY Auckland and, in
Australia, consider appropriate options to reiterate our commitment
to all staff;
68
AnnuAl RepoRt | Year ended 30 June 2016 Corporate governanCe statement
• actively encourage and report on the participation of under-
represented groups in our leadership training and talent
programmes;
• deliver targeted programmes that support staff from under-
represented groups to thrive and develop at SKYCITY; and
• review gender pay equality and deliver an organisation-wide
programme to remove risk of bias and inequity.
As at 30 June 2016, the gender composition of the company’s directors,
senior executives, officers and total workforce was as follows:
femAle
mAle
totAl
numBeR
%
numBeR
directors
Senior
executives
officers
total
workforce
1
2
2
2,726
17%
29%
29%
48%
%
83%
71%
71%
6
7
7
3,003
52% 5,729
Comparatively, the gender composition of the company’s directors,
senior executives, officers and total workforce as at 30 June 2015 was
as follows:
femAle
mAle
totAl
numBeR
%
numBeR
directors
Senior
executives
officers
total
workforce
1
2
1
2,940
13%
17%
9%
47%
In the above tables:
%
87%
83%
91%
8
12
11
3,312
53% 6,252
5
5
5
7
10
10
•
•
‘senior executives’ includes employees who are the
Chief Executive Officer’s or Interim Chief Executive Officer’s
(as the case may be) executive direct reports and site General
Managers; and
‘officers’ includes employees who are the Chief Executive Officer
or Interim Chief Executive Officer (as the case may be) and his
executive direct reports only.
4. SAfeguARd tHe IntegRItY of tHe CompAnY’S
fInAnCIAl RepoRtIng
The board is responsible for ensuring that effective policies and
procedures are in place to provide confidence in the integrity of the
company’s financial reporting.
The Audit and Financial Risk Committee has responsibility for
oversight of the quality, reliability, and accuracy of the company’s
internal and external financial statements, the quality of the company’s
external result presentations, its internal control environment and risk
management programmes, and for its relationships with its internal and
external auditors.
The Audit and Financial Risk Committee and the board undertake
sufficient inquiry of the company’s management and the company’s
internal and external auditors in order to enable them to be satisfied as
to the validity and accuracy of the company’s financial reporting.
The Chief Executive Officer and the Chief Financial Officer are
required to confirm in writing to the Audit and Financial Risk
Committee that the annual and interim financial statements present a
true and fair view of the company’s financial condition and results of
operations, and comply with relevant accounting standards.
The Audit and Financial Risk Committee oversees the independence of
the company’s internal and external auditors and monitors the scope and
quantum of work undertaken and fees paid to the auditors for non-audit
services. The Committee has adopted an External Audit Independence
Authority Policy that sets out the framework for assessing and
maintaining audit independence.
The Committee has formally reviewed the independence status of
PricewaterhouseCoopers and is satisfied that its objectivity and
independence is not compromised as a consequence of non-audit work
undertaken for the company.
PricewaterhouseCoopers has confirmed to the Committee that it is not
aware of any matters that could affect its independence in performing its
duties as auditor of the company.
Fees paid to PricewaterhouseCoopers during the 2015/2016 financial
year are set out in note 5 to the financial statements. Fees for audit and
tax compliance work in the 2015/2016 financial year represent 69% of
total PricewaterhouseCoopers fees.
5. tImelY And BAlAnCed dISCloSuRe
The board is committed to ensuring timely and balanced disclosure of
all material matters concerning the company to ensure compliance with
the letter and intent of the NZX and ASX Listing Rules such that:
• all investors have equal and timely access to material information
concerning the company, including its financial situation,
performance, ownership and governance; and
• company announcements are factual and comprehensive.
SKYCITY believes high standards of reporting and disclosure are
essential for proper accountability between SKYCITY and its investors,
employees and stakeholders.
The company is committed to promoting investor confidence by
providing timely and balanced disclosure of all material matters relating
to SKYCITY and its subsidiaries (SKYCITY Group). The company
maintains a Market Disclosure Policy (available in the Governance
section of the company’s website at www.skycityentertainmentgroup.
com) for directors and employees that sets out guidelines in respect of
the company’s continuous disclosure obligations. The Policy is designed
to ensure that SKYCITY:
•
satisfies the requirements of the New Zealand Financial Markets
Conduct Act 2013, the Australian Corporations Act 2001 and the
NZX and ASX Listing Rules;
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Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
• meets its disclosure obligations in a way that allows all interested
parties equal opportunity to access information;
• meets stakeholders’ expectations for equal, timely, balanced and
company’s external auditors are also invited to attend the
company’s annual meeting to answer any shareholder questions
concerning their audit and external audit report; and
meaningful disclosure; and
• provides guidance on the processes to ensure compliance.
• ensuring that continuous disclosure obligations are understood and
complied with throughout the SKYCITY Group.
The company is also committed to presenting its financial and key
operational performance results in a clear, effective, balanced and timely
manner to the stock exchanges on which the company’s securities are
listed, and to its shareholders, analysts and other market commentators,
and ensures that such information is available on the company’s website.
Peter Treacy, General Counsel, is Company Secretary and the
Disclosure Officer for SKYCITY Entertainment Group Limited and is
responsible for bringing to the attention of the board any matter relevant
to the company’s disclosure obligations. The Company Secretary is also
accountable directly to the board, through the chairperson of the board,
on all matters to do with the proper functioning of the board.
6. ReSpeCt And fACIlItAte tHe RIgHtS of
SHAReHoldeRS
The company’s shareholder communications strategy is designed to
facilitate the effective exercise of shareholder rights by:
• communicating effectively with shareholders;
• providing shareholders with ready access to balanced and
understandable information about the company and corporate
proposals; and
•
facilitating participation by shareholders in general meetings
of the company.
The company achieves this by:
• ensuring that information about the company (including its
corporate governance framework, media releases, current and past
annual reports, dividend histories and notices of meeting)
is available to all shareholders in the Investor Centre section of the
company’s website at www.skycityentertainmentgroup.com;
• posting stock exchange announcements in the Investor Centre
section of the company’s website promptly after they have been
disclosed to the market;
• giving shareholders the option to receive communications from,
and send communications to, the company and its security registry,
Computershare, electronically;
• engaging in a programme of regular interactions with institutional
investors, shareholder associations and proxy advisers;
• promoting two-way interaction with shareholders, by encouraging
shareholders to attend general meetings of the company and
making appropriate time available at such meetings for shareholders
to ask questions of directors and management. Each year, in the
company’s notice of meeting, shareholders are invited to submit
questions to the company prior to the annual meeting to enable the
company to aggregate the main themes of the questions asked and
respond to them at the annual meeting. Representatives of the
7. ReCognISe And mAnAge RISK
The company maintains a programme for the identification, assessment,
monitoring and management of risk to the company’s business.
SKYCITY maintains an independent, centrally-managed risk assurance
function which evaluates and reports on financial, operational and
management controls across the Group. Management is required to
report to the Audit and Financial Risk Committee and board on the
effectiveness of the company’s management of its material business risks
at least annually, with the most recent report being provided in
August 2016.
The Audit and Financial Risk Committee approves the risk assurance
programme, with results and performance of the control environments
regularly reviewed by both the committee and the external auditors.
The Chief Executive Officer and the Chief Financial Officer are
required to confirm in writing to the Audit and Financial Risk
Committee at least annually that the statement in respect of the integrity
of the company’s financial statements referred to above is founded on a
sound system of risk management and internal compliance and control
which implements the policies of the board, and that the company’s
financial risk management and internal compliance and control systems
are operating efficiently and effectively in all material respects. The
most recent confirmations were provided by the Interim Chief
Executive Officer and the Chief Financial Officer in August 2016.
The company maintains business continuity, material damage and
liability insurance covers to ensure that the earnings of the business
are well protected from adverse circumstances.
SKYCITY’s ability to create or preserve value for its shareholders
requires the successful execution of its business strategy.
Risks influencing its ability to do this, including SKYCITY’s material
exposure to economic, environmental and social sustainability risks,
if any, and how it manages or intends to manage those risks,
are set out below:
• Highly regulated industry
SKYCITY operates in industries (in particular, the casino industry)
which are highly regulated. The regulatory framework is subject to
changes from time to time, which may impact the environment in
which SKYCITY operates and the costs of operating its business.
Potential examples of such changes include unfavourable changes to
gaming legislation and regulations, licence conditions and gaming
taxes and levies.
The risk of regulatory change is mitigated by maintaining
engagement with the governments of each jurisdiction in which
SKYCITY operates and with the industry stakeholders through
frequent submissions and regular informal engagements. Targeted
proactive and reactive compliance initiatives are undertaken as and
70
AnnuAl RepoRt | Year ended 30 June 2016 Corporate governanCe statement
when required based on the likelihood of the risk occurring and the
impact it would have on SKYCITY’s business.
• Renewal or extension of Auckland casino licence
SKYCITY’s Auckland property contributes a significant portion of
SKYCITY’s EBITDA. This concentration of earnings means that the
performance of SKYCITY is heavily dependent upon the Auckland
property. A significant disruption to SKYCITY’s Auckland
operations (which may arise through the expiry of the Auckland
casino licence) could have a significant negative impact on
SKYCITY.
SKYCITY has mitigated this risk by entering into the
New Zealand International Convention Centre Project and
Licensing Agreement dated 5 July 2013 with the New Zealand
Government, which has secured an extension of the Auckland casino
licence to 30 June 2048.
8. peRfoRmAnCe evAluAtIon
evaluation of Board and its Committees
The board and committee charters require an evaluation of the board
and its committees’ performance on an annual basis. The Governance
and Nominations Committee determines and oversees the process for
evaluation, which includes assessment of the role and responsibilities,
performance, composition, structure, training, and membership
requirements of the board and its committees.
In 2016, the board determined that it was appropriate for an
independent facilitated evaluation process to be undertaken by an
international facilitator with significant experience in board evaluations.
The key areas of focus for evaluation were:
• SKYCITY’s strategic agenda/growth opportunities;
• working with management;
• board teamwork/dynamics; and
• board structure, composition, committees and processes.
The aims of the review were to be forward looking, yet self-reflective
where it could provide a basis for future improvement, and also to
inform the subsequent (but ongoing) non-executive director
recruitment process. As part of the evaluation, the facilitator met on a
one-on-one basis with each director and relevant senior managers.
The findings of the review were discussed at the board’s February 2016
meeting with the facilitator in attendance. Overall, the external review
found that the board was fully engaged and effective, but identified
some areas where improvements could be made.
evaluation of Senior management
The board undertakes the performance review of the Chief Executive
Officer and reviews the outcomes of those reporting directly to that
position in accordance with the company’s performance review
procedures. In the case of the Chief Executive Officer, the review
generally involves a formal response/feedback process at both the
half-year and full year. In the case of each senior executive, the
review involves a formal response/feedback process between the
Chief Executive Officer and each senior executive.
9. RemuneRAte fAIRlY And ReSponSIBlY
Remuneration governance
The Remuneration and Human Resources Committee is the
main governing body for setting remuneration policy across the
SKYCITY Group and develops the remuneration framework and
policies for board approval.
The responsibilities of the Remuneration and Human Resources
Committee are outlined in the Remuneration and Human Resources
Committee Charter (available in the Governance section of the
company’s website at www.skycityentertainmentgroup.com),
which is reviewed annually by the board.
The Remuneration and Human Resources Committee oversees the
management of the human resources activities of the company,
the senior management structure, senior executive performance,
remuneration and incentivisation, and succession planning. It also seeks
to assist the board to ensure that the company’s remuneration policies
and practices reward fairly and responsibly with a clear link to the
company’s strategic objectives and corporate and individual
performance. The Remuneration and Human Resources Committee is
also responsible for periodically reviewing non-executive director fees.
The board-approved Remuneration and Human Resources Policy
Statement (available in the Governance section of the company’s website
at www.skycityentertainmentgroup.com) recognises that to achieve its
business objectives SKYCITY needs high quality, committed people.
The aim of the Policy is, therefore, to attract, retain and motivate
high-calibre executives capable of achieving the objectives of the
company and encourage superior performance and creation of
shareholder value.
The guiding principles that underpin SKYCITY’s remuneration policies
are to:
• be market competitive at all levels to ensure the company can
attract and retain the best available talent;
• be performance-oriented so that remuneration practices recognise
and reward high levels of performance and to avoid an entitlement
culture;
• provide a significant at-risk component of total remuneration
which drives performance to achieve company goals and strategy;
• manage remuneration within levels of cost efficiency and
affordability; and
• align remuneration for senior executives with the interests of
shareholders.
A range of market data and specific benchmark reports are used to
ensure market relativity of senior executive positions, including research
and reports from independent remuneration consultants. Each year,
the Remuneration and Human Resources Committee reviews changes
in remuneration laws and practices and market trends to ensure the
company’s practices are appropriately aligned.
During the financial year ended 30 June 2016, there were no material
changes to SKYCITY’s remuneration policies.
71
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
A. Remuneration of non-executive directors and group
executives
The following table outlines the non-executive directors’ fees (exclusive
of GST, if any) for the board and its committees as at 30 June 2016:
This section details the company’s approach to remuneration
frameworks, outcomes and performance for the following
non-executive directors and group executives for the financial year
ended 30 June 2016:
nAme
poSItIon
teRm
non-executive directors
Chris Moller
Bruce Carter
Richard Didsbury
Brent Harman
Sue Suckling
Richard Tsiang
Chairman
deputy Chairman
director
director
director
director
Full Year
Full Year
Full Year
Full Year
Full Year
Full Year
former non-executive director
Peter Cullinane
director
Part Year
group executives
John Mortensen
Interim Chief executive
Officer
Chief Operating Officer,
New Zealand
Part Year
Part Year
Rob Hamilton
Chief Financial Officer
Full Year
Peter Treacy
Gráinne Troute
General Counsel and
Chief Risk Officer
General Manager
Corporate Services
Full Year
Full Year
former group executive
poSItIon
Chairperson
Board
Deputy Chairperson
feeS
(peR Annum)
$275,000
$157,500
Non-Executive Director
$126,000
Audit and financial Risk
Committee
Remuneration and
Human Resources
Committee
Corporate Social
Responsibility
Committee
Chairperson
Member
Chairperson
Member
Chairperson
Member
$35,000
$15,000
$35,000
$15,000
$25,000
$15,000
All non-executive directors are members of the Governance and
Nominations Committee and receive no additional fees for this
Committee.
The board chairman does not receive separate fees for the board
committees that he sits on.
The company’s Policy on Non-Executive Director Remuneration
(available in the Governance section of the company’s website at
www.skycityentertainmentgroup.com) sets out a framework for
SKYCITY to attract and retain qualified, highly capable directors from
a pan-Australasian talent pool for the purpose of driving value and
maintaining the highest standards of corporate governance on behalf of
shareholders. The Policy is reviewed annually to take account of
changing market, industry and economic circumstances as well as
developing organisational requirements. The guiding principles that
underpin the Policy are that:
Nigel Morrison
Chief executive Officer
Part Year
• non-executive director remuneration will be regularly
The following key changes to the board and senior executive team
occurred during the financial year ended 30 June 2016:
Peter Cullinane Retired as a director effective from
13 November 2015
Nigel Morrison
Resigned as Managing Director and Chief
Executive Officer effective from 29 April 2016
John Mortensen Appointed as Interim Chief Executive Officer
effective from 30 April 2016
non-executive directors
Shareholders at the annual meeting determine the total remuneration
available to the company’s non-executive directors. At the 2014 Annual
Meeting, shareholders approved, effective from 1 July 2014, a total
remuneration amount for non-executive directors of $1,365,000
per annum (plus GST, if any).
benchmarked against external comparator markets to ensure it is
broadly in line with that payable in other large publicly-listed
companies in Australasia; and
•
the incremental accountability and commitment that accompanies
specific roles will be recognised in the company’s non-executive
director remuneration structure.
The Remuneration and Human Resources Committee is responsible for
making recommendations to the board annually on non-executive
director remuneration changes. The board seeks shareholder approval
for any proposed increase to the total remuneration pool, but may not
seek such approval more regularly than every two years under the Policy
on Non-Executive Director Remuneration. The board considered the
current total remuneration pool at its April 2016 meeting and
determined that the current pool remained adequate.
In addition to directors’ fees, non-executive directors may also receive
remuneration for additional services provided to the company outside of
their capacities as directors of the company at the discretion of the board
72
AnnuAl RepoRt | Year ended 30 June 2016
Corporate governanCe statement
and subject to the maximum remuneration amount which has been
approved by the shareholders of the company.
Details of the total remuneration paid to, and other benefits received by,
non-executive directors during the financial year ended 30 June 2016
are set out on page 80 of this annual report.
group executives
Remuneration framework
Remuneration components are offered in the context of a total
remuneration package, measured on a “total cost to the company” basis.
The remuneration arrangements for each group executive comprise
both fixed and variable remuneration, with the variable portion
comprising both short term incentive at-risk remuneration (STI) and
long term incentive at-risk remuneration (LTI).
The STI component for each group executive is based on performance
against both key financial and non-financial measures and all STI
bonuses are at the ultimate discretion of the board.
The board determines an appropriate level of fixed remuneration for
each group executive taking into account recommendations from the
Remuneration and Human Resources Committee.
fixed Remuneration
The company endeavours to set fixed remuneration at levels that are
relative to similar positions in the market in which individual executives
are positioned and, for “casino-specific” positions, account is taken of
salaries within the sector.
To assist the Remuneration and Human Resources Committee in its
salary deliberations, PricewaterhouseCoopers is commissioned on a
regular basis to survey remuneration against external comparator
markets as relevant and appropriate (eg industry and geography).
Fixed remuneration is reviewed annually for each group executive
and the Remuneration and Human Resources Committee approves
remuneration increases for the group executives.
Short term Incentive Remuneration
70% of each group executive’s STI is based on the company’s financial
performance. In the case of each group executive (except John
Mortensen), eligibility for this element is based on achievement of the
company’s budgeted NPAT (normalised net profit after tax) for the
financial year ended 30 June 2016. For John Mortensen, eligibility for
this element is based on achievement of budgeted EBITDA (earnings
before interest, taxes, depreciation and amortisation) for the company’s
New Zealand operations, excluding International Business and
overheads, for the financial year ended 30 June 2016.
The remaining 30% of each group executive’s STI is based on the
achievement of a small number of personal goals that are agreed with
each individual at the commencement of each financial year. In the case
of the Chief Executive Officer, these are aligned to the strategic
priorities of the company. The non-financial objectives for each of the
other group executives are aligned to those set for the Chief Executive
Officer but may include specific personal objectives. For each group
executive there is an STI eligibility “gateway” related to meeting or
exceeding the prior year’s financial performance.
The former Chief Executive Officer had an STI target of 105% of his
fixed remuneration. Each of the other group executives has an STI
target of 40% of their fixed remuneration and a maximum STI potential
of 54% of their fixed remuneration.
Each group executive receives their STI (in cash) each year following
completion of the external audit of the company’s year-end results.
long term Incentive Remuneration
The company operated three LTI plans during the financial year ended
30 June 2016 – one for the former Chief Executive Officer (which was
approved by shareholders in 2013) and the remaining two for the
company’s most senior executives, including the other group executives
outlined above.
The 2013 SKYCITY Chief Executive Officer LTI Plan is no longer
in operation following Nigel Morrison’s resignation (effective from
29 April 2016). Details of the shares that vested to Mr Morrison under
the 2013 SKYCITY Chief Executive Officer LTI Plan during the
financial year ended 30 June 2016 are detailed below.
Details of the SKYCITY Senior Executive LTI Plan and SKYCITY
Executive Cash Award Plan are included on page 74 of this
annual report.
Chief Executive Officer Remuneration
Nigel Morrison resigned as Managing Director and Chief Executive
Officer effective from 29 April 2016. His employment agreement,
which commenced on 1 March 2008, was not a fixed term contract
and provided for a fixed base salary of $1,957,900 gross per annum
and an STI component with a target of 105% of his base salary
(being $2,055,795 gross) for the 2015/2016 financial year.
During the financial year ended 30 June 2016, he received a fixed salary
of $1,656,282 gross and an STI payment of $2,055,795 gross based on
full achievement of his financial (70%) and non-financial (30%) KPIs.
The financial KPI was based on achievement of the company’s budgeted
NPAT. Achievement of the non-financial KPIs required the SKYCITY
board to be satisfied that Mr Morrison had met the pre-agreed progress
milestones in relation to the NZICC and Hobson Street hotel projects,
the Adelaide Casino redevelopment project, a plan of the options for
funding all three major development projects and a digital and
innovation strategy.
Immediately prior to Mr Morrison’s resignation, a total of 1,279,258
shares were outstanding under the 2013 SKYCITY Chief Executive
Officer LTI Plan (approved by shareholders in 2013) and held by
Public Trust on behalf of Nigel Morrison. The shares had been
purchased by Mr Morrison under the Plan with the assistance of an
interest-free loan and were held on his behalf by Public Trust.
On 29 April 2016, 729,177 (57%) of those shares vested to Mr Morrison
73
Skycity entertainment group limited | skycityentertainmentgroup.com Corporate governanCe statement
under the terms of the Plan on the basis of performance testing and an
additional 250,000 (20%) shares were vested to him under the terms
of the Plan in consideration of him agreeing to extend his restraint of
trade, with the remaining 300,081 (23%) shares being forfeited by him
in accordance with the terms of the Plan.
In addition to the above payments and payment of outstanding annual
leave of $96,915 gross, Mr Morrison also received $2,321,096 gross on
resignation – comprising 12 months’ base salary of $1,957,900 gross on
the grounds that he was entitled to be paid six months’ base salary in
lieu of notice ($978,950 gross) and an STI payment in respect of that
notice period ($978,950 gross) and $363,196, which represented the
dividends relating to his LTI shares, in accordance with the terms of the
2013 SKYCITY Chief Executive Officer LTI Plan.
B. Remuneration of SKYCItY employees
All salaried roles within SKYCITY are job-sized using a recognised
methodology to measure the impact, accountability and complexity of
each role as it contributes to the organisation. Remuneration data is
obtained from a number of sources to determine remuneration ranges
by job band or level to ensure competitiveness at both base salary and
total remuneration levels.
Individual remuneration is set within the appropriate range taking into
account such matters as individual performance, scarcity/availability
of resource/skill, internal relativities and specific business needs.
This process ensures internal equity between roles and allows
comparison with the overall market. Remuneration ranges are
reviewed annually to reflect market movements.
Senior executive StI
For the financial year ended 30 June 2016, a total of $2.16 million will
be paid under the Senior Executive STI Plan to 10 senior executives
(including the group executives outlined on page 72 other than the
former Chief Executive Officer) – an amount equivalent to 47% of
combined base salary for this group.
SKYCItY Senior executive ltI plan
Under the SKYCITY Senior Executive LTI Plan introduced in 2009,
selected senior executives are provided with financial assistance by way
of an interest-free loan by a subsidiary of the company to acquire shares
in the company. A trustee holds legal title to the relevant shares on
behalf of those senior executives for a restrictive period of at least
three years until certain performance hurdles are met. The performance
hurdles involve comparison of the total shareholder return (TSR)
achieved by SKYCITY against the shareholder returns achieved by
a group of comparable Australasian companies (comparator group),
and by the companies whose securities are in the NZSX50 index
(index group).
For LTI shares issued before and including 2013, to vest in a participant
under the SKYCITY Senior Executive LTI Plan, the company must
achieve a TSR equal to or greater than the average of the comparator
and index groups’ median TSRs. The number of shares that will vest
depend on where the SKYCITY TSR is relative to the average median
TSR (at which point 50% of the shares vest) and the average of the
TSRs representing the 75th percentiles of the TSRs achieved by the
comparator group and the index group (at which point 100% of the
shares vest). In addition, the board has discretion to determine that up
to 25% of the shares will vest if the company’s TSR for the relevant
period does not exceed the average median TSR, but exceeds one or
other of the TSRs representing the 50th percentile of TSRs of the
members of the comparator group and of the index group.
For LTI shares issued in 2014 and thereafter, 50% of the shares are
allocated to a peer comparator group tranche and 50% of the shares are
allocated to an index comparator group tranche. The number of shares
that will vest depend on where the SKYCITY TSR is relative to the
median TSR of each of the peer comparator group and index
comparator group separately and the TSRs representing the 75th
percentiles of the TSRs achieved by the each of the peer comparator
group and the index group separately. Each tranche will be tested
separately. If SKYCITY’s TSR is at the median TSR of a group,
50% of a tranche will vest. If SKYCITY’s TSR is at the 75th percentile
of a group, 100% of a tranche will vest.
Performance is assessed three years after the issue of the shares and
(provided the shares have not lapsed and all performance hurdles have
not been satisfied) after a further six and twelve months.
Special assessment may occur in the event of a takeover offer,
amalgamation or scheme of arrangement involving the company.
Shares which have not previously been vested will lapse to the extent
performance hurdles have not been fully satisfied in respect of the
period to the fourth anniversary of the issue date.
During the financial year ended 30 June 2016, the following vesting
calculations were completed:
• August 2011 LTI: The third (and final) test was completed on 31
August 2015 with no shares vesting to executives. All unvested
shares were accordingly forfeited in accordance with the terms of
the SKYCITY Senior Executive LTI Plan; and
• August 2012 LTI: The first and second tests were completed.
To date, no shares have vested to executives. The third (and final)
test will be completed during September 2016 and any shares that
do not vest at that time will be forfeited in accordance with the
terms of the SKYCITY Senior Executive LTI Plan.
Details of the shares issued under the SKYCITY Senior Executive
LTI Plan and outstanding as at 1 August 2016 are detailed on page 85
of this annual report.
SKYCItY executive Cash Award plan
In February 2016, the company established the SKYCITY Executive
Cash Award Plan in Australia. The objectives of the Plan are to promote
the retention of the company’s most senior executives in Australia and
drive longer-term performance and alignment of incentives of
participants with the interests of the company’s shareholders.
Grants made under the Plan support these objectives by conferring on
selected senior executives the right to receive a cash amount (based on
the market value of shares in SKYCITY) on the achievement of
74
AnnuAl RepoRt | Year ended 30 June 2016 Corporate governanCe statement
performance hurdles, which mirror the performance hurdles for
the SKYCITY Senior Executive LTI Plan as outlined above.
As at 1 August 2016, there were two participants in the SKYCITY
Executive Cash Award Plan.
Salaried employee StI and Individual Bonus plans
To drive outstanding company and individual performance, SKYCITY
operates an STI plan for selected senior salaried employees and those
with operational accountability for a department or business unit
(Salaried STI Plan). For each individual, a minimum of 60% of their
STI target is linked to the achievement of minimum financial targets
with the remaining percentage dependent on the achievement of
individual, role-specific targets. Payments under the Salaried STI Plan
have a minimum trigger point based on company and business unit
financial targets and increase according to the degree by which the
company performs relative to these financial targets.
For the financial year ended 30 June 2016, 346 salaried staff will
participate in the Salaried STI Plan. Based on achievement of individual
and financial targets, 345 staff will receive an average STI payment of
15% of their fixed salaries.
All other permanent salaried employees who were not eligible to
participate in the Salaried STI Plan participated in a discretionary bonus
plan known as the Individual Bonus Plan. Under the Individual Bonus
Plan, bonuses were awarded to those outstanding staff that consistently
exceeded the key performance indicators that were set for them at the
commencement of the financial year.
In total, for the financial year ended 30 June 2016, 525 SKYCITY
salaried personnel will be paid incentives totalling $8.36 million under
the Salaried STI Plan and Individual Bonus Plan.
10. ReCognISe tHe oBlIgAtIonS to All
StAKeHoldeRS
SKYCITY acknowledges legal and other obligations to non-shareholder
stakeholders such as employees, suppliers, customers, regulators, and the
community as a whole.
The SKYCITY Code of Business Practice (available in the Governance
section of the company’s website at www.skycityentertainmentgroup.com)
sets out the company’s commitment to the community and the standards of
behaviour that can be expected by all stakeholders, including employees
and shareholders.
SKYCITY is aware that its business may be associated with gambling
and alcohol-related harm for some customers. Effective and pro-active
customer care are the cornerstone principles of SKYCITY’s approach
to Host Responsibility.
SKYCITY ENTERTAINMENT GROUP LIMITED | SKYCI tYenteRtAInmentgRoup.Com
75
shareholder information
TwenTy larGeST SHareHOlDerS aS aT 1 aUGUST 2016
1. HSBC Nominees (New Zealand) Limited - NZCSD
2. JP Morgan Nominees Australia Limited
3. HSBC Nominees (New Zealand) Limited A/C State Street - NZCSD
4. Citibank Nominees (New Zealand) Limited - NZCSD
5. JP Morgan Chase Bank NA NZ Branch-Segregated Clients Acct - NZCSD
6. HSBC Custody Nominees (Australia) Limited
7. National Nominees New Zealand Limited - NZCSD
8. National Nominees Limited
9. RBC Investor Services Australia Nominees Pty Limited
10. Accident Compensation Corporation - NZCSD
11. BNP Paribas Noms Pty Limited
12. Citicorp Nominees Pty Limited
13. BNP Paribas Nominees (NZ) Limited - NZCSD
14. ANZ Custodial Services New Zealand Limited - NZCSD
15. UBS Nominees Pty Limited
16. Citicorp Nominees Pty Limited
17. HSBC Nominees A/C NZ Superannuation Fund Nominees Limited - NZCSD
18. ANZ Wholesale Australasian Share Fund - NZCSD
19. FNZ Custodians Limited
20. BNP Paribas Nominees (NZ) Limited - NZCSD
numBeR of
SHAReS
%
of SHAReS
56,960,679
52,521,340
42,680,009
42,642,567
40,843,758
39,529,001
32,453,839
31,313,930
21,214,702
18,679,090
13,226,693
11,218,390
10,968,290
9,530,064
9,222,513
7,289,711
7,210,501
7,070,450
5,480,112
5,232,683
8.67%
7.99%
6.50%
6.49%
6.22%
6.02%
4.94%
4.77%
3.23%
2.84%
2.01%
1.71%
1.67%
1.45%
1.40%
1.11%
1.10%
1.08%
0.83%
0.80%
total
465,288,322
70.82%
Total ordinary shares on issue as at 1 August 2016 were 656,986,761 of which 5,720,530 were held in aggregate by Public Trust on behalf of
eligible and future participants pursuant to the SKYCITY Executive Long Term Incentive Plan.
The ordinary shares are quoted on both the NZX Main Board and ASX under the ticker code ‘SKC’.
No shares were held by the company directly as treasury stock.
76
AnnuAl RepoRt | Year ended 30 June 2016
shareholder information
DISTrIBUTIOn OF OrDInary SHareS anD reGISTereD SHareHOlDInGS aS aT 1 aUGUST 2016
1– 1,000
1,001– 5,000
5,001– 10,000
10,001– 100,000
> 100,000
total
numBeR of
SHAReHoldeRS
numBeR
of SHAReS
4,049
1,563,926
7,642 20,600,555
20,359,529
2,929
59,570,659
2,618
170 554,892,092
17,408 656,986,761
As at 1 August 2016, there were 907 shareholders (with a total of 32,698 shares) holding less than a marketable parcel of shares under the ASX
Listing Rules, based on the closing share price of A$4.81. The ASX Listing Rules define a marketable parcel of shares as a parcel of shares of not
less than A$500.
SUBSTanTIal SeCUrITy HOlDerS
The following persons had given notice as at 30 June 2016, in accordance with subpart 5 of Part 5 of the New Zealand Financial Markets
Conduct Act 2013, that they were substantial security holders in the company and held a relevant interest in the number of ordinary shares
shown below:
dAte of
SuBStAntIAl
SeCuRItY
notICe
RelevAnt
InteReSt In
numBeR of
SHAReS
% of SHAReS
Held At
dAte of
notICe
Lazard Asset Management Pacific Co
8 April 2016
30,240,033
5.064%
The total number of listed voting securities of SKYCITY Entertainment Group Limited as at 30 June 2016 was 656,986,761.
77
Skycity entertainment group limited | skycityentertainmentgroup.com
bondholder information
BOnDS
On 28 September 2015, the company issued 125 million unsubordinated, unsecured, redeemable, fixed rate, seven year bonds at an issue price
of $1 per bond. The bonds pay a fixed rate of interest of 4.65% per annum until the maturity date and are quoted on the NZX Debt Market
under the ticker code ‘SKC040’.
TwenTy larGeST reGISTereD BOnDHOlDerS aS aT 1 aUGUST 2016
Investment Custodial Services Limited
1.
2. Forsyth Barr Custodians Limited
3. FNZ Custodians Limited
4. Custodial Services Limited
5. ANZ Custodial Services New Zealand Limited - NZCSD
6. Custodial Services Limited
7. Custodial Services Limited
8. ANZ Bank New Zealand Limited - NZCSD
9. Custodial Services Limited
10. Lynette Therese Erceg & Darryl Edward Gregory & Catherine Agnes Quinn
11. Tappenden Holdings Limited
12. Custodial Services Limited
13. Forsyth Barr Custodians Limited
14. Custodial Services Limited
15. Forsyth Barr Custodians Limited
16. JBWere (NZ) Nominees Limited
17.
18. BNP Paribas Nominees (NZ) Limited - NZCSD
19. BGS Trustee Limited
20. Citibank Nominees (New Zealand) Limited - NZCSD
Investment Custodial Services Limited
numBeR
of BondS
%
of BondS
14,993,000
11,706,000
11,567,000
11,016,000
6,610,000
5,062,000
4,079,000
3,280,000
2,741,000
2,000,000
2,000,000
1,805,000
1,750,000
1,487,000
1,146,000
900,000
800,000
755,000
750,000
600,000
11.99%
9.37%
9.25%
8.81%
5.29%
4.05%
3.26%
2.62%
2.19%
1.60%
1.60%
1.44%
1.40%
1.19%
0.92%
0.72%
0.64%
0.60%
0.60%
0.48%
total
85,047,000
68.04%
78
AnnuAl RepoRt | Year ended 30 June 2016 bondholder information
DISTrIBUTIOn OF BOnDS anD reGISTereD HOlDInGS aS aT 1 aUGUST 2016
1,001– 5,000
5,001– 10,000
10,001– 100,000
> 100,000
total
numBeR of
BondHoldeRS
numBeR
of BondS
455,000
91
229
2,213,000
750 26,302,000
71 96,030,000
1,141 125,000,000
79
Skycity entertainment group limited | skycityentertainmentgroup.com
direCtor and employee remuneration
reMUneraTIOn OF DIreCTOrS
eMPlOyee reMUneraTIOn
Remuneration paid to, and other benefits received by, non-executive
directors for services in their capacity as directors of the company
during the financial year ended 30 June 2016 are as listed below:
BoARd And CommIttee feeS
otHeR
Chris Moller (Chairman)
Bruce Carter (Deputy Chairman)
Brent Harman
Peter Cullinane(2)
Sue Suckling
Richard Didsbury
Richard Tsiang
$275,000.00
$192,500.00
$161,000.00
$56,625.00
$156,625.00
$141,000.00
$141,000.00
$3,511.17(1)
$1,755.76(1)
The figures shown are gross amounts and exclude GST where applicable.
(1) Being premiums paid to SKYCITY’s health insurance provider during the
period for the relevant director, who received the benefit of a health insurance
plan that SKYCITY offers to all of its employees (either at no cost or at a
discounted rate).
(2) Peter Cullinane retired as a director effective from 13 November 2015.
In addition to the amounts above:
• SKYCITY meets the expenses incurred by directors in relation to
company matters, which are incidental to the performance of their
duties, including travel; and
• SKYCITY paid a total of $34,800 (plus GST) to Richard Didsbury
during the financial year ended 30 June 2016 in connection with
consultancy services provided by him in relation to the New Zealand
International Convention Centre development and Adelaide Casino
redevelopment projects, which were provided as additional services
outside of his capacity as a director of the company.
Nigel Morrison was Managing Director and Chief Executive Officer of
the company until 29 April 2016. The remuneration paid to, and other
benefits received by, Mr Morrison in his capacity as Chief Executive
Officer during the financial year ended 30 June 2016 are detailed on
pages 73 and 74 of this annual report.
The numbers of employees or former employees (excluding the former
Chief Executive Officer) of the company and its subsidiaries, not being
directors of the company, who received remuneration and other benefits
in their capacity as employees, the value of which was in excess of
$100,000 and was paid to those employees during the financial year
ended 30 June 2016, are listed below.
Remuneration includes salary, short term cash bonuses and, where
applicable, health insurance premiums and the value of share rights
and shares expensed during the financial year ended 30 June 2016.
Remuneration shown below also includes settlement payments and
payments in lieu of notice with respect to certain employees upon their
departure from the company.
RemuneRAtIon
$100,000–$109,999
$110,000–$119,999
$120,000–$129,999
$130,000–$139,999
$140,000–$149,999
$150,000–$159,999
$160,000–$169,999
$170,000–$179,999
$180,000–$189,999
$190,000–$199,999
$200,000–$209,999
$210,000–$219,999
$220,000–$229,999
$230,000–$239,999
$240,000–$249,999
$270,000–$279,999
$280,000–$289,999
$290,000–$299,999
$300,000–$309,999
$330,000–$339,999
$340,000–$349,999
$350,000–$359,999
$360,000–$369,999
$390,000–$399,999
$410,000–$419,999
$420,000–$429,999
$450,000–$459,999
$470,000–$479,999
$500,000–$509,999
$520,000–$529,999
$580,000–$589,999
$730,000–$739,999
$760,000–$769,999
$800,000–$809,999
$830,000–$839,999
$990,000–$999,999
$1,130,000–$1,139,999
$1,240,000–$1,249,999
emploYeeS
42
40
24
27
21
7
19
14
7
2
1
4
3
5
3
2
1
1
1
1
1
3
2
2
1
1
1
1
1
1
1
1
1
1
1
1
1
2
80
total
248
AnnuAl RepoRt | Year ended 30 June 2016
direCtors’ disClosures
InTereSTS reGISTer
Disclosure of Directors’ Interests
Section 140(1) of the New Zealand Companies Act 1993 requires a director of a company to disclose certain interests. Under subsection (2) a
director can make disclosure by giving a general notice in writing to the company of a position held by a director in another named company or
entity. The following are particulars included in the company’s Interests Register as at 30 June 2016 (notices given by directors during the financial
year ended 30 June 2016 are marked with an asterisk):
director
Director
Trustee
Trustee
Director
Chair
Director
Director
Director
Consultant and
Advisory Board
Member
Chris Moller (Chairman)
Meridian energy Limited
New Zealand Transport Agency
Westpac New Zealand Limited
Bruce Carter (Deputy Chairman)
ASC Pty Limited
Aventus Capital Limited
Badge Management Pty Limited
Bank of Queensland Limited
and certain subsidiaries
Cobbadah Pty Limited
Eudunda Farmers Limited
Ferrier Hodgson
Genesee & Wyoming Australia Pty Limited
Stichting Administratiekantoor Manadel (Holland)
Brent Harman
Harman Investments Limited
Sue Suckling
Callaghan Innovation Research Limited
eCL Group Limited
Jacobsen Holdings Limited
Lincoln Hub Establishment Board
Ministry of Awesome
New Zealand Qualifications Authority
Restaurant Brands New Zealand Limited
Sue Suckling Holdings Limited
richard Didsbury
Chair
Chair
auckland International airport Limited
Brick Bay Wines Limited
Director
Brick Bay Development Trust
Brick Bay Investments Trust
Brick Bay Trustee Limited
Committee for auckland Limited
Hobsonville Land Company Limited
Kiwi Property Group Limited
Whisper Cove Heights Limited
richard Tsiang
The Hong Kong Jockey Club
Chair
Chair*
Director
Director
Director
Director
Consultant
Director
Director
Director and
Shareholder
Chair
Chair
Chair
Chair*
Trustee*
Chair
Director
Managing
Director*
The following details included in the Interests Register as at 30 June 2015, or entered during the financial year ended 30 June 2016, have been
removed during the financial year ended 30 June 2016:
• Chris Moller is no longer an Observer of Cricket World Cup 2015 Limited;
• Bruce Carter is no longer a director of BBRC Funds Management Pty Limited or Fortis Ago Pty Limited;
• Brent Harman is no longer a director of Harman Consulting Limited; and
• Sue Suckling is no longer the Chair of Barker Fruit Processors and certain subsidiaries, Interim Chair of NZ Health Partnerships Limited
or the managing director of Acemark Holdings Limited.
81
Skycity entertainment group limited | skycityentertainmentgroup.com
direCtors' disClosures
DIreCTOrS’ anD OFFICerS’ InDeMnITIeS
Indemnities have been given to directors and senior managers of the company and its subsidiaries to cover acts or omissions of those persons in
carrying out their duties and responsibilities as directors and senior managers.
DISClOSUre OF DIreCTOrS’ InTereSTS In SHare TranSaCTIOnS
Directors disclosed, pursuant to section 148 of the New Zealand Companies Act 1993, the following acquisitions and disposals of relevant interests in
SKYCITY shares during the period to 30 June 2016:
Chris Moller (Chairman)
Bruce Carter (Deputy Chairman)
Brent Harman
Sue Suckling
Richard Didsbury
Richard Tsiang
Nigel Morrison(14)
dAte of
ACQuISItIon/
dISpoSAl
duRIng peRIod
2 October 2015
30 October 2015
30 October 2015
18 March 2016
10 June 2016
2 October 2015
18 March 2016
9 June 2016
27 May 2016
27 May 2016
10 June 2016
10 June 2016
14 June 2016
14 June 2016
2 October 2015
18 March 2016
10 June 2016
24 August 2015
2 October 2015
18 March 2016
10 June 2016
19 May 2016
23 February 2016
24 February 2016
15 March 2016
11 April 2016
29 April 2016
29 april 2016
ConSIdeRAtIon
$3.7846 per share(1)
Nil(3)
Nil(3)
$4.324 per share(1)
$4.40 per share(4)
$3.7846 per share(1)
$4.324 per share(1)
A$4.05 per share(4)
Nil(6)
nil(6)
$4.40 per share(4)
$4.40 per share(4)
nil(6)
nil(6)
$3.7846 per share(1)
$4.324 per share(1)
$4.40 per share(4)
$3.91 per share
$3.7846 per share(1)
$4.324 per share(1)
$4.40 per share(4)
$4.40 per share(10)
A$4.18 per share
$4.51 per share
$4.7248 per share
$4.702 per share
$3.908516 per share(12)
nil(13)
SHAReS
ACQuIRed/
(dISpoSed)
1,234(2)
(64,760)(2)
64,760
1,053
6,581
1,265(5)
1,140(5)
5,634(5)
2,480(7)
(2,480)(8)
4,280(7)
248(8)
248(7)
(248)(8)
612(9)
522(9)
3,264(9)
15,000
590
504
3,148
3,000
(27,000)(11)
(50,000)
(50,000)
(100,000)
979,177
(300,081)
(1) Shares issued under the SKYCITY Dividend Reinvestment Plan.
(2) Shares held by FNZ Custodians Limited.
(3) Shares transferred from FNZ Custodians Limited to Chris Moller as part of a personal reorganisation.
(4) Acquisition of new shares under the retail entitlement component of an accelerated 1 for 10 pro-rata entitlement offer announced by SKYCITY on 11 May 2016.
(5) Shares held by Tarquay Pty Limited on trust for the Tarquay Superannuation Fund.
(6) Shares transferred by Investment Custodial Services Limited to Forbar Nominees Limited as part of a personal reorganisation.
(7) Shares held by Forbar Nominees Limited.
(8) Shares held by Investment Custodial Services Limited.
(9) Shares held by the trustees of The Sue Suckling Family Trust.
(10) Acquisition of new shares under the institutional entitlement component of an accelerated 1 for 10 pro-rata entitlement offer announced by SKYCITY on 11 May 2016.
(11) Shares held by Perpetual Limited.
(12) Vesting of shares to Nigel Morrison under the 2013 SKYCITY Chief Executive Officer Long Term Incentive Plan.
(13) Forfeiture of shares by Nigel Morrison under the 2013 SKYCITY Chief Executive Officer Long Term Incentive Plan.
(14) Includes details of acquisitions and disposals up to 29 April 2016 only, being the date of Nigel Morrison’s resignation as Managing Director.
82
AnnuAl RepoRt | Year ended 30 June 2016
direCtors’ disClosures
DISClOSUre OF DIreCTOrS’ InTereSTS In SHareS
Directors disclosed the following relevant interests in SKYCITY shares as at 30 June 2016:
Chris Moller (Chairman)
Bruce Carter (Deputy Chairman)
Brent Harman
Sue Suckling
Richard Didsbury
Richard Tsiang
(1) Shares held by Tarquay Pty Limited on trust for Tarquay Superannuation Fund.
(2) Shares held by Forbar Nominees Limited.
(3) Shares held by the trustees of The Sue Suckling Family Trust.
SHAReS
BenefICIAllY Held
72,394
61,983(1)
49,808(2)
35,911(3)
34,632
33,000
83
Skycity entertainment group limited | skycityentertainmentgroup.com Company disClosures
STOCK eXCHanGe lISTInGS
• Directors: Peter Treacy, John Mortensen and Bruce Carter:
SKYCITY Entertainment Group Limited is a listed issuer with ordinary
shares quoted on both the NZX Main Board and ASX (in each case,
under the ticker code ‘SKC’) and bonds quoted on the NZX Debt
Market (under the ticker code ‘SKC040’).
SKYCITY Entertainment Group Limited has been designated as
‘Non-Standard’ by the NZX due to the nature of the company’s
constitution. In particular, the constitution places restrictions on the
transfer of shares in the company in certain circumstances and provides
that votes and other rights attached to shares may be disregarded and
shares may be sold if these restrictions are breached, as more particularly
described on pages 85 and 86 of this annual report.
SKYCITY has taken advantage of recent changes to the ASX Listing
Rules, which enable companies that are dual-listed on the ASX with a
primary listing on a foreign exchange to comply with a limited set of
ASX Listing Rules in addition to the rules of its home exchange, and
changed its ASX listing category from a ‘Standard Listing’ to a
‘Foreign Exempt Listing’ effective from 7 January 2016. The ASX
Foreign Exempt Listing category is based on a principle of substituted
compliance recognising that, for secondary listings, the primary
regulatory role and oversight rest with the home exchange and the
supervisory regulator in that jurisdiction.
SKyCITy enTerTaInMenT GrOUP lIMITeD
The following persons held office as directors of SKYCITY
Entertainment Group Limited as at 30 June 2016:
Chris Moller (Chairman)
Brent Harman
Richard Didsbury
Bruce Carter (Deputy Chairman)
Sue Suckling
Richard Tsiang
SUBSIDIary COMPanIeS
Subsidiary Company Directorships
The following persons held office as directors of subsidiaries of
SKYCITY Entertainment Group Limited as at 30 June 2016:
• Directors: Peter Treacy and John Mortensen:
New Zealand International Convention Centre Limited
Otago Casinos Limited
Queenstown Casinos Limited
SKYCITY Action Management Limited
SKYCITY Auckland Holdings Limited
SKYCITY Auckland Limited
SKYCITY Casino Management Limited
SKYCITY Hamilton Limited
SKYCITY International Holdings Limited
SKYCITY Investments Australia Limited
SKYCITY Investments Queenstown Limited
SKYCITY Management Limited
SKYCITY Metro Limited
SKYCITY Wellington Limited
Sky Tower Limited
84
SKYCITY Adelaide Pty Limited
SKYCITY Australia Finance Pty Limited
SKYCITY Australia Pty Limited
SKYCITY Treasury Australia Pty Limited
SKYCITY Darwin Pty Limited
• Directors: Peter Treacy and Robert Hamilton:
Horizon Tourism Limited
SKYCITY Investment Holdings Limited
non-wholly Owned Company Directorships
As at 30 June 2016, SKYCITY also had an interest in, and was
represented by SKYCITY executives on the boards of, the companies
listed below:
• SKYCITY representative on the board – John Mortensen:
Force Location Limited
waIVerS FrOM THe new zealanD anD aUSTralIan
STOCK eXCHanGeS
The following waivers from the NZX and ASX Listing Rules were
either granted and published by NZX or ASX (as the case may be)
within, or relied upon by the company during, the 12-month period
preceding the balance date:
• on 9 February 2011, NZX granted SKYCITY a waiver from NZX
Listing Rule 7.11.1 (which requires allotment to occur within five
business days following the latest date on which applications for
securities close) in relation to the allotment of shares pursuant to the
company’s Dividend Reinvestment Plan; and
• on 11 May 2016, NZX granted SKYCITY a waiver from the
following NZX Listing Rules in relation to a 1 for 10 pro-rata
accelerated entitlement offer of new fully paid ordinary shares in
SKYCITY announced on 11 May 2016:
- 7.3.1(a), which prohibits the issue of equity securities unless the
precise terms and conditions of the specific proposal to issue those
equity securities have been approved by separate resolutions of
holders of each class of quoted equity securities whose rights or
entitlements could be affected by that issue and that issue is
completed within the specified timeframe;
- 7.10.1, which requires letters of entitlement to rights to be sent to
holders of those rights within five business days of the record date
for the determination of the entitlement and by means that will
give holders reasonable time to deal with their rights;
- 7.10.2, which provides that the closing date and time for
applications under rights issues must not be earlier than the twelfth
business day after the day of mailing of the last of the letters of
entitlement; and
- 7.10.8, which provides that where a rights issue is to be made but
quotation is not sought the issuer must give to NZX forthwith
after the decision has been made (and at least five business days
before the ex date to determine entitlements) full details of the
issue.
All other waivers granted prior to the 12-month period preceding the
balance date had ceased to have effect or were not relied upon during
the period.
AnnuAl RepoRt | Year ended 30 June 2016
other information
VOTInG rIGHTS aTTaCHeD TO SeCUrITIeS
Each share gives the holder a right to attend and vote at a meeting of
shareholders. Holders have the right to cast one vote per share on a poll
of any resolution put to the shareholders.
There are no voting rights attached to SKYCITY’s debt securities.
However, bond holders are welcome to attend the annual meeting
of shareholders.
The total number of listed voting securities of SKYCITY Entertainment
Group Limited as at 30 June 2016 was 656,986,761.
•
increasing their combined holding further beyond 5% if:
- they already hold more than 5% of the shares in SKYCITY; and
- the transferee has not been approved by the relevant regulatory
authority as an associated casino person of any casino licence
holder,
then the votes attaching to all shares held by the transferee and the
persons associated with that transferee are suspended unless and
until either:
• each regulatory authority advises that approval is not needed; or
• any regulatory authority which determines that its approval is
lOnG TerM InCenTIVe SHareS
As at 1 August 2016, a total of 2,618,850 shares were issued under the
SKYCITY Senior Executive Long Term Incentive Plan (initially
approved by directors in September 2009) and held by Public Trust on
behalf of 19 participants. The shares have been purchased by the
participants under the Plan with the assistance of interest-free loans and
are held on behalf of the participants by Public Trust for a restrictive
period. The relevant shares vest in a participant only when performance
hurdles set by the board of directors are met
•
•
lIMITaTIOnS On aCQUISITIOnS OF OrDInary SHareS
The company’s constitution contains various provisions which are
included to take into account the application of:
•
•
•
•
the Gambling Act 2003 (New Zealand);
the Casino Act 1997 (South Australia);
the Gaming Control Act (Northern Territory); and
the legislation providing for the establishment, operation and
regulation of casinos in any other jurisdiction in which SKYCITY
or any of its subsidiaries may hold a casino licence.
SKYCITY needs to ensure when it participates in gaming activities
that:
•
•
it has the power under its constitution to take such action as may be
necessary to ensure that its suitability to do so in a particular
jurisdiction is not affected by the identity or actions (including share
dealings) of a shareholder; and
there are appropriate protections to ensure that persons do not gain
positions of significant influence or control over SKYCITY or its
business activities without obtaining any necessary statutory or
regulatory approvals in those jurisdictions.
Accordingly, the constitution contains the following provisions
restricting the acquisition of shares in the company to achieve this.
TranSFer OF SHareS
Clause 12.11 of the constitution provides that if a transfer of shares
results in the transferee, and the persons associated with that transferee:
• holding more than 5% of the shares in SKYCITY; or
required approves the transferee, together with the persons associated
with that transferee, as an associated casino person of any applicable
casino licence holder; or
the board of the company is satisfied that registration of the proposed
transfer will not prejudice any casino licence; or
the transferee and the persons associated with that transferee dispose
of such number of SKYCITY shares as will result in their combined
holding falling below 5% or, if the regulatory authorities approve in
respect of the transferee and the persons associated with that
transferee a higher percentage, the lowest such percentage approved
by the regulatory authorities.
If a regulatory authority does not grant its approval to the proposed
transfer, SKYCITY may sell such number of the shares held by the
transferee and by any persons associated with that transferee, as may be
necessary to reduce their combined shareholding to a level that will not
result in the transferee and the persons associated with that transferee
being an associated person of that casino licence holder.
The power of sale can only be exercised if SKYCITY has given one
month’s notice to the transferee of its intention to exercise that power
and the transferee has not, during that one month period, transferred
the requisite number of shares in SKYCITY to a person who is not
associated with the transferees.
During the financial year ended 30 June 2016, the board considered all
such transfers and was satisfied in each case that the registration of the
relevant transfer would not prejudice any casino licence.
DOnaTIOnS
Donations of $10,041 were made by the company during the 12-month
period ended 30 June 2016 ($52,260 during the 12 months ended
30 June 2015).
reVIew OF OPeraTIOnS anD aCTIVITIeS
A detailed review of the operations and activities of the company for
the financial year ended 30 June 2016 is set out in the Chairman and
Interim Chief Executive Officer’s Review on pages 4 to 9 of this
annual report.
85
Skycity entertainment group limited | skycityentertainmentgroup.com
other information
OTHer leGISlaTIOn/reQUIreMenTS
CreDIT raTInG
As at the date of this annual report, SKYCITY Entertainment Group
Limited has a Standard & Poor’s BBB– rating with a stable outlook.
FInal DIVIDenD
In respect of the year ended 30 June 2016, a final dividend of 10.5 cents
per share will be paid on 16 September 2016 to all shareholders on the
company’s register at the close of business on 2 September 2016.
The company’s Dividend Reinvestment Plan (established in
February 2011) will apply to this final dividend with a 2% discount.
The closing date for electing to participate in the Dividend
Reinvestment Plan for this final dividend is 5.00pm (New Zealand
time) on 2 September 2016. Full details of the company’s Dividend
Reinvestment Plan are available in the Investor Centre section of the
company’s website at www.skycityentertainmentgroup.com.
General limitations on the acquisition of securities imposed by the
jurisdiction in which SKYCITY is incorporated (ie New Zealand law)
are outlined in the following paragraphs.
Other than the provisions noted on page 85 of this annual report, the
only significant restrictions or limitations in relation to the acquisition
of securities are those imposed by New Zealand laws relating to
takeover, overseas investment and competition.
The New Zealand Takeovers Code creates a general rule under which
the acquisition of more than 20% of the voting rights in SKYCITY, or
the increase of an existing holding of 20% or more of the voting rights
in SKYCITY, can only occur in certain permitted ways. These include
a full takeover offer in accordance with the Takeovers Code, a partial
takeover offer in accordance with the Takeovers Code, an acquisition
approved by an ordinary resolution, an allotment approved by an
ordinary resolution, a creeping acquisition (in certain circumstances),
or compulsory acquisition if a shareholder holds 90% or more of the
shares in the company.
The New Zealand Overseas Investment Act 2005 and the Overseas
Investment Regulations 2005 regulate certain investments in
New Zealand by overseas persons. In general terms, the consent of the
New Zealand Overseas Investment Office is likely to be required when
an ‘overseas person’ acquires shares or an interest in shares in SKYCITY
Entertainment Group Limited that amount to 25% or more of the shares
issued by the company, or if the overseas person already holds 25% or
more, the acquisition increases that holding.
The New Zealand Commerce Act 1986 is likely to prevent a person
from acquiring shares in SKYCITY if the acquisition would have, or
would be likely to have, the effect of substantially lessening competition
in a market.
eSCrOw anD BUyBaCK arranGeMenTS
SKYCITY Entertainment Group Limited has no securities subject
to an escrow arrangement.
From time to time, the Public Trust acquires shares in the company
on-market for the purposes of the SKYCITY Senior Executive
Long Term Incentive Plan as detailed above. In addition, SKYCITY
(or a nominee or agent of SKYCITY) may, from time to time, acquire
existing shares in the company to satisfy its obligations to participating
shareholders under the company’s Dividend Reinvestment Plan
established in February 2011. As at the date of this annual report,
the company does not have in place an on-market share buy-back
programme.
86
AnnuAl RepoRt | Year ended 30 June 2016 reGISTereD OFFICe
aUDITOr
SKYCItY
entertainment
group limited
Level 6
Federal House
86 Federal Street
PO Box 6443
Wellesley Street
auckland
New Zealand
Telephone:
+64 9 363 6000
Facsimile:
+64 9 363 6140
Email: sceginfo@skycity.co.nz
www.skycityentertainmentgroup.com
Registered Office in Australia
c/o finlaysons
81 Flinders Street
GPO Box 1244
adelaide
South Australia
Telephone:
+61 8 8235 7400
Facsimile:
+61 8 8232 2944
pricewaterhouseCoopers
188 Quay Street
Private Bag 92162
auckland
SOlICITOrS
Russell mcveagh
Vero Centre
48 Shortland Street
PO Box 8
auckland
Bell gully
Vero Centre
48 Shortland Street
PO Box 4199
auckland
webb Henderson
110 Customs Street West
PO Box 105–426
auckland
SUPerVISOr FOr BOnDS
the new Zealand guardian trust
Company limited
Dimension House
99–105 Customhouse Quay
PO Box 913
Wellington
direCtory
reGISTrarS
new ZeAlAnd
Computershare
Investor Services
limited
Level 2
159 Hurstmere Road
Takapuna
Private Bag 92119
auckland
Telephone:
+64 9 488 8700
Facsimile:
+64 9 488 8787
Email: enquiry@computershare.co.nz
aUSTralIa
Computershare
Investor Services
pty limited
Level 4
60 Carrington Street
Sydney NSW 2000
GPO Box 7045
Sydney NSW 2000
Telephone:
+61 2 8234 5000
Facsimile:
+61 2 8234 5050
Email: enquiry@computershare.co.nz
87
Skycity entertainment group limited | skycityentertainmentgroup.com skycityentertainmentgroup.com