2021
Annual Report
Year ended 30 June 2021
Contents
GENERAL
Report from the Chair and
Chief Executive Officer
About this Annual Report
Year in Review
Managing the Impacts of COVID-19
Creating Value
Performance
An Award-Winning Business
Diversity Snapshot
Group Strategy
About SkyCity
Auckland
Adelaide
Hamilton
Queenstown
International Business
Online
Our Values
Refreshing Our Brand
Risk Profile and Management
Our Board
Our Senior Leadership Team
SUSTAINABILITY
Sustainability
Our Customers
Our People
Our Communities
Our Suppliers
Our Environment
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9
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102
108
116
Independent Limited Assurance Statement 126
CORPORATE GOVERNANCE STATEMENT
AND OTHER DISCLOSURES
Corporate Governance Statement
Remuneration Report
Shareholder and Bondholder Information
Directors’ Disclosures
Company Disclosures
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
Index to the Notes to the
Financial Statements
RECONCILIATION OF NORMALISED
RESULTS TO REPORTED RESULTS
GRI CONTENT INDEX
GLOSSARY
DIRECTORY
128
138
150
153
155
159
166
167
168
170
171
172
218
219
223
227
228
ANNUAL MEETING
The 2021 SkyCity Annual Meeting will be held virtually via an online platform on 29 October 2021
commencing at 1.00pm (New Zealand time). Instructions and further details on how shareholders
can participate in the virtual Annual Meeting will be included in the Notice of Meeting.
Report from the
Chair and Chief
Executive Officer
The 2021 financial year was a challenging one for
SkyCity – responding to external events arising from
the COVID-19 pandemic, opening the Adelaide
expansion in an uncertain environment and running
the business in a volatile operating and regulatory
landscape. It has taken significant skill, energy
and dedication from our team and support from
stakeholders to deliver a satisfactory performance
for the business.
Despite the ongoing disruption and volatility,
SkyCity has maintained a strong financial position
over the period, delivered credible operating
performance when open and protected the health
and wellbeing of our people.
The SkyCity Board and management have
considered the regulatory and governance
environment in which the Group now operates.
The Board’s intention, endorsed by management,
is that SkyCity will maintain a casino and
entertainment business which is characterised by
high levels of:
• service and facility quality;
•
•
•
•
customer enjoyment and safety;
staff safety, inclusion, diversity and satisfaction;
social and environmental responsibility;
economic performance and investment returns;
and
•
ethical conduct in all respects.
Critically, the SkyCity Board and management
team recognise the importance of protecting our
casino licences and enhancing our social licence to
operate. Moreover, maintaining a strong balance
sheet, meeting the interests of all stakeholders and
keeping a disciplined allocation of capital to provide
appropriate risk-adjusted returns to shareholders
over the long term remain key priorities.
The key features of the year can be summarised as:
Management and Board
•
The appointment of Michael Ahearne as the
new Chief Executive Officer in November
4
2020 following an internal succession process
(replacing the outgoing Chief Executive Officer,
Graeme Stephens). Michael brings strong
operational knowledge of the SkyCity business, as
well as international gaming and entertainment
experience, to the role and has put in place a
refreshed Senior Leadership Team.
•
The retirement of Bruce Carter from the SkyCity
Board in March 2021.
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 L
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Impact of COVID-19
•
•
COVID-19 continued to significantly impact
the business and operations at each
of SkyCity’s properties over the period.
Government mandated lockdowns in
New Zealand and South Australia resulted in
the closure of SkyCity Auckland for 29 days and
SkyCity Adelaide for 3.5 days. When permitted to
reopen, the properties initially operated under
significant constraints due to restrictions on mass
gatherings and physical distancing requirements.
The Trans-Tasman border between New Zealand
and Australia reopened from 19 April 2021
(although subject to restrictions as pandemic
outbreaks have occurred) – however, the broader
international borders remain closed, significantly
impacting our tourism-related businesses.
Strategy and Major Projects
•
•
•
A refreshed Group strategy was announced at
the time of our interim results in February 2021.
Our strategic plan prioritises a focus on our
core business, executing our major projects
in Adelaide and Auckland, delivering on the
omnichannel opportunity and the efficient
allocation of capital.
In December 2020, SkyCity completed its
A$330 million expansion of the SkyCity Adelaide
property transforming it into an integrated resort
of international scale and quality. The project
(including Eos by SkyCity, a new 120-room
boutique hotel, and new gaming, hospitality
and entertainment areas) was completed
on-time and on-budget and has been well
received by customers with consistent operating
performance when open.
Ongoing delays continue to the New Zealand
International Convention Centre (NZICC) and
Horizon Hotel project, exacerbated by the fire in
October 2019 and COVID-19. SkyCity continues
to work closely with Fletcher Construction
on the project and has secured an extension
to the long stop date to complete the NZICC
to 15 December 2027 with the New Zealand
Government. Although Fletcher Construction’s
latest draft programme indicates completion
of the NZICC in late 2024, SkyCity considers
it prudent to retain a buffer between the
programme and the long stop date.
Report from the Chair and Chief Executive Officer
5
•
The renewal of the SkyCity Board was confirmed
during March 2021 with the subsequent
appointment of three new directors –
Silvana Schenone, Julian Cook and Chad Barton
– in June 2021. The new directors bring diverse
skills, backgrounds and experience to the Board.
The Board will be conducting a thorough review
of its effectiveness during the 2022 financial year.
•
•
SkyCity Auckland opened new food and beverage
facilities on the main gaming floor, improved VIP
gaming facilities on Levels 8 and 9 of the main
site and welcomed the arrival of the All Blacks
Experience and Weta Workshop Unleashed, two
world-class attractions, to the precinct.
A strategic review into the International
Business division was undertaken during April
2021. SkyCity has decided to permanently cease
dealing with junket operators, but to continue
to operate the division under a revised operating
model where SkyCity will deal directly with
patrons after appropriate know your customer
(KYC) and customer financial due diligence
requirements are satisfied.
Regulatory and Compliance
•
•
Steady progress was made with initiatives
to enhance SkyCity’s host responsibility
and anti-money laundering (AML) control
frameworks. Minimising harm to customers
remains a key focus with appropriate effort,
resource and capital allocated to support this
initiative, such as increased resourcing and
investment in bespoke ICT systems (including
facial recognition technology and specialised
customer screening tools). SkyCity is committed
to ensuring that it provides safe and responsible
experiences and environments and places
significant importance on its host responsibility
and AML obligations.
In June 2021, SkyCity was informed by the
Australian Transaction Reports and Analysis
Centre (AUSTRAC) that it had identified potential
serious non-compliance by SkyCity Adelaide with
the Australian AML legislation and that a formal
enforcement investigation into the compliance
of SkyCity Adelaide had been initiated.
The SkyCity Board and management team
take the concerns raised by AUSTRAC seriously
and have taken immediate steps to investigate
and appropriately address the concerns raised.
SkyCity will continue to fully cooperate with
AUSTRAC with regards to its inquiries and with
the investigation of SkyCity Adelaide.
Financial Performance, Balance Sheet
and Distributions
•
•
•
•
Group reported EBITDA and NPAT were
$317.3 million and $156.1 million respectively,
down from the prior comparable period due
to the ongoing impact of the New Zealand
International Convention Centre fire and the
gain from the sale of the Auckland car park
concession .
Group normalised EBITDA and NPAT of
$252.0 million and $90.3 million respectively are
at the top end of the guidance provided to the
market during June 2021, but are still well below
pre COVID-19 earnings in FY19.
SkyCity’s financial position remains strong
post implementation of our funding plan from
mid-2020. SkyCity has satisfied its financial
covenants for the 30 June 2021 testing period
and will pay a dividend of 7 cents per share
during September 2021.
SkyCity’s BBB- credit rating from S&P
Global Ratings was upgraded to “Stable”
from “Negative” Outlook during April 2021.
Following the issue of $175 million of six-year,
unsecured, unsubordinated, fixed rate bonds
in New Zealand in May 2021, SkyCity remains
well positioned to fund future capital and
operating commitments.
The financial result for the year was complicated by
property closures and other restrictions imposed by
COVID-19, which limit comparability with the prior
comparable period. SkyCity has also been aided
by Government responses in the form of wage
subsidies and other assistance measures over the
period, a portion of which SkyCity has elected to
repay reflecting improved financial performance.
The Group delivered a solid financial performance,
despite the challenging operating environment.
Local gaming has performed well when open
and operating without restrictions while our
tourism-related businesses, including hotels, food
and beverage and International Business, had a
weaker result primarily due to ongoing international
and domestic (Australia) border closures.
6
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 L
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At a property level, SkyCity Auckland delivered
resilient local gaming activity, but this was offset
by non-gaming performance being significantly
impacted by COVID-19. SkyCity Hamilton and
SkyCity Queenstown delivered strong EBITDA
performances led by local gaming revenue growth
combined with disciplined cost management.
SkyCity Adelaide’s performance prior to the
expansion opening was impacted by COVID-19
disruption, but when open has significantly
improved across all activities. SkyCity has been
making operational adjustments to the business
when necessary and we continue to adhere to all
Government guidance to ensure our employees and
customers are managed safely.
SkyCity has continued to operate its offshore
online casino venture, SkyCity Online Casino, with
Gaming Innovation Group Inc, despite operational
constraints. Performance has exceeded our
expectations with significant growth in revenue
and EBITDA and in excess of 45,000 active
customers currently.
SkyCity supports the regulation of online gaming
in New Zealand with an emphasis on strong host
responsibility and delivering community benefits
in New Zealand and we continue to prepare for
a regulated industry which ensures responsible
gambling. Growth in online gambling continues
to be a significant global industry theme with
numerous international jurisdictions regulating
online gambling (or intending to do so) to
safely address the transition from physical to
online entertainment.
SkyCity has continued to create and support a
positive employee culture over the period, focusing
on initiatives to enhance workplace flexibility,
wellbeing and diversity. To this end, SkyCity was
pleased to receive the Diversity and Inclusion
Leadership Award at the 2020 Deloitte Top 200
Awards for the second time in three years for
Project Nikau, an initiative to employ and develop
career pathways for youth with a focus on Māori
and Pasifika. SkyCity has also made progress
on refocusing the SkyCity Community Trusts in
New Zealand on initiatives that will enhance the
employability and advancement of youth and has
upweighted strategies to ensure its supply chain is
ethical and supports local businesses.
In terms of outlook for FY22, given the current
unpredictable operating environment and
uncertain near-term outlook due to COVID-19,
SkyCity is unable to provide detailed earnings
guidance at this time, but this will remain under
regular review. Our performance over the next
year will be underpinned by the ongoing recovery
of local gaming, optimising SkyCity Adelaide post
expansion and robust cost control across
all activities.
We wish to take the opportunity to publicly thank
the SkyCity Board and management team and, in
particular, the broader SkyCity family for effectively
meeting the challenges over the past year and for
continuing to support the business as it recovers
− your efforts are greatly appreciated. The SkyCity
Board and management are aligned in responding
to the challenges at hand, managing the risks
faced by the business and addressing strategic
opportunities as they arise.
Finally, and most importantly, thank you to our
external stakeholders – from our shareholders,
financiers, suppliers, through to our customers.
SkyCity doesn’t exist without you − a big thank
you for your ongoing support.
Rob Campbell
Chair
Michael Ahearne
Chief Executive Officer
Report from the Chair and Chief Executive Officer
7
The iconic Sky Tower
celebrated its 24th birthday
on 2 August 2021 with a
light show illuminating
the Auckland skyline.
About this
Annual Report
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This annual report is a review of SkyCity Entertainment
Group Limited (SkyCity or the company and, together
with its subsidiaries, the Group) and its subsidiary
companies’ performance for the financial year ended
30 June 2021. Where appropriate, information is also
provided in relation to activities that have occurred
after 30 June 2021, but prior to publication of this
annual report.
This annual report has been prepared in accordance
with the NZX Listing Rules and Corporate
Governance Code, the New Zealand Companies
Act 1993 and the New Zealand Financial Markets
Conduct Act 2013 and, although SkyCity is
not required to comply with ASX Listing Rule
4.10 (which requires entities to include certain
prescribed information in their annual reports)
as it has a ‘Foreign Exempt Listing’ status on ASX
Limited, substantially reflects the ASX Listing Rules
and the Corporate Governance Principles and
Recommendations (Fourth Edition) of the ASX
Corporate Governance Council.
This annual report has also been prepared with
due consideration of the International Integrated
Reporting Council’s International Integrated
Reporting Framework. Integrated reporting
applies principles and concepts that are focused
on bringing greater cohesion and efficiency to
the reporting process and adopting ‘integrated
thinking’ as a way of breaking down internal silos
and reducing duplication.
The non-financial information in this annual
report has been informed by the principles and
disclosures of the Global Reporting Initiative’s (GRI)
Sustainability Reporting Standards. Ernst & Young
has undertaken limited assurance (in accordance
with the International Standard on Assurance
Engagements (New Zealand)) over disclosures
associated with selected performance data
included in the Sustainability section included in
this annual report. A GRI reference index based
on the GRI Sustainability Reporting Standards is
included on pages 223 – 226 of this annual report.
The financial statements have been prepared
in accordance with the International Financial
Reporting Standards. This annual report
includes both reported and normalised financial
information. Our objective in providing normalised
financial information is to provide data that is useful
to the investment community in understanding the
underlying operations of the SkyCity Group – the
intention being to provide information which is
representative of SkyCity’s underlying performance
(as a potential indicator of future performance),
can be compared across years and can assist
with comparison between publicly listed casino
companies in New Zealand and Australia.
This objective is achieved by:
•
•
•
eliminating the inherent volatility (or 'luck' factor)
from International Business, which has variable
turnover and actual win percentage period
to period;
eliminating structural differences in the business
between periods; and
eliminating known different treatments with
other New Zealand and Australian publicly listed
casino companies.
Normalised numbers are a non-GAAP financial
measure. A reconciliation of reported and
normalised earnings and a description of the
differences are provided on pages 219 – 222 of this
annual report.
An electronic copy of this annual report is available
in the Investor Centre section of the company’s
website at www.skycityentertainmentgroup.com.
If you have any feedback and questions in
relation to SkyCity’s sustainability framework
and/or reporting, please contact SkyCity at
sustainability@skycity.co.nz.
Unless otherwise stated, all dollar amounts in this
annual report are expressed in New Zealand dollars.
Certain totals, subtotals and percentages stated in
this annual report may not agree throughout due
to rounding.
This annual report is dated 25 August 2021 and is
signed on behalf of the SkyCity Board by:
Rob Campbell
Chair of the
SkyCity Board
Jennifer Owen
Chair of the Audit
and Risk Committee
9
Year in
Review
• SkyCity completes a
• SkyCity Auckland’s casino
$50 million share purchase
plan as part of a $230 million
equity raising announced
in June 2020 to strengthen
SkyCity’s balance sheet in
response to uncertainty around
the impacts of COVID-19
and entertainment facilities
closed from 12 – 30 August
in response to the COVID-19
Alert Level in Auckland
increasing to Alert Level 3
2020
JULY
AUGUST
• SkyCity welcomes in the
New Year with a fireworks
display from the top of
the Sky Tower involving
500 kilograms of
pyrotechnics, 3,800 effects,
1.6 tonnes of equipment
and 14 kilometres of
computer control cabling
JANUARY
2021
• SkyCity Auckland’s casino
and entertainment facilities
closed from 14 – 17 February
and 28 February – 6 March
in response to the COVID-19
Alert Level in Auckland
increasing to Alert Level 3
• SkyCity Auckland celebrates
its 25 year anniversary
• S&P Global Ratings revises the
outlook for SkyCity's long term
issuer credit rating and its debt
issue rating from 'Negative' to
'Stable' and affirms SkyCity's
long term issuer credit rating
and its debt issue ratings
as BBB-
FEBRUARY
APRIL
• SkyCity redeems 125 million
‘Series 2015’ corporate bonds
at $1.0280 per bond
• A new VIP gaming offering,
VIP BLACK and Ultra, opens
at SkyCity Auckland as part
of a $50 million upgrade of
SkyCity Auckland’s gaming
facilities
• Flare bar and Food Republic
(a new food court) open on
the SkyCity Auckland main
gaming floor
• SkyCity confirmed as the
official accommodation and
hospitality partner of the 2020
Aotearoa Music Awards
SEPTEMBER
OCTOBER
• The A$330 million
SkyCity Adelaide expansion
project officially opens
(completed on-time and
on-budget), including the
new 120-room luxury hotel
Eos by SkyCity
• The All Blacks Experience
and Weta Workshop
Unleashed attractions open
at SkyCity Auckland
• Michael Ahearne appointed
as Chief Executive Officer,
replacing outgoing
Chief Executive Officer
Graeme Stephens
• SkyCity Adelaide closed
from 19 – 22 November in
response to state-wide
COVID-19 restrictions
DECEMBER
NOVEMBER
• Julie Amey appointed as Chief
Financial Officer, replacing
outgoing Chief Financial Officer
Rob Hamilton
• SkyCity issues $175 million
of six-year, unsecured,
unsubordinated, fixed rate
bonds maturing on 21 May 2027
• Free sanitary products made
available in all female and
gender-neutral employee
bathrooms across SkyCity’s
New Zealand properties
• Silvana Schenone, Julian Cook
and Chad Barton appointed
as non-executive directors of
SkyCity Entertainment Group
• SkyCity informed by
AUSTRAC of potential AML
non-compliance by
SkyCity Adelaide
MAY
JUNE
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11
Managing the
Impacts of COVID-19
The global COVID-19 pandemic has continued
to significantly impact SkyCity’s business and
operations at each of its properties over the last
financial year. Government mandated lockdowns
in New Zealand and South Australia resulted in
the closure of the SkyCity Auckland casino and
entertainment facilities for a total of 29 days over
the period and the SkyCity Adelaide property for a
total of 3.5 days over the period.
These collective measures have meant that SkyCity
has been well positioned to deal with the events of
the last financial year and quickly respond when
our properties have been permitted to reopen.
Pleasingly, our core domestic gaming business has
proved resilient. However, the ongoing health and
safety risks of COVID-19 have significantly altered
the commercial landscape for SkyCity's land-based
properties in both New Zealand and South Australia.
The SkyCity Wharf property has remained
closed in Queenstown since initially closing on
23 March 2020 (just prior to the initial COVID-19
lockdown in New Zealand) as the ongoing border
restrictions continue to have a detrimental effect on
the local Queenstown economy in particular, which
is largely dependent on tourism.
When permitted to reopen, our properties have
initially operated with significant operational
constraints due to restrictions on mass gatherings
and physical distancing requirements. Significant
operational effort has been required to rapidly close
and reopen our properties with rigorous health and
safety measures in place.
Fortunately, due to the significant efforts of the
SkyCity team and the strength of our business
continuity framework, SkyCity has been able to
quickly and successfully respond to the ongoing
challenges that the COVID-19 pandemic has
presented and manage the impacts to SkyCity’s
business and operations.
Fortunately, development work on the
A$330 million SkyCity Adelaide expansion project
and associated master planning projects, the
New Zealand International Convention Centre and
Horizon Hotel projects and the $50 million upgrade
of the SkyCity Auckland gaming facilities was
able to continue over the period. The completed
SkyCity Adelaide expansion project, including
Eos by SkyCity – a new 120-room luxury hotel,
was officially opened in December 2020.
SkyCity Online Casino, SkyCity’s offshore online
casino platform based in Malta, continued to trade
over the period without interruption and saw strong
growth in its customer base during lockdown
periods in New Zealand.
SkyCity’s continuing focus is on managing the post
COVID-19 recovery and operating sustainability as
a smaller, domestically focused business pending
the gradual recovery of international visitors as
international borders reopen.
Impact of COVID-19 – FY21 vs FY19 Performance
International
visitation to
New Zealand down
95%
12
Auckland hotel
occupancy down
38%
Sky Tower
visitation down
71%
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 L
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We developed and implemented a
COVID-19 Health
Management
Framework and
Operating Plan
for our business and operations.
SkyCity’s New Zealand properties were amongst
the first casino operations in the world to reopen
(at COVID-19 Alert Level 2) during the global
pandemic with robust health
management strategies in place.
We introduced a new
SkyCity Flex
framework for our employees
to enable flexible working and
restructured our New Zealand
workforce (downsizing it
by around 25%).
We refocused SkyCity
as a smaller,
domestically
focused business
and adjusted our operating model to
reflect the new COVID-19 operating
environment, including minimising
our operating costs, reducing
operating hours across our
precincts and significantly
reducing capital expenditure.
We executed a
$230 million
equity raising in mid-2020 as part of a
comprehensive funding plan to strengthen SkyCity’s
balance sheet in response to uncertainty around the
impacts of COVID-19 and secured the support
of existing lenders by way of covenant
waivers/relief, extensions to $170 million of
upcoming debt maturities and $160 million in
additional debt facilities.
In May 2021, we also issued $175 million of six-year,
unsecured, unsubordinated, fixed rate bonds to
institutional investors and New Zealand retail
investors, the proceeds of which were used
to reduce the SkyCity Group's drawings on
its bank facilities.
We were assisted by the
New Zealand and Australian
Governments in the form of
Wage
Subsidy
and JobKeeper payments
(which SkyCity has subsequently
determined to partially refund).
13
Impacts of COVID-19 Alert Level Changes
The New Zealand Government introduced a four-tiered COVID-19 Alert System in March 2020 to manage
and minimise the risk of COVID-19 in New Zealand and to help people understand the current level of risk
and corresponding legal restrictions. The following table shows the impacts of the various COVID-19 Alert
Levels on SkyCity’s New Zealand properties.
ALERT LEVEL
EFFECTIVE DATE OF
CHANGE IN ALERT LEVEL
AUCKLAND
HAMILTON
QUEENSTOWN
28 February 2020
First COVID-19 case reported in New Zealand
19 March 2020
21 March 2020
21 March 2020
1.30pm, 23 March 2020
11.59pm, 25 March 2020
11.59pm, 27 April 2020
11.59pm, 13 May 2020
11.59pm, 8 June 2020
12.00pm, 12 August 2020
11.59pm, 30 August 2020
11.59pm, 21 September 2020
11.59pm, 23 September 2020
11.59pm, 7 October 2020
13 November 2020
11.59pm, 14 February 2021
11.59pm, 17 February 2021
11.59pm, 22 February 2021
6.00am, 28 February 2021
6.00am, 7 March 2021
12.00pm, 12 March 2021
14
New Zealand border closed to all but New Zealand citizens and
permanent residents
Alert Level system introduced
2
3
4
3
2
1
3
2.5
2.5
2
1
Auckland CBD
closed
3
2
1
3
2
1
2
3
4
3
2
1
2
2
1
1
1
1
2
1
1
2
1
1
2
3
4
3
2
1
2
2
1
1
1
1
2
1
1
2
1
1
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Alert Levels
LEVEL
4
LEVEL
3
Full closure (excluding the SkyCity Auckland hotels)
Full closure (excluding the SkyCity Auckland hotels),
but construction work permissible
LEVEL
2/2.5
Open with significant operational constraints due
to restrictions on mass gatherings and physical
distancing requirements
LEVEL
1
Open with no restrictions on
mass gatherings or physical
distancing requirements
In Adelaide, COVID-19 restrictions have been implemented as required by the South Australian Government
in response to the level of risk at the relevant times and businesses are required to have a COVID
Management Plan, approved by SA Health (the South Australian Government), and/or a COVID-Safe
Plan in place outlining how high-risk activities will be managed to reduce the risk of transmission of
COVID-19 between patrons/attendees and staff. An approved COVID Management Plan is in place for the
SkyCity Adelaide property.
To comply with physical distancing
requirements, each move from Alert 1
to Alert 2 (and vice versa) in Auckland
has required the construction (and
deconstruction) of 11 separate zones
within the main casino floor
and involved:
• moving approximately 400
electronic gaming machines and
370 hoarding panels
• 15 dedicated staff members over
two days
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15
Creating Value
Our Business
(as at 30 June 2021)
GAMING
HOTELS
4,259staff
5
land-based casino licences
755hotel rooms
HOSPITALITY
5properties across
New Zealand and Australia
309table games
18restaurants
331
automated table games
15bars
SKY TOWER
1online casino
3,456
electronic gaming machines
328metres tall
FY21 REVENUE BY BUSINESS ACTIVITY
Local Gaming
International Gaming
Online Gaming
Hotels and Conventions
Food and Beverage
Other
Reported
Normalised
%
75%
2%
2%
5%
10%
6%
%
77%
3%
2%
4%
9%
5%
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FY21 Outputs and Financial Results
FY21 revenue and annual visitation
GAMING
HOTELS
CONTRIBUTIONS
$585.4
million
including online
(reported)
$666.1
million*
including online
(normalised)
1.9million
visits from loyalty card
members to our
land-based casinos**
HOSPITALITY
$77.9million
3.4
million
restaurant/bar covers
$29.5million
142,067
rooms coccupied
SKY TOWER
$7.3million
166,096
visits
$112.1
million
in taxes to Governments
(including GST, gaming tax
and income tax)
$278.7
million
in remuneration
and benefits to staff
$53.2million
in dividends declared for
shareholders (in relation
to the FY21 period)
$12.3million
in community contributions,
levies and sponsorships
$293.8million
to suppliers
$177.5million
of capital invested
$38.7million
in interest paid to lenders
*Includes gaming GST.
** Calculated by reference to customers who used their SkyCity Premier Rewards cards to game, where one visit records
a customer's patronage on a day irrespective of how many times they used their card on that day.
17
FY21 Outcomes and Impacts
OUR CUSTOMERS
OUR PEOPLE
OUR COMMUNITIES
Implemented ‘Phase 2’ of
facial recognition technology
at the SkyCity Auckland and
SkyCity Hamilton casinos
to enable SkyCity to better
identify customers who
remain within the casino for
extended periods of time.
133
additional cameras
installed within our casino
properties for Phase 2 of
facial recognition in FY21
1,373
customers
identified within our casino
properties in breach of their
exclusion orders during FY21
FY20 – 1,757
1,077
exclusion orders
issued across our casino
properties during FY21
FY20 – 982
Provided increased support
for employee mental health
and wellbeing as employees
cope with the challenges and
uncertainty that has been a
feature of the past year with
the impact of COVID-19.
80%
of our employees
participated in our biennial
Speak Up employee
engagement survey
with an engagement score
of 85% favourable achieved
ZERO
fatalities or life altering
injuries
FREE
sanitary products provided
to all employees – with the
initial pilot phase rolled out
in New Zealand in May 2021
and in Adelaide in July 2021
Since establishing the
first SkyCity Auckland
Community Trust in 1996,
SkyCity has awarded
nearly 5,000 grants
totalling over $61.7 million
to various community
groups and organisations
in New Zealand, large and
small, through the four
SkyCity Community Trusts.
$4.1 million
paid to the SkyCity
Community Trusts
FY20 – $3.7 million
$39.2 million
paid in gaming taxes and
problem gaming levies
FY20 – $33.1 million
Over
$2.2 million
raised for Leukaemia and
Blood Cancer New Zealand
in two Firefighter Sky Tower
Stair Challenges
18
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Our sustainability vision recognises that, to be a sustainable business, we must be
a responsible business actively protecting and promoting the people we serve and
the places we share, whilst creating value for our shareholders.
SkyCity’s sustainability initiatives are therefore focused on doing good for our
customers, our people, our communities, our suppliers, our environment and
our shareholders.
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OUR SUPPLIERS
OUR ENVIRONMENT
OUR SHAREHOLDERS
Refined our sourcing
strategy by developing
clear definitions for what
constitutes “local” in the
context of our supplier and
product classifications.
Over
$426 million
paid to suppliers of goods
and services during
FY21 (including capital
expenditure)
FY20 – over $530 million
Around
600
key ongoing
significant suppliers
across the SkyCity Group
FY20 – around 800
71 active suppliers
had completed an EcoVadis
assessment/audit process as
at 30 June 2021
FY20 – 79 active suppliers
Achieved carbon zero
status for the SkyCity Group
for FY21 by way of offset
through Toitū Envirocare.
16,750
tonnes CO2e
total carbon footprint
FY20 – 15,137 tonnes CO2e
43.4%
reduction
in waste sent by SkyCity to
landfill since 2015
148 tonnes
of food waste from our
SkyCity Auckland kitchens
sent to be commercially
composted to aid the
New Zealand horticulture
industry
FY20 – 292 tonnes
7 cents
dividend per share
(fully imputed) declared
in relation to FY21
FY20 – 10 cents per share
Eligible shareholders
in New Zealand and
Australia were invited to
participate in a
$50 million
share purchase plan – with
21,008,403 new ordinary
shares issued in July 2020
at $2.38 per share, a 2.5%
discount to the five-day
volume weighted average
price of SkyCity’s shares
traded on the NZX during
the last five days of the
offer period
Creating Value
19
Performance
FY21 Highlights
SkyCity’s result for the financial year ended 30 June 2021 was significantly impacted by the New Zealand
International Convention Centre fire and COVID-19 pandemic (as was the case in the financial year
ended 30 June 2020), with normalised EBITDA and NPAT for the Group for the period to 30 June 2021
negatively impacted.
The key features of the FY21 result are:
EBITDA
Reported
NPAT
Reported
$317.3 million
FY20 – $348.3 million
$156.1million
FY20 – $235.4 million
Normalised
Normalised
$252.0 million $90.3 million
FY20 – $200.7 million
FY20 – $66.3 million
DIVIDEND
FY21 dividend* (fully imputed) of
7 cents per share
to be paid during September 2021
FY20 – 10 cents per share
BONDS
$175 million
of six-year, unsecured, unsubordinated,
fixed rate bonds issued in May 2021
* An interim dividend was not declared for FY21 due to restrictions
in the covenant waivers/relief secured as part of a funding plan
announced by the company in June 2020.
20
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 BONDS
Our Performance History
Group Revenue
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n
o
i
l
l
i
m
$
1,200
1,000
800
600
400
200
0
1,029
878
1,101
1,119
816
822
1,125
780
952
822
FY17
FY18
FY19
FY20
FY21
Reported
Normalised
(Including gaming GST)
Group EBITDA
320
307
338
310
343
298
n
o
i
l
l
i
m
$
350
300
250
200
150
100
50
0.0
348
201
317
252
Reported
Normalised
FY17
FY18
FY19
FY20
FY21
Earnings Per Share (EPS) and Dividend Per Share (DPS)
35.4
25.4 25.3
25.6
20.0
20.0
21.4
20.0
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0
e
r
a
h
s
r
e
p
s
t
n
e
C
23.4
6.8
20.6
11.9
10.0
10.0
7.0
Reported EPS
Normalised EPS
Declared DPS
FY17
FY18
FY19
FY20
FY21
Enterprise Value
n
o
i
l
l
i
m
$
3,500
3,000
2,500
2,000
1,500
1,000
500
0.0
3,072
349
3,196
447
2,723
2,749
3,036
488
2,548
3,258
590
2,668
2,308
541
1,767
FY17
FY18
FY19
FY20
FY21
Equity Value
Net Debt
21
An Award-Winning
Business
SkyCity’s vision is to be the leader in gaming, entertainment and hospitality in
our communities.
As a major employer with more than 4,200 staff across our properties in
New Zealand and Adelaide, South Australia, we play a significant role in our
communities and are immensely proud of the contribution we make to the
communities we operate in, and our staff continue to do us proud, year-on-year.
Winning Employment Opportunities
•
•
Winner of the Diversity and Inclusion Leadership Award at the 2020 Deloitte Top 200 Awards and
the Diversity and Inclusion Award at the 2021 NZ HR Awards for Project Nikau, SkyCity’s pathway to
employment programme for vulnerable young people targeting Māori and Pasifika
SkyCity Hamilton was awarded a Workbridge ‘Above and Beyond Employer Award’ in 2020 which
recognises employers who are committed to creating a more inclusive workplace by supporting
workers with disabilities
Winning Experiences
• The Grand by SkyCity named Oceania's Leading Business Hotel at the 27th World Travel Awards
•
•
2021 Tripadvisor Travellers' Choice Award for the SkyCity Hotel, The Grand by SkyCity, MASU, The Grill,
Orbit, Depot and Huami
2020 Tripadvisor Travellers' Choice Award for the Sky Tower, The Sugar Club, MASU, The Grill, Orbit,
Gusto and Depot
• MASU, Depot and Huami named in Viva’s ‘Top 50’ restaurants in Auckland for 2021
• MASU and Huami named in Metro Magazine’s ‘Top 50’ bars in Auckland for 2021
• MASU, Depot, Huami and Fed Deli named in the 2021 Denizen Hospo Heroes
• The Sugar Club named in Zufolo’s ‘Top 50’ Auckland restaurants for 2020-2021
• Fed Deli named ‘Best under $50’ in Remix Magazine’s 2021 Lifestyle Awards
Tripadvisor gives a Travellers’ Choice
Award to accommodation, attractions
and restaurants that consistently earn
great reviews from travellers and are
ranked within the top 10% of properties
on Tripadvisor
22
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Winning Teams
•
•
•
•
•
Winner of the Best Social Responsibility category at the 2020 CBD Celebration Awards, recognising
SkyCity Hamilton’s commitment to community, customers, diversity and sustainability
Awarded the Excellence in Treasury Award and named a finalist in the Market Leaders Best Investor
Relations Award at the 2021 INFINZ Awards
Awarded an Excellence Award in the In-House Lawyer of the Year category and the In-House Team of the
Year category at the 2020 New Zealand Law Awards
Awarded a Gold Award in the 2021 Australian Reporting Awards General Award, and a Silver Award in the
2021 Australian Reporting Awards Sustainability Reporting Awards, for the 2020 SkyCity Annual Report
Finalist in the 2020 New Zealand Events Awards in the Best Not-for-Profit or Cause-related Event
category (for the Firefighter Sky Tower Stair Challenge), Best Event Sponsorship category (for Vertical
Pursuit) and Best Music or Entertainment Event category (for New Year's Eve)
Winning
Partnerships
Over the last financial
year, we were proud to
sponsor and partner
with great organisations
in our communities:
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Diversity Snapshot
At SkyCity, we employ a diverse range of people at all skill levels and aim to create an
environment where people are at the centre, are motivated to work hard, progress in
their careers and are empowered to grow and achieve.
The following graphic shows the diverse make up of SkyCity’s workforce as at 30 June 2021 and, where
relevant, as a comparison against our workforce numbers as at 30 June 2020.
4,259
STAFF (full-time, part-time
and casual)
62%
of our workforce are
36 years old and under
34YEARS – average age
of our workforce
FY20 – 3,817
FY20 – 58%
FY20 – 36 years
76YEARS – age of our
oldest staff member
1%
identify as having
a disability
37%
of leadership roles
held by women
FY20 – 79 years
FY20 – 1%
FY20 – 39%
49%
of total workforce
are women
51%
of total workforce
are men
0%
of total workforce
are gender diverse
FY20 – 48%
FY20 – 51%
FY20 – 1%
AGE BREAKDOWN
24.4%
37.8%
28.3%
9.5%
0%
Generation Z
(<23 years)
Millennials
(24–36 years)
Generation X
(37–53 years)
Baby Boomers
(54–75 years)
Veterans
(76–93 years)
FY20 – 19.2%
FY20 – 38.4%
FY20 – 31.4%
FY20 – 10.9%
FY20 – 0.1%
24
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 PLEDGING SUPPORT TO THE 40:40 VISION
Although women make up around half of SkyCity’s workforce, female representation remains
challenging at higher levels of the organisation, particularly in senior leadership roles.
In May 2021, SkyCity signed up to the 40:40 Vision, pledging a commitment to achieve gender balance
across its executive leadership by 2023. 40:40 Vision is an investor and business-led initiative to achieve
40% women, 40% men and 20% any gender across the executive leadership teams of all ASX200
companies by 2030.
See page 95 of this annual report for the gender composition of SkyCity’s directors, officers, senior
executives and total workforce as at 30 June 2021.
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OUR TOP 10 ETHNICITIES STAFF IDENTIFY WITH
15%
14%
14%
8%
7%
Chinese
Australian
New Zealander
Indian
Filipino
FY20 – 17%
FY20 – 11%
FY20 – 15%
FY20 – 11%
FY20 – 6%
7%
6%
4%
4%
4%
Other Asian
Māori
Other South East
Asian
Samoan
European
FY20 – 7%
FY20 – 8%
FY20 – 1%
FY20 – 3%
FY20 – 6%
Given as a percentage of those staff members who provided details about their ethnicity and those who elected “prefer not to say”.
6%
identify as being a member
of the LGBTTI+ community
61languages spoken
and/or written by staff
FY20 – 6%
FY20 – 57
Mandarin
Tagalog (Philippines)
Hindi
our top 3 non-English languages
FY20 – Mandarin, Tagalog, Hindi
25
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Group Strategy
Key Strategic Pillars
(core focus)
Operational excellence
at our core
Complete major projects
and optimise portfolio
Pursue the omnichannel
opportunity
Culture of protecting and enhancing social licence – responsible gaming,
anti-money laundering, community, sustainability and people
Capital allocation
framework
Key financial settings
(dividends,
credit rating, etc)
Sustainable total
shareholder return
growth
Financial Strategy
A Refreshed Group Strategy
In February 2021, following the appointment of Michael Ahearne as the new Chief Executive Officer
in November 2020, SkyCity announced a refreshed Group strategy. Our refreshed strategy prioritises a
focus on our core business, executing our major projects in Adelaide and Auckland and delivering on the
omnichannel opportunity, whilst focusing on protecting and enhancing our social licence to operate to
secure our future success across various financial, social and human capitals.
SkyCity continues to monitor and evaluate adjacent opportunities in the casino industry as they arise.
27
This section provides a summary of SkyCity’s
performance and strategic positioning to create
value during the financial year ended 30 June 2021
and our priorities for the year ahead.
FY21 Performance – Our
Business Goals
Operational Excellence at our Core
During the past financial year, SkyCity continued to
face significant challenges from the impact of the
COVID-19 pandemic. Pleasingly, we have been able
to leverage a more flexible and resilient operating
model to effectively manage an uncertain domestic
and international environment.
The benefits of our investment in new gaming
product, product management and changes to
the gaming floor layout continue to be realised
across the Group, particularly in Auckland with the
opening of new premium gaming rooms and in
Adelaide post the opening of the new expansion
project from December 2020.
SkyCity continues to leverage its complementary
assets to drive gaming visitation and our properties
have benefitted from increased domestic tourism
in New Zealand and South Australia as local
customers continue to have limited opportunities
to travel internationally. SkyCity continues to focus
on tactical marketing and loyalty activations as a
cost-effective tool to drive higher quality visitation
with marketing expenditure as a percentage of
revenue significantly down across all properties.
Changes to SkyCity’s operating model in response
to COVID-19 and an ongoing focus on cost control
are delivering efficiencies across the Group, with
operating margins up compared to pre COVID-19
levels at all properties on a like-for-like basis.
The resilient performance of our local gaming
businesses, particularly in New Zealand, has been
pleasing given its importance to Group earnings
and hence value. Both SkyCity Hamilton and
SkyCity Queenstown delivered strong EBITDA
performances for the full year underpinned by
strong local gaming activity (particularly electronic
gaming machines) and good cost execution.
When operating at Alert Level 1 in New Zealand,
local gaming activity at SkyCity Auckland was
consistently above pre COVID-19 levels, particularly
during weekend and holiday peaks.
Performance at SkyCity Adelaide post the opening of
the expansion project has been consistent with strong
local gaming activity, particularly from premium
customers (with electronic gaming machine market
share around 9%) and new non-gaming facilities
proving popular with customers. Good cost execution
has seen property margins ahead of expectations at
around 20%.
We continue to make good progress on our ICT
investment and enhancing our digital capability,
focusing on initiatives to improve customer
experience, centred around loyalty, customer
relationship management (CRM) and data analytics.
Complete Major Projects and Optimise Portfolio
We have progressed a number of key initiatives
to optimise our existing portfolio over the last
financial year.
Adelaide Expansion Project
The A$330 million SkyCity Adelaide expansion
project was delivered on-time and on-budget in
December 2020 and included significant master
planning works at the existing property within the
historic Railway Station building to restore the
building and improve the layout and experience
for customers.
The new gaming spaces, Eos by SkyCity (the new
120-room luxury hotel) and a majority of the
new food and beverage venues were opened in
a staged manner from early December 2020,
reflecting customer demand - with the focus
initially on local and interstate customers given
the ongoing international border closures. The
expansion delivers significantly expanded gaming
and entertainment facilities with a multi-level
casino podium, contemporary gaming spaces (both
main floor and premium) and a 30% increase in
gaming product.
28
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 L
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New regulatory reforms were implemented in
time for the expansion opening, permitting the
use of banknote acceptors, ticket-in ticket-out
(TITO) functionality on the main gaming floor and a
multi-protocol gaming system.
Walker Corporation has now completed a
1,500-space car park as part of its redevelopment of
the Festival Plaza adjacent to the SkyCity Adelaide
precinct and, in June 2021, handed over 750 car
park spaces for SkyCity’s exclusive use. The Festival
Plaza car park will be a key asset to drive visitation
to the precinct and to address the convenience
offered by suburban venues in metropolitan
Adelaide – in 2019, around A$500 million of
electronic gaming machine revenue was generated
by venues within a 50 kilometre radius of
SkyCity Adelaide.
Trading at SkyCity Adelaide has been consistent
when open and SkyCity continues to expect a
meaningful earnings uplift over the medium-term.
New Zealand International Convention Centre and
Horizon Hotel Project
The fire at the NZICC site during October 2019
and the COVID-19 pandemic have made the
NZICC and Horizon Hotel project more complex,
resulting in further significant project delays.
Reinstatement works post the fire are progressing
(with over 300 Fletcher Construction personnel
currently on site), but slower than expected.
The latest draft construction programme from
Fletcher Construction now indicates completion
of the Horizon Hotel during 2024 and the NZICC in
late 2024.
Despite the impact of the fire and COVID-19 on the
project timetable, we remain comfortable with
our contractual position – Fletcher Construction
is required to complete the project, insurance is
responding to the damage caused by the fire and, in
July 2021, we secured an extension to the long stop
date to complete the NZICC (to 15 December 2027)
with the New Zealand Government.
As previously reported, we still expect the total
cost to reinstate the NZICC and Horizon Hotel to
be covered by insurance or Fletcher Construction
and accordingly there is no material change
to previous guidance for the total project costs
(of around $750 million). As at 20 August 2021,
around $120 million of project costs (excluding fire
reinstatement costs) still remained to be spent.
Whilst the further delays on the project are
regrettable, the NZICC will support long term
growth in tourism expenditure in New Zealand and
be a significant demand driver for our Auckland
precinct, in addition to having secured the
extension of the Auckland casino venue licence out
to 2048.
Other Projects
Significant long term option value remains
embedded in our Auckland and Hamilton precincts.
Future options for our two Queenstown properties
continue to be evaluated, but with the current focus
on optimising SkyCity Queenstown and leveraging
strong domestic tourism whilst the Wharf Casino
remains closed due to ongoing international
border closures.
A range of smaller growth projects were completed
during the period, including a major refurbishment
and expansion of our premium gaming facilities
in Auckland.
As an entertainment and hospitality provider,
SkyCity is challenged to stay relevant in relation
to new forms of entertainment. In addition to
launching the SkyCity Online Casino, in late 2020
the former SkyCity Auckland Convention Centre
became home to the All Blacks Experience and
Weta Workshop Unleashed. These two world-class
attractions provide unique, interactive customer
experiences and will help to ensure the long term
relevance to the Auckland precinct.
SkyCity remains focused on effective capital
discipline and, following implementation of our
funding plan in mid-2020, the balance sheet is in
a strong position to deliver on our medium term
strategic plan. We have significant liquidity to fund
commitments, and withstand slower recovery in
New Zealand and Australia, one-off events and/or
further COVID-19 disruptions. SkyCity has satisfied
its financial covenants for the 30 June 2021 testing
period and will pay a dividend of 7 cents per
share during September 2021, following dividends
being suspended whilst in reliance on covenant
waivers/relief secured during 2020.
SkyCity remains committed to its BBB- credit rating
from S&P Global Ratings which was upgraded to
“Stable” from “Negative” Outlook during April 2021.
Group Strategy
29
Pursue the Omnichannel Opportunity
SkyCity has continued to optimise the SkyCity
Online Casino with Gaming Innovation Group Inc
(GiG) despite operational constraints. Performance
of the offshore online casino has exceeded our
expectations with significant growth in revenue and
EBITDA and in excess of 45,000 active customers.
GiG continues to provide SkyCity with a full-suite
online casino solution, which includes a technical
platform, gaming content, managed services and
front-end development.
SkyCity remains supportive of future regulation of
online gaming in New Zealand with an emphasis on
strong host responsibility and delivering community
benefits and we continue to prepare for a regulated
industry to deliver on the omnichannel opportunity
for the Group. Growth in online gambling continues
to be a significant global industry theme with
numerous international jurisdictions regulating
online gambling (or intending to do so) to
address the transition from physical to online
entertainment, which has been exacerbated by the
impact of COVID-19.
Following a public consultation which commenced
during 2019, the New Zealand Department of
Internal Affairs continues to develop a policy
framework for potential regulation. Regulation of
the New Zealand online gaming market would
enable SkyCity to pursue the omnichannel
opportunity and address a fast-growing category
which is highly complementary to our land-based
activities whilst offering customers a varied gaming
experience (both physical and digital).
FY21 Performance – Our Character
and Culture Goals
Culture of Protecting and Enhancing our
Social Licence
At SkyCity, we need to continually focus on
protecting and enhancing our social licence to
operate. A feature of the past financial year has
been the steady progress made with the many
initiatives under SkyCity’s ESG/sustainability
framework.
Steady progress has also been made to
enhance SkyCity’s host responsibility and AML
control frameworks.
Minimising harm to customers remains a key
focus with appropriate effort, resource and capital
allocated to support this initiative, such as increased
resourcing and investment in bespoke ICT systems
(including facial recognition technology and
specialised customer screening tools). SkyCity
is committed to ensuring that it provides safe
and responsible experiences and environments
and places significant importance on its host
responsibility and AML obligations. We continue
to deliver on our health and safety strategy, which
is centred around preventing harm and building
wellness, particularly in response to the risks posed
by COVID-19 in our communities.
SkyCity has continued to create and support a
positive employee culture over the period, focusing
on initiatives to enhance workplace flexibility,
wellbeing and diversity. To this end, SkyCity was
pleased to be awarded the Diversity and Inclusion
Leadership Award at the 2020 Deloitte Top 200
Awards for the second time in three years for
Project Nikau, an initiative to employ and develop
career pathways for youth with a focus on Māori
and Pasifika. SkyCity has also made progress
on refocusing the SkyCity Community Trusts in
New Zealand on initiatives that will enhance the
employability, wellbeing and advancement of youth
and has upweighted strategies to ensure its supply
chain is ethical (including the implementation of a
modern slavery statement, approved by the Board
in October 2020) and supports local businesses.
We continue to meaningfully reduce our gender pay
gap across the New Zealand businesses and thefinal
instalment of our ‘$20 by 2020’ wage initiative was
implemented in New Zealand at the end of 2020.
We remain proud of, and rely on, our culture of
compliance, which encourages people to focus
on doing the right thing by themselves, their
teammates, the company and stakeholders. To
ensure our future success across various financial,
social and human capitals, it is important to
continue conducting the business holistically within
the terms of our ESG/sustainability framework.
30
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Bowl and Social at
SkyCity Hamilton
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Our Business Goals
FY22 Priorities
Operational
excellence at our
core
Complete major
projects and
optimise portfolio
•
•
•
•
•
•
•
•
•
•
•
•
•
Continue to manage the COVID-19 recovery, including maintaining a flexible
operating model to respond to the operating environment
Continue growth in the local gaming business, particularly electronic gaming
machines
Continue to pursue operating efficiencies and cost savings
Improve loyalty and marketing execution with an increased focus on customer
experience management (CXM)
Optimise the SkyCity Adelaide expansion and integration of the new assets
Ongoing review and appraisal of gaming floor optimisation, including product,
layout and technology
Ongoing review and assessment of potential licence renewal and/or relocation
in Queenstown and Hamilton
Complete asset review and develop holistic property strategy
Deliver the NZICC and Horizon Hotel project in line with market guidance of
around $750 million and consistent with the revised timetable
Develop and refine the long term master plans for each property
Explore leasing and/or sale opportunities for non-operational property assets,
particularly in Auckland
Deliver asset maintenance plan
Support the new entertainment attractions (All Blacks Experience and Weta
Workshop Unleashed) in Auckland
Pursue the
omnichannel
opportunity
• Progress the opportunity for a regulated online casino market in New Zealand
• Continue to optimise our offshore venture (SkyCity Online Casino) with GiG
•
Resource the online business and progress with pre-regulation planning and
preparedness
• Explore new product verticals, such as Bingo and Poker
32
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 L
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Our Character and
Culture Goals
FY22 Priorities
Responsible
gaming leadership
and anti-money
laundering
• Respond to the AUSTRAC enforcement investigation into SkyCity Adelaide
• Deliver best practice anti-money laundering standards across all properties
• Deliver best practice host responsibility standards across all properties
•
•
Finalise long play detection trials and implement technology and enhance
facial recognition systems
Promote awareness of SkyCity’s anti-money laundering, know your customer
and host responsibility obligations, and training and education amongst staff
Community and
sustainability
• Focus on building staff resilience, morale and motivation
• Ongoing improvements in health, safety and wellbeing strategies
•
•
Deliver on gender and ethnicity diversity targets in leadership/talent pipeline
Increase understanding of/participation in flexibility at work programme
• Ongoing reduction of employee turnover
• Ongoing improvements in gender and ethnic pay equality
•
Deliver employment opportunities for youth through our Project Nikau
programme
•
Implement the 'SkyCity Sustainable Wage' in New Zealand
• Refine our sustainable sourcing strategy for our supply chain
• Maintain labour standards commensurate with an employer of choice
•
Increase awareness of modern slavery risks and mitigations for employees
working in areas impacted by these risks
• Measure, report and offset SkyCity's carbon footprint
•
Implement initiatives to reduce waste to landfill and water usage
Group Strategy
33
About SkyCity
SkyCity is New Zealand’s largest tourism, leisure and
entertainment company and is dual listed on the New Zealand
and Australian stock exchanges.
As one of three major publicly listed casino operators in Australasia, SkyCity
operates integrated entertainment complexes in New Zealand (in Auckland,
Hamilton and Queenstown) and in Adelaide, South Australia – each featuring
casino gaming facilities and premium restaurants and bars, which appeal to
both domestic and international visitors alike. SkyCity also offers premium hotel
accommodation in Auckland and Adelaide.
In addition to its land-based casino operations, SkyCity Online Casino (based out
of Malta) offers New Zealanders an exciting online gaming experience.
SkyCity Online Casino Malta
OUR HISTORY AT A GLANCE
2019
SkyCity sells
SkyCity Darwin
SkyCity Online Casino
launches offshore
SkyCity sells long term
concession (licence to
operate) over SkyCity
Auckland car parks to
Macquarie Principal
Finance Group
A significant fire breaks
out at the New Zealand
International
Convention Centre
(under construction)
2021
SkyCity Auckland
celebrates its
25th anniversary
2016
The first sod is turned
on the New Zealand
International Convention
Centre/Horizon Hotel site
2012
SkyCity acquires
full ownership of
SkyCity Queenstown
2021
2020
2015
2010
2018
Construction
commences on the
SkyCity Adelaide
expansion project
2013
SkyCity acquires
SkyCity Wharf
in Queenstown
2020
COVID-19 pandemic
temporarily closes all
SkyCity properties
in New Zealand
and Adelaide,
South Australia
SkyCity Adelaide
expansion project
officially opens
34
and Australia5 ONLINE
CASINO1
PROPERTIES
across New Zealand
HOTELS3
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SkyCity Auckland
and Group
Head Office
SkyCity Adelaide
SkyCity Hamilton
SkyCity
Queenstown
and SkyCity
Wharf*
2005
SkyCity acquires
full ownership
of SkyCity
Hamilton
2002
SkyCity
Hamilton
opens
1999
SkyCity lists
on the
Australian
stock
exchange
1997
Sky Tower
opens in
Auckland
* Wharf Casino has been
closed since March 2020.
1994
Construction of the
SkyCity Auckland
complex commences
2005
2000
1995
1994
2004
SkyCity acquires
SkyCity Darwin
2000
SkyCity
Queenstown
opens
SkyCity
acquires
SkyCity
Adelaide
1998
Harrah’s
management
contract ends
and SkyCity
becomes a
New Zealand-
managed
operation
1996
SkyCity opens its flagship
SkyCity Auckland complex
with Harrah’s Entertainment
(now Caesars Entertainment),
the largest casino
entertainment operator in the
United States, as the operator
SkyCity lists on the
New Zealand stock exchange
35
Auckland
Property
Property Manager
SkyCity Auckland, New Zealand
Opened
1996
Casino Venue Licence
Runs until 2048*
Callum Mallett, Chief Operating Officer New Zealand
Facilities
• Casino
• Hotels
• Sky Tower
• Theatre
• Food and beverage
• Telecommunications and
• Entertainment
• Car parking
broadcasting facilities
Licensed Gaming Product
• 1,877 electronic gaming machines**
Workforce
FY21 Revenue
• 150 table games**
• 240 automated table games***
~2,500 staff
$436.4 million^ (reported)
$488.2 million (normalised)
*The casino venue licence can be renewed for a further period of 15 years pursuant to sections 134–138 of the New Zealand Gambling Act 2003.
**This allowance may be alternatively utilised to enable automated table game terminals.
***This allowance may be alternatively utilised to enable table games.
^Excludes New Zealand International Convention Centre fire income and liquidated damages received.
SkyCity Auckland is the flagship property of the
SkyCity Entertainment Group, featuring a casino,
two award-winning hotels – The Grand by SkyCity
and SkyCity Hotel, bars and restaurants, a 700-seat
theatre and the iconic Sky Tower. Located in the
heart of Auckland’s CBD, the SkyCity Auckland
precinct occupies ~295,000sqm of gross floor
area across the majority of three city blocks
(~3.5 hectares).
Opened in 1997, the 328-metre tall Sky Tower
is an icon of Auckland’s skyline and the tallest
free-standing structure in the Southern
Hemisphere. Visitors can enjoy breathtaking
views right across Auckland from the observation
decks or any of the three restaurants in the Sky
Tower, including Auckland’s only 360-degree
revolving restaurant. At the very top of the
Sky Tower, a 93-metre communications mast
accommodating VHF, UHF, AM and FM broadcasting
and telecommunications antennas provides
telecommunications and broadcasting facilities to
the telecommunications industry.
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During the last financial year, SkyCity completed a
$50 million upgrade within the SkyCity Auckland
casino with the opening of Flare bar, Food Republic
(a three-restaurant food court) and a new VIP BLACK
and Ultra gaming machine area that provides an
unrivalled VIP offering and experience to SkyCity’s
domestic VIP customers. Two new attractions also
opened within the SkyCity Auckland precinct –
the All Blacks Experience, a joint venture between
New Zealand Rugby and Ngāi Tahu Tourism that
provides visitors with a state-of-the-art, interactive
experience showcasing the All Blacks through
the use of innovation and technology, and Weta
Workshop Unleashed, an immersive film effects
workshop created by Academy Award-winning
design and effects company Weta Workshop.
SkyCity is currently investing around $750 million
within the SkyCity Auckland precinct to develop the
New Zealand International Convention Centre, an
adjacent laneway, over 1,250 additional car parking
spaces, and Horizon Hotel – a new 300-room, 5-star
hotel. This development was originally expected to
be completed in 2019 – however, due to delays by
the contractor, the significant fire that broke out
at the New Zealand International Convention in
October 2019 and the subsequent impacts of the
COVID-19 pandemic, Horizon Hotel is now expected
to be completed during 2024 and the New Zealand
International Convention Centre and adjacent
laneway are expected to be completed in late 2024.
When open, the New Zealand International
Convention Centre will be New Zealand’s premier
convention centre enabling New Zealand to attract
major international conferences as well as having
capability for sporting events, theatre and musical
performances. The centre is designed to be a
welcoming, open building complemented by a fresh
new streetscape for local, national and international
visitors alike to enjoy.
FY21 PERFORMANCE
SkyCity Auckland celebrated its 25-year anniversary
in February 2021 and delivered a satisfactory
performance for the full year period with earnings
up 4.9% compared to the prior comparable
period, despite operational constraints arising
due to the impact of COVID-19. The property
was closed for 29 days during the period due
to COVID-19 lockdowns in August 2020 and
February/March 2021, and operated for 48.5
days under Alert Levels 2 and/or 2.5 restrictions
during the period with limits on gatherings and
mandatory social distancing requirements which
significantly reduced capacity, particularly in the
gaming business.
Local gaming performance remained resilient over
the period and, when operating at Alert Level 1 (with
no restrictions, except at the border), electronic
gaming machine activity was consistent with or
above pre COVID-19 levels, particularly during
weekend and holiday peaks. The property continues
to benefit from new product and an improved floor
layout, in addition to the new premium gaming
rooms which have been well received by customers.
Our tourism-related businesses in Auckland
continue to be impacted by ongoing international
border closures, but performance improved
progressively over the period and benefitted
from ongoing strong domestic tourism across
New Zealand as customers continue to have
limited options for international travel. Our hotels
remain profitable and continue to outperform the
competitor set, but RevPAR and earnings were
well down on pre COVID-19 levels. Our food and
beverage and attraction businesses were at broadly
break-even contribution.
Pleasingly, operating margins at the property
remained stable compared to the prior
comparable period leveraging cost saving initiatives
implemented during 2020.
About SkyCity
37
Weta Workshop Unleashed
All Blacks Experience
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Food Republic
VIP BLACK
Flare
About SkyCity
39
Adelaide
Property
Property Manager
SkyCity Adelaide, Australia
Acquired
2000
Licensing Agreement
Runs until 2085*
David Christian, Chief Operating Officer Australia
Facilities
• Casino
• Hotel
• Food and beverage
• Entertainment
• Conventions
Licensed Gaming Product
• 1,080 electronic gaming machines (allowance for 1,500)
Workforce
FY21 Revenue
• 118 table games (allowance for 200)**
• 91 automated table games (allowance for 300)
~1,350 staff
A$183.2 million (reported)
A$196.9 million (normalised)
* The Approved Licensing Agreement between the Minister for Business Services and Consumers and SkyCity Adelaide Pty Limited provides
Adelaide Casino with exclusive rights to provide casino gaming (except for interactive gambling) in South Australia until 30 June 2035.
**This allowance may be alternatively utilised to enable automated table game terminals.
Located in and around the historic Railway Station
building on the banks of the Torrens River, SkyCity
Adelaide is South Australia’s only casino destination
on the Festival Plaza forecourt adjacent to the
Adelaide Festival Centre and Adelaide Convention
Centre and near the Adelaide Oval.
In December 2020, SkyCity completed a A$330
million expansion project at the Adelaide property,
transforming SkyCity Adelaide into a world-class
integrated entertainment hub. Designed by The
Buchan Group in association with Hecker Guthrie
Walter Brooke, and built by Hansen Yuncken, the
new development includes a 120-room luxury
hotel – Eos by SkyCity, wellness centre with a day
spa, pool, sauna and gym, VIP gaming facilities,
function and conference facility for up to 650
guests, two new bars (including a rooftop bar) and
four additional signature restaurants. A spectacular
three-storey glass atrium connects the Railway
Station building seamlessly with the adjoining
new development.
As part of the transformation, the existing SkyCity
Adelaide business, housed in the iconic Adelaide
Railway Station, was also extensively revitalised
and restored to improve the layout and experience
for customers, and now includes a new live
entertainment space (The District at SkyCity) and
Australia’s first fully functional microbrewery within
a casino (operated by Pirate Life).
As part of the South Australian Government’s
broader review of gambling regulation in South
Australia, in October 2020, SkyCity Adelaide
introduced ticket-in ticket-out (TITO) technology
on the main gaming floor and banknote acceptors
across the casino.
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FY21 PERFORMANCE
SkyCity Adelaide’s performance prior to the
expansion opening in December 2020 was
impacted by operational constraints due to
COVID-19 and construction disruption, but
performance since opening the new facilities
significantly improved across all activities.
Strict social distancing measures were required
due to COVID-19 for a large part of the full year
period and the property was closed for 3.5 days
in late November 2020 in response to a local
COVID-19 outbreak.
Performance at SkyCity Adelaide when open has
been consistent with strong local gaming activity,
particularly from premium customers (with
electronic gaming machine market share of around
9%) and new non-gaming facilities proving popular
with customers. Property revenue during 2H21
was up around 50% compared to the comparable
periods (including FY19 for April through to June
2021 due to the property being closed in the FY20
prior comparable period). Good cost execution has
seen property margins ahead of expectations at
around 20%.
SkyCity Adelaide received a one-off benefit from the
Australian Jobkeeper scheme (around A$11 million
EBITDA impact) during the period which was
treated as other income. A partial repayment will
be made to reflect SkyCity’s improved financial
performance in FY21.
About SkyCity
41
A NEW ERA OF LUXURY IN ADELAIDE
The A$330 million SkyCity Adelaide expansion
development opened to the public in December 2020.
Eos by SkyCity is Adelaide’s most luxurious hotel, with
rooms ranging from 50sqm – 230sqm and opulently
appointed to meet the growing demand for quality hotel
rooms from both domestic and international visitors.
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About SkyCity
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Hamilton
Property
General Manager
Opened
Casino Venue Licence
Facilities
SkyCity Hamilton, New Zealand
Michelle Baillie
2002
Increased ownership from 70% to 100% in 2005
Runs until 2027*
• Casino
• Food and beverage
• Conventions
• Car parking
• Entertainment
• Tenpin bowling
Licensed Gaming Product
• 339 electronic gaming machines**
Workforce
FY21 Revenue
• 23 table games**
~300 staff
$65.0 million (reported)
$73.5 million (normalised)
*The casino venue licence can be renewed for a further period of 15 years pursuant to sections 134–138 of the New Zealand Gambling Act 2003.
**This allowance may be alternatively utilised to enable automated table game terminals.
Situated within Hamilton’s historic Chief Post Office,
a building designed to maximise its superb riverside
location on the banks of the Waikato River, SkyCity
Hamilton features a casino, bars and restaurants,
a conference centre and Hamilton’s only tenpin
bowling alley – Bowl and Social.
Over the last financial year, SkyCity has continued to
invest in its core casino and hospitality businesses
with a range of improvements across the SkyCity
Hamilton property, including a new Baccarat Lounge
and a refurbished function space, The Garden
Room. A key focus has been on product and layout
optimisation within the casino to maintain SkyCity
Hamilton’s market leader position and manage high
demand for electronic gaming machines (which
remain capacity constrained at peak times).
SkyCity Hamilton is a key member and supporter
of the local community and is committed to
being the Waikato region’s premier entertainment
destination. We were therefore thrilled to have been
named the winner of the Best Social Responsibility
category at the Hamilton Central Business
Association’s 2020 CBD Celebration Awards,
recognising SkyCity Hamilton’s commitment to
community, customers, diversity and sustainability,
and the runner-up in the Community Contribution
category at the 2020 Waikato Business Awards.
FY21 PERFORMANCE
SkyCity Hamilton delivered a strong revenue and
earnings result for a full year period, underpinned
by strong local gaming activity and cost control,
despite 51 days operating under Alert Level 2
restrictions over the period.
Consistent with prior periods, Hamilton delivered
strong electronic gaming machine activity, despite
capacity constraints, benefitting from improved
product mix and new gaming areas, particularly for
VIP customers.
The property has shown resilience to the impacts of
COVID-19 over the last financial year due to having
a predominantly domestic (and gaming) focused
business and supportive external factors, including
population growth, an increasingly diverse local
economy (less reliance on the primary sector) and
improved connectivity to the Auckland region. The
Waikato region has also benefitted from strong
domestic tourism activity in New Zealand as
international borders remain closed.
A focus on cost control and operating efficiencies
delivered significant margin improvement
compared to the prior comparable period.
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Queenstown
Property
General Manager
SkyCity Queenstown and SkyCity Wharf, New Zealand
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Opened/Acquired
Opened Queenstown in 2000 and increased ownership
from 60% to 100% in 2012
Casino Venue Licence
Runs until 2025* for Queenstown
Acquired Wharf in 2013
Facilities
Runs until 2024* for Wharf
• Casino
• Food and beverage
• Entertainment
• Conventions
Licensed Gaming Product
• 86 electronic gaming machines (Queenstown)**
Workforce
FY21 Revenue
• 12 table games (Queenstown)**
• 74 electronic gaming machines (Wharf)**
• 6 table games (Wharf)**
~50 staff
$10.9 million (reported)
$12.3 million (normalised)
*The casino venue licence can be renewed for a further period of 15 years pursuant to sections 134–138 of the New Zealand Gambling Act 2003.
**This allowance may be alternatively utilised to enable automated table game terminals.
SkyCity’s two Queenstown casinos, SkyCity
Queenstown and SkyCity Wharf, are located in
central Queenstown surrounded by the majestic
Southern Alps.
Whilst the larger SkyCity Queenstown property
reopened on 14 May 2020 after the first COVID-19
lockdown in New Zealand, the smaller SkyCity
Wharf property has remained closed since initially
closing on 23 March 2020 as ongoing border
restrictions continue to have a detrimental effect on
the local Queenstown economy in particular, which
is largely dependent on tourism.
FY21 PERFORMANCE
SkyCity Queenstown delivered a strong earnings
result for a full year period, underpinned by strong
electronic gaming machine activity, positive
domestic tourism into the region, particularly during
peak holiday periods, and effective cost control.
This strong performance was despite 51 days
operating under Alert Level 2 restrictions over
the period and ongoing international border
closures. The Wharf Casino remained closed over
the period and is expected to remain so for the
foreseeable future.
Good cost execution over the period delivered
a significant increase in operating margins – an
onerous lease benefit of $986,076 was realised
during 1H21 when the decision was made to keep
the Wharf Casino closed. Future options for our two
Queenstown properties continue to be evaluated,
with the current focus on optimising SkyCity
Queenstown and leveraging strong domestic
tourism trends.
About SkyCity
45
International Business
General Manager
Facilities
FY21 Revenue
Stewart Neish
Premium gaming facilities at SkyCity Auckland,
SkyCity Adelaide and SkyCity Queenstown
$17.8 million (reported)
$22.1 million (normalised)
SkyCity’s International Business division caters
for high-net worth international players who visit
casinos as part of their leisure activities.
The flagship SkyCity Auckland property features
several premium gaming spaces, including
1,800 sqm of luxury high-end gaming space
above the SkyCity Hotel featuring four luxurious
gaming salons for exclusive use and four private
accommodation suites. Each salon has its own
private dining facilities, bar and massage chairs, as
well as its own lounge area and outdoor balcony.
Gaming dealers are available on request for
customers, who enjoy the full range of gaming
options offered at SkyCity Auckland in their own
private salon.
Additional VIP luxury gaming facilities were opened
in December 2020 as part of the A$330 million
SkyCity Adelaide expansion.
In April 2021, SkyCity announced, following
completion of a strategic review into its
International Business division, that it would
permanently cease dealing with junket operators
and continue to operate its International Business
division under a revised operating model where
SkyCity will deal directly with International Business
patrons after appropriate know your customer and
customer due diligence requirements are satisfied.
FY21 PERFORMANCE
Our International Business division continues to be
significantly impacted by COVID-19 and ongoing
international border closures resulting in negligible
international tourism activity over the period.
Cost control and modest interstate tables activity in
Adelaide post expansion reduced expected losses,
with 2H21 performance slightly EBITDA positive.
Our International Business team has continued
to focus on proactive customer engagement to
prepare the business for when borders reopen
and customers can return to our properties.
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Online
Managing Director
Facilities
FY21 Revenue
Steve Salmon
Online casino
$13.1 million (reported)
$13.1 million (normalised)
Launched in August 2019, SkyCity Online Casino
provides New Zealanders with an offshore online
casino platform, featuring over 1,600 online games.
complementary to our land-based activities whilst
offering customers a varied gaming experience
(both physical and digital).
FY21 PERFORMANCE
SkyCity continued to optimise its online casino
venture with GiG over the period, despite
operational constraints. SkyCity Online Casino’s
performance over the year has exceeded
expectations with significant growth in revenue
and EBITDA and in excess of 45,000 active
customers currently.
With gross gaming revenue of $27.9 million (and
net revenue attributable to SkyCity of $13.1 million)
and reported EBITDA of $9.1 million for the period,
SkyCity Online Casino is now making a meaningful
contribution to the Group. EBITDA margin for
the period was in line with expectations due to
operating leverage and effective management of
customer acquisition costs.
SkyCity Online Casino is operated out of Malta by
international iGaming company Gaming Innovation
Group Inc (GiG) on behalf of SkyCity Malta Limited,
an independently operated subsidiary of the SkyCity
Entertainment Group, and led by a Managing
Director based in Europe.
GiG provides a full-suite online casino solution,
including a technical platform, gaming content,
managed services and front-end development.
SkyCity remains supportive of future regulation of
online gaming in New Zealand with an emphasis on
strong host responsibility and delivering community
benefits in New Zealand and we continue to
prepare for a regulated industry to deliver on the
omnichannel opportunity for the Group. Growth
in online gambling continues to be a significant
global industry theme with numerous international
jurisdictions regulating online gambling (or
intending to do so) to address the transition from
physical to online entertainment, which has been
exacerbated by the impact of COVID-19.
Following a public consultation which commenced
during 2019, the Department of Internal Affairs
(the New Zealand gambling regulator) continues
to develop a policy framework for potential
regulation. Regulation of the New Zealand
online gaming market would enable SkyCity
to pursue the omnichannel opportunity and
address a fast-growing category which is highly
Our Values
Our people-centric values represent what it means to succeed at SkyCity – they
identify what is expected from us when we come to work and define the important
role we all play in creating magic at SkyCity.
We all have a unique set of skills with which we
do our part for SkyCity.
Own your role, embrace it with passion and
energy, act with integrity, be genuine with your
interactions and be accountable for your work.
Be proud of your successes.
Take responsibility for your mistakes and learn
from them to keep improving.
We're all a part of the SkyCity team.
Be a passionate member of your team and work
towards your shared goals.
Help others along the way, treat your colleagues
and customers fairly and with respect.
Be honest and connect with others to build
strong relationships.
Be inclusive and embrace diversity.
Be enthusiastic and take pride in working
for SkyCity.
Always strive to deliver exceptional
customer experiences.
Seek out ways to go the extra mile and leave
a lasting impression.
Help us to continually improve and create the
best version of SkyCity.
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Refreshing Our Brand
In June 2021, SkyCity Auckland launched a new brand campaign, Feel It, across outdoor, online video and
print media channels. Designed to remind Aucklanders and visitors from the rest of New Zealand that
SkyCity offers a range of memorable experiences, the campaign celebrates the feelings SkyCity creates
for its visitors across its extensive range of offerings. The campaign features many of SkyCity’s most iconic
attractions, as well as several less well known experiences.
Feel It unifies the many and varied parts of SkyCity under the many and varied feelings they create, be that a
delicious meal, a relaxing massage or yoga class, a walk around the outside of the Sky Tower, or a jump off it,
a stay in one of our hotels, or a night at the roulette table – all of these activities create memorable feelings
that are celebrated in this campaign.
49
Risk Profile and
Management
SkyCity operates in a dynamic and challenging
environment with risks and opportunities both
locally and internationally. The SkyCity Board
is ultimately responsible for the governance of
the Group’s risk management, which includes
formulating the Group’s risk appetite and setting
and monitoring risk tolerance.
SkyCity maintains a risk management framework
for the identification, assessment, monitoring and
management of risk to the company’s business.
As part of this framework, SkyCity maintains an
independent, centrally managed Group Risk
function which evaluates and reports on risks and
controls across the Group. The Group Risk team
collates, assesses and monitors the risks the Group
faces by way of a Top Risk Profile, which is updated
regularly. The Top Risk Profile is a current view of the
most significant emerging or potential risks facing
the Group, as well as a summary of how those risks
are being mitigated or prepared for, and is a critical
input to strategic planning, insurance renewal,
investment and resource prioritisation, assurance
planning, and ongoing business improvements.
Management reports to the SkyCity Board and
the Board’s Audit and Risk Committee on the
effectiveness of the company’s management of its
material business risks at least annually.
The SkyCity Board and management recognise that
a positive culture is fundamental to an effective
risk management framework and instils and
promotes a culture which values the principles
of honesty, fairness, cooperation, diversity and
inclusion, and accountability – as reflected in the
SkyCity Group’s Code of Conduct (available in the
Governance section of the company’s website at
www.skycityentertainmentgroup.com).
The Group Risk team monitors the company’s
culture for indications on how well the risk culture is
performing and/or areas for improvement by way of:
•
•
•
•
•
leadership risk culture surveys conducted
annually across the SkyCity Group;
mini risk culture surveys conducted as part of
each assurance and risk review;
bi-annual reviews of various metrics to help
provide a proxy view of risk culture;
bi-annual presentation of a risk culture
dashboard to the Audit and Risk Committee; and
regular discussions with management on risk
culture.
Our Material Risks
SkyCity operates a combined assurance model
which is led by the Group Risk team and includes a
combination of business self-assurance (production
and maintenance of business unit risk registers),
internal audit activity, and the selected outsourcing
of a number of independent reviews. The overall
effectiveness of the combined assurance model
is monitored and assessed by, and all significant
assurance findings are communicated to, the Audit
and Risk Committee.
SkyCity’s ability to create and preserve value for its
shareholders requires the successful execution of
its business strategy, while maintaining a sound
culture and practices to maintain compliance with
responsible gaming frameworks. 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 outlined in the
table overleaf.
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Material Exposure
Risk Management
Highly Regulated Industry
SkyCity operates in the casino industry, which is
highly regulated. The regulatory framework in
which the business operates is not only complex
but also subject to change from time to time, which
may impact the environment in which SkyCity
operates and increase the costs and complexities
of operating its business. In addition, there is an
increased regulatory focus by different regulators of
the casino industry, as well as ongoing pressure to
keep improving SkyCity’s standards.
Potential examples of such changes include
unfavourable changes to gaming and/or smoking
legislation and regulations, licence conditions and
gaming taxes and levies. Such changes may be
introduced for a variety of reasons, including in
response to the behaviour of others operating in the
industry or increased government and regulatory
conservatism in relation to the casino industry in
New Zealand and Australia.
For example, over the past financial year there has
been an increased focus on additional consumer
protection requirements and regulatory oversight
of land-based casino operators in New Zealand
and Australia (including in respect of anti-money
laundering and host responsibility obligations) and
on SkyCity’s ‘social licence’ to operate – see page 58
of this annual report for more details.
Pandemic Preparedness and Business Continuity
As with any large, distributed business, SkyCity
must be prepared for a wide range of events that
have the potential to cause significant disruption
and/or temporary closure of one or more of its sites.
The COVID-19 pandemic and related actions taken
in response by the New Zealand, Australian and
other Governments (including national lockdowns
and border controls/travel restrictions) and the
effects of the pandemic on global and domestic
economies have had, and are likely to continue
to have, a material adverse effect on SkyCity, its
financial performance and outlook, liquidity and/or
share price.
The regulatory risk is mitigated by close monitoring
of the evolving regulatory landscape, including
maintaining frequent and transparent engagement
with the governments and regulators in each
jurisdiction in which SkyCity operates and with
industry stakeholders to ensure that expectations
are met and high standards of compliance are
maintained.
Targeted initiatives are undertaken as and when
required based on the likelihood of the risk
occurring and the impact it would have on SkyCity’s
business.
SkyCity also supports a robust compliance culture
and framework to ensure compliance with
licence conditions and applicable legislation and
regulations.
To mitigate this risk, SkyCity maintains a
comprehensive business continuity framework,
which supports preparedness and response to
a wide range of critical events, including natural
disasters, fire, emergency incidents and pandemics.
The business continuity framework is subject
to ongoing monitoring to ensure management
readiness and capability (including undertaking
simulated crisis response drills on a regular basis
to test management readiness and capability) and
improvement to enhance resilience.
Due to the strength of the business continuity
framework, the SkyCity Board and management
have worked well in responding to and managing
the ongoing impacts of the global COVID-19
pandemic to date.
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Material Exposure
Risk Management
Liquidity and Solvency Risk
SkyCity’s ability to achieve its business objectives is
dependent on it being able to effectively manage
its liquidity and solvency throughout a period of
no and/or significantly diminished revenue and
earnings.
SkyCity 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.
There is significant complexity related to managing
those matters, including as a consequence of
a number of matters being outside of SkyCity's
control. Such unexpected matters could result in
SkyCity's financial position and future performance
being adversely impacted.
SkyCity’s ability to demonstrate fiscal resilience
during these times is critical to maintaining long
term investor and regulatory confidence.
Loss of 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 suspension, cancellation or expiry
of the Auckland casino licence, would have a
significant negative impact on SkyCity.
The suspension, cancellation or expiry of any of
SkyCity’s other casino licences would also have a
negative impact on SkyCity.
SkyCity also maintains close and transparent
relationships with its lenders (including banks and
United States private placement noteholders).
In June 2020, SkyCity announced a comprehensive
funding plan to strengthen its balance sheet and
secure additional liquidity in response to the
uncertainty around the impacts of COVID-19. The
funding plan was successfully implemented in June
and July 2020 and ensured that SkyCity had an
appropriate level of equity capital for the medium
to long term and sufficient liquidity to fund its
committed investment in its two major projects in
Auckland and Adelaide.
In May 2021, as part of its ongoing capital
management strategy, SkyCity issued $175 million
of six-year, unsecured, unsubordinated, fixed rate
bonds – the proceeds of which were used to reduce
the SkyCity Group's drawings on its bank facilities.
Given the cautious economic outlook and that
significant risk and uncertainty still exists around
COVID-19, SkyCity continues to adopt a conservative
approach to capital management.
SkyCity has mitigated this risk by securing an
extension of the Auckland casino licence to
30 June 2048.
The SkyCity Adelaide casino licence currently runs
until 30 June 2085 and extensions to the Hamilton
and Queenstown casino licences are intended to be
sought in accordance with the renewal provisions
of the Gambling Act 2003 (New Zealand) in due
course.
In addition, SkyCity mitigates the risk by maintaining
a robust compliance culture and framework to
ensure compliance with licence conditions and
gaming legislation and regulations, and maintaining
engagement with the governments and regulators,
in each jurisdiction in which SkyCity operates.
SkyCity has an excellent history of compliance over
20 years and is committed to working cooperatively
with its regulators on matters of concern.
Risk Profile and Management
53
Material Exposure
Risk Management
Economic and Business Volatility
The general economic conditions in the markets
that SkyCity operates in, in addition to volatility
in certain parts of the business, can significantly
influence the financial performance of the
company.
To mitigate these risks, SkyCity continually monitors
its external environment, including the geo-political
and global economic landscape, and has a robust
liquidity management framework.
SkyCity also continually reviews the optimal mix for
its business activities to ensure it has a balanced
portfolio reflecting its risk appetite.
Customer and Innovation Risk
SkyCity recognises that it is important to consider
evolving customer demographics and preferences
in both its gaming and non-gaming operations,
including new offerings, technologies and
innovation.
To ensure SkyCity remains relevant to its customers,
key strategic projects are currently being
progressed, with a focus on emerging industry
trends and opportunities for leveraging new
technology and demographic changes.
Technology Risk
Technology represents a critical platform to
SkyCity’s business – not only for facilitating/enabling
its operations, but also mitigating cyber-threats and
ensuring compliance with regulatory and licence
requirements.
SkyCity’s operations are dependent on a number
of key systems. There is a risk that the security
of critical systems may be compromised and/or
information is accessed without authorisation,
deleted or corrupted, which could impact SkyCity’s
ability to operate critical systems and result in
costs to resolve or repair, potential downtime of
operations, potential breaches of privacy and/or
reputational impacts.
Master planning also continues to be progressed for
each of the SkyCity sites to explore opportunities
for food and beverage, new gaming spaces and
entertainment offerings.
To mitigate technology risk, SkyCity has invested
in a significant programme over recent years
to improve technology systems, infrastructure,
capability and data management, and to
improve cyber-resilience. SkyCity continues to
invest in these areas as required (particularly
around ensuring improved levels of ICT disaster
recovery preparedness) and to keep abreast of the
latest cybersecurity issues and security patches.
Additionally, there is a strong, ongoing focus on
technology project governance, risk management
and assurance.
A management-led Privacy and Cybersecurity
Steering Committee has been established to
govern the development of SkyCity’s privacy and
cybersecurity strategy and programme, prioritise
mitigation initiatives against the cybersecurity risk
matrix, prioritise the operational initiatives to lift
SkyCity’s security posture, and review and respond
to major cyber and privacy incidents and oversee
the proposed measures to prevent recurrence.
Penetration testing is undertaken regularly to
test system resilience and identify any security
vulnerabilities that could be exploited. Simulated
phishing emails are also regularly sent within the
organisation to raise security awareness amongst
employees.
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Risk Management
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Development and Project Risk
(including Return from Major Projects)
SkyCity has a significant project still underway (the
New Zealand International Convention Centre and
Horizon Hotel development in Auckland). Potential
project risks include project delays, supply chain
constraints and project cost overruns.
The COVID-19 pandemic has significant implications
for return on capital invested in major projects.
For example, the ongoing closure of Australian
interstate and international borders over the short
to medium future is expected to impact visitation
and occupancy for the recently opened SkyCity
Adelaide expansion project.
Health and Safety Risk
SkyCity has Health and Safety Risk Registers in
place that identify risks in two key categories – high
consequence/low frequency (being critical risks)
and low consequence/high frequency risks.
Due to the hospitality and retail focus of
SkyCity’s business, a high percentage of the
company’s health and safety risk falls into the low
consequence/high frequency category, which
includes risks such as slips and trips and cuts from
manual task related injuries.
SkyCity seeks to mitigate these risks by continually
monitoring progress by contractors against
contractual obligations, and maintaining robust
project management.
SkyCity has established strong governance and
oversight frameworks for both current and future
major growth projects. SkyCity also ensures
robust governance over capital allocation and
shareholder returns.
To mitigate critical risks (which include working at
heights, confined spaces, electrical, moving plant,
fire and explosion), SkyCity has in place extensive
safe systems of work to effectively control the
potential for an incident. Ongoing safety assurance
activities seek to test these controls and, where
appropriate, strengthen critical risk controls
ensuring SkyCity keeps its people and visitors safe.
SkyCity has harm prevention programmes in place
which are aimed at reducing minor injuries and
promoting wellness amongst its employees and
contractors.
SkyCity’s New Zealand properties are tertiary
accredited under the Accident Compensation
Corporation (ACC) Accredited Employers Programme
and its Adelaide site is a registered self-insured
employer. The company undertakes assurance
activities to maintain certifications and continually
improve its health and safety performance.
SkyCity is committed to delivering robust health
and safety standards to manage the ongoing risks
associated with COVID-19 and has developed and
implemented a COVID-19 Health Management
Framework for its business operations.
Both New Zealand and Australia have achieved
relative success in ensuring a low level of infection
and mortality compared to many other countries
around the world. However, the ongoing health and
safety risks of COVID-19 have significantly altered
the commercial landscape for SkyCity's land-based
properties in both jurisdictions.
Given the nature of SkyCity’s operations, SkyCity does not have a material exposure to environmental risks
in its usual day-to-day operations. SkyCity nonetheless recognises the criticality of climate related risks to its
operations. Further details on these risks and SkyCity's approach to climate change risk management and
reporting are outlined on page 122 of this annual report.
Risk Profile and Management
55
Tackling Financial Crime
SkyCity is committed to ensuring that it provides
entertaining and profitable, yet safe and
responsible, experiences and environments.
The New Zealand Anti-Money Laundering and
Countering Financing of Terrorism Act 2009
and the Australian Anti Money Laundering and
Counter Terrorism Financing Act 2006 (Cth) place
obligations on certain organisations, including
financial institutions and casinos, to detect and
deter money laundering and terrorism financing
and requires them to take appropriate measures
to guard against money laundering and terrorism
financing. Money laundering is how criminals
disguise the illegal origins of their money. Financers
of terrorism use similar techniques to money
launderers to avoid detection by authorities and to
protect the identity of those providing and receiving
the funds.
At SkyCity, we place great importance on our
anti-money laundering (AML) and countering
financing of terrorism (CFT) obligations throughout
every part of the organisation.
As a casino operator and reporting entity for the
purposes of the AML/CFT legislation in New Zealand
and Australia, SkyCity has the following measures in
place across its land-based casinos:
an assessment of the money laundering and
financing of terrorism risks that SkyCity could
face in the course of running its business;
AML/CFT Programmes in New Zealand and
Australia that include procedures to detect,
deter, manage and mitigate money laundering
and the financing of terrorism;
an AML Compliance Officer appointed in each
of New Zealand and Australia to administer and
maintain the AML/CFT Programmes;
•
suspicious activity reporting, threshold
transaction reporting and auditing of systems
and processes. For example, SkyCity reports any
suspicious activity that may be related to illegal
activity, and cash transactions over $10,000,
to the New Zealand Police and the Australian
Transaction Reports and Analysis Centre
(AUSTRAC) (as applicable); and
•
regular internal and external audits and reviews
of AML/CFT compliance.
The Audit and Risk Committee is a dedicated Board
committee that has responsibility for ensuring
compliance with AML/CFT requirements in New
Zealand and Australia and discusses, as a standing
agenda item at each scheduled Audit and Risk
Committee meeting, matters relating to the Group’s
AML/CFT obligations.
Within the business, a specialist AML team oversees
the Group’s ongoing compliance with AML/CFT
requirements and a management-led AML Senior
Management Group provides enhanced governance
to AML/CFT related matters across the Group
and supports the effective implementation of
SkyCity’s AML/CFT obligations across the Group.
SkyCity senior managers and employees engaged
in AML/CFT related duties also receive training on
AML/CFT matters.
SkyCity’s online gaming site, SkyCity Online
Casino, is operated from Malta in partnership with
international iGaming company Gaming Innovation
Group Inc (GiG). GiG has in place an AML/CFT Policy
that includes procedures to detect, deter, manage
and mitigate money laundering and the financing
of terrorism, customer due diligence processes
(including customer identification and verification
of identity), and suspicious activity reporting,
auditing and annual reporting systems and
processes. A Money Laundering Reporting Officer
administers and maintains the AML/CFT Policy.
customer due diligence processes, including
customer identification and verification
of identity;
We continue to explore available technology
solutions and seek expert advice where required to
deliver best practice AML/CFT standards at SkyCity.
•
•
•
•
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Senior Management
Governance & Oversight
• An AML Senior Management
Group meets regularly to
discuss AML issues
relevant to the Group
• An Adelaide AML
Senior Management
Committee oversees
AML issues specific
to the Adelaide operations
Learning &
Development
AML training
programmes
for staff
Board Governance
& Oversight
SkyCity Board and Audit
and Risk Committee
oversight of anti-money
laundering (AML) compliance
SkyCity
Anti-Money
Laundering
Control
Framework
AML
Roles & Duties
A specialist AML team
(including designated
AML Compliance Officers)
within the business
oversees the Group’s
ongoing day-to-day
compliance with
AML requirements
External
Advisors
Assisted by
experienced
external
AML advisors
AML
Programmes
AML Programmes
established in New Zealand
and Adelaide outlining
SkyCity’s AML processes
and procedures for
customer screening,
transaction monitoring,
regulatory reporting,
customer due diligence and
enhanced due diligence
(subject to regular internal
and external review)
AML Risk
Assessment
Each AML Programme
contains a risk
assessment identifying
the money laundering
and terrorism financing
risks that SkyCity may
reasonably expect to face
in the course of its business
Independent
Assurance
An independent review
is carried out every
2–3 years in New Zealand
and Adelaide to monitor
compliance with the
AML Programmes
IT Systems
• Internal IT systems
(Bally and iTrak) used for
AML record keeping
• An external specialist
AML system (Jade ThirdEye)
used to facilitate customer
screening and reporting
Risk Profile and Management
57
Increased Focus on the Casino Industry
Over the last financial year, there has been an
increased focus on casino operators in Australia as a
consequence of the New South Wales Independent
Liquor and Gaming Authority’s inquiry into the
operation of Crown Casino in Sydney, the Royal
Commission established by the Western Australian
Government to inquire into and report on the affairs
of the Crown Casino Perth and related matters and
the Royal Commission established by the Victorian
Government to inquire into the suitability of Crown
Melbourne Limited to hold a casino licence.
These inquiries have led to increased focus and
scrutiny on SkyCity and other casino operators and
could lead to more stringent regulations for casino
operators in Australia and New Zealand in relation
to money laundering and other financial crimes.
As a result, there are heightened expectations
on SkyCity around its obligations under AML/CFT
legislation and regulations, monitoring cash and
third-party transactions, and undertaking enhanced
due diligence checks on higher risk customers.
Banks in both New Zealand and Australia are also
signalling to casinos that they have a significantly
reduced risk appetite for accepting cash deposits
from higher risk customers.
In April 2021, SkyCity announced, following
completion of a strategic review of its International
Business division, that it would permanently
cease dealing with all junket operators, effective
immediately, and continue to operate its
International Business division under a revised
operating model where SkyCity will deal directly
with International Business patrons after
appropriate know your customer and customer due
diligence requirements are satisfied.
AUSTRAC Enforcement Investigation
In June 2021, SkyCity was informed by AUSTRAC’s
Regulatory Operations Team that it had
identified potential serious non-compliance by
SkyCity Adelaide Pty Limited with the Australian
Anti-Money Laundering and Counter-Terrorism
Financing Act 2006 and Anti-Money Laundering
and Counter-Terrorism Financing Rules Instrument
2007 (No. 1) and it had, consequently, referred the
matter to AUSTRAC’s Enforcement Team which
had initiated a formal enforcement investigation
into the compliance of SkyCity Adelaide. The
potential non-compliance includes concerns
relating to ongoing customer due diligence,
adopting and maintaining an AML/CTF Programme
and compliance with Part A of an AML/CTF
Programme. These concerns were identified in
the course of a compliance assessment which
AUSTRAC commenced in September 2019 focusing
on SkyCity Adelaide’s management of customers
identified as high risk and politically exposed
persons over the periods from 1 July 2015
– 30 June 2016 and 1 July 2018 – 30 June 2019.
AUSTRAC has made clear that it has not made
a decision regarding the appropriate regulatory
response that it may apply to SkyCity Adelaide,
including whether or not enforcement action will
be taken.
The SkyCity Board and management team take the
concerns raised by AUSTRAC very seriously and took
immediate steps to investigate and appropriately
address AUSTRAC's concerns, including:
•
•
establishing a Steering Committee (led by
the Chair of the SkyCity Board) to oversee
SkyCity Adelaide's engagement with AUSTRAC
throughout the investigation process and its
response to addressing the concerns raised by
AUSTRAC; and
engaging an independent expert to conduct
a comprehensive review of SkyCity Adelaide’s
AML/CTF Programme and broader AML function
in light of the concerns raised by AUSTRAC to
assist SkyCity where appropriate to enhance
and improve the AML/CTF Programme and AML
function. SkyCity has also devoted substantial
further resources to reviewing these matters
with a view to identifying and implementing
appropriate improvements to SkyCity’s AML
function. These reviews have not been limited
in their scope to matters specifically raised
by AUSTRAC - they have also been directed
to identifying areas where SkyCity Adelaide’s
AML/CTF Programme and AML function could be
enhanced or uplifted more generally.
SkyCity will continue to fully co-operate with
AUSTRAC in relation to its inquiries and with its
investigation into SkyCity Adelaide.
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Risk Profile and Management
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Our Board
ROB CAMPBELL
Chair
SUE SUCKLING
Director
Member of the Audit and Risk Committee
Member of the People and Culture Committee
Member of the Sustainability Committee
Chair of the Governance and Nominations
Committee
Appointed a director of SkyCity in June 2017
and Chair of the SkyCity Board in January 2018
Rob is currently the Chair of Tourism Holdings
Limited, New Zealand Rural Land Company Limited,
Ara Ake Limited and WEL Networks Limited and
a director of Ultrafast Fibre Limited. Rob has over
30 years’ experience in capital markets and is a
director of, or advisor to, a range of investment fund
and private equity groups in New Zealand, Australia,
Hong Kong and the United States of America. He
was made a Companion of the New Zealand Order
of Merit (CNZM) in the New Year Honours 2020 list
for his services to governance and business.
Rob holds a Bachelor of Arts with First Class
Honours in Economic History and Political Science
and a Master of Philosophy in Economics.
Chair of the Sustainability Committee
Member of the Governance and Nominations
Committee
Appointed a director of SkyCity in May 2011
Sue Suckling is an independent director and
consultant with over 25 years in commercial
corporate governance. She is recognised for her
leadership in the technology innovation space and
her deep governance experience.
Sue is currently the Chair of the Insurance
& Financial Services Ombudsman Scheme
Commission, Jacobsen Holdings Limited, 5th
Element Limited, Eat My Lunch Limited, Rubix
Limited, Jade Software Corporation Limited and
Taska Prosthetics Limited. Previous governance
roles include chairing NIWA, the New Zealand
Qualifications Authority and AgriQuality Limited,
and as a director of Restaurant Brands Limited,
Westpac Investments Limited and the New Zealand
Dairy Board. She holds an OBE for her contribution
to New Zealand business.
Sue is a Chartered Fellow of the New Zealand
Institute of Directors and a Companion of the Royal
Society of New Zealand.
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JENNIFER OWEN
Director
MURRAY JORDAN
Director
Chair of the Audit and Risk Committee
Member of the People and Culture Committee
Member of the Governance and Nominations
Committee
Appointed a director of SkyCity in December 2016
Chair of the People and Culture Committee
Member of the Audit and Risk Committee
Member of the Sustainability Committee
Member of the Governance and Nominations
Committee
Appointed a director of SkyCity in December 2016
Jennifer Owen has more than 30 years’ experience
in the areas of accountancy, audit, finance, treasury
and equities research. She has specific specialist
knowledge of the New Zealand and Australian
gaming and entertainment sectors through her
previous roles as Director of Equities Research
at Citigroup Global Markets, with a specialist
focus on the Australasian gaming sector, and as
Equities Research Analyst at Macquarie Group
focusing on the tourism/leisure sector, and a wide
network within the gaming industry and a strong
understanding of industry and investor issues.
Jennifer is currently a Principal of Owen Gaming
Research, an independent research firm specialising
in the gaming and wagering markets, and a director
of Aspire Child Care (Mascot) Pty Limited.
Jennifer holds a Bachelor of Business from the
Queensland Institute of Technology and a Master
of Business Administration from the University of
Queensland, is a graduate of the Australian Institute
of Company Directors’ Diploma course and is a
member of Chartered Accountants Australia and
New Zealand.
Murray Jordan is currently a director of Metlifecare
Limited, Chorus Limited, Metcash Limited,
Stevenson Group Limited, Asia Pacific Village
Group Limited, Southern Cross Benefits Limited,
Southern Cross Hospitals Limited and the Southern
Cross Medical Care Society. He is also a trustee of
Southern Cross Health Trust, Starship Foundation,
Foodstuffs’ Members Protection Trust and The
Foodstuffs Co-operative Perpetuation Trust.
Prior to embarking on a governance career in
2015, he held various senior management roles at
Foodstuffs Limited from 2004 to 2015, including
Managing Director of Foodstuffs North Island and
Managing Director and General Manager Retail,
Sales and Performance of Foodstuffs Auckland
Limited. In 2013, he led the merger of the Auckland
and Wellington businesses of Foodstuffs to create
what is now known as Foodstuffs North Island and
established and oversaw the integration programme.
His early career was in the property sector, including
as General Manager of Telecom NZ’s property
business and General Manager of AMP Capital
Investors NZ Limited’s property portfolio. Murray has
a Master’s degree in Property Administration from
the University of Auckland.
Murray will retire from the SkyCity Board effective
from 30 September 2021.
61
SILVANA SCHENONE
Director
JULIAN COOK
Director
Member of the People and Culture Committee
Member of the Sustainability Committee
Member of the Governance and Nominations
Committee
Member of the Audit and Risk Committee
Member of the People and Culture Committee
Member of the Governance and Nominations
Committee
Appointed a director of SkyCity in June 2021
Appointed a director of SkyCity in June 2021
Silvana Schenone is a corporate partner at
MinterEllisonRuddWatts in Auckland where
she leads the firm’s Corporate division. She has
extensive expertise in mergers and acquisitions,
private equity investments, takeovers, scheme
of arrangements, capital raisings and corporate
governance matters.
Silvana is recognised internationally for her
commercial acumen and negotiation skills, and
is a thought leader on corporate governance
issues. Prior to joining MinterEllisonRuddWatts in
2007, Silvana was a corporate lawyer at Sullivan
& Cromwell LLP in New York and prior to that at
Cariola Diez Pérez-Cotapos in Chile.
Committed to championing greater diversity,
Silvana is a founding member of OnBeingBold.
She is also a Board member of the New Zealand
Takeovers Panel and holds a Master of Laws from
Harvard University.
Julian Cook was Chief Executive Officer of
Summerset Group Holdings Limited from 2014 to
March 2021 and, prior to becoming Chief Executive
Officer, Summerset’s Chief Financial Officer where
he oversaw the company’s transition to become a
publicly listed company on the New Zealand and
Australian stock exchanges.
Prior to joining Summerset in 2010, Julian was
an Associate Director at Macquarie Group where
he gained significant experience in the energy,
industrial services, tourism and aged care sectors
over a 12-year career.
Julian is currently a director of WEL Networks
Limited and holds a Master of Finance from
Victoria University and a Master of Science from the
University of Waikato.
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Our Board
63
CHAD BARTON
Director
Member of the Audit and Risk Committee
Member of the People and Culture Committee
Member of the Governance and Nominations
Committee
Appointed a director of SkyCity in June 2021
Chad Barton has extensive experience across
finance, capital markets, mergers, acquisitions and
property development. He is currently the Interim
Chief Financial Officer of Nuix Limited, an ASX-listed
global software company, and was the Chief
Financial Officer of ASX-listed companies The Star
Entertainment Group Limited from 2014 to 2019
and Salmat Limited from 2009 to 2014. Prior to this,
he was Chief Financial Officer of the Australia and
New Zealand business of Electronic Data Systems
from 2006 to 2009.
Chad, as founding Chairperson, established Women
in Gaming & Hospitality Australasia to achieve
gender equity and support the development and
success of women in the gaming industry.
Chad is currently a director of NeuRA (Neuroscience
Research Australia) Foundation and a member of
the Australian Institute of Company Directors and
Chartered Accountants ANZ and holds a Bachelor
of Business from the University of Technology
in Sydney.
Our Senior
Leadership
Team
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FROM LEFT TO RIGHT:
Nirupa George, Claire Walker, Callum Mallett, Matt Ballesty,
Michael Ahearne, Julie Amey, Jo Wong, Simon Jamieson and Glen McLatchie
Absent: David Christian
Our Senior Leadership Team
65
MICHAEL AHEARNE
Chief Executive Officer
CALLUM MALLETT
Chief Operating Officer New Zealand
Michael was appointed Chief Executive Officer in
November 2020. He joined SkyCity in December
2017 as Group Chief Operating Officer and was
responsible for driving value across SkyCity’s
properties in New Zealand and Australia. Michael
also led SkyCity’s online gaming strategy, including
overseeing the establishment of SkyCity Online
Casino in 2019.
Michael’s extensive global experience in the gaming
industry spans over 20 years across multiple
sectors, including land-based and online casinos,
as well as retail and online sports betting. Prior to
joining SkyCity, Michael held a number of senior
commercial, operational and product leadership
roles at Paddy Power Betfair, one of the world
leaders in sports betting and gaming. Michael was
formerly the Chief Operating Officer for Aristocrat in
the Australia and New Zealand regions and has held
several senior management positions at The Star
Casino in Sydney.
Michael is a qualified accountant and holds
a Master of Business Administration from the
University of Technology, Sydney.
JULIE AMEY
Chief Financial Officer
Julie joined SkyCity as Chief Financial Officer
in May 2021 and is responsible for the financial
management of SkyCity, including reporting,
treasury, risk management and corporate
development. She also oversees SkyCity’s
Information and Communications Technology
function and helps to drive the strategic direction of
the SkyCity Group.
Julie joined SkyCity from Shell Australia where she
held the role of Vice President Finance Integrated
Gas. She has also held a number of senior finance
roles with the Shell Group around the world since
2001, including as Vice President Finance Qatar
Shell, Chief Financial Officer for Shell & Turcas A.S.
Turkey and Business Finance Manager and Financial
Controller for Upstream Middle East in the United
Arab Emirates. Prior to joining Shell, she held
finance roles at Fletcher Challenge Energy, BBC
Worldwide Publishing and Deloitte & Touche.
Julie is a chartered accountant and holds a
Bachelor of Management Studies from the
University of Waikato.
Callum was appointed Chief Operating Officer
New Zealand in February 2021 and has operating
responsibility for SkyCity’s New Zealand
businesses, including the day-to-day operations
of SkyCity Auckland.
Callum has significant gaming and hospitality
experience having held a number of senior roles at
SkyCity since joining in 2009, including as General
Manager of SkyCity Darwin, General Manager
SkyCity Auckland Hotels, Convention Centre and
Sky Tower, and Executive General Manager of
Hospitality for SkyCity Auckland.
Prior to joining SkyCity, Callum held numerous
senior leadership roles across the hospitality,
retail and financial investment sectors. He holds
a Bachelor of Commerce from Victoria University
of Wellington, and has completed studies with
Cornell University, The London Business School and
the University of Nevada.
DAVID CHRISTIAN
Chief Operating Officer Australia
David was appointed
Chief Operating Officer
Australia in February
2021 and is responsible
for SkyCity’s Adelaide
business and overseeing
the Australian interstate
gaming business.
David has more than
30 years’ experience in
hospitality, hotel and
casino management,
including working in several Australian States and
Singapore. He has held a number of senior roles
during his career with SkyCity since joining in 2005,
including General Manager SkyCity Adelaide (where
he was responsible for overseeing the construction
and opening of the A$330 million Adelaide
expansion development), General Manager
SkyCity Darwin, General Manager SkyCity Auckland
and General Manager SkyCity Hamilton.
David holds a Master of Business Administration
from Deakin University, Victoria, and a Diploma
of Hospitality Management from Drysdale House,
Tasmania.
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CLAIRE WALKER
Chief People and Culture Officer
SIMON JAMIESON
General Manager NZICC
Since joining SkyCity in September 2007, Simon
has held a number of roles, including General
Manager SkyCity Adelaide, General Manager Hotels
SkyCity Auckland and Acting General Manager
SkyCity Auckland.
As General Manager NZICC, Simon oversees
the development of SkyCity’s New Zealand
International Convention Centre and Horizon Hotel
project in Auckland. He is also responsible for
SkyCity’s development projects in New Zealand and
health and safety.
With more than 35 years’ experience in large-scale
hospitality businesses, Simon brings a wealth
of commercial, property, project and tourism
experience to the SkyCity business.
GLEN MCLATCHIE
Chief Information Officer
Glen joined SkyCity in 2016 as Chief Information
Officer and is responsible for lifting the digital
capability of the organisation to be able to
respond to future innovation initiatives and
growth strategies.
Prior to joining SkyCity, Glen was General Manager
ICT with Meridian Energy where he transformed
and modernised their aging technology footprint
and digital capability. He has over 25 years of
technology experience from across several
industries globally, having worked in and out of the
UK, France, USA, Australia, Malaysia, India, China and
the Middle East.
Glen is a member of the Institute of Directors in
New Zealand, a board member of Auckland charity
Big Brothers Big Sisters and an advisory board
member of Cyber Research NZ. Glen holds a Master
of Information Systems from Swinburne University,
Australia, and a Bachelor of Business Studies from
Massey University, New Zealand.
Claire was appointed in August 2016, bringing
more than 20 years’ experience in human resource
management gained across a number of different
sectors, and holds the position of Chief People
and Culture Officer. She is responsible for leading
the development and implementation of best
practice people and culture strategy across the
SkyCity Group and has executive responsibility for
sustainability at SkyCity.
Prior to joining SkyCity in 2016, Claire was Chief
People Officer at Sanford Limited where she
established the human resources function and led
the sustainability and integrated reporting activities
for the organisation and, prior to that, Claire led the
human resources and employee relations function
for the SkyCity Auckland business. Claire has also
held senior human resource roles with Carter Holt
Harvey and Downer after several years working in
the education sector.
Claire holds a governance role on the advisory board
of the Sustainable Business Council in New Zealand.
JO WONG
General Counsel and Company Secretary
Jo joined SkyCity as Senior Legal Counsel in
January 2009 and was appointed as General
Counsel and Company Secretary in September
2016. She is responsible for SkyCity’s legal, company
secretarial, regulatory affairs and anti-money
laundering functions and is designated as SkyCity’s
Chief Privacy Officer.
Jo has over 20 years’ experience in both private
practice and in-house legal roles. Before joining
SkyCity in 2009, she held General Counsel and
Group Corporate Counsel roles in the New Zealand
financial services industry and was a Senior Solicitor
at Russell McVeagh, one of the leading law firms in
New Zealand.
Jo was a finalist in the In-House Lawyer of the
Year category in the 2019 and 2020 New Zealand
Law Awards and was recognised in New Zealand
Lawyer’s 2019 and 2020 In-House Leaders lists as
one of the leading lawyers across New Zealand. Jo is
a graduate of the 2017 Global Women Breakthrough
Leaders Programme, is a member of New Zealand
Asian Leaders and holds a Bachelor of Laws and
a Bachelor of Arts from Victoria University of
Wellington.
Our Senior Leadership Team
67
MATT BALLESTY
Chief Casino Officer
NIRUPA GEORGE
Chief Corporate Affairs Officer
Matt was appointed Chief Casino Officer in
February 2021 and is responsible for managing
the casino operations at SkyCity’s largest
property in Auckland and providing strategic
direction on all gaming products across the
SkyCity Group.
Matt has over 25 years’ experience in the gaming
and hospitality sector having held senior
executive positions in Australia, New Zealand,
Macau and Canada. Matt joined SkyCity originally
in 2005, leading the Auckland gaming machines
business and returned in 2013 as General
Manager Group Gaming Strategy after gaining
international gaming and hospitality experience
in Macau.
Nirupa joined SkyCity as Chief Corporate Affairs
Officer in June 2021 and is responsible for leading
SkyCity’s corporate affairs activities, including
government, community and industry stakeholder
relations and SkyCity’s public policy and advocacy.
Before joining SkyCity, Nirupa was Chief of Staff to the
Mayor of Auckland responsible for running his office
and executing the Mayor’s political priorities. Prior
to this, she ran Mayor Phil Goff’s successful mayoral
campaign in 2016 and worked in Parliament as a
Political and Media Advisor. Early in her career, Nirupa
was a Senior Solicitor specialising in refugee and
humanitarian law.
Nirupa is currently a board member of Amnesty
International Aotearoa New Zealand and holds a
Bachelor of Laws and a Bachelor of Health Science
from the University of Auckland.
BOARD AND SENIOR LEADERSHIP TEAM STRUCTURE
SkyCity is committed to maintaining the highest standards of corporate behaviour and responsibility
and has adopted governance policies and procedures reflecting this. Our corporate governance
framework ensures Board accountability to shareholders and provides for an appropriate delegation of
responsibilities to the Chief Executive Officer and Senior Leadership Team.
The SkyCity Board has responsibility for the affairs and activities of the company, which in practice
is achieved through delegation to the Chief Executive Officer and Senior Leadership Team who are
charged with the day-to-day leadership and management of the company. Further information on
SkyCity’s corporate governance framework is set out on pages 128 – 137 of this annual report. SkyCity’s
constitution and relevant charters and policies are available in the Governance section of the company’s
website at www.skycityentertainmentgroup.com.
SKYCITY BOARD
STANDING BOARD COMMITTEES
Governance and
Nominations
Committee
Audit and Risk
Committee
People and Culture
Committee
Sustainability
Committee
CHIEF EXECUTIVE OFFICER
Michael Ahearne
SENIOR LEADERSHIP TEAM
Chief
Financial
Officer
Julie Amey
Chief Operating
Officer
New Zealand
Callum Mallett
Chief Operating
Officer
Australia
David Christian
Chief People
and Culture Officer
Claire Walker
General Counsel and
Company Secretary
Jo Wong
General
Manager
NZICC
Simon Jamieson
Chief Information
Officer
Glen McLatchie
Chief
Casino Officer
Matt Ballesty
Chief
Corporate Affairs
Officer
Nirupa George
L
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AD-HOC BOARD SUB-COMMITTEES
(established to oversee SkyCity’s major projects)
SkyCity Hamilton is located on the banks of the Waikato River.
69
In July 2021, the Sky Tower
was once again awarded the
Qualmark Gold Award.
A Gold Award recognises
the best sustainable tourism
businesses in New Zealand and
identifies businesses leading
the way in making the
New Zealand tourism industry
a world-class sustainable
visitor destination.
Sustainability
At SkyCity, we recognise that
sustainability is critical to all levels of
our business and operations.
Part of being a responsible business
is understanding the impacts arising
from our operations. The aim of this
understanding is to enable positive
impacts to be fostered and negative
impacts to be at the very least mitigated
and ideally abated. This is particularly
true when there is potential for harm to
either people or the environment.
As a casino operator, we must continually focus on
our social licence to operate. SkyCity is committed
to maintaining the highest levels of sustainability
objectives and practices, with priority given to
minimising the impacts associated with problem
gambling as an area of primary focus.
Our sustainability initiatives are focused on doing
good for our customers, our employees, our
communities, our suppliers, our environment and
our shareholders. Our objective is to ensure that our
strategic decisions strengthen the communities
we operate in and provide environments and
opportunities for our customers, suppliers and staff
to enjoy, to be entertained and to be safe.
Setting Our Sustainability Framework
and Strategy
In 2016, after engaging with both internal and
external stakeholders on which sustainability issues
were most relevant to SkyCity’s business, SkyCity
adopted its first set of sustainability goals, priority
actions and targets and developed a materiality
matrix to identify a set of priority impact areas and
issues for the business. These were subsequently
refined in 2018 to incorporate global trends and
local market conditions in our approach to, and
assessment of, risks and opportunities, culminating
in a refreshed set of sustainability pillars.
In early 2020, we commenced a review of our
materiality matrix to prioritise the issues most
important to our business and stakeholders and
to ensure the issues were appropriately weighted
in our sustainability strategy. As part of this review,
internal and external stakeholders were asked
to prioritise issues material to SkyCity’s business
from a long list of potentially material issues via
a desktop review. SkyCity’s sustainability strategy
was subsequently refreshed to reflect the priorities
identified in that review and to incorporate
financial performance alongside social and
environmental performance.
“
Part of being a
responsible business
is understanding the
impacts arising from
our operations
”
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Our Material Issues
(as prioritised by our internal and external stakeholders)
Responsible
hosting
Employee
engagement
Customer
experience
Return on
investment
Operational
efficiency
Theft &
fraud
Business
continuity
Diversity
Organisational
structure
Health &
safety
Regulatory
risk
Business
model
Cyber-
security
Sustainable
portfolio
Climate
change
Community
& Iwi
engagement
Community
investment
i
w
e
V
s
s
e
n
i
s
u
B
4.60
4.50
4.40
4.30
4.20
4.10
Growth
4.00
Technology
innovation
3.90
3.80
3.70
3.60
3.00
3.20
3.40
3.60
3.80
4.00
4.20
4.40
4.60
Stakeholder View
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
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Despite the challenges presented by the COVID-19
global pandemic, SkyCity’s current sustainability
strategy and strategic pillar goals, plans and
priorities (as validated by the feedback from our
stakeholders as part of the materiality review
in 2020) remain relevant today. We continue to
focus on embedding our sustainability pillars
into all levels of the organisation and in the way
SkyCity operates.
The material issues identified have influenced
our focus on managing SkyCity’s risks and have
informed our sustainability strategy and priorities,
which underpin our reporting on our non-financial
performance.
Governance
The Sustainability Committee is a dedicated
Board committee that assists the SkyCity Board to
contribute to SkyCity’s vision and strategic plan by
ensuring that the company’s sustainability strategy
is best practice and supports the highest level
of sustainability objectives, with priority given to
minimising the impacts associated with problem
gambling as an area of primary focus.
The responsibilities of the Sustainability Committee
include reviewing and recommending to the
Board the sustainability strategy, principles,
policies and practices of the company to
ensure alignment with the company’s strategic
objectives and performance, and reviewing and
reporting to the Board on the company’s impacts
associated with SkyCity’s sustainability pillars.
The guiding principles that underpin SkyCity’s
sustainability activities and the role, responsibilities,
composition, structure and membership of
the Sustainability Committee are set out in the
Sustainability Committee Charter (available in
the Governance section of the company’s website
at www.skycityentertainmentgroup.com), which
is reviewed and approved by the Board on an
annual basis.
The Board and Sustainability Committee maintain
operational supervision of SkyCity’s sustainability
activities through clearly defined policy and
effective management. Claire Walker, SkyCity’s
Chief People and Culture Officer, has executive
responsibility for SkyCity’s sustainability activities
with key operational personnel within the business
having day-to-day responsibility for the activities.
Our Pillars
The following pages outline our priorities, objectives
and activities for each of the sustainability pillars –
‘Our Customers’, ‘Our People’, ‘Our Communities’,
‘Our Suppliers’ and ‘Our Environment’, outline the
activities undertaken to support our sustainability
strategy, and provide a summary of our
achievement against our priorities for the financial
year ended 30 June 2021. Commentary on the ‘Our
Shareholders’ pillar is provided in an overarching
way throughout the entirety of our financial and
non-financial disclosures.
The areas identified as priority issues are those
considered highly material for SkyCity’s business
and for our stakeholders. Our objectives and
activities set out what we intend to do both in our
business and our communities. They are intended
to challenge the business and staff and provide a
dedicated framework for measuring progress over
the coming years. We are committed to measuring
performance on each goal, through specific key
performance indicators, which will ensure the
business strives to keep pace with internal and
external expectations.
FTSE Russell (the trading name of FTSE International Limited and Frank
Russell Company) has confirmed that SkyCity Entertainment Group
has been independently assessed according to the FTSE4Good criteria,
and has satisfied the requirements to become a constituent of the
FTSE4Good Index Series.
Created by the global index provider FTSE Russell, the FTSE4Good
Index Series is designed to measure the performance of companies
demonstrating strong Environmental, Social and Governance (ESG)
practices. The FTSE4Good indices are used by a wide variety of market
participants to create and assess responsible investment funds and
other products.
Sustainability
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Our Sustainability Vision
To be a sustainable business, we must be a responsible business actively
protecting and promoting the people we serve and the places we share,
whilst creating value for our shareholders.
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P
nity
u
m
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o
C
s i b l e
n
o
B e r e s p
O
f
f
e
r
a
g
r
e
a
t
a
n
d
s
a
f
e
p
l
a
c
e
t
o w
ork
P
e
o
ple
P
R
O
F
I
T
S
h
a
r
e
h
o
l
d
e
r
s
Suppliers
l e a ders in our com
m
u
niti
e
s
t
s
r
fi
s
r
e
m
o
st
u
A l w a ys put c
v ir o n
n
E
m ent
Customers
PLACE
PEOPLE
PLACE
PROFIT
Inspire our people
Protect our environments
Create sustainable value
Create a great place to work
where people are empowered
to grow and achieve
Respect and protect our
physical environments for
future generations
Ensure business continuity through
operational efficiency, sustainable
investment and customer focus
Great, safe place to work
Sustainable success
Reliable return on investment
Sustainability
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CUSTOMERS | Always put customers first | Be responsible leaders in our community
Ensure safe and enjoyable experiences for our customers, employees and communities
Our Priorities
Our Plan
Leading host
responsibility
• Maintain industry-leading harm minimisation practices
• Host Responsibility Programme performance and problem
gambling indicators
• Industry benchmarking of SkyCity’s Host Responsibility
Programmes
• Leverage technology to enhance the identification of actual
or potential problem gamblers and act on that information
Material Issues
• Responsible hosting
• Customer experience
• Cybersecurity and
data privacy
• Regulatory risk
Customer experience
and engagement
• Employee Host Responsibility training completion rates
• Accelerate customer experience and engagement through
improved data, digital and loyalty capability
Community awareness
of harm minimisation
practices
• Increase in community knowledge and understanding of
SkyCity’s harm minimisation practices
• Customer data security and privacy practices
SUPPLIERS | Be responsible leaders in our communities
Source ethically and locally
Our Priorities
Our Plan
Low carbon
supply chain
• Encourage suppliers to set science-based targets and strive
to achieve zero carbon by 2050
Material Issues
• Ethical sourcing
Buy local
and seasonal
• Serve meals from a sustainable supply chain
to employees and customers
• Source animal products responsibly (eg. free range eggs)
• Track and report on local vs international
procurement spend
• Support supplier diversity (indigenous economy)
and working conditions
Connect to the
circular economy
• Remove single-use plastics from our supply chain
Progress initiatives to
eliminate modern slavery
• Develop and maintain a modern slavery statement for the
purposes of the Modern Slavery Act 2019 (Cth)
Ethical supply chain
• Progressively work towards an end-to-end understanding
of our supply chain, ensuring that all suppliers meet the
standards of our Ethical Sourcing Code
ENVIRONMENT | Be responsible leaders in our communities
Offer a great and safe place to work
Active commitment to reducing our environmental footprint
Our Priorities
Our Plan
Climate change/
emissions reduction
• Measure, report and offset SkyCity’s
carbon emissions
Material Issues
• Climate change
Reducing waste
• Reduction of waste and diversion from landfill
Employee activation
• Employee-led Green Fund
Reduction in water use
• Implement initiatives to reduce water use
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COMMUNITY | Be responsible leaders in our communities
Serve a social purpose by investing in our local economies and communities
Material Issues
• Community investment
• Community and Iwi
engagement
Our Priorities
Our Plan
Economic
contribution
• Measure and evaluate SkyCity’s economic contribution
to the communities in which we operate, through local
procurement spend
Building communities
by developing people
• In collaboration with the SkyCity Community Trusts, make
a positive impact on youth development, employment and
career paths
Investing in our
communities through the
SkyCity Community Trusts
in New Zealand
Developing deeper
connections with Iwi and
indigenous peoples
• Community based partnerships that achieve sustainable
social change
• Report on community outcomes through narrative and case
studies accompanied by quantitative results
• Build SkyCity’s confidence and capability to engage
authentically with Māori and indigenous peoples
PEOPLE | Offer a great and safe place to work
A great place to work where our people are empowered to grow and achieve
Our Priorities
Our Plan
Employee engagement
• Employee engagement pulse checks
Meaningful career and
development pathways
• Internal promotions and development opportunities
Diversity, inclusion
and belonging
Health, safety and
wellbeing
• Leverage the competitive advantage SkyCity’s diverse
workforce provides
• Ethnicity and gender reporting, including gender equality
of pay, and representation
• Health, safety and wellbeing scorecards
Material Issues
• Employee engagement
• Meaningful career and
development pathways
• Diversity, inclusion
and belonging
• Health, safety and
wellbeing
SHAREHOLDERS | Improve our operating performance | Optimise our
existing portfolio | Grow and diversify our business | Always put customers first
Create value and maintain our social licence to operate
Our Priorities
Our Plan
Material Issues
Business continuity
• Strengthen and maintain good relationships with all
stakeholders, including shareholders and debt providers
Improve operating
performance
• Grow gaming visitation and spend and develop
complementary activities that drive gaming
Optimise existing portfolio
• Achieve operating efficiencies which protect and
grow margins
• Business continuity
• Return on investment
• Operational efficiency
• Sustainable portfolio
• Regulatory risk
Grow and diversify
our business
• Develop digital businesses and leverage investment
in technology
• Capital allocation balances short term returns and
long term sustainability
• Ownership of assets balances strategic control and return
on capital
• Monitor and evaluate regional merger and acquisition
opportunities in our industry
Sustainability
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Be responsible
hosts
Ensure safe and enjoyable
experiences for our customers,
employees and communities.
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Our Customers
At our core, SkyCity is a provider of casino
entertainment. The promotion of responsible
gaming and safe consumption of alcohol are
therefore topics at the heart of our business.
We take our responsibilities to minimise risk and
harm from problem gambling very seriously.
Priority Issues
FY21 Performance Highlights
•
•
•
Leading host responsibility
Customer experience and
engagement
Community awareness of harm
minimisation practices
•
•
Key Stakeholders
• Customers (existing and potential)
• Department of Internal Affairs
• Gambling Commission
•
Office of Liquor and Gambling
Commissioner
• Consumer and Business Services
•
•
Government Ministers, agencies
and officials, including the Ministry
of Health
Treatment service providers
and public health providers,
including Asian Family Services,
Problem Gambling Foundation,
Salvation Army, Raukura Hauora
o Tainui and Hāpai Te Hauora in
New Zealand and Relationships
Australia, Overseas Chinese
Association, PEACE Multicultural
Services and OARS SA in South
Australia
• Australasian Gaming Council
• Police
• Local councils
Successfully trialled and implemented ‘Phase 2’ of facial
recognition technology at the SkyCity Auckland and SkyCity
Hamilton casinos to enable SkyCity to better identify customers
who remain within the casino for extended periods of time
Restructured our host responsibility function and resourcing
in New Zealand to enhance the quality and effectiveness of
our host responsibility practices, including an increase in host
responsibility staffing numbers at the SkyCity Auckland, SkyCity
Hamilton and SkyCity Queenstown casinos
•
Redesigned and launched a new staff host responsibility
training programme in New Zealand, including online modules
FY21 Key Challenges
•
•
•
Maintaining best practice host responsibility has been more
challenging in a COVID-19 operating environment
Alignment of host responsibility and harm minimisation
practice and culture across the SkyCity casinos remains
challenging due to differences from site to site
With changing behaviours and multiple delivery channels, it is
important for SkyCity to regularly review the most effective way
to educate and inform customers about our host responsibility
practices
FY22 Focus Areas
•
•
•
Continue to embed a culture of customer care within SkyCity
Maximise the use of existing host responsibility technologies
across all SkyCity properties and investigate new technologies
entering the market
Review internal host responsibility processes to ensure SkyCity
is providing the highest standard of customer care across all
areas of the business
79
Board Governance & Oversight
SkyCity Board and Sustainability
Committee governance and
oversight of performance of harm
minimisation framework
Senior Management
Governance & Oversight
A Host Responsibility
Governance Group meets
monthly to discuss host
responsibility matters
Host Responsibility
Programmes
Site-specific programmes
outlining SkyCity’s host
responsibility obligations
(approved by the regulator)
Reports to the
Regulator
Annual reporting to
the regulator on the
effectiveness of
SkyCity’s Host
Responsibility
Programmes
Communications
& Brand
An internal brand
communications
campaign to
promote awareness of
host responsibility
Facial Recognition
Technology
Use of facial recognition
and alert technology to
detect excluded patrons
Host Responsibility
Roles & Duties
Roles and activities
focused on customer
care and host
responsibility
monitoring
Software and Algorithms
to Monitor Gaming
Machine Play
Blended software for
analysis and insight
into player behaviour
and spend/visitation
traits, including real time
monitoring of continuous
use of gaming machines
Independent Assurance
• An independent audit is carried
out every two years at each
land-based casino to monitor
compliance with its
Host Responsibility Programme
• Internal independent assurance
programme (internal audit and
continuous improvement)
• Mystery shopping programme
SkyCity
Group Harm
Minimisation
Framework
Learning &
Development
Framework
A suite of host
responsibility modules
for staff, including online
courses, in-person courses,
and annual refresher
courses
iTrak Monitoring
& Reporting
A record management
tool for host
responsibility incidents
and assessments,
including reports for
ongoing oversight
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Leading and Best Practice
Host Responsibility
When done responsibly, gambling can be a fun
and enjoyable entertainment activity. However, it
can also have harmful effects on some individuals,
their families and their communities. Our
challenge is therefore to ensure that our business
provides entertaining and profitable, yet safe and
responsible, experiences and environments.
This section largely focuses on SkyCity’s approach
to host responsibility across its land-based
casinos. Due to limitations in the New Zealand
Gambling Act 2003, SkyCity launched its online
gaming site, SkyCity Online Casino, offshore in
August 2019 via its Maltese subsidiary, SkyCity
Malta Limited, in partnership with international
iGaming company Gaming Innovation Group
Inc (GiG). GiG provides a full-suite online casino
solution, which includes a technical platform,
gaming content, managed services, front-end
development and best-in-class host responsibility
procedures. SkyCity Malta Limited has tailored the
host responsibility tools available from its offshore
platform to align wherever possible with SkyCity’s
land-based practices and, in some cases, has
developed new processes specifically applicable
to the New Zealand market such as the casino age
restriction and contact information for support
services. Further details of SkyCity Online Casino’s
host responsibility practices are available at www.
skycityentertainmentgroup.com/our-commitment/
responsible-gambling for all customers and staff.
Commitment to Host Responsibility
At SkyCity, we place great importance on host
responsibility throughout every part of the
organisation.
The Sustainability Committee is a dedicated
Board committee that assists the SkyCity Board
to contribute to SkyCity’s vision and strategic plan
by ensuring that the company’s sustainability
strategy is best practice and supports the highest
level of sustainability objectives, with priority
given to minimising the impacts associated with
problem gambling as an area of primary focus.
The Sustainability Committee is responsible for
overseeing and monitoring the company’s host
responsibility and responsible gambling programme
and initiatives and monitoring licensing and
regulatory compliance in respect of such matters. At
each scheduled Sustainability Committee meeting,
progress against host responsibility and responsible
gambling measures and targets is reported and
discussed as a standing agenda item.
Within the business, a management-led Host
Responsibility Governance Group meets monthly
to discuss and review host responsibility matters
that have arisen or may arise in the future across
the SkyCity Group. The principle objectives of the
Governance Group are to:
•
•
•
•
provide collective guidance to SkyCity
management on host responsibility matters of
interest;
enable senior management to discuss any
relevant topics and to receive advice, support and
ongoing learnings in a confidential environment;
expose senior management personnel to host
responsibility topics that may have bearing
or impact on SkyCity’s regulatory environs,
customers, their site/jurisdiction of operation or
its employees; and
develop initiatives that will collectively benefit
SkyCity customers and shareholders by way
of discussion, provision or endorsement of
responsible gambling and/or harm prevention
components.
A robust Host Responsibility Programme is in place
at each of our physical sites, and within SkyCity
Online Casino, to prevent and minimise harm from
problem gambling.
All SkyCity Board members and staff receive training
in problem gambling awareness. A dedicated
team of experienced host responsibility specialists
are employed at each of SkyCity’s land-based
casinos and, through our partnership with GiG, an
experienced harm minimisation team is in place for
SkyCity Online Casino.
Our Customers
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An outline of SkyCity’s commitment to host
responsibility and detailed individual site-related
information, including the Host Responsibility
Programme for each site and SkyCity Online Casino,
is available at www.skycityentertainmentgroup.com/
our-commitment/responsible-gambling.
Maintaining Leading and Best Practice
Host Responsibility
We are immensely proud of the culture of care we
have developed within our casinos and continue to
focus on ways to ensure that this culture of care is
maintained and that we have the highest standard
of host responsibility best practice.
Over the past financial year, we implemented
additional host responsibility technology measures
to improve our ability to detect continuous
presence and play within our casinos, including:
•
•
the implementation of ‘Phase 2’ of facial
recognition technology at the SkyCity Hamilton
casino in November 2020, and at the SkyCity
Auckland casino in March 2021, to enable SkyCity
to better identify customers who remain within
the casino for extended periods - see further
details below; and
the introduction of ‘Live View’ system technology
at the SkyCity Queenstown casino to assist
in identifying uncarded continuous play on
electronic gaming machines. This technology
was earlier introduced at the larger SkyCity
Auckland and SkyCity Hamilton casinos during
the financial year ended 30 June 2020.
Over the past financial year, we also:
•
restructured our host responsibility function
and resourcing in New Zealand to enhance
the quality and effectiveness of our host
responsibility practices, including an increase
in host responsibility staffing numbers at the
SkyCity Auckland, SkyCity Hamilton and SkyCity
Queenstown casinos; and
•
redesigned and launched a new staff
host responsibility training programme in
New Zealand, including new online modules.
In a dynamic casino environment, maintaining
effectiveness, relevancy and consistency in harm
minimisation best practice is an ongoing challenge.
In response to that challenge, SkyCity continues to
explore available technology solutions, seek expert
advice, consult stakeholder groups and source a
range of research material.
Independent Assurance
An independent audit is carried out every two years
at each land-based casino to monitor compliance
with SkyCity’s relevant Host Responsibility
Programme.
SkyCity also has an internal independent assurance
programme in place to monitor and improve
compliance with SkyCity’s land-based harm
minimisation framework and undertakes internal
mystery shopping training exercises across its
land-based casinos to test the robustness of its host
responsibility practices.
Each SkyCity Host Responsibility Programme is also
subject to audit by the relevant gambling regulator.
Embracing Technology
Facial Recognition
After trialling different available technology
solutions from late 2018, SkyCity successfully
implemented a full facial recognition technology
solution across all its land-based casinos in
November 2019 using cameras positioned at all
entry points to the gambling areas. This technology
assists SkyCity to recognise customers who have
been excluded from re-entering its casinos by
notifying SkyCity personnel when an individual
matching an image from SkyCity’s database of
excluded patrons re-enters a SkyCity gambling
area. Prior to the introduction of facial recognition
technology in November 2019, staff recall was
the primary mechanism for identifying excluded
persons returning to the casino in breach of their
exclusion orders.
The new technology is proving to be useful in
assisting SkyCity to identify excluded customers
from re-entering SkyCity’s casinos, with a marked
increase in the number of excluded persons
identified returning to a SkyCity casino in breach
of their exclusion orders during the financial years
ended 30 June 2020 and June 2021 in comparison
to preceding periods.
In the second half of 2020, we commenced a trial
of ‘Phase 2’ of facial recognition technology at the
SkyCity Hamilton casino in conjunction with 26
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additional cameras installed within the casino to
assist SkyCity in identifying customers who remain
within the casino for extended periods. The trial
proved successful and the initiative was rolled
out at the SkyCity Hamilton casino in November
2020 and at the larger SkyCity Auckland casino (in
conjunction with 107 additional cameras installed
within the casino) in March 2021. This initiative is
intended to be rolled out at the SkyCity Adelaide
casino by the end of the financial year ending 30
June 2022.
The introduction of facial recognition technology
and other technological solutions significantly
bolsters and assists SkyCity’s ongoing efforts to
detect and prevent excluded customers from
re-entering its casinos and to detect continuous
presence and play – however, despite our best
efforts and host responsibility measures and
initiatives, there is no guarantee that facial
recognition technology will be effective in each and
every case and some individuals may nonetheless
find ways to elude staff.
Predicative Algorithm
Since 2014, SkyCity has operated a predictive
algorithm risk model created by Focal Research at
SkyCity’s largest and busiest casino in Auckland,
which analyses loyalty data as a tool to identify
players who may be at risk from gambling harm.
The algorithm was upgraded in May 2019 and
again in June 2020 with the addition of Focal
Research’s ‘ALeRT BETTOR Protection System’
software to enhance and improve SkyCity’s ability
to identify potential at-risk gamblers. The ALeRT
BETTOR Protection System software uses routinely
stored customer data to create complex models
for identifying and managing high-risk play (the
algorithm) that otherwise may not be outwardly
visible to operators or customers.
In June 2020, the algorithm (including the ALeRT
BETTOR Protection System software) was rolled out
and implemented at the SkyCity Hamilton casino.
Number of Excluded Persons Identified Returning to a SkyCity Property in Breach of an Exclusion Order
1,500
1,400
1,300
1,200
1,100
1,000
900
800
700
600
500
400
300
200
100
0
1,410
940
774
703
51 33 39
81
57
33
182
109
56
226
148
59
FY18
FY19
FY20
FY21
Auckland
Hamilton
Queenstown
Adelaide
The reduction in the number of exclusion-related breaches from FY20 to FY21 is likely due to changes
in excluded patron behaviour following the introduction of facial recognition technology in 2020.
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Consistency of Responsible
Gaming Culture and Practice
Customer Experience
and Engagement
The alignment of excellent host responsibility and
harm minimisation practice and culture across
the SkyCity Group remains challenging due to
differences from site to site, such as size, scale
and staffing structure. There are also market and
customer differences that impact our approach to
staff training and programme design, in addition
to unique cultural distinctions to consider.
Furthermore, our sites across New Zealand and
in South Australia have different regulatory
environments in which they operate in.
These differences mean that while SkyCity’s Host
Responsibility Programmes have similarities, they
are often carried out quite differently. However,
problem gambling is an addiction and the
possibility of harm from this type of behaviour
manifests itself in the same way regardless
of jurisdiction or location. That is why SkyCity
endeavours to lead in this area and employ best
practice prevention methods across the business.
A key strategic focus across the SkyCity Group
for minimising gambling harm is prevention.
Robust prevention initiatives can be developed
and implemented across the Group with few or
no regulatory or local procedural constraints. By
adopting a prevention approach, we can increase
our ability to identify and respond early to new
or emerging concerns that may lead to problem
gambling related issues for our customers.
We are committed to carrying out regular reviews
of each of our Host Responsibility Programmes to
ensure alignment of our practices across our sites.
SkyCity promotes a range of tools in order to
facilitate responsible gambling – however, exclusion
is an equally important host responsibility offering
for those who may be vulnerable to problem
gambling.
Our casinos offer extensive information to
customers about exclusion options and referral
details for problem gambling support services,
including gambling helplines and face-to-face
counselling organisations.
In New Zealand, customers can choose to exclude
themselves from all SkyCity casinos in New
Zealand for a period of up to two years. In some
cases, SkyCity itself makes the decision to exclude
a customer as a means to prevent risk of harm
occurring, or as a means to stop further harm
through a customer’s gambling at SkyCity’s casinos.
In Adelaide, all exclusions are referred to
Consumer Business Services (the South Australian
Government’s regulator) who has overall
management of exclusions.
With the size of our customer base and premises,
it can be a challenge to identify individuals
immediately and, despite our best efforts and
measures, some individuals may nonetheless find
ways to elude staff and re-enter a SkyCity casino.
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Community Knowledge
Given that a material issue to our internal and
external stakeholders is responsible gambling,
we aim to foster good relationships with problem
gambling stakeholders.
As part of this approach, we provide tours of our
facilities and literature to treatment providers
to assist them in understanding our gaming
environments and Host Responsibility Programmes.
We also partner with local experts and support
agencies to ensure we have up-to-date resources in
place for harm minimisation and prevention.
The objective is to improve information sharing
and collaboration between stakeholders in order
to advance SkyCity’s harm minimisation approach.
This collaborative approach ensures that knowledge
about problem gambling is shared between SkyCity
and the relevant stakeholders, who work together
to minimise harm.
During the past financial year, we continued to
engage with community stakeholders, both at their
request and through more formal bi-monthly Host
Responsibility Community Liaison Group meetings
in Auckland attended by treatment service
providers, public health providers and Government
agencies.
In December 2020, SkyCity participated in
Gambling Harm Awareness Week in New Zealand,
partnering with treatment service providers
and stakeholders to promote support and harm
minimisation initiatives with customers within our
SkyCity Auckland and SkyCity Hamilton casinos.
We also invite treatment service providers to attend
our internal host responsibility training programmes
wherever possible.
Exclusions at SkyCity Properties
The following graph summarises the number of exclusions issued by each of the SkyCity properties
over the 2017–2021 financial years:
900
800
700
600
500
400
300
200
100
0
806
696
766
620
678
131
138
59
29
66
25
61
44
169
189
112
61
217
124
58
FY17
FY18
FY19
FY20
FY21
Auckland
Hamilton
Queenstown
Adelaide
Our Customers
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“ Host responsibility shows that SkyCity cares about
its customers. Facial recognition is an additional
tool that helps us to recognise customers who may
need a helping hand.
I get to meet new people, but also check in and
ensure that they are enjoying their time with us
in a really safe way. I get to know more about our
customers, many of whom visit us from out of
Auckland. If there are any issues, I can assist them
straight away”.
Pam Lanumata
Table Games
Pam has been with SkyCity for 22 years and is a key member of our Table Games team at
SkyCity Auckland. She joined SkyCity as a young mother and, during her career with us, has progressed
from being a table games dealer to a ‘dual rate’ dealer where she can step up into a Supervisor role
during a shift depending on customer demand and business needs.
Pam is a natural leader and has an innate passion for SkyCity’s customers. She has completed training on
facial recognition technology, a key part of SkyCity’s host responsibility framework.
Pam has made lifelong friends at SkyCity and, prior to the COVID-19 pandemic, often travelled to
SkyCity Queenstown to serve as a dealer for our International Business customers. Working at SkyCity has
enabled her to raise her family and has provided many opportunities to learn and develop new skills.
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Inspire our
people
A great place to work where
our people are empowered
to grow and achieve.
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Our People
As a major employer with over 4,200 staff, we know
that taking care of our people is the key to creating a
great place to work.
We are committed to providing our employees with
sustainable career paths at SkyCity and want our
staff to grow their careers with us.
Priority Issues
•
•
Employee engagement
Meaningful career and
development pathways
• Diversity, inclusion and belonging
• Health, safety and wellbeing
Key Stakeholders
•
Employees (existing, former and
potential)
• Union representatives
•
Ministry of Business, Innovation
and Employment
•
Ministry of Social Development
• Ministry of Health
•
•
Department of Education, Skills
and Employment
Accident Compensation
Corporation
• WorkSafe NZ
• SafeWork SA
• ReturnToWorkSA
•
Immigration New Zealand
• Women’s Refuge
•
Women in Gaming and
Hospitality Australasia
• Gender Tick
• Rainbow Tick
• Southern Cross Healthcare
FY21 Performance Highlights
•
•
•
•
Awarded the Diversity and Inclusion Leadership Award at the
2020 Deloitte Top 200 Awards and the Diversity and Inclusion
Award at the 2021 NZ HR Awards for Project Nikau, SkyCity’s
pathway to employment programme for vulnerable young
people targeting Māori and Pasifika
Made a commitment to contribute to eliminating period poverty
by providing free sanitary products to all employees – with the
initial pilot phase rolled out in New Zealand in May 2021
Achieved Gender Tick and Rainbow Tick reaccreditation
80% of our employees participated in our Speak Up employee
engagement survey – with an engagement score of 85%
favourable achieved
FY21 Key Challenges
•
•
•
•
No face-to-face leadership development programmes were
delivered due to the disruption from COVID-19. Instead,
personalised talent development conversations and bespoke
interventions were deployed where appropriate
Project Nikau was put on hold during the first half of the year
due to the limited opportunity to hire new staff following the
COVID-19 related impacts on the New Zealand business
SkyCity’s Australian and New Zealand operations have faced
very constrained candidate markets due to the border closures,
making it challenging to fill vacant roles
Providing increased support for employee mental health
and wellbeing as employees cope with the challenges and
uncertainty that has been a feature of the past year with the
impact of COVID-19
FY22 Focus Areas
•
•
•
Strengthening SkyCity’s commitment to Iwi relationships and
improving our understanding of Te Ao Māori, Te Reo Māori and
tikanga in New Zealand whilst contributing to employment
opportunities for indigenous peoples in Australia
Providing support to employees to strengthen mental health
and wellbeing
Using the insights gained from our Speak Up employee
engagement survey to further enhance employee engagement
89
At SkyCity, we aim to create an environment where
our people are at the centre and ensure that our
staff can work safely, are motivated to work hard,
progress in their careers, and have the tools and
knowledge they need to look after both themselves
and our customers.
Employee Engagement
and Developing Meaningful
Career Pathways
With a large and diverse workforce, SkyCity is
recognised for taking a lead in staff development
and care. Our vision is to be a centre of expertise
that delivers high value learning and development
solutions for staff which contribute to the
achievement of our business priorities.
We have an advanced set of priorities and
programmes in place across our sites to achieve
our goal of being a great place to work where our
people are empowered to grow and to achieve.
To ensure that these programmes remain effective
and relevant, we regularly review the effectiveness
of the programmes, in terms of both interest
and sustained impact, and make refinements as
required. New programmes are also trialled and
introduced where appropriate. We regularly seek
advice from staff on how to remove barriers to
participation (such as release time) and introduce
better incentives for participation.
Speak Up Employee Engagement Survey
Our Speak Up survey is a biennial Group-wide
employee engagement survey – the purpose of
which is to understand employee engagement
and to prioritise Group-wide initiatives to maintain
and improve employee engagement. Employee
engagement is defined as the levels of enthusiasm
and connection employees have with SkyCity – it is
a measure of how motivated people are to put in
discretionary effort for SkyCity and a sign of how
committed they are to stay.
Our most recent Speak Up survey was completed
in April 2021, with 80% of employees responding to
the survey (up seven points on 2019). Pleasingly, we
achieved an engagement score of 85% favourable
(up one point on 2019) – meaning that, on average,
85% of SkyCity employees answered that they
either “agreed” or “strongly agreed” with nine
engagement specific questions.
To maintain and improve employee engagement,
the survey results support continued investment
in diversity, inclusion and belonging, our role in
the communities we operate in, living our values,
and health and safety. The results also suggest
opportunity for improvement in ensuring people
feel recognised for a good job, change management
at a team level, scheduling and staffing, and
providing feedback to improve performance.
Tahuna Te Ahi – Ignite the Fire
Recognising the special standing of Māori as
tangata whenua and the indigenous people of
Aotearoa, SkyCity launched Tahuna Te Ahi, a
tailored programme developed by New Zealand
company Indigenous Growth Limited, for our
New Zealand-based employees in 2018. The
programme provides accelerated leadership
development specifically for Māori employees in
addition to implementing initiatives which elevate
the standing of Māori at SkyCity more broadly.
The programme connects people to indigenous
values and culture while at the same time giving
them the tools to incorporate their culture into a
business environment.
SkyCity was awarded the 2018 Deloitte Top 200
Diversity and Inclusion Leadership Award for the
programme in November 2018 and was named
as a Platinum winner in the ‘Best Learning &
Development Project – Leadership Capability’
category at the 2019 LearnX Asia Pacific Awards for
the programme in June 2019.
15 employees commenced the Tahuna Te Ahi
programme during the last financial year.
Health, Safety and Wellbeing
At SkyCity, our people are paramount to the success
of our business. Ensuring we take care of our people
at work allows them to provide our guests with a safe
and enjoyable experience. Our character and culture
goal is to provide a great and safe place to work.
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 •
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•
Effective risk management – we will focus on
our critical risks, ensuring we have sufficient risk
mitigation strategies in place to prevent fatal or
serious harm;
Sustainable systems and processes – we will
create a contemporary and resilient approach
to the management and improvement of health
and safety; and
Health and wellbeing – we will adopt a
risk-based approach to health and wellbeing,
including programmes to reduce physical and
psychosocial risks to our workers.
Health and Safety
Over the last financial year, our primary objective
has been to keep our people and guests safe from
COVID-19 and support Government initiatives to
minimise the risk of COVID-19 in our communities.
We have implemented extensive processes to
plan, manage and review our COVID-19 health
management response.
We also continued to implement initiatives to
achieve the strategic goals outlined in our FY19–21
Group Health and Safety Strategy (adopted in 2018),
which has allowed us to develop strong foundations
for sustainable safety change. Our Group Health
and Safety Strategy for FY19–21 centres around the
mission “Prevent Harm and Build Wellness” and the
following four goals:
•
Industry leading safety culture – we will create a
positive safety culture for our workers and guests
with a strong emphasis on genuine and visible
leadership and active engagement of
our workers;
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FY21 Health and Safety Scorecard
Indicator
Target
FY21 Performance
Safety Success
Indicator 1
Zero fatalities or life altering injuries
Achieved – no fatalities or life
altering injuries
FY18-21
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
Safety Success
Indicator 2
FY18-21
Safety Success
Indicator 3
FY18-21
OUR LAST THREE YEARS - STRATEGY IN REVIEW
The final TRIFR and hazard reporting results were significantly impacted by the COVID-19 disruptions and
closures, which significantly reduced the total number of hours worked.
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
OUR PROGRESS
Increase hazard reports by 10% from
FY18-21
the FY20 baseline
FY18-21
FY18-21
FY18-21
FY18-21
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
Reduce Total Recordable Incident
Frequency Rate (TRIFR) by 10% from
FY18-21
FY18-21
the FY20 baseline
Not achieved – increased by 23.36%
Not achieved – increased by 3.22%
FY18-21
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
INDUSTRY LEADING
SAFETY CULTURE
INDUSTRY LEADING
SAFETY CULTURE
INDUSTRY LEADING
INDUSTRY LEADING
INDUSTRY LEADING
SAFETY CULTURE
SAFETY CULTURE
SAFETY CULTURE
Active and Visible
Safety Leadership
OUR LAST THREE YEARS - STRATEGY IN REVIEW
OUR LAST THREE YEARS - STRATEGY IN REVIEW
GOAL 1
GOAL 4
Industry Leading
Health and
Safety Culture
Wellbeing
HEALTH &
INDUSTRY LEADING
WELLBEING
SAFETY CULTURE
Key Achievements
Key Achievements
(FY19-21)
(FY19-21)
HEALTH &
INDUSTRY LEADING
WELLBEING
SAFETY CULTURE
Active and Visible
Safety Leadership
OUR LAST THREE YEARS - STRATEGY IN REVIEW
GOAL 3
GOAL 2
Sustainable Systems
Effective Risk
and Processes
Management
SUSTAINABLE SYSTEMS
SUSTAINABLE SYSTEMS
EFFECTIVE
EFFECTIVE
AND PROCESSES
AND PROCESSES
RISK MANAGEMENT
RISK MANAGEMENT
Key Achievements
Key Achievements
(FY19-21)
(FY19-21)
EFFECTIVE
SUSTAINABLE SYSTEMS
SUSTAINABLE SYSTEMS
EFFECTIVE
EFFECTIVE
EFFECTIVE
RISK MANAGEMENT
AND PROCESSES
RISK MANAGEMENT
AND PROCESSES
RISK MANAGEMENT
RISK MANAGEMENT
Effective Risk
Effective Risk
Management
Management
EFFECTIVE
RISK MANAGEMENT
HEALTH &
WELLBEING
HEALTH &
WELLBEING
Occupational Health
Prevention of Illness
Occupational Health
Prevention of Illness
Compliant Health
and Safety
Management System
Compliant Health
and Safety
Management System
Key achievements
All leaders have mandatory Health and
Safety targets. Targets are cascaded
based on responsibility
Interactive dashboards are available to
leaders providing a snapshot of Health
and Safety performance
Key achievements
Key achievements
Active and Visible
Safety Leadership
All leaders have mandatory Health and
Safety targets. Targets are cascaded
Key achievements
Key achievements
based on responsibility
Key achievements
Establishment of divisional risk registers,
owned and managed by the business
Key achievements
owner
Key achievements
Key achievements
Key achievements
Effective Risk
Active and Visible
Key achievements
Key achievements
Key achievements
Compliant Health
Compliant Health
Occupational Health
Extensive surveys of our
•
Safety management
•
Effective Risk
Effective Risk
Active and Visible
Active and Visible
Establishment of
•
All leaders have
•
Effective Risk
Active and Visible
Effective Risk
Management
Safety Leadership
and Safety
and Safety
Prevention of Illness
Management
Management
Safety Leadership
Safety Leadership
Management
Safety Leadership
Management
Management System
Management System
noise risks to prevent
systems audited against
mandatory health and
divisional risk registers –
Safety management systems audited
Safety management systems audited
Extensive surveys of our noise risks to
Establishment of divisional risk registers,
All leaders have mandatory Health and
hearing loss related
ACC and Australian
against ACC & Australia standards
owned and managed by
safety targets. Targets
against ACC & Australia standards
prevent hearing loss related injuries
owned and managed by the business
Safety targets. Targets are cascaded
Key achievements
Key achievements
Key achievements
Key achievements
Key achievements
Key achievements
achieving 3 successful audit results
achieving 3 successful audit results
based on responsibility
owner
injuries
standards – achieving 3
Key achievements
the business owner
are cascaded based on
Improvements to the management of
successful audit results
responsibility
Establishment of divisional risk registers,
All leaders have mandatory Health and
Improvements to the
•
•
Significant investment
Extensive surveys of our noise risks to
Safety management systems audited
Establishment of divisional risk registers,
Safety management systems audited
Establishment of divisional risk registers,
All leaders have mandatory Health and
All leaders have mandatory Health and
Design and deployment of new Health
processes involving biological risks
Design and deployment of new Health
Significant investment in higher level risk
Significant investment in higher level risk
Interactive dashboards are available to
Interactive dashboards are available to
Establishment of divisional risk registers,
All leaders have mandatory Health and
Establishment of divisional risk registers,
owned and managed by the business
Safety targets. Targets are cascaded
management of processes
Design and deployment
•
prevent hearing loss related injuries
against ACC & Australia standards
owned and managed by the business
against ACC & Australia standards
owned and managed by the business
Safety targets. Targets are cascaded
Safety targets. Targets are cascaded
and Safety Management software
in higher level risk
Interactive dashboards
•
(cooling towers, swimming pools, air
and Safety Management software
controls of our critical risks aimed at
controls of our critical risks aimed at
leaders providing a snapshot of Health
leaders providing a snapshot of Health
owned and managed by the business
Safety targets. Targets are cascaded
owned and managed by the business
owner
based on responsibility
achieving 3 successful audit results
owner
achieving 3 successful audit results
owner
based on responsibility
based on responsibility
creating single point for Health and
quality)
creating single point for Health and
removing dependencies on low level
removing dependencies on low level
and Safety performance
and Safety performance
of new Health and Safety
involving biological
owner
based on responsibility
owner
are available to leaders
controls of our critical
Improvements to the management of
safety activities and performance
safety activities and performance
controls
controls
Management software
risks (cooling towers,
providing a snapshot
risks aimed at removing
Significant investment in higher level risk
Interactive dashboards are available to
processes involving biological risks
Design and deployment of new Health
Significant investment in higher level risk
Design and deployment of new Health
Significant investment in higher level risk
Interactive dashboards are available to
Interactive dashboards are available to
Visual ergonomic risk assessments to
Health and Safety communications plans
Health and Safety communications plans
Significant investment in higher level risk
Interactive dashboards are available to
Significant investment in higher level risk
controls of our critical risks aimed at
leaders providing a snapshot of Health
creating single point for
swimming pools and air
of health and safety
dependencies on low
(cooling towers, swimming pools, air
and Safety Management software
controls of our critical risks aimed at
and Safety Management software
controls of our critical risks aimed at
leaders providing a snapshot of Health
leaders providing a snapshot of Health
Significant increases in reported
reduce risk of fatigue in CCTV control
Significant increases in reported
Introduction of safety assurance
Introduction of safety assurance
developed and regularly reviewed
developed and regularly reviewed
controls of our critical risks aimed at
leaders providing a snapshot of Health
controls of our critical risks aimed at
removing dependencies on low level
and Safety performance
health and safety activities
quality)
performance
level controls
quality)
creating single point for Health and
removing dependencies on low level
creating single point for Health and
removing dependencies on low level
and Safety performance
and Safety performance
incidents through driving changes to
rooms
incidents through driving changes to
programme over all Construction and
programme over all Construction and
removing dependencies on low level
and Safety performance
removing dependencies on low level
controls
safety activities and performance
controls
safety activities and performance
controls
reporting behaviours
and performance
reporting behaviours
development activities
development activities
controls
controls
Visual ergonomic risk
•
Introduction of safety
•
Visual ergonomic risk assessments to
Introduction of safety assurance
assessments to reduce risk
Significant increases
assurance programme
reduce risk of fatigue in CCTV control
Significant increases in reported
Introduction of safety assurance
Significant increases in reported
Introduction of safety assurance
Introduction of safety assurance
programme over all Construction and
in reported incidents
of fatigue in CCTV control
over all construction and
rooms
incidents through driving changes to
programme over all Construction and
incidents through driving changes to
programme over all Construction and
programme over all Construction and
development activities
through driving changes
rooms
reporting behaviours
development activities
reporting behaviours
development activities
development activities
development activities
Reduce Low Consequence
Reduce Low Consequence
Learning and
Learning and
to reporting behaviours
High Frequency
High Frequency
Improvement
Improvement
(LCHF) Events
(LCHF) Events
Health and safety
Health and Safety communications plans
communications plans
developed and regularly reviewed
developed and regularly
reviewed
Introduction of safety assurance
programme over all Construction and
development activities
Health and Safety communications plans
Health and Safety communications plans
Health and Safety communications plans
developed and regularly reviewed
developed and regularly reviewed
developed and regularly reviewed
Wellness – Promotion
Of Healthier Bodies
Positive Safety
Culture
Positive Safety
Culture
•
•
Key achievements
Occupational Health
Prevention of Illness
Extensive surveys of our noise risks to
prevent hearing loss related injuries
Key achievements
Improvements to the management of
Extensive surveys of our noise risks to
processes involving biological risks
prevent hearing loss related injuries
(cooling towers, swimming pools, air
quality)
Improvements to the management of
processes involving biological risks
Visual ergonomic risk assessments to
(cooling towers, swimming pools, air
reduce risk of fatigue in CCTV control
quality)
rooms
Visual ergonomic risk assessments to
reduce risk of fatigue in CCTV control
rooms
Wellness – Promotion
Of Healthier Bodies
Health and Safety communications plans
developed and regularly reviewed
Key achievements
Positive Safety
Positive Safety
Positive Safety
Positive Safety
Culture
Culture
Culture
Culture
Introduction of safety leadership walks for
leaders and our Board of Directors
Key achievements
Positive Safety
Culture
Reduce Low Consequence
Key achievements
Key achievements
Reduce Low Consequence
Reduce Low Consequence
Reduce Low Consequence
High Frequency
Learning and
High Frequency
High Frequency
High Frequency
(LCHF) Events
Improvement
(LCHF) Events
Refined and simplified induction
(LCHF) Events
(LCHF) Events
Deployment of a online chemical
Introduction of safety leadership walks for
training to focus on the basics
management system for all operations
leaders and our Board of Directors
Key achievements
Key achievements
Reduce Low Consequence
Learning and
High Frequency
Improvement
(LCHF) Events
Refined and simplified induction
Deployment of a online chemical
training to focus on the basics
management system for all operations
Key achievements
Wellness – Promotion
Of Healthier Bodies
Key achievements
Wellness – Promotion
Of Healthier Bodies
Wellness initiatives and promotions to
continue improving our peoples health
Wellness initiatives and promotions to
continue improving our peoples health
Key achievements
Key achievements
Key achievements
Key achievements
Introduction of safety leadership walks for
leaders and our Board of Directors
Established the annual Chairmans Health &
Introduction of safety leadership walks for
Introduction of safety leadership walks for
Safety Award for Safety Excellence and
Introduction of safety leadership walks for
leaders and our Board of Directors
leaders and our Board of Directors
Innovation
leaders and our Board of Directors
Key achievements
Key achievements
Introduction of safety
•
Established the annual Chairmans Health &
leadership walks for
Introduction of safety leadership walks for
Safety Award for Safety Excellence and
leaders and our Board of Directors
leaders and the Board
Innovation
•
Established the annual Chairmans Health &
Safety Award for Safety Excellence and
Innovation
Established the annual Chairmans Health &
Established the annual
Established the annual Chairmans Health &
Established the annual Chairmans Health &
Simplified safety learning activities to
Simplified safety learning activities to
Established the annual Chairmans Health &
Safety Award for Safety Excellence and
Chairman’s Health
Safety Award for Safety Excellence and
Safety Award for Safety Excellence and
promote stronger culture
promote stronger culture
Safety Award for Safety Excellence and
Innovation
Innovation
Innovation
and Safety Award for
Innovation
Safety Excellence and
Simplified safety learning activities to
Innovation
promote stronger culture
Simplified safety learning activities to
Simplified safety learning activities to
Simplified safety learning activities to
promote stronger culture
promote stronger culture
promote stronger culture
Simplified safety learning activities to
promote stronger culture
•
Key achievements
Key achievements
Key achievements
Key achievements
Key achievements
Key achievements
Key achievements
Wellness initiatives and
•
Refined and simplified
•
Deployment of an online
•
Rolled out new training programmes
Rolled out new training programmes
Over 400 individual physical health
A focus on flooring upgrades to slip and
A focus on flooring upgrades to slip and
Deployment of a online chemical
promotions to continue
induction training to
management system for
Refined and simplified induction
Refined and simplified induction
Wellness initiatives and promotions to
Deployment of a online chemical
Deployment of a online chemical
with use of new technology. I.e. fire
with use of new technology. I.e. fire
checks as part of wellbeing programme
trip hazard areas
trip hazard areas
Deployment of a online chemical
Deployment of a online chemical
management system for all operations
training to focus on the basics
training to focus on the basics
continue improving our peoples health
management system for all operations
management system for all operations
simulators, VR learning
improving our peoples’
focus on the basics
all operations
simulators, VR learning
management system for all operations
management system for all operations
Over 2000 vaccinations delivered for as
Roll out of sit/stand workstations to our
Roll out of sit/stand workstations to our
health
A focus on flooring upgrades to slip and
Rolled out new training
A focus on flooring
Rolled out new training programmes
Rolled out new training programmes
Over 400 individual physical health
A focus on flooring upgrades to slip and
A focus on flooring upgrades to slip and
Celebrated World Day for Safety at Work
Celebrated World Day for Safety at Work
part of Group wide vaccination
administration divisions
administration divisions
A focus on flooring upgrades to slip and
A focus on flooring upgrades to slip and
trip hazard areas
Over 400 individual
•
programmes with the
upgrades to slip and trip
with use of new technology. I.e. fire
with use of new technology. I.e. fire
checks as part of wellbeing programme
trip hazard areas
trip hazard areas
with onsite information days
with onsite information days
programme
trip hazard areas
trip hazard areas
simulators, VR learning
simulators, VR learning
physical health checks
use of new technology
hazard areas
Introduction of fit for work programme
Introduction of fit for work programme
Roll out of sit/stand workstations to our
Over 2000 vaccinations delivered for as
Roll out of sit/stand workstations to our
Roll out of sit/stand workstations to our
in our Australian property
in our Australian property
as part of our wellbeing
(including fire simulators
Roll out of sit/stand workstations to our
administration divisions
Rollout of sit/stand
Celebrated World Day for Safety at Work
Celebrated World Day for Safety at Work
part of Group wide vaccination
administration divisions
administration divisions
administration divisions
programme
and VR learning)
workstations to our
with onsite information days
with onsite information days
programme
Introduction of fit for work programme
Over 2,000 vaccinations
•
Celebrated World Day
administrative divisions
Introduction of fit for work programme
Introduction of fit for work programme
Introduction of fit for work programme
in our Australian property
in our Australian property
in our Australian property
delivered as part of the
for Safety at Work with
in our Australian property
Introduction of a fit for
Group-wide vaccination
onsite information days
work programme at our
programme
Adelaide property
•
Introduction of fit for work programme
in our Australian property
Roll out of sit/stand workstations to our
administration divisions
•
•
•
Key achievements
Over 400 individual physical health
Wellness initiatives and promotions to
checks as part of wellbeing programme
continue improving our peoples health
Over 2000 vaccinations delivered for as
Over 400 individual physical health
part of Group wide vaccination
checks as part of wellbeing programme
programme
Over 2000 vaccinations delivered for as
part of Group wide vaccination
programme
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Employee Wellbeing
Staff Support Programmes
SkyCity has programmes in place to promote
healthy behaviours and personal responsibility for
mental and physical health. The programmes aim to
promote healthy lifestyles, increase physical activity,
reduce absenteeism and improve productivity.
In response to the COVID-19 pandemic, SkyCity has
established a specialist Health and Hygiene team
to provide staff with up-to-date information on the
global pandemic, support in dealing with anxiety
and stress relating to the pandemic, and training
and awareness on health management relating
to the pandemic. Following periods of lockdown,
we also focused on physical and mental health
work conditioning. These programmes were aimed
at minimising harm in an environment involving
significant disruptions to our operations.
Over the last financial year, we also:
•
•
•
launched a physical health check programme
where employees can participate in a 30 minute
health consultation with a nurse – with over 400
health checks being carried out to date;
conducted a ‘People Pulse Survey’ on mental
health and wellbeing with 700 employees
responding to the survey. The results identified
that our people leaders wanted more training
on how to support employees, and employees
wanted more information on personal coping
skills for stress management. In response to this
feedback, EAP Services delivered 15 workshops to
146 managers on how to support better mental
health outcomes for employees; and
supported the World Day for Safety and Health
at Work by hosting a special event in partnership
with the NZ Business Leaders Health & Safety
Forum in Auckland. To coincide with this day,
a pocket guide on 'How to have a conversation
about Mental Health' was launched. This guide
is based on the NZ Mental Health Foundation's
work and is designed to empower our people to
have safe conversations and be able to identify
certain behaviours, approaching colleagues with
empathy and a willingness to listen.
As part of SkyCity’s wellness programme, all
SkyCity employees are invited to receive a free
flu vaccination. This service is offered annually
to employees onsite at the beginning of the flu
season to ensure all staff have easy access to the
vaccinations. Around 600 vaccinations have been
delivered in 2021.
SkyCity has a range of services designed to assist
employees who may need a helping hand.
At our Auckland and Hamilton sites, SkyCity offers
confidential help and advice for SkyCity employees
– for work issues and situations outside of work.
They offer advice about practical and effective ways
to handle difficult or sensitive issues and, where
appropriate, assist employees in working with
agencies outside of SkyCity who may be able to help.
The Group-wide Employee Assistance Programme
(delivered via EAP Services) is a supportive and
confidential programme designed to assist SkyCity
employees who may have problems that affect
them at work – advice and support is available
24 hours a day, seven days a week, from trained
professional counsellors who can help staff with
their problems.
SkyCity also provides emergency financial
assistance for employees suffering financial
hardship. This help can include budgeting advice,
and last resort financial help through a ‘SMILE’ loan
to New Zealand-based staff who qualify for support.
Employee Hardship Fund
Like many other businesses, the COVID-19 pandemic
has adversely impacted SkyCity’s business and
operations and necessitated significant changes
across the SkyCity business from March/April 2020,
including significantly reducing capital expenditure,
minimising operating costs and restructuring
SkyCity’s workforce.
In April 2020, the SkyCity Employee Hardship Fund
was established to initially assist SkyCity’s departing
employees in New Zealand who found themselves
in financial difficulties that could not fully be
addressed by their redundancy payments. The Fund
was established using funds contributed by the
Senior Leadership Team and other senior executives
across the business via voluntary reductions in
their salaries from 1 April – 30 June 2020 and from
voluntarily contributions by other staff members.
As at 30 June 2021, a total of $223,407 had been
granted (with no obligation for repayment) to 123
affected employees.
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Healthcare
SkyCity understands that healthcare can be
expensive and sometimes difficult to access
for members of the workforce. We therefore
offer permanent, full-time employees in our
New Zealand sites health insurance via our
healthcare provider Southern Cross Healthcare.
SkyCity fully subsidises the RegularCare plan,
which provides shared cover for surgical treatment,
recovery, support, imaging and diagnostic tests and
day-to-day treatment. Employees are also able to
add their family members to the insurance plan at
an additional cost.
Diversity, Inclusion and Belonging
We have a strong representation of minority groups
at SkyCity who are often underrepresented at
leadership levels in the workforce. Encouraging
diversity of thought in our workforce, and
in leadership roles in particular, allows us to
strategically reflect our diverse customer base and
draw people with different backgrounds to our
business. We believe this diversity of thought offers
an opportunity to enhance SkyCity’s competitive
advantage and provide long term sustainable
business success.
We value and respect the contributions, ideas
and experiences of people from all backgrounds
and are committed to an inclusive workplace that
enhances and promotes workplace diversity across
the business. We are committed to providing
opportunities and initiatives that assist all to reach
their potential, and regularly benchmark and report
on our diversity position, policy and objectives.
SkyCity’s Diversity and Inclusion Policy (available in
the Governance section of the company’s website
at www.skycityentertainmentgroup.com) provides
a framework for the company’s current and future
diversity and inclusion initiatives. Each year, the
SkyCity Board sets measurable objectives to
promote diversity and inclusion. The measurable
objectives set by the Board for the financial year
ending 30 June 2022 are to:
•
continue to ensure strong female candidates are
identified in the recruitment process for all Board
and senior executive roles;
•
•
•
•
•
•
•
maintain a gender balance across the population
of employees who make up the top four levels of
the organisation hierarchy;
continue to review gender and ethnic pay
equality and deliver an organisation-wide
programme that removes any risk of bias or
inequality;
leverage and grow diverse talent pools to develop
a more ethnically diverse leadership population;
maintain certification with specialist
organisations who represent minority groups
within the SkyCity workforce (for example
Rainbow Tick) to reiterate our commitment to,
and support of, these minority groups’ interests;
build the capability of all leaders in
understanding and leveraging diversity of
thought through ensuring appropriate learning
and development solutions are delivered;
continue to work with a panel of advisors and
experts to provide informed perspectives and
guidance to the Chief Executive Officer and
Inclusion Council on diversity and inclusion
matters; and
continue to provide support and education to
employees and managers to promote mental
health awareness and wellbeing.
Gender Composition
Over the last financial year, SkyCity has challenged
itself to increase female representation, particularly
in senior leadership roles, and has maintained a
gender balance across the top four levels of the
organisation. This has been driven by initiatives
which support the development of our female
talent pipeline and by ensuring strong female
candidates are identified in the recruitment
process for all executive roles and any systemic
bias in recruitment, development and promotion
processes are removed.
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The gender composition of SkyCity’s directors, officers, senior executives and total workforce as at 30 June 2021
and, comparatively as at 30 June 2020, is set out below:
Female
Male
2021
Number
Directors
Officers
Senior Executives
Total Workforce
3
4
5
2,082
2020
Number
Female
Directors
Officers
Senior Executives
Total Workforce
In the above tables:
2
3
4
1,832
%
43%
50%
45%
49%
%
40%
43%
40%
48%
Number
4
4
6
2,167
Number
3
4
6
1,980
Male
%
57%
50%
55%
51%
%
60%
57%
60%
52%
Total
7
8
11
4,249
Total
5
7
10
3,812
•
•
•
‘officers’ are the Chief Executive Officer and those directly reporting to the Chief Executive Officer, other than the Executive Assistant;
‘senior executives’ are , with the exception of the Chief Executive Officer, those who hold a strategic position (as determined by the People
and Culture Committee from time to time); and
the ‘total workforce’ number does not include those who identify as gender diverse and those who elected not to identify as being female,
male or gender diverse.
Inclusion Council
In 2019, a SkyCity Inclusion Council was established to
support the embedding of an authentic and inclusive
culture within SkyCity Auckland. The Council is made
up of Employee Resource Groups whose purpose
is to bring to life SkyCity’s diversity and inclusion
objectives. The Employee Resource Groups sit on
a forum to discuss priorities and proposed actions
with senior leadership on a quarterly basis. The five
core Employee Resource Groups are Women in
Leadership, NZ Asian Leaders, SkyCity Pride, Pasifika
Leaders and Te Roopū Māori o SkyCity. The leaders of
the Employee Resource Groups bring together their
respective communities, confirming their priorities
and work together to drive initiatives that impact the
groups they represent.
Te Roopū Māori o SkyCity continues to provide a
significant amount of support and guidance to
SkyCity management, and the broader workforce,
with the aim of delivering better outcomes for
Māori. In September 2020, the Roopū celebrated
Te Wiki o Te Reo (Māori language week) with the
delivery of an online te reo Māori lesson to SkyCity
employees and, in association with Te Taura Whiri
i te Reo Māori (the Māori Language Commission),
projected a hei tiki on the Sky Tower – which
received recognition as a stand-out moment from
Te Taura Whiri i te Reo Māori. Te Roopū Māori o
SkyCity has also supported cultural elements of
SkyCity events over the last financial year, including
the official pōwhiri for Michael Ahearne into the role
of Chief Executive Officer and Matariki celebrations,
launched a new Te Roopū Māori o SkyCity logo and
established an employee whānau room.
In the last financial year, a SkyCity Inclusion Council
was also established in SkyCity Adelaide with
three core Employee Resource Groups - Women in
Leadership, LGBTTIQA+ and Disability/Ability.
Eliminating Period Poverty
With our ongoing focus on gender equality and
inclusion, one key area SkyCity has identified where
it can make a difference is the elimination of period
poverty by removing one of the barriers to women
participating in work with the same conveniences
as their male colleagues. Period poverty is when
someone cannot access the menstrual products
(such as pads, tampons or cups) they need for
their period. There are many barriers to access -
the biggest is usually cost. Other barriers include
convenience (being caught short) absence of basic
equipment (such as sanitary bins), different cultural
beliefs and community stigma.
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Since May 2021, we have provided free sanitary
products in all female and gender-neutral employee
bathrooms across the SkyCity properties in New
Zealand to ensure that our female employees
feel empowered and engaged to come to work
and perform their very best without facing any
barriers or being inconvenienced. SkyCity Adelaide
has provided free sanitary products in all female
employee bathrooms from July 2021.
Supporting Our Rainbow Community
SkyCity has maintained a Rainbow Tick for its
Auckland and Hamilton properties for a sixth year,
and our Queenstown site was awarded the Pride
Pledge in 2020. Being a Rainbow Tick employer
means SkyCity has been acknowledged as being a
safe, supportive and welcoming workplace where
employees can bring their whole selves to work
without fear of discrimination or disadvantage
– no matter what their gender identity or sexual
orientation.
SkyCity is committed to continually improving and
working with the feedback received from Rainbow
Tick to find ways we can further support our SkyCity
rainbow community.
Through the Inclusion Council at SkyCity Auckland,
the SkyCity Pride Employee Resource Group has
driven a range of initiatives through Pride Week
and celebrated Wear It Purple Day, an awareness
day specifically for young people who identify as
LGBTTIQA+ and IDAHOBIT Day, the International
Day against Homophobia, Biphobia and
Transphobia.
Our Adelaide site maintained its Pride in Diversity
programme membership, which reiterates our
commitment to our lesbian, gay, bi-sexual,
trans-sexual and intersex Australian-based staff.
SkyCity Queenstown has been a supporter of the
Winter Pride event in Queenstown for many years
and signed up to the Pride Pledge in June 2018. The
Pride Pledge was started in Queenstown to raise
the visibility of safe spaces within the Queenstown
community after the Winter Pride festival
organisers realised that, although the town had an
inclusive heart, it was very difficult for the rainbow
community to see any visible signs that they were
welcome and included.
Gender Tick
In April 2019, SkyCity was awarded the Gender Tick
in recognition of its commitment to providing a fair
workplace for all employees. The Gender Tick was
reconfirmed in June 2020 and July 2021.
Gender Tick is a New Zealand-based accreditation
for businesses to demonstrate their commitment to
gender equality in the workplace. The programme
assesses organisations across five key indicators,
including gender inclusive culture, flexibility and
leave, women in leadership, gender pay equality
and ensuring a safe workplace.
Pay Equality
SkyCity continues to monitor and report on
remuneration outcomes by gender to ensure pay
equality.
In the last financial year, SkyCity also conducted
gender pay equality analysis for like positions
(being positions with similar degrees of know-how,
problem solving and accountability). This analysis
identified that there are no indications of gender
bias across similar positions.
We remain focused on increasing the
representation of women in senior roles across the
business through a gender balanced talent pipeline.
These initiatives, in addition to a strategy deployed
over the past three years to lift the hourly wage
rate of SkyCity’s lowest paid staff, has contributed
to a reduction to SkyCity’s gender pay gap in
New Zealand. While our Australian gender pay gap
remains well below the Australian National Gender
Pay Gap, the changes to our Australian business
over the financial year ended 30 June 2021 have
seen a significant increase to our Australian gender
pay gap. We are undertaking extensive root cause
analysis on this change in Australia and remain
committed to reducing both our Australian and
New Zealand gender pay gaps. We are developing
further enhancements to our pay transparency
approach and believe this will have a positive
impact on our gender pay gap across Australia and
New Zealand.
In the last financial year, SkyCity conducted an
ethnic pay gap analysis for the first time. As part of
this, and to ensure our data and insights accurately
reflect our workforce and continue to inform our
priorities, we commenced a programme to increase
employee ethnicity data capture which resulted in
an increase in data capture from 60% of SkyCity’s
workforce to 83% (excluding individuals who
elected ‘prefer not to say’).
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The following table illustrates the SkyCity gender pay gap as at 30 June 2021 and as a comparison against
the prior periods and the respective national gender pay gaps:
2021
2020
2019
New Zealand
Australia
SkyCity Gender
Pay Gap
(as at 30 June)
National Gender
Pay Gap
SkyCity Gender
Pay Gap
(as at 30 June)
6.9%
7.5%
8.2%
9.5%
(August 2020)
9.3%
(August 2019)
9.2%
(August 2018)
6.1%
1.5%
1.5%
National Gender
Pay Gap
13.4%
(November 2020)
13.9%
(November 2019)
14.1%
(November 2018)
Percentage difference between the median hourly rate for women compared to the median hourly rate for men as at 30 June 2020.
Includes permanent and temporary employees.
The following table illustrates the SkyCity ethnic pay gap as at 30 June 2021:
SkyCity Ethnic Pay Gap as compared to Pakeha
Men (as at 30 June 2021)
National Ethnic Pay Gap*
New Zealand
Pakeha Women
Māori Women
Pacific Women
Asian Women
7.9%
18.9%
16.6%
11.3%
* The New Zealand Household Labour Force Survey pay gaps (to Pakeha men) as at 30 June 2020.
11.9%
22.0%
25.4%
19.0%
European
Asian Women
2.0%
13.3%
SkyCity Ethnic Pay Gap as compared to European Men (as at 30 June 2021)
Australia
Women in Gaming and Hospitality Australasia
SkyCity is a Platinum Partner of Women in Gaming
and Hospitality Australasia. SkyCity’s partnership
broadened the industry body’s reach into New
Zealand and Adelaide.
Women in Gaming and Hospitality Australasia is
dedicated to achieving an inclusive industry and
promoting gender equitable outcomes in the
workplace. Its purpose is to achieve an inclusive
industry and promote positive outcomes for
women in the gaming, hospitality and gaming
related industries by encouraging the development
and success of women through education,
mentorship and networking opportunities and
providing tools and support for organisations
wishing to develop or enhance their gender
diversity and inclusion initiatives – all of which
aligns strongly with SkyCity’s values.
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97
Performance Against FY21 Board Diversity and Inclusion Objectives
SkyCity performed well against the measurable objectives set by the Board to promote diversity and
inclusion for the financial year ended 30 June 2021:
Objective
Progress Made
Continue to ensure
strong female candidates
are identified in the
recruitment process
for all Board and senior
executive roles
Maintain a gender balance
across the population of
employees who make up
the top four levels of the
organisation hierarchy
Continue to review
gender pay equality and
deliver an organisation-
wide programme that
removes any risk of bias or
inequality
Recruitment briefs for the Board recruitment process during the past
financial year explicitly specified that SkyCity required female candidates to
be identified wherever possible.
In the past financial year, three new Board members have been appointed,
one of whom is female. This brings our total gender composition for the
Board to 43% female and 57% male.
Recruitment briefs for the senior leadership recruitment process explicitly
specified that SkyCity required female candidates to be identified wherever
possible.
In the past financial year, six senior executive appointments have been
made, four of which were internal and two external. Whilst the four internal
appointments are male, both external appointments are female – bringing
SkyCity’s ‘Senior Executive’ gender composition to 45% female and 55%
male and ‘Officer’ gender composition to 50% female and 50% male, where:
•
•
‘Senior Executives’ are, with the exception of the Chief Executive Officer,
those who hold a strategic position (as determined by the People and
Culture Committee from time to time); and
‘Officers’ are the Chief Executive Officer and those directly reporting to the
Chief Executive Officer, other than the Executive Assistant.
During the past financial year, gender balance has been maintained across
the top four levels of the organisation hierarchy with 46% of employees
being female and 54% being male, demonstrating a balanced gender
representation in our talent pipeline.
SkyCity continues to monitor and report on remuneration outcomes by
gender to ensure pay equality.
SkyCity also conducted gender pay equality analysis for like positions,
positions with similar degrees of know-how, problem solving and
accountability. This analysis identified that there are no indications of
gender bias across similar positions.
While our analysis has identified no evidence of a gender driven pay gap
for like positions, we remain focused on increasing the representation of
women in senior roles across the business through a gender balanced talent
pipeline.
SkyCity’s New Zealand overall gender pay gap decreased to 6.9% (at 30 June
2021) from 7.5% (at 30 June 2020).
SkyCity’s Australian overall gender pay gap increased to 6.1% (at 30 June
2021) from 1.5% (at 30 June 2020).
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Objective
Progress Made
Leverage and grow diverse
talent pools to develop a
more ethnically diverse
leadership population
Maintain certification with
specialist organisations
who represent minority
groups within the SkyCity
workforce (for example
Rainbow Tick) to reiterate
our commitment to and
support of these minority
groups’ interests
Build the capability of all
leaders in understanding
and leveraging diversity of
thought through ensuring
appropriate learning and
development solutions
are delivered
Identify and appoint an
advisory panel to provide
informed perspectives
and guidance to the
Chief Executive Officer
and Inclusion Council on
diversity and inclusion
matters
Continue to provide
support and education to
employees and managers
to promote mental health
awareness and wellbeing
Several initiatives were delivered during the past financial year with the
objective of developing a more ethnically diverse leadership population:
•
•
•
SkyCity continued to offer its Māori leadership programme, Tahuna te
Ahi, in partnership with Indigenous Growth Limited;
SkyCity continued as a major partner of TupuToa, hosting four summer
interns for three months within our corporate business, two of whom
have been appointed to permanent positions; and
SkyCity continued its sponsorship of the New Zealand Asian Leaders
Forum.
Rainbow Tick certification was achieved for our Auckland and Hamilton
sites, and our Queenstown site was awarded the Pride Pledge.
Our Adelaide property maintained its Pride in Diversity membership.
SkyCity New Zealand sites achieved reaccreditation of Gender Tick, an
accreditation for businesses to demonstrate their commitment to and
progress for gender equality.
The SkyCity Inclusion Council continued to encourage employee-led
initiatives and provide strong executive visibility and sponsorship across
the New Zealand properties. Five core groups continue to be represented,
including Women in Leadership, NZ Asian Leaders, SkyCity Pride, Pasifika
Village and Te Roopū Māori o SkyCity.
SkyCity Adelaide has launched an Inclusion Council, which replicates
the model already established in New Zealand, with three core groups
represented, including Women in Leadership, LGBTTIQA+ and
Disability/Ability.
SkyCity Adelaide has launched online learning modules for people leaders
to build understanding of diversity and inclusion and unconscious bias and
provide suggested actions to remove bias.
SkyCity conducted an employee ‘Pulse Check’ on mental health and
wellbeing, which identified that people leaders were seeking more
training on how to support employees and employees were seeking more
information on personal coping skills for stress management.
SkyCity partnered with EAP Services to deliver workshops to people leaders
building greater awareness of mental health and wellbeing and launched
a range of tools and executive team sponsorship as part of Mental Health
Awareness week.
SkyCity supported the World Day for Safety and Health at Work by hosting
a special event in partnership with the NZ Business Leaders Health & Safety
Forum in Auckland. To coincide with this day, a pocket guide on 'How to
have a conversation about Mental Health' was launched. The guide is based
on the NZ Mental Health Foundation's work and is designed to empower our
people to identify certain behaviours, approaching colleagues with empathy
and a willingness to listen.
A number of specialists have been engaged to provide perspectives and
guidance to both management and Employee Resource Groups from the
Inclusion Council, with a focus on building cultural understanding and
competence.
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Our Staff Numbers
Worked Full-Time Equivalent (FTE)* by Site
Site
Number of Employees
%
Adelaide
Auckland
Hamilton
Queenstown
FY21
733
1,726
185
43
FY20
FY21
FY20
616
27%
24%
1,696
64%
67%
179
38
7%
2%
7%
2%
Total
2,687
2,529
100% 100%
27%
Adelaide
64%
Auckland
* The FTE calculation is based on actual hours worked by staff,
not contracted hours. This definition provides a more accurate
assessment of full-time equivalent staff.
7%
Hamilton
2%
Queenstown
Total Headcount for Group
Site
Number of Staff
%
Adelaide
Auckland
Hamilton
Queenstown
FY21
1,346
FY20
FY21
FY20
1,059
32%
28%
2,562
2,414
60%
63%
293
58
290
54
7%
1%
8%
1%
Group Total
4,259
3,817
100% 100%
32%
Adelaide
60%
Auckland
7%
Hamilton
1%
Queenstown
Employment Contract Type for Group
Contract Type
Number of Employees
%
Permanent
Temporary
FY21
3,784
475
FY20
FY21
FY20
3,462
89%
91%
355
11%
9%
Group Total
4,259
3,817
100% 100%
89%
Permanent
11%
Temporary
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Employment Contract Type by Gender
Contract type
Female
Gender Diverse
Male
Group Total
Permanent
Temporary
FY21
89%
11%
FY20
FY21
FY20
FY21
FY20
91%
9%
100%
100%
88%
90%
0%
0%
12%
10%
FY21
89%
11%
FY20
91%
9%
Employment Contract Type by Site
Contract type
Adelaide
Auckland
Hamilton
Queenstown
Permanent
Temporary*
FY21
68%
32%
FY20
72%
28%
FY21
98%
2%
FY20
FY21
FY20
FY21
FY20
98%
100%
99%
100%
100%
2%
0%
1%
0%
0%
*Adelaide defines casual employees as temporary whereas the New Zealand sites define employees with a fixed end date as temporary.
Employment Type by Gender
Contract type
Female
Gender Diverse
Male
Group Total
Full-Time
On Demand
Part-Time
FY21
49%
21%
30%
FY20
54%
20%
26%
FY21
50%
33%
17%
FY20
FY21
FY20
25%
50%
25%
60%
62%
18%
22%
17%
21%
FY21
54%
20%
26%
FY20
58%
19%
23%
Employees in Collective Agreements by Site
Contract type
Adelaide
Auckland
Hamilton
Queenstown
Group Total*
Yes
No
FY21
77%
23%
FY20
74%
26%
FY21
20%
80%
FY20
26%
74%
FY21
3%
97%
FY20
FY21
FY20
FY21
FY20
4%
0%
0%
96%
100% 100%
37%
63%
37%
63%
*Group total percentages are weighted proportionately based on site Worked FTE.
Employee Absenteeism*
Contract type
Adelaide
Auckland
Hamilton
Queenstown
Group Total**
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
FY21
FY20
Absenteeism
4.06%
3.08%
3.76%
3.95%
3.62%
3.09%
2.32% 1.83%
3.78%
3.70%
*As a percentage of scheduled days.
**Group total percentages are weighted proportionately based on site Worked FTE.
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Grow our
communities
Serve a social purpose by
investing in our local economies
and communities.
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Our Communities
Our aim is to create value in our business and in the
communities in which we operate.
We understand that to do this we need to engage
meaningfully with our communities, listen to
their critical needs and expectations, and respond
through developing meaningful community
partnerships and by taking action to address key
issues in our operations.
Priority Issues
FY21 Performance Highlights
•
•
•
•
Economic contribution
Building communities by
developing people
Investing in our communities
Developing deeper connections
with Iwi and indigenous peoples
Key Stakeholders
• Community groups
•
Sponsorship partners, including
Leukaemia & Blood Cancer
New Zealand and
Variety – The Children’s Charity
• Community partnerships
•
Recipients of SkyCity Community
Trust grants
• Philanthropy New Zealand
• Local Iwi
• Ministry of Social Development
• Te Puni Kōkiri
• TupuToa
• First Foundation
•
•
•
•
In our Speak Up employee engagement survey, employees
rated “being proud of the role SkyCity plays in the community”
as a key driver of engagement
The Firefighter Sky Tower Stair Challenge raised over $2.2 million
for Leukaemia and Blood Cancer New Zealand across the two
events held in FY21 (including the postponed 2020 event)
SkyCity Hamilton continued its support of women’s sport by
sponsoring women’s cricket team, the Northern Spirit, and
netball team, Waikato Bay of Plenty Magic
SkyCity contributed a total of $4.1 million to the four SkyCity
Community Trusts for distribution to community groups and
organisations in the Auckland, Waikato and Queenstown Lakes
regions
• Seven Project Nikau cadets were employed at SkyCity Auckland
FY21 Key Challenges
•
•
Onboarding new Trustees for the SkyCity Community Trusts,
developing a new funding strategy and communicating this to
our communities
Due to COVID-19 related business disruption, there were
limited opportunities to employ Project Nikau rangatahi
(young people) in the first half of the year
FY22 Focus Areas
•
•
Project Nikau has a target of employing, developing and
retaining 100 rangatahi over the next three years, moving from
a pilot programme to an integral part of SkyCity's recruitment
and retention strategy, with continued focus on Māori and
Pasifika from the "Not in Employment, Education or
Training" cohort
SkyCity will continue to deepen its relationships with
indigenous peoples in New Zealand and Australia with a
formal Te ao Māori advisory agreement in place with Ngāti
Whātua Ōrakei in New Zealand and support to Career Trackers,
an organisation which supports pathways for indigenous
university graduates into corporate internships in Adelaide
103
SkyCity is a cornerstone of each of the communities
in which it operates. We understand that our scope
for influence and change is huge, and SkyCity
invests in and works to develop our communities in
a variety of ways.
Engaging with our stakeholders helps us to
understand community attitudes toward SkyCity,
the communities’ expectations of us, and how
stakeholders believe SkyCity should create value.
SkyCity engages with stakeholders in a variety of
ways, both formal and informal, in each of the
communities in which it operates. These actions
range from legally required engagement with
regulators to less formal feedback mechanisms
such as social media, customer surveys and public
perception monitoring.
Whilst it is easy for organisations to talk about
inputs and outputs, such as how much money
or ‘in-kind’ contributions are given to charity, the
number of charities receiving support, or how many
hours staff spend on volunteering for community
projects, it is a more challenging exercise to
determine the outcomes and impacts of those
activities. We want to ensure that there is genuine
and measurable social impact from our SkyCity
Community Trusts and other charitable giving.
We continue to review and assess our community
investments and partnerships in a more holistic and
strategic way, to ensure that they are aligned to our
unique business assets and are ultimately delivering
both social and business value.
Economic Contribution
Sourcing Locally
SkyCity is committed to sourcing locally. One
of the intentions outlined in the SkyCity Group
Procurement Policy is to source and procure locally
made and supplied products from Australasian
owned and operated businesses as a preference
wherever possible.
In the financial year ended 30 June 2021, SkyCity
spent approximately $153 million on operational
goods and services, the bulk of which was spent
with local suppliers – with over $33 million on
food and beverage items across New Zealand
and Australia.
Partnerships
Leukaemia & Blood Cancer New Zealand
Each year, firefighters from communities across
New Zealand join forces to raise money for
Leukaemia & Blood Cancer New Zealand (the
national charity dedicated to supporting patients
and their families living with blood cancers and
related blood conditions) in the Firefighter
Sky Tower Stair Challenge, with each participant
climbing the 1,103 steps of the Sky Tower wearing
25 kilograms of gear.
SkyCity is proud to have Leukaemia & Blood Cancer
New Zealand as a charity partner and to have
worked together to raise more than $2.2 million
during the last financial year, and in excess of
$10 million over the 17 year partnership, through the
Step Up and Firefighter Sky Tower Stair Challenges.
Variety – The Children’s Charity
SkyCity has continued its 21-year partnership with
Variety – The Children’s Charity through delivering
Variety Bingo in Auckland, Adelaide and Hamilton.
We are really proud of the partnership we have with
Variety, and the support we can provide to continue
the important work they do in our communities.
Over the last financial year, SkyCity has worked with
Variety – The Children’s Charity to raise more than
$157,000, and in excess of $4.7 million over the
21 year partnership.
The Cookie Project
The Cookie Project is an Auckland based social
enterprise that creates ethical employment for
people living with disabilities, ensuring their
workers are paid at least the adult minimum wage.
Over the first year of our partnership, SkyCity
purchased more than 15,000 cookies for our
customers and internal teams, generating almost
200 hours of employment for disabled workers.
During the current year, SkyCity has committed to
more than doubling its order to 40,000 cookies,
which will generate close to 500 hours of paid
employment for people with disabilities.
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Community Outcomes, Strategy
and Progress
Building Communities by Developing People
During the 2018 financial year, after engaging
with employees from across the SkyCity Group
and community representatives (including the
youth development, family support and financial
capability sectors), SkyCity developed a new
community development and investment strategy
centred around a thematic approach of “Building
Communities by Developing People”. This approach
recognises that SkyCity can provide employment
opportunities for unskilled, unemployed youth at
risk of poor employment outcomes within each of
the communities within which it operates – we can
provide employment, training and a career path.
During the 2019 financial year, SkyCity finalised
the operational strategy across the SkyCity Group
to deliver this new strategy with the launch of
Project Nikau, a youth employment programme
with a focus on developing work-ready skills.
SkyCity worked in collaboration with Te Puni
Kōkiri, the Ministry of Social Development and a
community-based provider to design a work ready
programme – with the first cohort of 15 cadets
joining the SkyCity Auckland pilot programme
in June 2019. Whilst the programme was not
operational during the first half of the last financial
year, since February 2021 seven cadets have been
employed - bringing the total number of Project
Nikau cadets employed to 19. SkyCity has designed
and implemented a wraparound youth mentoring
support for each cohort and, in partnership with Te
Puni Kōkiri, has co-designed individualised learning
and development plans for each cadet. SkyCity was
awarded the Diversity and Inclusion Leadership
award in the 2020 Deloitte Top 200 Awards in
December 2020 and the Diversity and Inclusion
Award at the 2021 NZ HR Awards in May 2021 for
Project Nikau.
In addition, through collaboration with the
SkyCity Auckland Community Trust, greater social
impact has been achieved in the areas of youth
advancement and development through the
Trust's prioritisation of initiatives that support youth
development, wellbeing and employability.
SkyCity committed to its fourth First Foundation
Scholarship in 2021. Applications were open to
dependents from the SkyCity employee network
in New Zealand and were managed by the First
Foundation, where strict criteria had to be met
to ensure eligibility. The scholarship supports
an academically talented student, from a low
decile school and low-income family, through
tertiary study.
We continue to be a major partner of TupuToa,
an organisation focused on ensuring corporate
New Zealand is representative of the country, by
developing and empowering young Māori and
Pasifika peoples and building the cultural capability
of their partners. In the last financial year, SkyCity
hosted four summer interns for three months
within its corporate teams.
Developing Deeper Connections with Māori
Iwi Māori relationships have been initiated to
support and guide Project Nikau, SkyCity’s youth
employment programme. Our partnership with
Te Puni Kōkiri has enabled young Māori to access
cadetships which support their transition into
employment with SkyCity.
Through SkyCity’s Inclusion Council, Te Roopū
Māori o SkyCity (an internal Employee Resource
Group) has been established to support authentic
engagement with Māori staff. In addition, SkyCity
formally engaged an experienced and licensed
Māori translator to build our capability across
our New Zealand sites and put in place a formal
advisory agreement with Ngāti Whātua Ōrakei for
the SkyCity Auckland property.
Investing in our Communities
SkyCity Community Trusts
Established to provide funds for community and
charitable purposes, the SkyCity Community
Trusts are one of the vehicles SkyCity uses to
‘put something back’ into the New Zealand
communities in which the company operates.
The SkyCity Auckland Community Trust, SkyCity
Hamilton Community Trust, SkyCity Queenstown
Casino Community Trust and SkyCity Wharf Casino
Community Trust aim to help local and regional
Our Communities
105
organisations carry out community assistance and
development work, focusing on supporting families
to thrive and communities to prosper, with a
specific focus on youth development.
SkyCity contributed a total of $4.1 million to the
four SkyCity Community Trusts for distribution
to community groups and organisations in the
Auckland, Waikato and Queenstown Lakes regions
for the financial year ended 30 June 2021 - of which
$2.4 million was distributed by the Trusts in the
financial year ended 30 June 2021.
Since establishing the first SkyCity Auckland
Community Trust in 1996, SkyCity has awarded
nearly 5,000 grants totalling over $61.7 million to
various community groups and organisations in
New Zealand, large and small, through the four
SkyCity Community Trusts.
SkyCity Community Trust Recipients in FY21
SkyCity Auckland Community Trust
SkyCity Hamilton Community Trust
Diversity Counselling
Halo Charitable Trust
Hamilton Christian Nightshelter Trust
Mental Health Solutions Ltd – (Here 2 Help U)
Society of St Vincent de Paul Hamilton
The Serve
Waikato Environment Centre – (Kaivolution)
SkyCity Queenstown Community Trust
Alpine Community Development Trust –
operating as Community Needs Wanaka
Mana Tāhuna
Queenstown Community Hub Trust
Wakatipu Community Foundation - Greatest
Needs Fund
Auckland City Mission
Auckland Sexual Abuse HELP Foundation
Christians Against Poverty New Zealand
Crescendo Trust of Aotearoa
EVolocity Limited
Far North Safer Community Council Society
Incorporated
First Foundation
Glen Innes Family Centre Charitable Trust
Grandparents Raising Grandchildren Trust NZ
Great Potentials Foundation
InZone Education Foundation
Just Move Charitable Health Trust
Mad Ave Community Trust
Papatūānuku Kōkiri Marae
Ranui 135 Leadership Team
The Kindness Institute
The Lifewise Trust
The Middlemore Foundation for Health
Innovation
The Rising Foundation Trust
The TYLA Trust (Turn Your Life Around)
TupuToa
Yes Disability Resource Centre Services Trust
Youth in Transition Charitable Trust
Youthline Auckland Charitable Trust
Zeal Education Trust
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“ Our rangatahi come to
the programme with a
low sense of self, minimal
skills and experience.
They come through the
programme realising that,
despite their personal
challenges, barriers and,
for some, a generational
cycle of unemployment,
they have shown
resilience, gained
employability skills
and developed a strong
work history which sets
them up well for the next
phase of their life – be it
progressing in their role,
transitioning into another
role or deciding to leave
and study, which is all
defined as success.”
Lua Mika
Youth Development
and Employment
Lua leads our Youth Development and Employment
team and returned to SkyCity in 2019 as a Youth
Mentor for Project Nikau after initially working at
SkyCity as a Food and Beverage Stock Controller from
2002 to 2004.
Project Nikau is SkyCity’s pathway to employment
programme for youth with a focus on Māori and
Pasifika. The programme was developed following
a conversation that recognised youth employment
was a significant challenge in the communities that
SkyCity operates in, especially for Māori and Pasifika
young people.
“Project Nikau has informed the business of an
alternative approach when supporting and retaining
our young Māori and Pasifika employees. A key
component to supporting rangatahi (young people)
at work is pastoral care during the initial phase of
employment”, says Lua.
“In the two years that Project Nikau has been
operating, SkyCity has shown a real commitment to
youth pathways and embedding this focus into our
recruitment process. Through our early learnings,
and feedback from people leaders and rangatahi, we
have a more blended approach when onboarding
rangatahi. The collective support from across the
business has contributed to the successful outcomes
for Project Nikau - it has helped transform and shift
mindsets over time.
The exciting part from a young person’s lens is
overcoming adversity during their journey and the
pride and mana that comes from the realisation that
they can do it. The transformation and growth I’ve
seen in our existing Project Nikau rangatahi has far
exceeded the narrative that we hear and read of so
often that our disadvantaged youth are not worth
the opportunities given to them and that they’re just
a product of their communities that are rife with
poverty and crime”.
Lua is grateful for the opportunities to build strong
connections with people in the business that have
helped him to do what he does well - “the success of
this programme has been a team effort right across
SkyCity. Our values and culture are about people”.
Project Nikau has been recognised on a national level
for its innovative approach to youth employment
and is a testament to the work Lua and operational
leaders have done to ensure the programme is
embraced across SkyCity.
Our Communities
107
Sourcing
responsibly
Source ethically and locally.
Our Suppliers
We can leverage our relationships with other
organisations to promote positive outcomes in
areas of impact such as anti-corruption, responsible
political advocacy, fair competition and promoting
social and environmental responsibility in our
supply chain.
Priority Issues
•
Ethical supply chain
• Low carbon supply chain
• Buy local and seasonal
• Connect to the circular economy
•
Progress initiatives to eliminate
modern slavery
Key Stakeholders
• Suppliers (existing and potential)
FY21 Performance Highlights
•
•
•
Refined our sourcing strategy by developing clear definitions
for what constitutes “local” in the context of our supplier and
product classifications and embedded regular reporting of
the top 100 suppliers at each SkyCity property around local
procurement
Reactivated the EcoVadis programme (after having been
paused in FY20 due to COVID-19) and commenced the rollout
of the programme across SkyCity’s Australian suppliers
The SkyCity Board approved a modern slavery statement in
October 2020
• EcoVadis
FY21 Key Challenges
•
Managing product sourcing and supply chain issues/challenges
arising from the impacts of COVID-19, including mandated
property closures
• Educating suppliers on SkyCity’s Ethical Sourcing Code
•
Given the complexity of SkyCity's supply chain, while we expect
our suppliers to ensure that their suppliers have an ethical
approach, it can be challenging to verify that an ethical supply
chain is being maintained beyond first tier suppliers
FY22 Focus Areas
•
•
•
Influencing our major suppliers to set science-based targets by
2023
Testing specific international product supply chains to ensure
products are being sourced ethically
Strengthening our awareness of modern slavery risks and
mitigations
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SkyCity has approximately 600 key ongoing
significant suppliers across the SkyCity Group, with
a substantial number of these being in the food and
beverage sector. As a major purchaser of goods and
services (we spent over $153 million with a vast array
of suppliers of goods and services in the financial
year ended 30 June 2021), SkyCity has a significant
opportunity to use its purchasing power to drive
sustainability. Our approach is to focus on the areas
in which we can have the biggest impact in terms
of minimising our carbon footprint and with respect
to key vendors at high ongoing expenditure levels.
These areas include food, beverage, property and
marketing portfolios in particular.
Approximately $153 million of the total spend
(of over $426 million in the financial year ended
30 June 2021) relates to operational goods and
services – a breakdown of which is shown in the
graphs below:
35.4%
13.2%
5.5%
Food, Beverage
& Retail
Marketing
Repairs &
Maintenance
FY20 – 33%
FY20 – 12%
FY20 – 5%
12.3%
6.9%
1.2%
Utilities, Rates
& Rent
Operating
Consumables
Travel &
Entertainment
FY20 – 13%
FY20 – 6%
FY20 – 4%
9.3%
10.3%
5.9%
Professional
Fees & Insurance
ICT
Other
Expenses
FY20 – 9%
FY20 – 9%
FY20 – 9%
Ethical and Sustainable
Sourcing Practices
Ethical Sourcing Code
In 2016, we adopted an Ethical Sourcing Code
to improve our indirect impact on society and
the environment by carefully selecting and
working with our suppliers to ensure sustainable
procurement. The Code outlines our alignment
with the ten principles of the United Nations Global
Compact, which are derived from the Universal
Declaration of Human Rights, the International
Labour Organization’s Declaration on Fundamental
Principles and Rights at Work, the Rio Declaration
on Environment and Development, and the
United Nations Convention against Corruption.
Whilst it is not a compliance measure in itself,
SkyCity requests its suppliers to acknowledge
our commitment to the principles of the Ethical
Sourcing Code. Through distribution of our Ethical
Sourcing Code, we aim to encourage our suppliers
to improve their practices and to assist them in
doing so, hence improving the quality of life of the
people we touch indirectly and contributing to the
protection of the environment.
Ethical and Responsible Sourcing Strategy
Our ethical and responsible sourcing strategy
seeks to minimise negative impacts linked
to our operational footprint and to make a
positive contribution to the business, people and
communities that make up our supply chain. As a
significant player in Australasia’s hospitality industry,
SkyCity has an opportunity to promote responsible
sourcing practices.
SkyCity’s ethical sourcing strategy focus areas are
outlined in the diagram overleaf.
The focus areas represent the impact and activity
areas that SkyCity believes to be the most relevant
to the business and supply chain. Each focus area is
located within an ambition level which represents
the level of positive impact that SkyCity seeks to
achieve. For ‘Basics’ focus areas, SkyCity aims to
establish a combination of minimum standards
for the supply chain and pilot initiatives to gain
knowledge. In ‘Good practice’ focus areas, SkyCity
aims to focus on specific product and service
categories where these focus areas are most
significant. Finally, ‘Signatory Level’ focus areas are
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35.4%12.3%9.3%13.2%6.9%10.3%5.5%1.2%5.9%SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Y
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Shift
to low
carbon
Buy local
and seasonal
SIGNATORY LEVEL
Leading the industry and
shaping the supply chain
Connect to the
circular economy
Serve meals from a
sustainable supply chain
GOOD PRACTICE
Meeting customer expectations
beyond legal compliance
Support supplier delivery
and working conditions
Source animal products responsibly
Processes and tools
BASICS
Compliance with minimum
standards and build knowledge
where SkyCity intends to implement initiatives
broadly across the SkyCity Group, thereby helping
to positively influence its entire supply chain.
Supply Chain Transparency
and Traceability
Sustainable Supply Chain
In September 2017, we commenced a sustainable
supply chain assessment pilot initiative with 129 of
our key suppliers in New Zealand. As part of this,
we engaged an external provider, EcoVadis, to audit
and rate our suppliers against an industry-tailored
set of environmental, social and governance criteria
and our suppliers were invited to complete a
questionnaire and provide supporting evidence.
Founded in 2007, EcoVadis has grown to
become the world’s largest provider of business
sustainability ratings, creating a global network
of more than 75,000 rated companies. Each
supplier who completes the assessment receives a
rating scorecard that shows areas where they are
achieving good practice and areas where they may
need to improve.
Participation in the EcoVadis assessment/audit
process was initially encouraged – however, as
supplier participation is central to SkyCity’s ability
to quantify its impact on the supply chain and
execute its strategy for this pillar, the EcoVadis
assessment/audit was made mandatory for
SkyCity’s significant existing suppliers and new
suppliers during the 2019 financial year. During
the 2020 financial year, we paused the EcoVadis
assessment/audit for suppliers due to the impacts
of COVID-19 but continued to actively use the
information collected to date to improve the
performance of existing suppliers. The EcoVadis
assessment/audit process recommenced during the
2021 financial year.
As at 30 June 2021, 71 suppliers to SkyCity's
New Zealand properties representing over
$33 million of our total annual procurement spend
had completed the EcoVadis assessment/audit
process. Of SkyCity’s $20 million annual food and
beverage procurement spend in New Zealand,
81% is captured under the EcoVadis process – an
increase from 76% in the 2020 financial year.
We continue to focus on obtaining a clearer picture
of our suppliers’ supply chains to ensure they align
with our Ethical Sourcing Code and new suppliers
are asked about their supply practices prior to
becoming an approved supplier of the company.
However, the scope and geographic spread of
our supply chain, together with the wide variety
of suppliers we engage with, creates challenges
for embedding the Ethical Sourcing Code and
ensuring our suppliers are doing more than
acknowledging their commitments. Our suppliers
are very diverse, ranging from small localised family
businesses to global multinationals. In some cases,
our suppliers are very small operators and they
have few resources to provide detailed information
about their policies and sustainability and
governance approaches. In other cases, we have had
long-standing agreements with suppliers, but have
not engaged them before on sustainability issues.
As we manage these issues more closely, we will
have the opportunity to deepen our engagement
with our suppliers on the Ethical Sourcing Code.
A key way that we will do that into the future is to
undertake supplier sustainability assessments and
audits and ensure that our procurement teams
continue to have strong relationships with the
businesses we procure from.
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Modern Slavery Act
The Modern Slavery Act 2018 (Cth) came into
force in Australia on 1 January 2019 and requires
reporting entities to disclose the risks of modern
slavery practices in the operations and supply
chains of the reporting entity, and any entities that
the reporting entity owns or controls. The Modern
Slavery Act applies to SkyCity Entertainment Group
Limited, being an entity based, or operating, in
Australia having an annual consolidated revenue
of more than A$100 million. SkyCity’s first modern
slavery statement was published on the Australian
Government’s online Register for Modern Slavery
Statements in November 2020 and is available at
https://www.modernslaveryregister.gov.au/
statements/299/ and in the Governance section
of the company’s website at
www.skycityentertainmentgroup.com.
SkyCity is fully supportive of the Modern Slavery Act
and its intention to eliminate modern slavery in all
its forms, including trafficking in persons, slavery,
servitude, forced marriage and forced labour.
SkyCity has zero tolerance towards modern slavery.
We are committed to implementing and enforcing
effective systems and controls to seek to ensure that
modern slavery is not taking place anywhere in our
business or supply chains.
SkyCity operates primarily in New Zealand and
Australia with limited supply chains and, as such,
we believe that our exposure to the risks of modern
slavery is low. However, we still recognise that
there is scope for modern slavery to occur and our
modern slavery statement sets out the steps we
have taken to minimise this risk.
SkyCity always aims to obtain a clear picture of a
potential suppliers’ supply chain to ensure that it
will align with SkyCity’s high expectations around
ethical procurement practices. All new suppliers
are asked about their supply practices prior to
becoming an approved supplier. SkyCity has several
policies, practices and procedures in place to assist
in conducting supply chain due diligence which, in
turn, enables SkyCity to take significant measures to
mitigate the risks of modern slavery.
Over the last financial year, we updated the
Ethnical Souring Code to include mitigating the
risks of modern slavery as defined in the Modern
Slavery Act.
Local Suppliers
As part of a major information technology
upgrade implemented in April 2019, SkyCity is
able to categorise items in some detail, including
location of the supplier. This enables SkyCity to
modify procurement practices where required to
support the intention outlined in SkyCity’s Group
Procurement Policy – to source and procure locally
made and supplied products from Australasian
owned and operated businesses as a preference
wherever possible. This Policy drives greater rigour
in the onboarding of new suppliers and has an
emphasis on supplier consolidation and ethical
sourcing with SkyCity choosing the best mix of
suppliers to meet its business requirements.
Our primary focus is procuring from businesses
operating in the same countries in which SkyCity
operates, thus supporting local economies even
where, in some instances, goods are imported. Our
secondary focus is procuring local products and
produce from businesses that are geographically
close to our businesses.
In the financial year ended 30 June 2021, SkyCity
spent over $33 million on food and beverage items
across New Zealand and Adelaide. This equates to
over 22% of our operational spend. We will continue
to work with our food and beverage suppliers
to gain more understanding as to where our
products are being sourced to ensure a local focus
where practical.
SkyCity engages local contractors wherever possible
for its construction projects who, in turn, procure
local products, materials and subcontractors where
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feasible. Many of the gaming products and equipment required by SkyCity for its casino operations are not
able to be manufactured or sourced locally - in sourcing these items internationally, SkyCity's focus is on
procuring such items from ethical suppliers.
In 2020, we refined our sourcing strategy by developing clear definitions for what constitutes “local” in the
context of our supplier and product classifications. Using these definitions, we reviewed (and regularly review)
the top 100 suppliers (by spend) at each of the SkyCity properties to understand where our products are
being sourced.
Category
Suppliers
Same country
Locally based
Majority locally owned
Products
Locally manufactured
Locally produced
and/or manufactured
Definition
Products procured
from businesses in the
same country
Products procured from
businesses in the same
region as the relevant
SkyCity property
(for example, the
Waikato region for
SkyCity Hamilton)
Products procured
from businesses with
greater than 50% local
ownership
Products manufactured
locally, but from
imported products
Entire product is
manufactured from
locally sourced
products
Top 100 Suppliers
Per Site (as at
30 June 2021)
Same
Country
Locally
Based
Majority
Locally
Owned
Auckland
Hamilton
Queenstown
Adelaide
94%
89%
94%
96%
79%
44%
40%
64%
62%
67%
72%
64%
S a m e country
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Sleeping Easy
SkyCity sources a range of luxury bedding made from recycled plastic bottles by Vendella, a New Zealand
owned and operated business, for SkyCity’s Auckland hotels. Through its participation in our EcoVadis
assessment/audit process, Vendella was awarded a silver rating by EcoVadis.
A three-step recycling process transforms plastic bottles into a microfibre for Vendella’s luxury bedding range.
Plastic bottles are sterilised and reduced from their raw waste state into small flakes. These small flakes are
spun into a yarn and then transformed into premium, hypoallergenic, microfibre that has a high loft and
luxurious softness.
In 2017, Vendella threw its support behind Keep New Zealand Beautiful, forming The Dream Green Initiative
partnership. For every eight ‘Dream 900’ pillows sold, Vendella funds the planting of a native seedling.
Since 2017, the initiative has funded the planting of over 4,000 native trees throughout New Zealand.
Since September 2015, SkyCity has purchased over 7,700 pillows, duvet inners, mattress protectors,
quilts and blankets from Vendella – the equivalent of around 194,000 plastic bottles.
Save the Planet
while you sleep
We are part of ‘The Dream Green Initiative’ that helps
Kiwi accommodation providers, like us, to provide more
sustainable options during your stay!
To date, the SkyCity Hotels Group has helped recycle:
194,000
Plastic Bottles
Dreamticket
Bliss Pillow
25
Bottles
Dreamticket
Dream Pillow
23
Bottles
Dreamticket
Duvet Inner
Dreamticket
Mattress Protector
Dreamticket
Snug Quilt
25-46Bottles
5-12
Bottles
37
Bottles
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“ The fundamental
features of a
sustainable supply
chain are social,
environmental, and
financial responsibility.
Developing my
knowledge about
each feature was the
first step for me in
understanding the
expectations that
SkyCity has in making
our supply chain more
sustainable and aligned
across the business.”
Shonan Pereira
Procurement
Shonan joined SkyCity in 2017 as National
Procurement Coordinator and is currently a
Procurement Specialist in our Procurement team.
For Shonan, the most exciting and rewarding feature
of her time at SkyCity is he tāngata, he tāngata,
he tāngata - the people, the people, the people.
“The relationships I’ve built with my internal and
external stakeholders is an extremely rewarding part
of my role. Being able to take them on the journey to
achieve a goal that’s beneficial to the team and the
overall business is so important and fulfilling”.
In her role managing three key portfolios - Property
Services, Corporate and Marketing, Shonan is mindful
of the commitments and responsibilities SkyCity has
when she engages with key stakeholders.
“Taking a hands-on, grassroots approach to supplier
engagement is a positive way of engaging with
others. One-on-one engagement always helps build
understanding between parties and aligns supplier
goals with SkyCity’s sustainability pillar. It’s about
building relationships and being able to understand
people, their business goals and requirements and
their challenges as well.
People and businesses become loyal to brands that
they share their values with and here at SkyCIty
we invest in and promote sustainable practices
that help reduce waste and use ethically sourced
materials – our long standing supplier relationships
are a testament to this. The work I do helps me
assign accountability for myself and the suppliers
we align with. Personal accountability is as equally
important as holding others accountable, especially
in a procurement role. Our documentation, language
and procurement processes reflect SkyCity’s values
and, when we’re in negotiations, our expectations are
made clear”.
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Protect the
environment
Active commitment to reducing
our environmental footprint.
Our Environment
We are dedicated to growing in a sustainable
manner with a commitment to environmental
sustainability as a foundation for successful
economic, social and cultural development.
Priority Issues
FY21 Performance Highlights
•
Climate change/emissions
reduction
• Reducing waste
• Reducing water use
• Employee activation
Key Stakeholders
• KiwiHarvest
• Toitū Envirocare
• Climate Leaders Coalition
•
Energy Efficiency and
Conservation Authority
• SUEZ-ResourceCo
• Beca
• Sustainable Business Council
• EnviroWaste
•
•
Appointed Beca to produce a de-carbonisation roadmap which
will guide SkyCity towards its science-based targets
Continued reduction in the use of single-use plastics across all
SkyCity properties (against the 30 June 2020 baseline), with:
– SkyCity Adelaide achieving a 60% reduction in plastic volume
– SkyCity Auckland achieving a 37% reduction in plastic volume
– SkyCity Hamilton achieving a 46% reduction in plastic volume
– SkyCity Queenstown achieving a 48% reduction in plastic volume
•
•
Continued reduction in electricity use with assistance from the
B-Tune programme
Achieved carbon zero status for the SkyCity Group (by way of
offset thorough Toitū Envirocare)
FY21 Key Challenges
•
•
Introducing food waste composting across all SkyCity properties
Lack of alternatives to certain single use plastics, making zero
single use plastics difficult to achieve
FY22 Focus Areas
•
Continued focus on carbon reduction emissions across the Group
• Continued focus on reducing water use across the Group
•
•
Deliver a zero waste technology solution for the
SkyCity Auckland site
Deliver a green waste composting solution for all SkyCity
properties
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Working within the limits of the natural
environment will allow current and future
generations to benefit from its resources to ensure
continual economic and social prosperity, which we
believe results in business continuity and positive
impacts on staff and stakeholder wellbeing.
Reducing Waste
Since 2015, SkyCity has reduced its waste sent to
landfill by 43.4%, in part due to the mandated
property closures during FY20 and FY21
(in response to the COVID-19 pandemic).
Food Donations and Composting
In Auckland, SkyCity continued to support
KiwiHarvest, a national food rescue charity
that redistributes excess food, free of charge, to
community groups and social service agencies,
with donations of food from its Auckland property.
During the past financial year, the SkyCity Auckland
property donated around 150kgs of food to
KiwiHarvest.
Food that cannot be donated from the
SkyCity Auckland kitchens is collected and
commercially composted offsite to be used on
New Zealand soils to aid the horticulture industry.
During the past financial year, through the efforts of
our kitchen teams, SkyCity sent 148 tonnes of food
waste to be commercially composted - bringing
the total amount collected and composted
since the programme began in April 2017 to
over 1,000 tonnes. Pleasingly, SkyCity’s focus on
reducing food wastage has resulted in a reduction
of food waste being composted each year since the
programme began.
Upcycling Textiles
In the last financial year, our SkyCity Hamilton
Wardrobe team (with assistance from a small group
of supporters from other departments) repurposed
approximately 230 metres of fabric from old
uniforms into face masks for staff, door stops, dining
table phone holders for staff, cushions for staff areas
and kitten hammocks for cat rescue operators.
118
As part of the A$330 million SkyCity Adelaide
development project (which officially opened in
December 2020), iconic South Australian fashion
designer Liza Emanuele was commissioned
to design a range of new uniforms for
SkyCity Adelaide. This uniform refresh resulted
in over 13,000 obsolete garments, which were
donated to three important charities – St Vincent de
Paul (Vinnies) and two local Adelaide charities, Hutt
St Centre and Dressed for Success Adelaide. The
Hutt St Centre is a place of hope and opportunity
for people facing homelessness to rebuild their
lives without judgement. Dressed for Success is
an organisation empowering women to achieve
economic independence by providing a network of
support and professional attire to help them thrive
in work and life. Uniforms donated to international
charity St Vincent de Paul have been shipped to
Africa where they will be distributed throughout
much needed regions.
SkyCity Adelaide Wardrobe Manager,
Caterina Goglia, and SkyCity Adelaide
employee, Bianca White, oversaw
the donation of over 13,000 obsolete
garments to three charities.
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Plastics
SkyCity continues to transition from traditional
plastic to commercially compostable food and
beverage packaging, such as takeaway coffee cups
and lids, straws, plates, containers and cutlery.
The packaging is made from rapidly replenishing
plant-based material and can be disposed of in
food waste bins.
The goals of SkyCity’s Zero Waste Strategy are to
eliminate waste sent to landfill and improve the
efficiency of resource use through reduction and
recycling. Stage one involves the removal of all
customer facing single-use plastics, such as water
bottles and Styrofoam cups. Stage two is the
development of a plan to remove plastic packaging
from the Sky Tower gift shop in Auckland. The
third stage involves quantifying all non-customer
facing plastics, which are used by suppliers of
goods to SkyCity, and developing a collaborative
plan to reduce or replace these with more
sustainable alternatives.
From 1 March 2021, single-use plastic straws,
cutlery and stirrers have been prohibited from sale,
supply or distribution in South Australia (including
bioplastic alternatives) under the Single-Use and
Other Plastic Products (Waste Avoidance) Act 2020
(SA) - the first legislation of its kind in Australia.
From 1 March 2022, expanded polystyrene cups,
bowls, plates and clamshell containers will also be
prohibited from sale, supply or distribution in South
Australia under the Act. These items are not utilised
in SkyCity’s properties.
During the last financial year, we have continued to
reduce our use of single-use plastics across SkyCity’s
properties, with:
•
•
•
•
SkyCity Adelaide achieving a 60% reduction in
plastic volume (driven by the introduction of the
Single-Use and Other Plastic Products (Waste
Avoidance) Act 2020 (SA));
SkyCity Auckland achieving a 37% reduction in
plastic volume;
SkyCity Hamilton achieving a 46% reduction in
plastic volume; and
SkyCity Queenstown achieving a 48% reduction
in plastic volume,
(in each case as a comparison against the
30 June 2020 baseline).
Whilst there is a lack of alternatives to certain
single-use plastics, SkyCity continues to transition
from traditional plastic to commercially
compostable food and beverage packaging
wherever possible.
Eliminate Waste to Landfill
Over the last financial year, we have continued to
consider and progress the feasibility for a waste
converter for SkyCity Auckland, the largest and
busiest property within the SkyCity Group. The
waste converter is a zero waste to landfill option
which can process nearly all waste materials (with
the exception of construction waste and batteries).
Materials that can be composted or that SkyCity
receives a rebate from (such as cardboard), would
continue to be recycled through existing avenues
as would glass and HDPE plastics. The residual
product from the converter has calorific value
that is suitable to be made into an energy source
or a building material (similar to MDF). The key
objectives of the converter are to achieve zero waste
to landfill, reduce associated costs of disposing
waste to landfill and to ensure that the end product
will be recycled in New Zealand. If achieved, SkyCity
Auckland would be the first casino in the world to
achieve a zero waste to landfill status.
In Adelaide, SkyCity has engaged SUEZ to assist
SkyCity Adelaide in achieving zero waste to
landfill. SUEZ offers recycling and commercial
food composting solutions with the remaining dry
general waste being diverted to SUEZ-ResourceCo
(a joint venture between SUEZ and ResourceCo).
The Suez-ResourceCo facility processes commercial,
industrial and construction waste into Processed
Engineered Fuel (PEF) which is then used as a
fuel source by Adelaide Brighton Cement instead
of using traditional fossil fuels. PEF is used to
power cement kilns, reducing carbon emissions
by 30%. SUEZ-ResourceCo has the capacity to
convert up to 350,000 tonnes of raw material per
annum into 180,000 tonnes of PEF, and reducing
carbon emissions by 30%. Since commencing this
partnership with Suez in December 2020, SkyCity
Adelaide has significantly increased its waste
diversion from landfill from an average of 30% to an
average of 92% in the first 7 months – resulting in:
•
92 tonnes of dry waste being processed at the
Suez-ResourceCo facility (preventing 37 tonnes
of CO2 being emitted into the atmosphere) –
enough to produce 199 tonnes of clinker blocks
or 685m3 of concrete; and
Our Environment
119
•
132 tonnes of organic food waste being collected
by SUEZ for reuse in soil compost by many of
SkyCity Adelaide’s suppliers, creating a circular
economy and second use of our food waste.
Climate Change and Emissions
Although SkyCity is not, through its usual day-to-day
operations, a major emitter of greenhouse gases, we
recognise the role that we need to play in reducing
our impacts. We are committed to progressing
initiatives to reduce emissions and taking action to
combat climate change.
As part of SkyCity’s commitment to climate action,
we have measured, audited and verified SkyCity’s
carbon footprint for FY15–FY21 through the Certified
Emissions Measurement and Reduction Scheme
programme operated by Toitū Envirocare, a
government-owned environmental certifications
body in New Zealand.
Climate Change Strategy
In February 2019, SkyCity announced a climate
change strategy that would see SkyCity’s
New Zealand sites become carbon neutral by
30 September 2019, with SkyCity’s Adelaide site
achieving carbon neutrality by 30 September 2020.
As part of this strategy, a SkyCity Green Fund was
established – funded by an internal carbon levy
paid by each of SkyCity’s Auckland, Hamilton,
Queenstown and Adelaide sites relative to each
site’s emissions. The levy is an internal charge of $25
per tonne of carbon, in line with the New Zealand
Government’s price of carbon under the Emissions
Trading Scheme. Funds from the levy are used
to offset SkyCity’s carbon footprint to net zero by
investing in emission reduction projects selected
by Toitū Envirocare. The SkyCity Green Fund has
also accrued and invested in projects identified
and developed by SkyCity employees to reduce
SkyCity’s carbon emissions in accordance with its
science-based targets set in 2019.
SkyCity employees have had the opportunity to
measure and offset their own household carbon
footprints, with SkyCity matching their offset
dollar-for-dollar by payment into the SkyCity
Green Fund.
Pleasingly, SkyCity was among the first major
New Zealand companies to go carbon neutral
and was certified carbonzero by Toitū Envirocare
in New Zealand in October 2019 following the
payment by SkyCity of $86,000 to offset the
equivalent of 12,866 tonnes of carbon (measured in
FY19). The carbon credits purchased through Toitū
Envirocare are generated by international projects,
which will fund 48,000 solar household cookers
for rural communities in China and help build
wind farm capacity in India to replace fossil fuel
alternatives.
As planned, the SkyCity Adelaide property also
became carbon neutral, alongside SkyCity’s
New Zealand sites, when the emissions generated
during the year ended 30 June 2020 (5,518 tonnes
of carbon) were offset by purchasing carbon credits
through Toitū Envirocare in September 2020. In
total, SkyCity paid $131,238 to offset the equivalent
SkyCity has submitted to the Science Based Targets (SBT) initiative,
a partnership between CDP (formerly Carbon Disclosure Project),
the United Nations Global Compact, the World Resources Institute
and the World Wildlife Fund, to set science-based reduction targets
from our FY15 base year. Targets are science-based when in line with
the level of decarbonisation required to keep global temperature
increase well below 2°C.
As part of this, SkyCity has committed to reduce absolute scope one and scope two Green House
Gas (GHG) emissions by 38% by 2030 and by 73% by 2050 (from a 2014-2015 base year) and that 67%
of SkyCity’s suppliers, by spend covering purchased goods and services and capital goods, will set
science-based scope one and scope two targets by the year 2023. SkyCity was the first hospitality
business in Oceania to set science-based targets to help keep the rise in global temperature to well
below 2°C.
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of 15,137 tonnes of carbon in respect of the Group's
FY20 carbon emissions.
The emissions generated by the SkyCity Group
during the year ended 30 June 2021 (16,750 tonnes
of carbon) were offset by the purchase of $166,663
in carbon credits through Toitū Envirocare in
August 2021.
Reductions in Water and Electricity Use
SkyCity has continued to implement water saving
initiatives at its largest SkyCity Auckland property in
response to water use restrictions in Auckland City
(imposed since May 2020), including:
•
•
•
•
washing buildings and windows using buckets of
water rather than hoses;
reusing water for other outdoor cleaning tasks;
using dishwashers only when full and turning off
taps in the kitchens;
making staff and hotel guests aware of the water
restrictions; and
•
restrictions on cooling tower usage.
A number of initiatives led by the Property Services
team at our Auckland site, including continuous
commissioning and finetuning of the Building
Management System (BMS) and the B-Tune
programme (building tune), have cumulatively
generated significant reductions in SkyCity Auckland’s
use of utilities reducing our overall carbon emissions
and spend on electricity, gas and water.
Climate Change Governance and Risks
SkyCity’s climate change strategy is overseen
by the Board’s Sustainability Committee.
A management-led Climate Change Committee
is responsible for working with wider operational
management to execute the strategy.
The New Zealand Government published its first
National Climate Change Risk Assessment in August
2020 and, in April 2021, introduced legislation (in
the form of the Financial Sector (Climate-related
Disclosure and Other Matters) Amendment Bill)
to make climate-related disclosures aligned
with the Recommendations of the Task-Force
on Climate-related Financial Disclosures (TCFD)
mandatory for some organisations, including
publicly listed companies (such as SkyCity) and
large insurers, banks, non-bank deposit takers and
investment managers. If approved by Parliament,
the legislation will require climate-related
disclosures for financial years commencing in 2022,
with disclosures being made in 2023 at the earliest.
The New Zealand Government is also due to issue a
National Adaptation Plan in August 2022, which is
expected to provide further guidance on how local
and central government will respond to climate
change risks. These documents and legislation will
be a critical resource for SkyCity to take its climate
change strategy, planning and reporting to the next
stage. SkyCity is committed to progressing towards
TCFD-compliant reporting and aims to progress
with detailed scenario analysis as part of its ongoing
journey towards TCFD-compliant reporting.
SkyCity is a signatory to the Climate Leaders
Coalition, a group representing a variety of
businesses from different industries which
contribute to nearly half of New Zealand’s emissions.
The group’s goal is to help New Zealand transition to
a low emissions economy and, in doing so, create a
positive future for New Zealanders, business and the
economy. Members of the Climate Leaders Coalition
have signed a joint Climate Change Statement,
which commits their companies to action and is the
group’s first step in their drive for positive change.
By signing the statement, each of the businesses
has committed to:
•
•
•
•
•
measuring their greenhouse gas emissions and
publicly reporting on them;
setting a public emissions reduction target
consistent with keeping within 2°C of warming;
working with their suppliers to reduce their
greenhouse gas emissions;
supporting the Paris Agreement and
New Zealand’s commitment to it; and
supporting the introduction of a climate
commission and carbon budgets enshrined
in law.
The Climate Leaders Coalition recognises the role
that business can play in bringing about change
and demonstrates the significant leadership
direction being taken by businesses on the issue of
climate change.
Our Environment
121
SkyCity Climate Related Risks
Nature of Risk
Physical risks
Description and Impact
Rise in global temperatures
Increase in violent weather
events, including cyclone, sea
surge, tornado
Rise in sea levels
Increased load on air
conditioning, increased power
outages, increased reliance on
generators, increased fire risk
in Adelaide and a reduced ski
season in Queenstown
Damage to property, business
interruption, undrinkable
water, gas leaks, power outages,
increased reliance on generators,
reduced visitation/tourism and
the need for new infrastructure to
be more resilient
Salt intrusion in soils impacting
supply chain
Market and reputational risks
and opportunities
•
Shift in consumer preferences, increasing societal pressure to
participate in green economy and the stigma of not participating
• Potential for banks to increase cost of funds for non-green entities
•
•
•
•
•
•
•
•
•
Increasing long term focus by investors in green funds, which could
impact SkyCity’s share price
Increased challenges with tourism around New Zealand
(erratic weather) increases the opportunity for an indoor “proxy”
experience
Potential for New Zealand to become a more attractive tourism
destination for its “green” status
Increase in compliance and reporting costs associated with
measuring, demonstrating and actioning new requirements
Change in policy and regulations (new building construction,
building fit outs and remedial work to maintain building warrant
of fitness)
General increase in cost of doing business (through an emissions
trading scheme and/or value chain risk), including fuel, water,
waste water, electricity, gas, transportation, taxes, waste disposal,
certain goods and services, and insurance
Prohibition of non-green consumables, which may cost more or
less than alternative green consumables
Change in infrastructure and furniture, fixtures, and equipment
(FFE) costs (green standards, energy efficiency, electric vehicles and
other green technology)
SkyCity will be considering carbon in future investment and
divestment opportunities
Policy and legal risks
Economic risks and
opportunities
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FY21 Carbon Footprint Inventory
67%*
21%
1%
4%
7%
Electricity
Gas
Flights
Waste
Other
FY20 – 53%
FY20 – 24%
FY20 – 10%
FY20 – 4%
FY20 – 9%
*The increase in electricity usage from FY20 to FY21 is due to a reduction in COVID-19 closures and the completion of the SkyCity Adelaide expansion.
FY15–FY21 Performance
The following graphs summarise SkyCity's key environmental performance data for FY15–FY21.
SkyCity has continued efforts to reduce its carbon footprint – with Scope 1 and 2 emissions combined
reducing by 18.7% since FY15 and emissions from waste reducing by 52.7%, in part due to the mandated
property closures and travel restrictions during FY20 and FY21 (in response to the COVID-19 pandemic).
The increase in absolute carbon from FY18 to FY19 was due to increased air travel across the Group, which
SkyCity reduced in FY20 and FY21 through better utilisation of Skype for Business and economy class flights
and due to COVID-19 related international border restrictions.
Total Emissions (Scope 1, 2 and 3) (Tonnes CO2e) – by Site
12,000
10,000
10,093
8,000
7,290
6,000
4,000
2,000
0
8,786
8,934
6,598
6,226
7,506
8,047
7,102
5,158
1,119
314
955
311
903
281
658 292
833
644
FY15
*
FY18
FY19
FY20
FY21
Adelaide
Auckland
Hamilton
Queenstown
*SkyCity's science-based reduction targets are set from our FY15 base year.
Our Environment
123
Scope 1 and 2 Emissions (Tonnes CO2e) – Group
17,333
15,270
15,129
12,207
10,629
10,367
15,196
10,784
12,822
8,085
5,126
4,640
4,761
4,736
4,412
17,500
15,000
12,500
10,000
7,500
5,000
2,500
0.0
FY15*
FY18
FY19
FY20
FY21
Scope 1
Scope 2
Scope 1 & 2
Scope 3 Emissions (Tonnes CO2e) – Group
2,137
1,425 1,477
1,298
2,747
1,152
3,000
2,500
2,000
1,500
1,000
500
0
1,520
654
654
122
FY15*
FY18
FY19
FY20
FY21
Waste
Flights
*SkyCity's science-based reduction targets are set from our FY15 base year.
124
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Scope Definitions
Through the Toitū carbonreduce certification (formerly the Certified Emissions Measurement and Reduction
Scheme) operated by Toitū Envirocare, SkyCity must report all Scope 1, Scope 2 and Scope 3 emissions
(unless deemed de minimis), where:
•
Scope 1 emissions are direct emissions from sources owned or controlled by SkyCity – for example, gas
(LPG and natural), fuel combustion from company vehicles, rental cars and leased fleet, and refrigerant
and air conditioning systems;
• Scope 2 emissions are indirect emissions from electricity purchased by SkyCity; and
•
Scope 3 emissions are indirect emissions from sources not owned or controlled by SkyCity but resulting
from SkyCity's activities – for example, travel (including short and long-haul air travel), waste sent to
landfill and freight/couriers (for items exceeding 2kg).
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Independent Limited Assurance Statement to the Management and Directors of
SkyCity Entertainment Group Limited
Our Conclusion:
Ernst & Young Limited (‘EY’, ‘we’) have been engaged by SkyCity Entertainment Group Limited (‘SkyCity’) to perform a limited assurance
engagement, as defined by the International Standard on Assurance Engagements (New Zealand), 3000: Assurance Engagements Other
than Audits or Reviews of Historical Financial Information (‘ISAE (NZ) 3000’), hereafter referred to as the ‘engagement’, over selected
disclosures included in SkyCity’s 2021 Annual Report (‘Report’) for the year ended 30 June 2021. Based on our procedures and the
evidence obtained, as of 23 August 2021 we are not aware of any material modifications that should be made to the selected disclosures
included in our review in order for the disclosures to be in accordance with the criteria.
What our review covered
We reviewed SkyCity’s selected disclosures (subject
matter), listed below, as disclosed in the Report, for the year
ended 30 June 2021.
Selected disclosures
/
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Customer exclusions issued at SkyCity
casinos (#)
Customers identified in breach of their
exclusion orders in FY21 (#)
l
Zealand staff (%)
e Gender pay gap for Australia and New
p
o
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P
r
u
O
Workforce diversity statistics
Metric
1,077
1,373
Aus - 6.1%
NZ - 6.9%
Top 10
Ethnicities
Reduction in waste to landfill volume
FY15-FY21 (tonnes)
43.4%
Contributions by SkyCity casinos to the
SkyCity Community Trusts (NZ$)
4.1 million
(NZ$)
Total procurement spend on food and
beverage from Australia and New
Zealand-based suppliers (NZ$)
33,857,375
(NZ$)
Total FY21 spend excluding construction
(%)
213,262,178
(NZ$)
t
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Criteria applied by SkyCity
In preparing the selected disclosures, SkyCity applied:
► Global Reporting Initiative’s (GRI) Standards; and
► SkyCity’s own published criteria (the Criteria).
SkyCity’s responsibilities
in accordance with
SkyCity’s management (‘Management’) was responsible for
selecting the Criteria, and for presenting the selected
disclosures
that Criteria. This
responsibility included establishing and maintaining internal
controls and adequate records and making estimates that
are relevant to the preparation of the subject matter, such
that it is free from material misstatement, whether due to
fraud or error.
EY’s responsibilities
Our responsibility is
to express a limited assurance
conclusion on selected disclosures included in the Report
based on the evidence we obtained.
We conducted our engagement
in accordance with
the International Standard on Assurance Engagements
(New Zealand), 3000: Assurance Engagements Other than
Audits or Reviews of Historical Financial
Information
(‘ISAE (NZ) 3000’) and the terms of reference for this
engagement as agreed with SkyCity on 8 July 2021. The
standard
that we plan and perform our
engagement to obtain limited assurance about whether,
in all material respects, the subject matter is presented
in accordance with the Criteria, and to issue a report. The
nature, timing, and extent of the procedures selected
depend on our judgment, including an assessment of the
risk of material misstatement, whether due to fraud or
error.
requires
We believe that the evidence obtained is sufficient and
appropriate to provide a basis for our limited assurance
conclusions.
Key suppliers completed an EcoVadis
assessment/audit process as at 30 June
71
EY’s independence and quality control
2021 (#)
A member firm of Ernst & Young Global Limited
126
independent of SkyCity
We are
in accordance with
Professional and Ethical Standard 1 International Code of
Ethics for Assurance Practitioners (including International
Independence Standards) (New Zealand) issued by the
New Zealand Auditing and Assurance Standards Board,
and we
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 have fulfilled our other ethical responsibilities in accordance
with these requirements.
description suggested that they should have been
classified as recordable incidents
The firm applies Professional and Ethical Standard 3
(Amended) and, accordingly, maintains a comprehensive
system of quality control including documented policies and
procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulatory
requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement
vary in nature and timing from, and are less in extent than
for, a reasonable assurance engagement. Consequently, the
level of assurance obtained
limited assurance
engagement is substantially lower than the assurance that
would have been obtained had a reasonable assurance
engagement been performed. Our procedures were
designed to obtain a limited level of assurance on which to
base our conclusion and do not provide all the evidence that
would be required to provide a reasonable level of
assurance.
in a
Although we considered the effectiveness of Management’s
internal controls when determining the nature and extent of
our procedures, our assurance engagement was not
designed to provide assurance on internal controls. Our
procedures did not include testing controls or performing
procedures relating to checking aggregation or calculation of
data within IT systems.
A
limited assurance engagement consists of making
enquiries, primarily of persons responsible for preparing the
selected disclosures and related information, and applying
analytical and other review procedures including:
► Conducting interviews with key personnel to understand
SkyCity’s process for collecting, collating and reporting
the selected disclosures during the reporting period
► Checking that the Criteria has been reasonably applied
in preparing the selected disclosures
► Checking the reasonableness of assumptions
► Inquiring of personnel to identify risks of underreporting
and quality controls
► Undertaking data analytics to check the reasonableness
of the data supporting disclosures, such as analysis of
month on month changes in the consumption of various
energy sources
► Performing recalculations of performance metrics to
confirm quantities stated were replicable, such as
performing a recalculation of greenhouse gas emissions
using source data and the relevant emissions factor as
defined by the Criteria
► Assessing evidence on a sample basis, such as
selecting a sample of non-recordable health and safety
incident
incidents and assessing whether
the
A member firm of Ernst & Young Global Limited
► Checking aggregation of selected disclosures and
transcription to the Report
► Checking the appropriateness of the presentation
relating to the selected disclosures.
Use of our Assurance Statement
We disclaim any assumption of responsibility for any
reliance on this assurance statement, or on the selected
disclosures to which it relates, to any persons other than the
management and the Directors of SkyCity, or for any
purpose other than that for which it was prepared. Our
review included web-based information that was available
via web links as of the date of this assurance statement. We
provide no assurance over changes to the content of this
web-based information after the date of this assurance
statement.
Ernst & Young
Auckland, New Zealand
23rd August 2021
Pip Best
Partner
127
Corporate
Governance
Statement and
Other Disclosures
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 New Zealand
and Australian stock exchanges, these cornerstone
principles, detailed below and on the following
pages, reflect the Listing Rules and Corporate
Governance Code of NZX Limited (NZX), the
Listing Rules of ASX Limited (ASX), the Corporate
Governance Principles and Recommendations
(Fourth Edition) of the ASX Corporate Governance
Council, and the New Zealand Financial Markets
Authority’s Corporate Governance Principles
and Guidelines.
SkyCity is listed as a ‘Foreign Exempt Listing’ on
the ASX. 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 (Fourth Edition)
of the ASX Corporate Governance Council.
Notwithstanding, SkyCity has taken into account
ASX Listing Rule 4.10 when preparing this annual
report and considers its corporate governance
practices and principles have substantially
reflected 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 Code, during the
financial year ended 30 June 2021. 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 (Fourth 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
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.
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Specific responsibilities of the Board include:
the addition of value to the company.
•
•
•
•
•
•
•
•
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 details
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.
2. Structure the Board to
Add Value
Board effectiveness requires the efficient discharge
of the duties imposed on the directors by law and
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
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 are:
• gaming industry experience and understanding;
• understanding of Asia and Asian consumers;
•
local market knowledge;
• government relations;
• public relations and communications;
•
investment banking;
• property and real estate acumen;
•
•
hospitality industry experience and understanding;
law;
• finance and accounting;
• mathematical fluency;
• human resources;
• health and safety;
• marketing;
• digital capability and exposure;
• sustainability; and
• millennial understanding.
Corporate Governance Statement
129
In June 2021, Board members completed a self-assessment survey to identify the Board’s overall
competency in relation to the agreed areas of expertise and experience. The results of the survey are set
out in the graph below – where 1 indicates low competency and 5 indicates high competency. Details of
individual expertise and experience of the directors are set out on pages 60 – 63 of this annual report.
4.29
4.29
4.29
4.00
4.00
4.00
4.14
4.14
4.14
4.00 4.00
3.57
3.29
3.14
2.71
4.29
3.71
3.86
3.43
3.57
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Where there is an identified gap in expertise and/or
experience, the Board seeks to address that gap
through learning and personal development, the
use of independent expert advisors in specific
areas of perceived need when necessary, or by the
appointment of a director or directors with the
relevant expertise and experience.
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.
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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 Group 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.
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
chair from the Chief Executive Officer position.
The Board Charter requires the Board chair and
(where appointed) deputy chair 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 Main Board Listing Rules and
has taken into account the independence
guidelines as recommended in the ASX Corporate
Governance Council’s Corporate Governance
Principles and Recommendations (Fourth Edition)
(ASX Independence Guidelines).
At its June 2021 meeting, the Board reviewed the
status of each director in accordance with the
definition of independence set out in the NZX Main
Board Listing Rules and taking into account the ASX
Independence Guidelines and determined that all
current non-executive directors were independent
at the balance date having regard to the factors
described in the NZX Corporate Governance Code
and ASX Independence Guidelines that may impact
director independence.
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
training and regular visits to the company’s key
operations. The Board also undertakes periodic
educational trips (as a group and/or individually) 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 chair 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.
Corporate Governance Statement
131
Board Committees
The Board has four formally appointed standing committees – the Audit and Risk Committee, Governance
and Nominations Committee, People and Culture Committee and Sustainability Committee. The members
of each of these committees are non-executive directors and the non-executive directors of the Board
appoint the chair of each committee.
Each of these committees 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 or more
regularly if required.
From time to time, the Board creates specific sub-committees to deal with a particular matter or matters
and/or to have certain decision-making authority as the Board may elect to delegate to that sub-committee.
Board and Committee Membership
The following table lists the members and chair of the SkyCity Board and each of its four formally appointed
standing committees as at 30 June 2021 and as at the date of this annual report.
Biographical details of individual directors, and their respective qualifications and experience, are set out on
pages 60 – 63 of this annual report.
BOARD
Chair
Members
Rob Campbell
Sue Suckling
Jennifer Owen
Murray Jordan
Silvana Schenone
Julian Cook
Chad Barton
APPOINTMENT TO OFFICE
25 June 2017
9 May 2011
5 December 2016
5 December 2016
8 June 2021
8 June 2021
8 June 2021
AUDIT AND RISK COMMITTEE
PEOPLE AND CULTURE COMMITTEE
Chair
Members
Jennifer Owen
Rob Campbell
Murray Jordan
Julian Cook
Chad Barton
Chair
Members
Murray Jordan
Rob Campbell
Jennifer Owen
Silvana Schenone
Julian Cook
Chad Barton
SUSTAINABILITY COMMITTEE
GOVERNANCE AND NOMINATIONS COMMITTEE
Chair
Members
Sue Suckling
Rob Campbell
Murray Jordan
Silvana Schenone
Chair
Members
Rob Campbell
Sue Suckling
Jennifer Owen
Murray Jordan
Silvana Schenone
Julian Cook
Chad Barton
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Board and Committee Meeting Attendance
The following table shows director attendance at Board meetings and committee member attendance at
committee meetings (both scheduled and unscheduled) during the financial year ended 30 June 2021.
BOARD
AUDIT AND RISK
PEOPLE AND
CULTURE
SUSTAINABILITY
GOVERNANCE AND
NOMINATIONS
TOTAL NUMBER
OF MEETINGS
Rob Campbell
Sue Suckling
Jennifer Owen
Murray Jordan(1)
Bruce Carter(2)
Silvana Schenone(3)
Julian Cook(3)
Chad Barton(3)
12
12
11
12
12
4
3
3
3
6
6
–
6
1
5
–
1
1
5
5
–
5
5
–
2
1
2
4
4
4
–
1
3
1
–
–
1
1
1
1
1
1
–
–
–
(1) Murray Jordan was appointed a member of the Audit and Risk and Sustainability Committees effective from 23 March 2021.
(2) Bruce Carter resigned as a director effective from 20 March 2021.
(3) Prior to their appointment on 8 June 2021, Silvana Schenone, Julian Cook and Chad Barton attended Board and Committee meetings from
29 March 2021 in their capacity as advisors.
3. Integrity and
Ethical Behaviour
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 periodically
throughout their time at SkyCity.
Sustainability
To help the company define its responsibilities and
the effectiveness of its activities, SkyCity maintains
operational supervision of its sustainability activities
through management as well as governance-level
oversight through the Board’s Sustainability
Committee. This Committee directs the company’s
commitment to care activities and is responsible
for developing and maintaining SkyCity’s
sustainability policies.
The Sustainability Committee focuses on the agreed
pillars of the company’s sustainability strategy,
which are described in further detail on pages
70 – 125 of this annual report together with details
of SkyCity’s sustainability activities.
Code of Conduct
The Sustainability 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 Conduct (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.
Corporate Governance Statement
133
Compliance with the Code of Conduct 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 Conduct.
The most recent annual confirmations were
provided by senior managers in August 2021.
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.
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 Main Board
Listing Rules and formally disclose their SkyCity
shareholdings and other securities holdings to the
NZX and, consequently, ASX within prescribed
timeframes.
Conflicts of Interest
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.
Gaming Prohibition
Directors and employees are not permitted to
participate in any gaming or wagering activity at
any SkyCity land-based casino.
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 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 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 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 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 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.
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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
financial year ended 30 June 2021 are set out in
note 7 to the financial statements. Fees for audit
and other assurance work for the financial year
ended 30 June 2021 represented 74% 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, Australian
Corporations Act 2001, NZX Main Board Listing
Rules and ASX Listing Rules;
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 meaningful disclosure; and
•
provides guidance on the processes to
ensure compliance.
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.
The company’s annual report (including this
annual report) is prepared by the General Counsel
for the SkyCity Entertainment Group with input
from the Chief Executive Officer and other senior
management who bear responsibility for the topics
covered in the annual report with a view to ensuring
the contents are materially accurate, balanced
and provide investors sufficient information about
SkyCity and its performance over the relevant
financial year. The Board also contributes to and
approves the contents of the annual report.
Jo Wong, 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 chair 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
and Governance sections of the company’s
website at www.skycityentertainmentgroup.com;
Corporate Governance Statement
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•
•
•
•
•
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;
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 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
•
ensuring that continuous disclosure obligations
are understood and complied with throughout
the SkyCity Group.
7. Recognise and Manage Risk
The company maintains a risk management
framework for the identification, assessment,
monitoring and management of risk to the
company’s business.
SkyCity maintains an independent, centrally
managed Group Risk function which evaluates
and reports on risks and controls across the Group.
Management is required to report to the Audit and
Risk Committee and Board on the effectiveness of
the company’s management of its material business
risks at least annually.
The Audit and Risk Committee approves the
assurance plan, with results and performance
of the organisation’s risk and controls 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 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 control which aligns to
the policies of the Board, and that the company’s
risk management and internal control systems are
operating efficiently and effectively in all material
respects. The most recent confirmations were
provided by the Chief Executive Officer and Chief
Financial Officer in August 2021.
The company maintains business continuity,
material damage and liability insurance cover to
ensure that the earnings of the business are well
protected from adverse circumstances.
SkyCity’s ability to create and preserve value for its
shareholders requires the successful execution of
its business strategy, while maintaining a sound
culture and practices to maintain compliance with
responsible gaming frameworks. 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 outlined on
pages 51 – 59 of this annual report.
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8. Performance Evaluation
9. Remunerate Fairly and
Evaluation of the Board and its Committees
The Board and committee charters require an
evaluation of the Board’s 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.
The annual evaluation of the Board’s and its
committees’ performance is generally carried
out in the form of a self-evaluation questionnaire
completed by each of the directors and select
management. From time to time, an independently
facilitated evaluation process may be carried out, in
addition to or in substitution of the self-evaluation
process, for the purpose of evaluating the
performance of the Board and its committees.
During the last financial year, the annual evaluation
of the Board’s and its committees’ performance was
carried out by way of self-evaluation questionnaires
in October/November 2020, with the results
discussed by the Board in December 2020.
Evaluation of Senior Management
The Board undertakes the performance review
of the Chief Executive Officer and reviews the
performance 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.
Responsibly
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 managers with the
interests of shareholders.
SkyCity’s remuneration strategy and policies are
based on a “pay for performance” philosophy.
The People and Culture Committee has reviewed
the structure of SkyCity’s incentive schemes
to ensure they are competitive and effective
to enable the company to attract and retain
the leadership and talent required to drive
business strategy and financial performance in
the interests of shareholders. Any subsequent
change to the company’s remuneration strategy
and/or policies will continue to reflect SkyCity’s
“pay for performance” philosophy and drive
shareholder value.
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137
Remuneration Report
As Chair of the People and Culture Committee
of the Board, I am pleased to present our
remuneration report for the financial year ended
30 June 2021. This remuneration report outlines
SkyCity’s remuneration frameworks and plans,
including detailed information on Group executives
and non-executive director remuneration and
outcomes for the financial year ended 30 June 2021.
Detailed in this remuneration report are the
employment and remuneration arrangements as
they pertain to Michael Ahearne, appointed Chief
Executive Officer in November 2020. Given the
ongoing impact of COVID-19 on our business
and the economy, the Board, on advice from the
People and Culture Committee, has determined
a remuneration package with arrangements
that focus on the mid to long term recovery and
success of SkyCity, by way of an annual grant of
equity as well as inclusion in the 2018 SkyCity
Executive Long Term Incentive Plan. Mr Ahearne
does not have a short term incentive component
in his remuneration package at this point in time,
again reflective of the current focus of aligning the
Chief Executive Officer’s reward to SkyCity’s mid to
long term success.
In the interests of greater transparency and
disclosure, the Board has elected to provide
the remuneration arrangements of the Chief
Financial Officer, the Chief Operating Officer New
Zealand and the Chief Operating Officer Australia.
Also detailed is the remuneration received by
Graeme Stephens relating to the period of the
financial year he was Chief Executive Officer of
SkyCity, the remuneration paid to him on his
retirement as part of his contractual entitlements,
as well as the equity incentive entitlements still
under issue to him.
Although the financial gateway for the SkyCity
Performance Incentive Plan and the SkyCity
Short Term Incentive Plan (being the normalised
Group NPAT result for the financial year ended
30 June 2021 meeting or exceeding the normalised
Group NPAT result for the immediately preceding
financial year) was met, the Board exercised its
discretion in relation to awards under the plans
by applying one financial measure and outcome
to all participants instead of participants receiving
an individual financial outcome dependent on
the performance of their business unit against
budget. The financial measure was determined
by measuring the normalised Group NPAT for the
financial year ended 30 June 2019 against the
normalised Group NPAT for the financial year ended
30 June 2021, adjusted to account for one-offs
and changes in SkyCity’s business (such as the
earnings attributable to the operation of the car
park in the financial year ended 30 June 2019).
Key considerations for the Board in exercising
its discretion was the need to meet shareholder
expectations by controlling cost, given the ongoing
impact of the COVID-19 pandemic, as well as
consideration of the potential implications of the
AUSTRAC enforcement investigation into SkyCity
Adelaide, balanced with the need to retain and
reward employees for their performance and
outcomes in a challenging year. An explanation of
the mechanics and discretion applied to the plans
is provided within this remuneration report.
In light of the economic impact of the COVID-19
pandemic, the company will not be seeking
shareholder approval to increase the non-executive
director fee pool at the 2021 annual meeting on
29 October 2021, noting the non-executive director
fee pool was last increased by shareholders at
the 2018 annual meeting, and prior to that, at the
2014 annual meeting. As such, the People and
Culture committee did not seek independent
benchmarking of the non-executive director fee
pool and fees this year but did commission external
remuneration benchmarking specialists to provide
remuneration benchmarking for senior executives.
Senior executives’ salaries have been frozen for the
financial year ended 30 June 2021.
Details of the various employee incentive plans are
available in the Remuneration Policy Statement in
the Governance section of the company’s website
at www.skycityentertainmentgroup.com or can be
obtained by contacting the Company Secretary.
I hope you find the detail contained within
this remuneration report useful and, as always,
I welcome your feedback.
Murray Jordan
Chair
People and Culture
Committee
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Non-Executive Directors Fees
This section details the fees paid to non-executive directors.
The company’s Policy on Non-Executive Director Remuneration (available in the Governance section of the
company’s website at www.skycityentertainmentgroup.com or by contacting the Company Secretary) 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.
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 and subject to the maximum remuneration amount which has been approved by the shareholders
of the company. Shareholders at the annual meeting determine the total remuneration available to the
company’s non-executive directors.
At the 2018 annual meeting, shareholders approved, effective from 1 July 2018, a total remuneration amount
for non-executive directors of $1,440,000 per annum (plus GST, if any).
The following table outlines the approved non-executive directors’ fees (exclusive of GST, if any) for the Board
and its committees as at 30 June 2021:
APPROVED POSITION
FEES (PER FINANCIAL YEAR)
Board
Chair
Non-Executive Director
Audit and Risk Committee
Chair
Member
People and Culture Committee
Chair
Member
Sustainability Committee
Chair
Member
$280,000
$128,500
$35,000
$15,000
$35,000
$15,000
$35,000
$15,000
All non-executive directors are members of the Governance and Nominations Committee and receive no
additional fees for this Committee. The Board Chair does not receive separate fees for the Board committees
that he sits on.
In addition to remuneration paid for services in their capacity as directors of the company, SkyCity meets
the expenses incurred by directors in relation to company matters, which are incidental to the performance
of their duties, including travel.
Individuals who are invited by the SkyCity Board to join the Board as non-executive directors are appointed
subject to the company obtaining the approval of the regulatory authorities in each of the gaming
jurisdictions in which the company operates, a process which usually takes some months to conclude. Until
such approvals are obtained, individuals assist the Board in an advisory capacity and are entitled to receive
remuneration for consultancy services provided to the company (subject to the maximum remuneration
amount which has been approved by the shareholders of the company as noted above).
Remuneration Report
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Non-Executive Director Fees for the Year Ended 30 June 2021
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 2021 are as listed below:
BOARD AND
COMMITTEE FEES
OTHER
BENEFITS
TOTAL
Rob Campbell
2021
2020
Bruce Carter
2021
2020
Sue Suckling
2021
2020
Jennifer Owen
2021
2020
Murray Jordan
2021
2020
Silvana Schenone
2021
Julian Cook
2021
Chad Barton
2021
$280,000.00
$245,000.00
(1)
(2)
$151,209.68
(1)
$178,333.40
–
–
–
–
$280,000.00
$245,000.00
$151,209.68
$178,333.40
$163,500.00
$143,062.50
(1)
$4,523.82(3)
$3,429.70(3)
$168,023.82
$146,492.20
$164,534.95
$138,687.50
(1)
–
$14,850.00(4)
$164,534.95
$153,537.50
$171,887.10
$143,062.50
(1)
–
$4,050.00(5)
$171,887.10
$147,112.50
$10,126.39
(6)
$29,618.24(7)
$39,744.63
$10,126.39
(6)
$29,618.24(7)
$39,744.63
$10,126.39
(6)
$29,618.24(7)
$39,744.63
The figures shown are gross amounts and exclude GST where applicable.
(1) Non-executive directors elected to waive 50% of their Board and Committee fees for the final quarter of the financial year ended 30 June 2020.
(2) Bruce Carter retired as a director effective from 20 March 2021.
(3) 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).
(4) Being fees payable for consultancy services provided by Jennifer Owen in relation to the SkyCity Adelaide expansion project, which were
provided as additional services outside of her capacity as a director of the company. This includes fees for consultancy services provided in FY19
but paid in FY20.
(5) Being fees payable for consultancy services provided by Murray Jordan in relation to the New Zealand International Convention Centre
development, which were provided as additional services outside of his capacity as a director of the company.
(6) Silvana Schenone, Julian Cook and Chad Barton were appointed directors effective from 8 June 2021.
(7) Being fees payable for consultancy services provided to the company for the period from 29 March to 7 June 2021 (inclusive) prior to their
appointment as directors on 8 June 2021.
Share Ownership in SkyCity
To further align non-executive directors’ interests with those of shareholders, each non-executive
director is encouraged, over a period of two years from appointment, to build up and retain shares in the
company (purchased on market by each non-executive director) equivalent to at least one year of their
base non-executive director fees. Following this initial two-year period, non-executive directors are then
encouraged to acquire 15% of their base director fees per year.
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Remuneration of Employees
This section details the company’s approach
to remuneration frameworks, outcomes and
performance of SkyCity’s Chief Executive Officer,
other Group executives and employees for the
financial year ended 30 June 2021.
Chief Executive Officer and Group Executives
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 where the fixed portion comprises
a base salary, a KiwiSaver/superannuation
contribution and a limited number of other
benefits and the variable portion comprises both
short term incentive at-risk remuneration (STI)
and long term incentive at-risk remuneration (LTI).
The remuneration arrangements for the Chief
Executive Officer are detailed in the ‘Chief Executive
Officer’s Remuneration’ section below.
The Board determines appropriate levels
of fixed remuneration taking into account
recommendations from the People and Culture
Committee. The STI component 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 disclosures on the following pages of this
annual report reflect the total rewards earned by,
although not necessarily paid to, Group executives
for the financial year ended 30 June 2021 as the
Board believes this approach more appropriately
describes executive pay and performance.
Accordingly, the following disclosures include the
STI and LTI components earned by Group executives
in respect of the financial year ended 30 June 2021.
Fixed Remuneration
The company endeavours to set fixed remuneration
at levels that are relative to similar positions
in the broader Australasian market and, for
“casino-specific” positions, account is taken of
salaries within the sector.
Fixed remuneration is reviewed annually for each
Group executive and, when appropriate, the People
and Culture Committee approves remuneration
increases for Group executives.
Short Term Incentive Remuneration
To drive outstanding company and individual
performance, SkyCity introduced the Performance
Incentive Plan (PIP) for Group executives and senior
managers in 2018.
The PIP:
•
•
recognises and rewards short and longer
term performance by providing participants
an opportunity to be further aligned with
shareholders’ interests by earning, subject to the
company achieving its financial performance
gateway, an incentive award which is delivered in
cash and deferred equity awards (in the form of
restricted share rights in the company); and
provides participants the opportunity to earn
a cash payment under a STI scheme and
acquire restricted share rights under a deferred
STI scheme.
STI Scheme Component of PIP
STI awards will be delivered in cash at the end of
the financial year following the completion of the
external audit of the company’s year-end results,
where the maximum award under the STI is 150%
of the target award.
Deferred STI Component of PIP
The deferred STI scheme under the PIP
offers participants, subject to the relevant STI
performance conditions being met, the opportunity
to acquire restricted share rights of an amount
equivalent to between 10% and 50% of their
base salary. Restricted share rights (if any) issued
to a participant on a STI cash payment date
(Declaration Date) will only vest if that participant
remains an employee up and until:
•
•
the first anniversary of the Declaration Date in
respect of 50% of the restricted share rights; and
the second anniversary of the Declaration Date
in respect of the remaining 50% of the restricted
share rights.
However, if a participant’s deferred STI entitlement
in any financial year is to restricted share rights
having a value of $10,000 or less (calculated using
the volume-weighted average sale price of SkyCity
shares used to determine the number of restricted
share rights to be issued to the participant), the
restricted share rights will not be split out equally
into two separate tranches, but will instead
comprise one tranche and (subject to the vesting
criteria being satisfied) vest to the participant on
the first anniversary of the Declaration Date.
Remuneration Report
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Upon vesting, a participant will be allocated one
ordinary share in the company for each restricted
share right that vests as soon as practicable after the
relevant anniversary of the Declaration Date. Subject
to complying with the company’s Securities Trading
Policy and Code of Business Practice, participants
are free to sell, transfer or otherwise deal with
shares issued to them under the PIP (subject to
minimum shareholding requirements for the Chief
Executive Officer and other Group executives).
The intention of the deferred STI component
under the PIP is to act both as a retention and an
engagement tool. The maximum award under the
deferred STI scheme is 150% of the target award.
Any unvested restricted share rights will be forfeited
if a participant ceases to be employed by SkyCity
(or a company in the SkyCity Group) before the
relevant Declaration Date, although the Board has
discretion to determine otherwise such as where a
participant ceases to be an employee due to injury,
permanent disability, ill health or redundancy
or death. In the case of select Group executives
however, if they cease employment for any reason
(other than as a result of the termination of their
employment by SkyCity for cause, including for
serious misconduct) prior to vesting of any restricted
share rights, and they have been employed by
SkyCity for at least three years as at the date of
cessation of their employment, then they will
continue to be eligible to have shares transferred
to them on the first and second anniversaries
(as applicable) of the Declaration Date as if their
employment had not ceased, at the discretion of
the Board. As a rule, a Group executive will not be
eligible to the extent they are terminated for cause,
breach the terms of their employment agreement
or for underperformance.
Participants do not have the right to receive
dividends in respect of restricted share rights,
however if any restricted share rights vest and
shares are issued or transferred to a participant,
then that participant may receive, at the Board’s
sole discretion, a cash payment equivalent to the
cash dividends declared and paid from the date of
issue of the restricted share rights to the date the
shares are issued or transferred to that participant.
The cash payment will not include any imputation
credits, franking credits or similar benefits in respect
of such dividends.
In the event that a genuine error is made by, or on
behalf of, the Board or the company in determining
any entitlement under the PIP, including where the
company’s financial statements are subsequently
required to be restated, the Board may seek to
recover from a participant the value of any benefits
erroneously awarded to a participant under the PIP.
Restricted share rights issued under the PIP may
not be transferred, assigned or disposed of and
participants may not create any interest in favour
of any third party over the restricted share rights
(except with Board approval).
Board Discretion Exercised under the PIP and
Short Term Incentive (STI) Plan
For the financial year ended 30 June 2021, the
Board exercised its discretion under the PIP and STI
plan by amending the mechanics that determine
the individual financial objective.
Under the plan rules, the following financial goals
must be satisfied for the financial goal component
(being 70% of the target award) to be awarded:
•
•
the normalised Group NPAT result for the
financial year must meet or exceed the
normalised Group NPAT result for the
immediately preceding financial year; and
the participant’s business unit and/or
department must achieve at least 95% of its
financial target.
In relation to the financial year ended 30 June 2021,
the first financial goal was met and the majority
of the business units exceeded their financial
goals - allowing for a multiplier of up to 150% of
the financial objective target to be applied under
the plan rules. However, the Board recognised that
this outcome would not take into consideration
shareholder expectations in relation to controlling
cost, given the ongoing impact of the COVID-19
pandemic, as well as consideration of the potential
implications of the AUSTRAC enforcement
investigation into SkyCity Adelaide.
The Board therefore determined that an equitable
outcome for all participants under the PIP and STI
plan was to put in place one financial measure
for all participants, instead of a financial measure
depending on the performance of each individual
participant’s business unit and/or department.
This approach recognises that some business units
were more impacted by COVID-19 restrictions, such
as lockdowns, but that all participants should be
recognised for the overall financial performance
of SkyCity.
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The financial measure was determined by
measuring the normalised Group NPAT for the
financial year ended 30 June 2019 against the
normalised Group NPAT for the financial year ended
30 June 2021, adjusted to account for one-offs
and changes in our business (such as the earnings
attributable to the operation of the car park in
the financial year ended 30 June 2019) as well as
the impact of the receipt of Government wage
subsidies relating to the COVID-19 pandemic. This
resulted in a financial multiplier of 59.7%, which is
41.8% of the 70% financial target.
The mechanics relating to individual non-financial
objectives (being a target of 30%) followed the
plan rules, meaning participants could earn
between 50% and 150% of the non-financial target
depending on their achievement of individual
objectives and behaviour goals.
For the financial year ending 30 June 2022, 448
employees will be invited to participate in the
PIP for the opportunity to earn a cash payment
under the STI scheme – 100 of whom also have the
opportunity to acquire restricted share rights under
the deferred STI scheme.
Long Term Incentive Remuneration
Two LTI plans were in operation during the financial
year ended 30 June 2021 for the company’s most
senior employees, including the Group executives.
These plans were the SkyCity Senior Executive
Long Term Incentive Scheme and the 2018 SkyCity
Executive Long Term Incentive Plan. Copies of the
plan documents and rules are available in the
Governance section of the company’s website at
www.skycityentertainmentgroup.com.
In the financial year ended 30 June 2021, grants
were made to the Chief Executive Officer and other
Group executives under the 2018 SkyCity Executive
Long Term Incentive Plan.
To further align the Group executives’ interests
with those of shareholders, each Group executive is
encouraged, over a period of five years, to build up
and retain shares in the company (acquired under
the PIP and/or 2018 SkyCity Executive Long Term
Incentive Plan) equivalent to at least one year of
their base salary.
2018 SkyCity Executive Long Term Incentive Plan
The 2018 SkyCity Executive Long Term Incentive
Plan provides participants 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 participants for a restrictive period
of three years until the following performance
hurdles are tested:
•
•
•
50% of the shares are allocated to an absolute
total shareholder return (TSR) tranche which
includes a cost of equity premium;
the remaining 50% of the shares are allocated
equally to each of an NZX comparator group
tranche, an ASX comparator group tranche and a
competitor comparator group tranche; and
performance is assessed three years after the
issue of the shares, with no retesting dates in the
event the performance hurdles are not satisfied
as at that date.
In order to determine whether any shares will vest
in a participant following the three-year restrictive
period for those shares, each tranche is measured
against the performance hurdle for that tranche
on the performance testing date for those shares,
where the performance hurdle for each of the
tranches is:
•
•
•
•
for the absolute TSR tranche, a comparison of
SkyCity’s TSR over the restrictive period against
the cost of equity for the SkyCity Group over the
restrictive period as determined by the Board;
for the NZX comparator group tranche, a
comparison of SkyCity’s TSR over the restrictive
period against the TSR of each of the constituent
entities of the NZX 50 index (as at the grant date,
other than SkyCity) over the same period;
for the ASX comparator group tranche, a
comparison of SkyCity’s TSR over the restrictive
period against the TSR of each of the constituent
entities of the ASX 200 index (as at the grant
date, other than SkyCity) over the same period;
and
for the competitor comparator group tranche, a
comparison of SkyCity’s TSR over the restrictive
period against the TSR of each of Crown Resorts
Limited and The Star Entertainment Group
Limited over the same period.
As at 30 June 2021, a total of 1,353,423 shares were
issued under the 2018 SkyCity Executive Long
Term Incentive Plan and held by the Public Trust
on behalf of six participants. The shares vest in a
participant only when performance hurdles set by
the Board of directors are met.
The maximum award under the 2018 SkyCity
Executive Long Term Incentive Plan is 100% of the
relevant grant allocation.
Remuneration Report
143
The transfer of shares to participants at the end of the three-year restrictive period is dependent on
satisfaction of the performance conditions and continued employment with SkyCity. If a participant resigns
or is dismissed for misconduct or poor performance before the end of the restrictive period, any unvested
shares will be forfeited, unless SkyCity terminates the employment of a Group executive without cause, a
Group executive ceases employment as a result of a material change to the terms and conditions of his/her
employment which results in a diminution of that Group executive’s role, status and responsibility in the
period of 12 months immediately preceding a performance testing date or a Group executive dies or ceases
to be an employee due to medical incapacity or permanent disability.
In the event that a genuine error is made by, or on behalf of, the Board or the company in determining a
participant’s entitlement under the 2018 SkyCity Executive Long Term Incentive Plan, including where the
company’s or a third party’s financial statements are subsequently required to be restated, the Board may seek
to recover from a participant the value of any shares erroneously determined to have vested to that participant.
Until the restrictive period for the relevant shares has ended and the relevant loan on those shares is repaid,
a participant may not sell those shares or use them as security for another loan.
From time to time as directed by SkyCity, the Public Trust acquires shares in the company on-market for the
purposes of the company’s long term incentive employee plans, including the SkyCity Senior Executive Long
Term Incentive Plan and the 2018 SkyCity Executive Long Term Incentive Plan. As at 30 June 2021, the Public
Trust held a total of 3,394,058 shares – 2,104,306 of which were allocated and held on behalf of eligible
participants and 1,289,752 of which were unallocated and held on behalf of future participants.
Fixed Remuneration of Salaried Employees
All salaried roles within SkyCity are 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 several 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 considering 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.
Chief Executive Officer's Remuneration
The total remuneration earned by Michael Ahearne for duties relating to the Chief Executive Officer position
for the financial year ended 30 June 2021 is outlined in the following table (covering the period from
16 November 2020 to 30 June 2021):
SALARY AND BENEFITS
EQUITY BASED REMUNERATION
BASE
SALARY
KIWISAVER
BENEFITS
SUBTOTAL
ANNUAL
SHARE
ENTITLEMENT(1)
LTI GRANT(2)
SUBTOTAL
TOTAL
REMUNERATION
$912,994
$29,680
$2,783
$945,457
$500,000
Nil
$500,000
$1,445,457
(1) Calculated on the basis of 166,003 SkyCity shares issued to Mr Ahearne on his commencement in the role of Chief Executive Officer.
For more details, please refer to the 'Employment Agreement' section within this remuneration report.
(2) Mr Ahearne will be allocated shares under the 2018 SkyCity Executive Long Term Incentive Plan in September 2021 for his role as
Chief Executive Officer.
The total remuneration earned by Mr Ahearne for duties relating to the Chief Operating Officer position
for the financial year ended 30 June 2021 is outlined in the following table (covering the period from
1 July 2020 to 15 November 2021):
SALARY AND BENEFITS
PIP OUTCOME
BASE
OTHER
SALARY KIWISAVER
BENEFITS
PAYMENTS(1) SUBTOTAL
CASH STI
DEFERRED
STI
LTI GRANT(2) SUBTOTAL
TOTAL
REMUNERATION
$384,946
$12,556
$1,996
$33,488
$432,986
$92,160
$92,160
$204,950
$389,270
$822,256
(1) Reflects payments equivalent to the cash dividends declared and paid by SkyCity from the date of issue of restricted share rights under the
Restricted Share Rights Plan and the SkyCity Performance Incentive Plan to the date they were transferred to Mr Ahearne.
(2) Calculated on the basis of 69,711 SkyCity shares allocated to Mr Ahearne under the 2018 SkyCity Executive Long Term Incentive Plan in
September 2020.
144
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(a) Equity Based Incentives Vested in the Financial Year Ended 30 June 2021
The following equity-based incentives vested to Mr Ahearne in the financial year ended 30 June 2021:
PLAN
GRANT
YEAR
VESTING
DATE
SECURITIES
PERFORMANCE
PERIOD
PERFORMANCE
MEASURE
VESTING
OUTCOME
SHARES
VESTED
VALUE ON
VESTING
Restricted
Financial
01/07/2020
Restricted
01/07/2017 –
Financial and
100%
49,066
$120,996.76(1)
Share Rights
Year 2018
Plan
Share
Rights
30/06/2018
Non-Financial
vested
Objectives
SkyCity
Financial
07/09/2020 Restricted
01/07/2018 –
Financial and
100%
28,101
$73,911.25(2)
Performance
Year 2019
Incentive
Plan
Share
Rights
30/06/2019
Non-Financial
vested
Objectives
(1) Determined by multiplying the number of ordinary SkyCity shares transferred to Mr Ahearne by the volume weighted average price over the
last five trading days ending on (and including) 1 July 2020 (being $2.4660 per share).
(2) Determined by multiplying the number of ordinary SkyCity shares transferred to Mr Ahearne by the volume weighted average price over the
last five trading days ending on (and including) 7 September 2020 (being $2.6302 per share).
The graphs below show the mix of remuneration
that was earned by Mr Ahearne for his performance
over the financial year ended 30 June 2021 for his
position as Chief Executive Officer, alongside graphs
illustrating the target and maximum remuneration
mixes:
FY21 Actual Remuneration
(b) Pay Gap
Mr Ahearne’s base salary remuneration ratio to the
median annualised employee base salary is 26.
(c) LTI Grant
Mr Ahearne was granted an allocation of 69,711
shares in the company equal to $204,950 under
the 2018 SkyCity Executive Long Term Incentive
Plan in September 2020. This allocation relates to
Mr Ahearne’s position as Chief Operating Officer.
65%
35%
(d) Employment Agreement
FY21 Target Remuneration
65%
35%
FY21 Maximum Remuneration
65%
35%
Fixed Remuneration
Equity Based Remuneration
Mr Ahearne’s employment agreement for the
position of Chief Executive Officer is dated 13
November 2020 and reflects standard conditions
that are appropriate for a senior executive of a listed
Australasian company.
Mr Ahearne’s employment agreement may be
terminated by:
•
•
•
either Mr Ahearne or the company by giving six
months' notice in writing;
the company without notice in the case of
serious misconduct, serious breach (including
substantial non-performance) or other cause
justifying summary dismissal; or
the company immediately if the SkyCity Board
forms the view that substantial incompatibility
and/or irreconcilable differences have developed
with Mr Ahearne or the Board otherwise wishes
to terminate his employment when he is not
at fault (including a redundancy situation or
medical incapacity).
Remuneration Report
145
The remuneration and benefits under Mr Ahearne’s employment agreement for the position of Chief
Executive Officer include a base annual salary of $1,500,000 (inclusive of KiwiSaver contributions), an annual
allocation of SkyCity Shares to the value of $500,000 with a 12-month restrictive period, and an annual
allocation under the 2018 SkyCity Executive Long Term Incentive Plan to the value of $500,000, the first of
which grant will take place in September 2021.
Mr Ahearne is not a participant in the Performance Incentive Plan in his position of Chief Executive Officer.
However, he received an award under that Plan for the year ended 30 June 2021 for his role as Chief
Operating Officer for the period from 1 July 2020 to 15 November 2020.
Other Group Executives’ Remuneration
The total remuneration earned by Julie Amey for the period of the financial year ended 30 June 2021 she
was employed in the position of Chief Financial Officer is outlined in the following table (covering the period
from 2 May 2021 to 30 June 2021):
FIXED REMUNERATION
PIP OUTCOME(2)
BASE
SALARY(1)
KIWISAVER
OTHER
BENEFITS
SUBTOTAL
CASH STI
DEFERRED
STI
LTI
GRANT SUBTOTAL RELOCATION
TOTAL
REMUNERATION
$99,231
$2,977
$943
$103,151
$20,888
$20,888
–
$41,776
$10,530
$155,457
(1) Reflects actual salary payments made to Ms Amey for the period from 2 May 2021 to 30 June 2021.
(2) Reflects pro-rated entitlement under the PIP for STI and deferred STI for the period Ms Amey was employed in the postion as Chief Financial
Officer. Ms Amey will be granted an allocation of SkyCity shares under the 2018 SkyCity Executive Long Term Incentive Plan in September 2021
relating to the financial year ending 30 June 2022.
The total remuneration earned by Callum Mallett for the period of the financial year ended 30 June 2021
he was employed in the position of Chief Operating Officer New Zealand is outlined in the following table
(covering the period from 1 February to 30 June 2021):
FIXED REMUNERATION
PIP OUTCOME(2)
BASE
SALARY(1)
KIWISAVER
OTHER
BENEFITS
SUBTOTAL
CASH STI DEFERRED STI
LTI GRANT SUBTOTAL
TOTAL
REMUNERATION
$228,462
$6,854
$2,423
$237,738
$53,765
$53,765
–
$107,530
$345,268
(1) Reflects actual salary payments made to Mr Mallett for the period from 1 February 2021 to 30 June 2021.
(2) Reflects pro-rated entitlement under the PIP for STI and deferred STI for the period Mr Mallett was employed in the position of Chief
Operating Officer New Zealand. Mr Mallett will be granted an allocation of SkyCity shares under the 2018 SkyCity Executive Long Term
Incentive Plan in September 2021 relating to the financial year ending 30 June 2022.
The total remuneration earned by David Christian for the period of the financial year ended 30 June 2021
he was employed in the position of Chief Operating Officer Australia is outlined in the following table
(covering the period from 1 February to 30 June 2021):
FIXED REMUNERATION
PIP OUTCOME(2)
BASE
SALARY(1) SUPERANNUATION
SUBTOTAL
CASH STI DEFERRED STI
LTI GRANT
SUBTOTAL
TOTAL
REMUNERATION
A$197,762
A$18,787
A$216,549
A$45,514
A$45,514
–
A$91,028
A$307,577
(1) Reflects actual salary payments made to Mr Christian for the period from 1 February 2021 to 30 June 2021.
(2) Reflects pro-rated entitlement under the PIP for STI and deferred STI for the period Mr Christian was employed in the position of Chief
Operating Officer Australia. Mr Christian will be granted an allocation of SkyCity shares under the 2018 SkyCity Executive Long Term Incentive
Plan in September 2021 relating to the financial year ending 30 June 2022.
146
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Remuneration and Benefits for Graeme Stephens
Graeme Stephens retired as Chief Executive Officer effective from 30 November 2020. The total
remuneration received by Mr Stephens for duties relating to the Chief Executive Officer position during the
financial year ended 30 June 2021 is outlined in the following table:
FIXED ANNUAL REMUNERATION
REMUNERATION AND BENEFITS RECEIVED ON TERMINATION
BASE
SALARY
KIWISAVER
BENEFITS
SUBTOTAL
PIP
OUTCOME
CASH STI(1)
OTHER
PAYMENTS(2)
SALARY
IN LIEU OF
NOTICE(3)
EX-GRATIA
PAYMENT(4)
ANNUAL
LEAVE(5)
OTHER
BENEFITS(6)
SUBTOTAL
TOTAL
REMUNERATION
$637,093
$19,112
$1,614
$657,819 $436,389
$110,289
$759,836
$529,781 $140,145
$26,500 $1,456,263
$2,660,760
(1) Reflects entitlement under the PIP for STI for the financial year ended 30 June 2021.
(2) Reflects payments equivalent to the cash dividends declared and paid by SkyCity from the date of issue of restricted share rights under the
Restricted Share Rights Plan and the PIP to the date they were transferred to Mr Stephens.
(3) Reflects six months’ salary in lieu of notice.
(4) Reflects a payment equivalent to four months' salary.
(5) Reflects entitled and accrued annual leave not taken by Mr Stephens.
(6) Reflects a payment in lieu of the provision of health insurance, KiwiSaver contributions and unused flight benefits.
In addition, Mr Stephens was awarded the following equity-based remuneration for the financial year ended
30 June 2021:
•
•
161,572 restricted share rights will be granted to Mr Stephens under the deferred STI component of the
PIP in September 2021. The restricted share rights will vest to Mr Stephens in two equal tranches, with
the first tranche vesting in September 2022 and the second tranche vesting in September 2023; and
361,827 SkyCity shares were allocated to Mr Stephens under the 2018 SkyCity Executive Long Term
Incentive Plan in September 2020 with a testing date of 17 September 2023. These shares will only vest to
Mr Stephens if the performance criteria, detailed under the ‘Long Term Incentive Remuneration’ section
above, are met on the testing date.
The following equity-based incentives vested to Mr Stephens in the financial year ended 30 June 2021:
PLAN
GRANT
YEAR
VESTING
DATE
SECURITIES
PERFORMANCE
PERIOD
PERFORMANCE
MEASURE
VESTING
OUTCOME
SHARES
VESTED
VALUE ON
VESTING
Restricted
Financial
01/07/2020
Restricted
01/07/2017 –
Financial and
100%
251,238
$619,552(1)
Share Rights
Year 2018
Plan
Share
Rights
30/06/2018
Non-Financial
vested
Objectives
SkyCity
Financial
07/09/2020 Restricted
01/07/2018 –
Financial and
100%
97,936
$257,591(2)
Performance
Year 2019
Incentive
Plan
Share
Rights
30/06/2019
Non-Financial
vested
Objectives
(1) Determined by multiplying the number of ordinary SkyCity shares transferred to Mr Stephens by the volume weighted average price over the
last five trading days ending on (and including) 1 July 2020 (being $2.4660 per share).
(2) Determined by multiplying the number of ordinary SkyCity shares transferred to Mr Stephens by the volume weighted average price over the
last five trading days ending on (and including) 7 September 2020 (being $2.6302 per share).
Mr Stephens continues to be eligible to have shares transferred to him:
•
•
•
under the SkyCity Executive Long Term Incentive Plan for allocations relating to the financial year ended
30 June 2018, subject to the performance conditions being satisfied on the relevant performance testing
date;
under the 2018 SkyCity Executive Long Term Incentive Plan for allocations relating to the financial years
ended 30 June 2019, 30 June 2020 and 30 June 2021, subject to the performance conditions being
satisfied on the relevant performance testing dates; and
under the PIP, on the second anniversary of the Declaration Date for the year ended 30 June 2019
(being 6 September 2021).
Remuneration Report
147
Group Executive Security Holdings
The following table summarises the acquisitions and disposals of relevant interests in SkyCity securities
during the period to 30 June 2021 by the current Chief Executive Officer and Chief Operating Officer
Australia. No acquisitions or disposals were made during the period by the current Chief Financial Officer
and Chief Operating Officer New Zealand.
GROUP EXECUTIVE
Michael Ahearne
Chief Executive Officer
David Christian
Chief Operating Officer
Australia
NATURE OF
RELEVANT
INTEREST
Beneficially
owned
Beneficially
owned
Beneficially
owned
Beneficially
owned(3)
Beneficially
owned
Beneficially
owned(5)
NATURE OF
SECURITY
DATE OF
TRANSACTION
DURING PERIOD
CONSIDERATION
(PER SECURITY)
ACQUIRED/
(DISPOSED)
Shares
01/07/2020
Nil(1)
49,066
Shares
09/07/2020
$2.38(2)
8,403
Shares
07/09/2020
Nil(1)
28,101
Shares (LTI 2020)
30/09/2020
$2.94
69,711
Shares
04/05/2021
Shares
04/05/2021
Nil(4)
Nil(4)
(94,261)
94,261
The above disclosures relate to each Group executive during such period as he/she held the relevant role.
(1) Shares transferred pursuant to the terms of the 2018 SkyCity Restricted Share Rights Plan.
(2) Acquisition of new shares pursuant to the share purchase plan announced by SkyCity on 17 June 2020.
(3) Held by the Public Trust in accordance with the 2018 SkyCity Executive Long Term Incentive Plan.
(4) Shares transferred pursuant to a personal reorganisation.
(5) Shares held by Bond Street Custodians Pty Ltd.
The following table summarises the relevant interests in SkyCity securities held by the Chief Executive
Officer, Chief Financial Officer, Chief Operating Officer New Zealand and Chief Operating Officer Australia as
at 30 June 2021:
GROUP EXECUTIVE
Michael Ahearne
Chief Executive Officer
Julie Amey
Chief Financial Officer
Callum Mallett
Chief Operating Officer New Zealand
David Christian
Chief Operating Officer Australia
NATURE OF SECURITY
TOTAL HELD AS AT
30 JUNE 2021
Shares
Shares
N/A
Shares
Shares
Shares
120,570
166,084(1)
Nil
85,819
30,000(2)
169,626(3)
(1) Shares held by the Public Trust in accordance with the 2018 SkyCity Executive Long Term Incentive Plan.
(2) Shares held by the Public Trust in accordance with the 2009 SkyCity Executive Long Term Incentive Plan.
(3) Shares held by Bond Street Custodians Pty Ltd.
LTI Vesting Calculations
During the financial year ended 30 June 2021, the following vesting calculations were completed:
August 2016 LTI: the third (and final) test was completed. No shares have vested to executives in respect
of the 2016 allocation. All unvested shares were accordingly forfeited in accordance with the terms of the
SkyCity Senior Executive Long Term Incentive Plan; and
August 2017 LTI: the first and second tests were completed. To date, no shares have vested to executives
in respect of the 2017 allocation. The third (and final) test will take place during August 2021 and any
shares that do not vest at that time will be forfeited in accordance with the terms of the SkyCity Senior
Executive Long Term Incentive Plan.
•
•
148
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Employee Remuneration
The number of employees or former employees
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 2021, are listed in
the table.
For the purposes of the table, remuneration
includes, where applicable (if any), (a) salary;
(b) short term cash bonuses; (c) health insurance
premiums and other health benefits; (d) the value
of shares expected to vest under the 2020 SkyCity
Performance Incentive Plan; (e) the value of share
rights expensed during the year (including PAYE
and PAYG on vested share rights, but excluding
accrued PAYE and PAYG on unvested share rights)
under the SkyCity Senior Executive Long Term
Incentive Plan and the 2018 SkyCity Executive Long
Term Incentive Plan; (f) the value of commencement
shares expensed during the year; (g) sign-on cash
payments; and (h) settlement payments and
payments in lieu of notice with respect to certain
employees upon their departure from the company.
E
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A
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REMUNERATION
NUMBER OF EMPLOYEES
$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
$250,000–$259,999
$260,000–$269,999
$270,000–$279,999
$280,000–$289,999
$290,000–$299,999
$310,000–$319,999
$320,000–$329,999
$330,000–$339,999
$340,000–$349,999
$350,000–$359,999
$390,000–$399,999
$400,000–$409,999
$420,000–$429,999
$430,000–$439,999
$450,000–$459,999
$520,000–$529,999
$560,000–$569,999
$580,000–$589,999
$590,000–$599,999
$630,000–$639,999
$640,000–$649,999
$730,000–$739,999
$1,790,000–$1,799,999
$2,620,000–$2,629,999
TOTAL
69
57
44
25
16
18
16
10
8
14
11
7
6
3
3
1
2
2
1
1
2
1
3
2
2
1
1
1
1
1
3
2
1
1
1
1
1
1
1
341
Remuneration Report
149
Twenty Largest Registered Shareholders as at 1 August 2021
1. HSBC Custody Nominees (Australia) Limited
106,157,389
13.96%
NUMBER OF SHARES
% OF SHARES
2. JP Morgan Nominees Australia Limited
3. Citicorp Nominees Pty Limited
4. HSBC Nominees (New Zealand) Limited – NZCSD
5. Citibank Nominees (New Zealand) Limited – NZCSD
6. Accident Compensation Corporation – NZCSD
7. HSBC Nominees (New Zealand) Limited A/C State Street – NZCSD
8. JPMorgan Chase Bank NA NZ Branch-Segregated Clients Acct – NZCSD
9. BNP Paribas Noms Pty Ltd
10. BNP Paribas Nominees Pty Ltd
11. BNP Paribas Nominees (NZ) Limited – NZCSD
12. HSBC Nominees A/C NZ Superannuation Fund Nominees Limited – NZCSD
13. ANZ Custodial Services New Zealand Limited – NZCSD
14. National Nominees Limited
15. New Zealand Depository Nominee Limited
16. BNP Paribas Nominees (NZ) Limited – NZCSD
17. ANZ Wholesale Australasian Share Fund – NZCSD
18. Citicorp Nominees Pty Limited
19. Masfen Securities Limited
20. PT (Booster Investments) Nominees Limited
89,129,857
60,731,654
53,585,486
46,714,257
35,070,066
32,261,558
19,821,588
19,147,212
18,839,987
18,012,059
16,131,421
13,323,928
12,318,845
12,132,394
11,543,997
8,810,026
6,782,190
5,750,986
5,525,682
11.72%
7.99%
7.05%
6.15%
4.61%
4.24%
2.61%
2.52%
2.48%
2.37%
2.12%
1.75%
1.62%
1.60%
1.52%
1.16%
0.89%
0.76%
0.73%
Total
591,790,582
77.85%
Total ordinary shares on issue as at 1 August 2021 were 760,205,209 of which 3,394,058 were held in
aggregate by the Public Trust on behalf of eligible and future participants pursuant to the SkyCity Senior
Executive Long Term Incentive Plan and 2018 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.
150
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Distribution of Ordinary Shares and Registered Shareholdings as
at 1 August 2021
1–1,000
1,001–5,000
5,001–10,000
10,001–100,000
> 100,000
Total
NUMBER OF
SHAREHOLDERS
4,839
6,431
2,586
2,613
148
16,617
NUMBER OF
SHARES
1,873,991
17,511,818
18,495,859
63,724,540
658,599,001
760,205,209
PERCENTAGE OF
TOTAL ORDINARY
SHARES IN THE
COMPANY
0.25%
2.30%
2.43%
8.38%
86.64%
100%
As at 1 August 2021, there were 1,517 shareholders (with a total of 92,385 shares) holding less than a
marketable parcel of shares under the ASX Listing Rules, based on the closing share price of A$3.04.
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 2021, 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
The Vanguard Group, Inc
Investors Mutual Ltd
Yarra Management Nominees Pty Ltd and
TA Universal Investment Holdings Ltd
AustralianSuper Pty Ltd
Commonwealth Bank of Australia
19/12/2018
08/12/2020
14/04/2021
05/05/2021
07/05/2021
36,018,413
42,319,188
65,593,783
45,844,429
46,350,211
5.278%
5.57%
8.6284%
6.03%
6.097%
Substantial security holder notices received since 30 June 2021 can be viewed at www.nzx.com/companies/
SKC/announcements.
The total number of listed voting securities of SkyCity Entertainment Group Limited as at 30 June 2021 was
760,205,209.
Shareholder and Bondholder Information
151
Bonds
On 21 May 2021, the company issued 175 million unsecured, unsubordinated, fixed rate, six-year bonds at an
issue price of $1.00 per bond. The bonds pay a fixed rate of interest of 3.02% per annum until the maturity
date and are quoted on the NZX Debt Market under the ticker code ‘SKC050’.
Twenty Largest Registered Bondholders as at 1 August 2021
NUMBER OF BONDS
% OF BONDS
1. Forsyth Barr Custodians Limited
2. Custodial Services Limited
3. FNZ Custodians Limited
4. Hobson Wealth Custodian Limited
5. BNP Paribas Nominees (NZ) Limited - NZCSD
6. National Nominees Limited - NZCSD
7. HSBC Nominees (New Zealand) Limited – NZCSD
8. Investment Custodial Services Limited
9. JBWere (NZ) Nominees Limited
10. BNP Paribas Nominees (NZ) Limited - NZCSD
11. FNZ Custodians Limited
12. Forsyth Barr Custodians Limited
13. Forsyth Barr Custodians Limited
14. FNZ Custodians Limited
15. Woolf Fisher Trust Incorporated
16. Falstaff Investments Limited
17. Tea Custodians Limited Client Property Trust Account – NZCSD
18. Custodial Services Limited
19. Kiwigold.co.nz Limited
20. Queen Street Nominees ACF Hobson Wealth - NZCSD
47,015,000
31,590,000
23,227,000
12,955,000
12,080,000
5,900,000
5,776,000
3,811,000
2,476,000
1,911,000
1,731,000
1,365,000
1,237,000
939,000
815,000
770,000
610,000
590,000
500,000
500,000
26.87%
18.05%
13.27%
7.40%
6.90%
3.37%
3.30%
2.18%
1.42%
1.09%
0.99%
0.78%
0.71%
0.54%
0.47%
0.44%
0.35%
0.34%
0.29%
0.29%
Total
155,798,000
89.03%
Distribution of Bonds and Registered Holdings as at 1 August 2021
NUMBER OF BONDHOLDERS
NUMBER OF BONDS
PERCENTAGE OF
TOTAL BONDS ISSUED
1,000–5,000
5,001–10,000
10,001–100,000
> 100,000
Total
31
122
415
46
614
155,000
1,172,000
13,433,000
160,240,000
175,000,000
0.09%
0.67%
7.68%
91.56%
100%
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Directors' Disclosures
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 2021 (notices given
by directors during the financial year ended 30 June 2021 are marked with an asterisk):
Rob Campbell (Chair)
Ara Ake Limited
Murray Jordan
Chair*
Asia Pacific Village Group Limited
Auckland University of Technology
Chancellor*
Asia Pacific Village Holdings Limited
He Toutou Mo Te Ahika Trust
Trustee*
Chorus Limited
Tourism Holdings Limited
Chair and Shareholder
New Zealand Rural Land
Company Limited
NZ Equity Partners
Paua Wealth Management Limited
Precinct Properties New Zealand
Limited
RC Custodian Limited
Tutanekai Investments Limited
Ultrafast Fibre Limited
VGI Partners Limited
WEL Networks Limited
Sue Suckling
5th Element Limited
Eat My Lunch Limited
Insurance & Financial Services
Ombudsman Scheme Commission
Jacobsen Holdings Limited
Jade Software Corporation Limited
Rubix Limited
Chair
Foodstuffs’ Members Protection
Trust
Investment Committee
Member
Advisory Board
Member
Director and
Shareholder
Director
Director and
Shareholder
Director
Advisory Director*
Chair
Metcash Limited
Metlifecare Limited
Real Clarity Limited
Southern Cross Benefits Limited
Southern Cross Health Trust
Southern Cross Hospitals Limited
Southern Cross Medical Care
Society
Starship Foundation
Stevenson Group Limited
The Foodstuffs Co-operative
Perpetuation Trust
Silvana Schenone
MinterEllisonRuddWatts
New Zealand Takeovers Panel
OnBeingBold Limited
Sequin Family Trust
Julian Cook
Chair*
Chair*
Chair
Chair
Chair
Chair
Director*
Director*
Director
Trustee
Director
Director*
Director and
Shareholder
Director
Trustee
Director
Director
Trustee
Director
Trustee
Partner*
Member*
Director*
Independent Trustee*
Sue Suckling Holdings Limited
Managing Director
Motutapu Investments Limited
Taska Prosthetics Limited
Chair*
WEL Networks Limited
Director*
Director*
Jennifer Owen
Aspire Child Care (Mascot) Pty Ltd
Owen Gaming Research
Director
Principal
Chad Barton
Bain & Company
External Advisor*
Casheaw Pty Limited
Chair and Shareholder*
Neurological Research Australia
(NeuRA)
Nuix Limited
Director*
Interim Chief Financial
Officer*
The following details included in the Interests Register as at 30 June 2020, or entered during the financial
year ended 30 June 2021, have been removed during the financial year ended 30 June 2021:
• Rob Campbell is no longer Chair of Summerset Group Holdings Limited; and
• Sue Suckling is no longer Chair of Brannigans Consulting Limited, Soltians Limited or Zag Limited.
Directors' Disclosures
153
Directors’ and Senior Managers’ 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 Securities Transactions
Directors disclosed, pursuant to section 148 of the New Zealand Companies Act 1993, the following
acquisitions and disposals of relevant interests in SkyCity securities during the period to 30 June 2021:
DIRECTOR
Rob Campbell
Bruce Carter(3)
Sue Suckling
Jennifer Owen
Murray Jordan
NATURE OF
RELEVANT
INTEREST
Beneficially
owned(1)
Beneficially
owned(1)
Beneficially
owned(1)
Beneficially
owned(4)
Beneficially
owned(5)
Beneficially
owned(6)
Beneficially
owned(6)
Beneficially
owned(7)
NATURE OF
SECURITY
DATE OF
TRANSACTION
DURING PERIOD
CONSIDERATION
(PER SECURITY)
ACQUIRED/
(DISPOSED)
Shares
09/07/2020
$2.38(2)
21,008
Shares
04/09/2020
$2.60
5,000
Shares
23/02/2021
$2.90
5,000
Shares
09/07/2020
A$2.24(2)
20,983
Shares
09/07/2020
$2.38(2)
21,008
Shares
09/07/2020
A$2.24(2)
20,983
Shares
22/10/2020
A$2.79
20,000
Shares
09/07/2020
$2.38(2)
21,008
(1) Shares held by FNZ Custodians Limited on behalf of Tutanekai Investments Limited.
(2) Acquisition of new shares pursuant to the share purchase plan announced by SkyCity on 17 June 2020.
(3) Bruce Carter resigned as a director effective from 20 March 2021.
(4) Shares held by Tarquay Pty Limited on trust for Tarquay Superannuation Fund.
(5) Shares held by the trustees of The Sue Suckling Family Trust.
(6) Shares held by the trustee of the Owen & Paull Retirement Fund.
(7) Shares held by the trustees of Endeavour Trust.
Disclosure of Directors’ Interests in Securities
Directors disclosed the following relevant interests in SkyCity securities as at 30 June 2021:
DIRECTOR
Rob Campbell
Sue Suckling
Jennifer Owen
Murray Jordan
Silvana Schenone
Julian Cook
Chad Barton
NATURE OF SECURITY
TOTAL HELD AS AT
30 JUNE 2021
Shares
Shares
Shares
Shares
Fixed Rate Bonds
Shares
N/A
101,936(1)
60,949(2)
75,983(3)
94,706(4)
160,000(5)
100,000(6)
Nil
(1) Shares held by FNZ Custodians Limited on behalf of Tutanekai Investments Limited.
(2) Shares held by the trustees of The Sue Suckling Family Trust.
(3) Shares held by the trustee of the Owen & Paull Retirement Fund.
(4) Shares held by the trustees of Endeavour Trust.
(5) Non-beneficially owned bonds held by Silvana Schenone as independent trustee of the Sequin Family Trust.
(6) Shares held by Motutapu Investments Limited.
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Company Disclosures
Stock Exchange Listings
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 ‘SKC050’).
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 156 and 157 of this
annual report.
SkyCity is listed as a ‘Foreign Exempt Listing’ on
the ASX.
SkyCity Entertainment Group Limited
The following persons held office as directors
of SkyCity Entertainment Group Limited as at
30 June 2021:
DIRECTORS
APPOINTMENT TO OFFICE
Rob Campbell (Chair)
25 June 2017
Sue Suckling
9 May 2011
Subsidiary Companies
The following persons held office as directors
of subsidiaries of SkyCity Entertainment Group
Limited as at 30 June 2021:
NEW ZEALAND SUBSIDIARIES
Directors
Michael Ahearne, Jo Wong
Companies
Cashel Asset Management Limited
Horizon Tourism (New Zealand) Limited
Lets Play Live Media Limited
New Zealand International Convention
Centre Limited
Otago Casinos Limited
Queenstown Casinos Limited
Sky Tower Limited
SkyCity Action Management Limited
SkyCity Auckland Limited
SkyCity Auckland Holdings Limited
SkyCity Casino Management Limited
SkyCity Development Limited
SkyCity Enterprises Limited
SkyCity Hamilton Limited
SkyCity Holdings Limited
SkyCity International Holdings Limited
SkyCity Investments Australia Limited
SkyCity Investments Queenstown Limited
SkyCity Management Limited
SkyCity Precinct Limited
SkyCity Projects Limited
SkyCity Properties Limited
SkyCity Properties Albert St Limited
SkyCity Properties Victoria St Limited
SkyCity Ventures Limited
TNZ Esports Limited
Jennifer Owen
5 December 2016
OVERSEAS SUBSIDIARIES
Murray Jordan
5 December 2016
Directors
Michael Ahearne, Jo Wong
Silvana Schenone
8 June 2021
Julian Cook
Chad Barton
8 June 2021
8 June 2021
Bruce Carter ceased to hold office as a director of
SkyCity Entertainment Group Limited effective from
20 March 2021.
Companies
Horizon Tourism Limited
SkyCity Investment Holdings Limited
Directors
Michael Ahearne, Jo Wong, David Christian
Companies
LPL Media Pty Limited
SkyCity Adelaide Pty Limited
SkyCity Australia Finance Pty Limited
SkyCity Australia Pty Limited
SkyCity Treasury Australia Pty Limited
Directors
Steve Salmon, Joe Borg
Company
SkyCity Malta Limited
Directors
Steve Salmon, WH Management Limited
Company
SkyCity Malta Holdings Limited
Directors
Steve Salmon, Michael Ahearne
Company
SkyCity Management (UK) Limited
Company Disclosures
155
For the financial year ended 30 June 2021, SkyCity
paid director’s fees of:
€12,000 (plus VAT) to WH Partners for
professional services provided by Joe Borg in
relation to his directorship of SkyCity Malta
Limited; and
resolution put to the shareholders.
There are no voting rights attached to SkyCity’s debt
securities although bondholders are welcome to
attend the annual meeting of shareholders.
Limitations on Acquisitions of Ordinary Shares
€6,000 (plus VAT) to WH Management Limited
for professional services provided in relation to its
directorship of SkyCity Malta Holdings Limited.
The company’s constitution contains various
provisions which are included to take into account
the application of the:
•
•
No director’s fees were paid to, or received by, any
other director of a subsidiary company during the
financial year ended 30 June 2021.
• Gambling Act 2003 (New Zealand);
• Casino Act 1997 (South Australia);
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 17 September 2019, NZX granted SkyCity
a waiver from NZX Listing Rule 8.1.5 (which
provides that no benefit or right attaching to
a quoted financial product may be cancelled
or varied by reason only of a transfer of that
quoted financial product) to the extent that
that rule would otherwise prevent SkyCity from
suspending voting rights or requiring a transfer
of shares in accordance with the provisions
set out in the company’s constitution. Further
details of those provisions are set out below. The
waiver was granted following the introduction
of new NZX Listing Rules on 1 January 2019 and
effectively re-documents prior decisions of NZX
Regulation in respect of the same matters; and
a class waiver and ruling issued by NZX dated
3 April 2020 in relation to NZX Listing Rules
3.5.1, 3.5.3, 3.6.1 and 3.12.1, which, in light of
the challenges posed by COVID-19, provided
issuers with up to an additional 30 days to
prepare and release results announcements
(including preliminary interim and full year
financial statements).
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.
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
•
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.
Clause 11.12 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
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
156
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•
•
•
any regulatory authority which determines that
its approval is 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 2021,
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 $15,924.50 were made by the
company during the financial year ended
30 June 2021 ($104,244 during the financial year
ended 30 June 2020).
Other Legislation and Requirements
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 included in the
company's constitution, 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 Buy Back 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
company's long term incentive employee plans
as detailed in the remuneration report on pages
138 – 149 in this annual report. 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.
Credit Rating
As at the date of this annual report, SkyCity
Entertainment Group Limited has a BBB– rating
(stable outlook) from S&P Global Ratings.
Company Disclosures
157
Financial
Statements
and Notes
for the year ended 30 June 2021
These financial statements were signed on
24 August 2021 on behalf of the Board of directors
of SkyCity Entertainment Group Limited by:
Rob Campbell
Chair
Jennifer Owen
Chair of the Audit and Risk Committee
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Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
Our opinion
In our opinion, the accompanying financial statements of SkyCity Entertainment Group Limited (the
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
Our opinion
position of the Group as at 30 June 2021, its financial performance and its cash flows for the year then
In our opinion, the accompanying financial statements of SkyCity Entertainment Group Limited (the
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
(NZ IFRS) and International Financial Reporting Standards (IFRS).
position of the Group as at 30 June 2021, 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
The Group's financial statements on pages 166 to 217 which comprise:
● the balance sheet as at 30 June 2021;
What we have audited
The Group's financial statements on pages 166 to 217 which comprise:
● the income statement for the year then ended;
● the statement of comprehensive income for the year then ended;
● the balance sheet as at 30 June 2021;
● the statement of changes in equity for the year then ended;
● the income statement for the year then ended;
● the statement of cash flows for the year then ended; and
● the statement of comprehensive income for the year then ended;
● the notes to the financial statements, which include significant accounting policies and other
● the statement of changes in equity for the year then ended;
explanatory information.
● the statement of cash flows for the year then ended; and
● the notes to the financial statements, which include significant accounting policies and other
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 financial statements section of our
report.
explanatory information.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
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 financial statements section of our
report.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
We are independent of the Group in accordance with Professional and Ethical Standard 1
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
International Code of Ethics for Assurance Practitioners (including International Independence
subsidiary statutory financial statements’ preparation, other assurance services in relation to
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
Board and the International Code of Ethics for Professional Accountants (including International
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
159
Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
Key audit matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial statements of the current year. These matters were addressed in the context
of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
Our opinion
In our opinion, the accompanying 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 2021, 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).
● the balance sheet as at 30 June 2021;
● Critically assessing the facts and
● the income statement for the year then ended;
● the statement of cash flows for the year then ended; and
● the statement of changes in equity for the year then ended;
How our audit addressed the key audit matter
● the statement of comprehensive income for the year then ended;
estimated extent of damage and the estimated
cost of reinstatement;
We have performed an assessment of the Group’s
estimates and related judgements, by:
● Reviewing the RLB expert reports on the
Description of the key audit matter
What we have audited
Accounting for the NZICC fire
The Group's financial statements on pages 166 to 217 which comprise:
As disclosed in note 6 to the financial
statements, the extent of damage and
insurance recovery pertaining to the New
Zealand International Convention Centre
(NZICC) and adjacent Hobson Street Hotel
(HSH) as a result of the fire, have been re-
estimated by an independent external
expert engaged by the Group, Rider Levett
explanatory information.
Bucknall Auckland Limited (RLB).These
estimates, along with information provided
by Fletcher Construction Company Limited
(the Contractor) inform the Group’s view of
the contracts work insurance recovery.
Adjustments have been made by the Group
to the cost of remediation estimate provided
by RLB to exclude: pre-remediation
expenses (site preparation and cleaning
costs) which are recognised separately as
other recoveries when incurred; and costs
for which the recoverability has not been
assessed as virtually certain.
circumstances, assumptions and methodology
underpinning the key estimates through
● the notes to the financial statements, which include significant accounting policies and other
meetings with management and their expert,
partaking on a guided tour of the NZICC and
Basis for opinion
HSH sites and comparison of RLB’s reports to
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
information provided by the Contractor; and
(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 financial statements section of our
report.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
independence and objectivity of the Group's
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
damage and insurance recovery estimate
Board and the International Code of Ethics for Professional Accountants (including International
expert;
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
Additionally, we have:
● Assessed the professional competence,
management which supports the judgement the
Group has made regarding the likelihood of
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
recovering other costs.
for our opinion.
As a result, in the year ended 30 June 2021
additional contract works insurance
recovery of $43.6 million has been
recognised as NZICC fire related income
and an additional $34.7 million of capitalised
work in progress has been derecognised,
offset by a release from the deferred licence
value liability of $7.5 million.
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
● Assessed the recoverability of the insurance
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
recoveries recognised giving consideration to
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
the credit risk of the respective insurers;
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
● Checked the mathematical accuracy of the
underlying calculations of the fire related
adjustments;
● Substantively tested a sample of other
● Reviewing legal advice obtained by
recoveries back to supporting documentation to
validate the amounts recorded during the year;
Expert investigation in respect of the
damage sustained and remediation works
required remains ongoing and as a result,
the estimates are highly sensitive and
continue to be based on limited information.
● Reviewed the Group’s agreement with the
Crown to extend the long stop date; and
● Considered the adequacy of the related
financial statement disclosures.
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
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How our audit addressed the key audit matter
Our opinion
In our opinion, the accompanying 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 2021, 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
The Group's financial statements on pages 166 to 217 which comprise:
● 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 financial statements, which include significant accounting policies and other
Description of the key audit matter
The most significant assumptions, and
associated risk to the estimates provided,
relate to the integrity of the structural steel,
extent of damage to the facade of the
NZICC, the percentage of contingency
included in the estimates, and the timeline
for remediation. Any changes to these and
other assumptions can significantly impact
the amounts recorded.
● the balance sheet as at 30 June 2021;
Other recoveries of $127.2 million have also
been recognised in the year, which primarily
relate to site preparation, demolition and
clean up costs on-charged by the
Contractor. The assessment of
recoverability of these costs as virtually
explanatory information.
certain is a key judgement and for some of
these costs the judgement is supported by
legal advice received by the Group.
There is significant estimation uncertainty
inherent in the balances recorded on the
balance sheet and the amounts recognised
in the income statement pertaining to the
accounting implications of the fire.
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 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.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
During the year, the Crown agreed to an
extension of the Completion Long Stop Date
included in the New Zealand International
Convention Centre Project and Licensing
Agreement. The revised date is 15
December 2027 and completion is expected
before this date.
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
For the Auckland and Hamilton CGUs, we
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
performed the following audit procedures:
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
● Understood the process undertaken by
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
Impairment considerations in respect of
goodwill and other intangible assets,
including the ongoing impact of COVID-19
At 30 June 2021, the carrying amount of
goodwill and casino licences totalled $585.4
million (30 June 2020: $589.5 million). Refer
to note 24 of the financial statements.
management to prepare the forecast cash
flows;
Accounting standards require an entity to
assess at the end of each reporting period
whether there is any indication that an asset
may be impaired. There is also a
requirement to perform an impairment
assessment of goodwill and other indefinite
life intangible assets at least annually.
● Compared the forecast cash flows used for
FY22 to the Board approved business plan;
● Considered and challenged key assumptions, in
particular those underpinning earnings before
interest, tax, depreciation and amortisation
(EBITDA) margin and the ongoing impacts of
COVID-19;
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T: +64 9 355 8000, www.pwc.co.nz
● Engaged our auditor’s valuation expert to
assess management’s valuation conclusions
and key assumptions, including the pre tax
discount rates and terminal growth rates; and
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● the notes to the financial statements, which include significant accounting policies and other
Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
Description of the key audit matter
How our audit addressed the key audit matter
● Compared historical performance against
Our opinion
In our opinion, the accompanying financial statements of SkyCity Entertainment Group Limited (the
budget, investigated material differences and
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
considered the impact on future cash flow
position of the Group as at 30 June 2021, its financial performance and its cash flows for the year then
forecasts.
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
(NZ IFRS) and International Financial Reporting Standards (IFRS).
The Group performed an impairment
assessment for the Auckland and Hamilton
cash generating units (CGUs), both of which
include indefinite life intangible assets. An
assessment of the value in use using
discounted cash flow forecast (DCF) models
What we have audited
was prepared for both of these CGUs.
The Group's financial statements on pages 166 to 217 which comprise:
For the Adelaide CGU, we performed the following
audit procedures on the independent valuation
prepared by management’s expert:
● Understood the process undertaken by
● the balance sheet as at 30 June 2021;
● 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
An impairment assessment was also
prepared in relation to the Adelaide CGU
which includes a finite life intangible asset,
the Adelaide casino licence. In the prior
year, the Group recorded an impairment
charge of $160.6 million against the
Adelaide casino licence. The Group
considered there to be indicators that the
CGU may be further impaired due to the
ongoing impact of the COVID-19 global
pandemic on the business.
explanatory information.
management to prepare the forecast cash
flows;
● Compared the forecast cash flows used for
FY22 to the Board approved business plan;
● Considered the adoption by the Board of the
five year forecast included in management’s
expert’s valuation;
● Compared historical performance against
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (New Zealand) (ISAs
budget, investigated material differences and
(NZ)) and International Standards on Auditing (ISAs). Our responsibilities under those standards are
considered the impact on future cash flow
further described in the Auditor’s responsibilities for the audit of the financial statements section of our
report.
forecasts;
The Group engaged a valuation expert to
perform an independent valuation of the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
● Considered and challenged key assumptions
Adelaide CGU which was prepared using a
for our opinion.
including the ongoing impacts of COVID-19,
DCF model under the fair value less costs of
international business strategy and the key
Independence
disposal (FVLCOD) method.
drivers of EBITDA growth and overall business
We are independent of the Group in accordance with Professional and Ethical Standard 1
performance, with reference to external
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
evidence where possible;
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
− Assess and challenge key assumptions,
● Engaged our auditor’s valuation expert to:
Impairment testing is a key focus of our
audit due to the materiality of the balances
and the significant level of management
estimation and judgement in determining the
key assumptions used in the impairment
assessments. The most significant of these
judgements and sensitivities are disclosed
in note 24.
including the discount and terminal growth
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
rates;
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
− Assess the reasonableness of the 2% cost
of disposal assumption applied under the
FVLCOD method; and
In relation to the Auckland and Hamilton
CGUs, the recoverable amount exceeds the
carrying amount and no impairment has
been recorded.
− Evaluate the valuation conclusions and
cross checks performed by management’s
valuation expert with reference to external
market evidence.
In relation to Adelaide, the impairment
review and independent valuation
concluded on a valuation of the CGU within
a reasonable range, the mid point of which
implied a potential impairment reversal of
$5.7 million at 30 June 2021 (with the low
end of the range suggesting an increase in
impairment of $16.9 million and the high end
suggesting a reversal of impairment of
$31.2 million).
●
In conjunction with our auditor’s valuation
expert, we met with management’s valuation
expert to understand and challenge the
valuation approach and key assumptions,
including the ongoing impact of COVID-19, in
particular the impact on international business;
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
PwC
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SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
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● Considered the key drivers for movements in
Description of the key audit matter
However, given the uncertainties associated
with forecasting in a COVID-19
environment, and acknowledging the
sensitivities of the valuation to small
changes in assumptions as disclosed in
note 24, management determined that the
What we have audited
current period valuation range did not
The Group's financial statements on pages 166 to 217 which comprise:
warrant a reversal of the impairment
recognised in the prior period nor any
additional impairment.
Our opinion
In our opinion, the accompanying financial statements of SkyCity Entertainment Group Limited (the
both the independent valuation of the CGU and
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
the carrying value of the CGU from the prior
position of the Group as at 30 June 2021, its financial performance and its cash flows for the year then
year. Assessed whether the valuation
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
conclusion supports both no impairment
(NZ IFRS) and International Financial Reporting Standards (IFRS).
reversal and no further impairment, noting
consistent with the prior year that there remains
significant uncertainty in forecasting in a
COVID-19 environment for the Group; and
● the income statement for the year then ended;
● the balance sheet as at 30 June 2021;
● Considered and challenged the extent of
● 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
disclosure provided in note 24 to the financial
statements, with particular emphasis on the
valuation sensitivities.
explanatory information.
For all CGUs, we assessed the appropriateness of
● the notes to the financial statements, which include significant accounting policies and other
disclosures made in the financial statements
including those for key assumptions and
sensitivities.
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 financial statements section of our
report.
Our audit approach
Overview
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Independence
Overall group materiality: $8.0 million, which represents
We are independent of the Group in accordance with Professional and Ethical Standard 1
approximately 5% of weighted-average profit before tax from
International Code of Ethics for Assurance Practitioners (including International Independence
continuing operations over the past four years, excluding the net gain
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
on the Auckland car park concession transaction, NZICC fire related
Board and the International Code of Ethics for Professional Accountants (including International
income, NZICC fire related expenses and income from liquidated
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
damages, recorded in either or both the current and prior years.
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We chose profit before tax from continuing operations, which is a
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
generally accepted benchmark, because in our view, it is the
subsidiary statutory financial statements’ preparation, other assurance services in relation to
benchmark against which the performance of the Group is most
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
commonly measured by users.
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
We chose to use a weighted average of the last four years and to
adjust it as described above because, in our view, it provides a more
stable measure of the Group’s performance.
Our Group audit focused on the major operating subsidiaries which
were selected based on their contribution to the Group’s revenue. In
aggregate, the subsidiaries selected for full scope audits contributed
96% of the Group’s revenue. We performed analytical review
procedures over the other subsidiaries.
As reported above, we have two key audit matters, being:
● Accounting for the NZICC fire
●
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
Impairment considerations in respect of goodwill and other
T: +64 9 355 8000, www.pwc.co.nz
intangible assets, including the ongoing impact of COVID-19.
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Independent auditor’s report
To the shareholders of SkyCity Entertainment Group Limited
As part of designing our audit, we determined materiality and assessed the risks of material
misstatement in the financial statements. In particular, we considered where management made
Our opinion
subjective judgements; for example, in respect of significant accounting estimates that involved
In our opinion, the accompanying financial statements of SkyCity Entertainment Group Limited (the
making assumptions and considering future events that are inherently uncertain. As in all of our audits,
Company), including its subsidiaries (the Group), present fairly, in all material respects, the financial
we also addressed the risk of management override of internal controls, including among other
position of the Group as at 30 June 2021, its financial performance and its cash flows for the year then
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
matters, consideration of whether there was evidence of bias that represented a risk of material
(NZ IFRS) and International Financial Reporting Standards (IFRS).
misstatement due to fraud.
● the balance sheet as at 30 June 2021;
What we have audited
The Group's financial statements on pages 166 to 217 which comprise:
Materiality
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
Misstatements may arise due to fraud or error. They are considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
● the statement of comprehensive income for the year then ended;
● the income statement for the year then ended;
● the statement of changes in equity for the year then ended;
explanatory information.
● the statement of cash flows for the year then ended; and
Based on our professional judgement, we determined certain quantitative thresholds for materiality,
including the overall Group materiality for the financial statements as a whole as set out above. These,
● the notes to the financial statements, which include significant accounting policies and other
together with qualitative considerations, helped us to determine the scope of our audit, the nature,
timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually
and in aggregate, on the financial statements as a whole.
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 financial statements section of our
report.
How we tailored our group audit scope
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an
opinion on the financial statements as a whole, taking into account the structure of the Group, the
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
accounting processes and controls, and the industry in which the Group operates.
for our opinion.
The materiality levels applied in the full scope audits for selected subsidiaries are performed at a
materiality level determined by reference to a proportion of Group materiality appropriate to the
relative scale of the subsidiary concerned.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
The structure of the Group means the majority of the audit work for the Group is performed by the
Board and the International Code of Ethics for Professional Accountants (including International
New Zealand Group audit team. Our Group audit team also included people based in Australia who
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
supported us in executing our audit procedures and brought knowledge of the trading environment
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
and legal and regulatory framework in Adelaide.
Information other than the financial statements and auditor’s report
The Directors are responsible for the other information. The other information comprises the
information included in the Annual report, but does not include the financial statements and our
auditor's report thereon.
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
Our opinion on the financial statements does not cover the other information and we do not express
independence as auditor of the Group.
any form of audit opinion or assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with the
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.
Responsibilities of the Directors for the financial statements
The Directors are responsible, on behalf of the Company, for the preparation and fair presentation of
the 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 financial statements that are free from
material misstatement, whether due to fraud or error.
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
PwC
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To the shareholders of SkyCity Entertainment Group Limited
In preparing the 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.
Our opinion
In our opinion, the accompanying 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 2021, its financial performance and its cash flows for the year then
Auditor’s responsibilities for the audit of the financial statements
ended in accordance with New Zealand Equivalents to International Financial Reporting Standards
Our objectives are to obtain reasonable assurance about whether the financial statements, as a
(NZ IFRS) and International Financial Reporting Standards (IFRS).
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
● the statement of comprehensive income for the year then ended;
economic decisions of users taken on the basis of these financial statements.
What we have audited
The Group's financial statements on pages 166 to 217 which comprise:
● the income statement for the year then ended;
● the balance sheet as at 30 June 2021;
● the statement of changes in equity for the year then ended;
A further description of our responsibilities for the audit of the financial statements is located at the
External Reporting Board’s website at:
● the statement of cash flows for the year then ended; and
● the notes to the financial statements, which include significant accounting policies and other
https://www.xrb.govt.nz/assurance-standards/auditors-responsibilities/audit-report-1/
explanatory information.
This description forms part of our auditor’s report.
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 financial statements section of our
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.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
The engagement partner on the audit resulting in this independent auditor’s report is Richard Day.
Independence
We are independent of the Group in accordance with Professional and Ethical Standard 1
International Code of Ethics for Assurance Practitioners (including International Independence
Standards) (New Zealand) (PES 1) issued by the New Zealand Auditing and Assurance Standards
Board and the International Code of Ethics for Professional Accountants (including International
Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
For and on behalf of:
Our firm carries out other services for the Group in the areas of tax compliance, tax advisory, providing
market survey data relating to executive remuneration levels, the prior licensing of a software tool for
subsidiary statutory financial statements’ preparation, other assurance services in relation to
compliance with banking and debt covenants and agreed-upon-procedure services in relation to the
allocation of Community Trust Revenue, the application of revenue under the Australian JobKeeper
Auckland
Scheme, the reconciliation of normalised results to reported results and scrutineering of the vote count
at the Annual General Meeting. The provision of these other services has not impaired our
independence as auditor of the Group.
Chartered Accountants
24 August 2021
PricewaterhouseCoopers, PwC Tower, 15 Customs Street West, Private Bag 92162, Auckland 1142 New Zealand
T: +64 9 355 8000, www.pwc.co.nz
PwC
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Income Statement
For the year ended 30 June 2021
Continuing Operations
Revenue
Other income
Share of losses from associates
NZICC fire related income
NZICC fire related expenses
Employee benefits expense
Asset impairment
Other expenses
Directors' fees
Gaming taxes
Direct consumables
Marketing and communications
Community contributions, levies and sponsorships
Fair value adjustments on investment properties
Earnings Before Interest, Tax, Depreciation
and Amortisation Expenses (EBITDA)
Depreciation and amortisation expense
Depreciation on right-of-use assets
Earnings Before Interest and Tax (EBIT)
Net finance costs
Profit Before Income Tax
Income tax (expense)/benefit
Profit from continuing operations
Profit from discontinued operations
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.
166
NOTES
3
4, 5
6(a)
6(b)
7
7
15
7
10
11
18
8
2021
$'000
713,216
67,936
–
170,727
(141,845)
(269,126)
(8,834)
(108,482)
(962)
(36,253)
(45,428)
(18,718)
(12,289)
7,386
317,328
(89,519)
(1,894)
225,915
(32,455)
193,460
(37,334)
156,126
2020
$'000
641,653
98,924
(83)
384,500
(108,090)
(284,867)
(160,600)
(91,332)
(900)
(30,254)
(60,039)
(16,184)
(10,382)
(14,055)
348,291
(85,446)
(1,114)
261,731
(28,613)
233,118
2,152
235,270
–
118
156,126
235,388
CENTS
20.6
CENTS
35.4
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
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Statement of Comprehensive Income
For the year ended 30 June 2021
NOTES
Profit for the Year
Other comprehensive income
Items that will not be reclassified to profit or loss
Asset Revaluation Reserve
Asset revaluation reserve – revaluation on transfer to investment property
30
Asset revaluation reserve – income tax
Items that may be subsequently reclassified to profit or loss
Foreign Currency Translation Reserve
Exchange differences on translation of overseas subsidiaries
Cash flow Hedge Reserve
Cash flow hedges – revaluations
Cash flow hedges – transfer to finance costs
Cash flow hedges – income tax
Cost of Hedging Reserve
Cost of hedging reserve – costs incurred/revaluations
Cost of hedging reserve – transfer to finance cost
Cost of hedging reserve – income tax
Other Comprehensive Income for the Year, Net of Tax
Total Comprehensive Income for the Year
30
30
30
The above statement of comprehensive income should be read in conjunction with the accompanying notes.
2021
$'000
156,126
8,755
(1,921)
6,834
2020
$'000
235,388
5,936
–
5,936
(4,669)
6,285
(24,859)
35,790
(3,076)
(6)
463
(128)
3,515
10,349
166,475
9,154
(5,143)
(1,239)
(113)
462
(98)
9,308
15,244
250,632
Financial Statements
167
Balance Sheet
As at 30 June 2021
ASSETS
Current Assets
Cash and bank balances
Receivables and prepayments
Derivative financial instruments
Inventories
Current tax receivables
NZICC fire recoveries
Assets held for sale
Total Current Assets
Non-current Assets
Property, plant and equipment
Intangible assets
Finance lease receivable
Derivative financial instruments
Investment properties
Deferred tax assets
Right-of-use asset
NZICC fire recoveries
Total Non-current Assets
Total Assets
The above balance sheet should be read in conjunction with the accompanying notes.
NOTES
26
25
31
6(c)
27
23
24
4
31
15
19
10
6(d)
2021
$'000
49,940
33,405
156
7,187
–
175,352
13,517
279,557
1,370,762
646,326
11,605
4,109
124,368
9,344
126,755
233,000
2,526,269
2,805,826
2020
$'000
54,224
42,252
53,288
6,628
1,989
49,571
11,019
218,971
1,528,902
649,531
10,574
23,100
72,400
6,877
51,967
227,000
2,570,351
2,789,322
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Balance Sheet (continued)
As at 30 June 2021
LIABILITIES
Current Liabilities
Payables and provisions
Interest bearing liabilities
Current tax liabilities
Derivative financial instruments
Lease liabilities
Deferred licence value
Total Current Liabilities
Non-current Liabilities
Interest bearing liabilities
Non-current payables
Lease income in advance
Derivative financial instruments
Deferred tax liabilities
Lease 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.
NOTES
2021
$'000
2020
$'000
28
13
31
10
16
12
22
31
20
10
17
29
30
200,165
48,031
16,256
–
3,014
1,963
269,429
221,842
302,509
776
6,113
485
153,165
684,890
440,964
282,731
20,317
36,310
7,528
57,031
115,793
207,436
885,379
1,154,808
1,651,018
10,569
39,815
24,375
45,175
52,188
214,972
669,825
1,354,715
1,434,607
1,338,223
1,288,287
(22,972)
335,767
1,651,018
(33,321)
179,641
1,434,607
Financial Statements
169
Statement of Changes in Equity
For the year ended 30 June 2021
Balance as at 1 July 2019
Total comprehensive income
Dividends paid
Equity raising
Share rights issued for employee service
Net movement in treasury shares
Buy back and cancellation of shares
Balance as at 30 June 2020
Balance as at 1 July 2020
Total comprehensive income
Equity raising
Share rights issued for employee service
Net movement in treasury shares
NOTES
SHARE
CAPITAL
RESERVES
RETAINED
EARNINGS
TOTAL EQUITY
$'000
$'000
1,126,996
(48,565)
$'000
77,541
$'000
1,155,972
–
–
177,160
3,698
436
(20,003)
1,288,287
1,288,287
–
48,737
3,253
(2,054)
9
29
29
29
29
29
29
15,244
235,388
250,632
–
–
–
–
–
(33,321)
(33,321)
10,349
–
–
–
(133,288)
(133,288)
–
–
–
–
179,641
179,641
156,126
–
–
–
177,160
3,698
436
(20,003)
1,434,607
1,434,607
166,475
48,737
3,253
(2,054)
Balance as at 30 June 2021
1,338,223
(22,972)
335,767
1,651,018
The above statement of changes in equity should be read in conjunction with the accompanying notes.
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Statement of Cash Flows
For the year ended 30 June 2021
Cash Flows from Operating Activities
Receipts from customers
Payments to suppliers and employees
Government grants
Gaming taxes and levies paid
Income taxes paid
NOTES
Net Cash Inflow from Operating Activities
38
Cash Flows from Investing Activities
Capital additions
Purchased intangible assets
Auckland car park concession disposal
NZICC fire related income
NZICC fire related costs
Lease income received in advance
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
Dividends paid to company shareholders
Interest paid
Lease interest paid
Buy back of share capital
Repayment of lease liabilities
Net Cash Outflow from Financing Activities
Net (Decrease)/Increase in Cash and Bank Balances
Cash and bank balances at the beginning of the year
Cash and Bank Balances at the End of the Year
9
14
26
The above statement of cash flows should be read in conjunction with the accompanying notes.
2021
$'000
718,898
(397,713)
28,643
349,828
(46,074)
(15,569)
288,185
(171,673)
(5,799)
–
30,533
(108,040)
–
(254,979)
46,683
17,669
208,031
(267,447)
–
(35,857)
(2,879)
2020
$'000
655,470
(480,613)
27,354
202,211
(40,988)
(41,057)
120,166
(326,877)
(20,515)
128,946
106,000
(26,638)
39,815
(99,269)
177,597
(2,327)
45,814
(34,127)
(133,288)
(41,444)
–
–
(20,003)
(3,690)
(37,490)
(4,284)
54,224
49,940
(469)
(8,247)
12,650
41,574
54,224
Financial Statements
171
1 Summary of Significant
Accounting Policies
SkyCity Entertainment Group Limited (Company)
and its subsidiaries (together, SkyCity or the Group)
operate in the gaming, entertainment, hotel,
convention, hospitality 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 Company is
registered under the Companies Act 1993 and
is an FMC reporting entity under Part 7 of the
Financial Markets Conduct Act 2013. The address
of its registered office is 99 Albert Street, Auckland.
The Company is dual-listed on the New Zealand
and Australian stock exchanges (NZX and ASX
respectively).
These consolidated financial statements were
approved for issue by the Board of directors on
24 August 2021.
For the purposes of complying with generally
accepted accounting practice in New Zealand
(GAAP), the Group is a for-profit entity.
(a) Basis of Preparation
The financial statements of the Group have
been prepared in accordance with GAAP.
They comply with New Zealand Equivalents to
International Financial Reporting Standards (NZ
IFRS), International Financial Reporting Standards
(IFRS), the requirements of Part 7 of the Financial
Markets Conduct Act 2013 and the NZX Main Board
Listing Rules.
The Group financial statements incorporate the
assets and liabilities of all subsidiaries of the Group
as at 30 June 2021 and the results of all subsidiaries
for the year then ended.
Measurement Basis
These financial statements have been prepared
under the historical cost convention, as modified
by the revaluation of certain assets and liabilities,
as identified in the accounting policies below and
in the notes.
Presentation Currency
The financial statements are presented in
New Zealand dollars, which is the Company's
functional currency. Amounts are rounded to the
nearest thousand dollars, unless otherwise stated.
Non-GAAP Financial Information
The Group’s standard profit measure prepared
under GAAP is profit for the year. When discussing
financial performance, the Group also uses
non-GAAP financial information, which is not
prepared in accordance with NZ IFRS and
therefore may not be comparable to similar
financial information presented by other entities.
The directors and management believe that this
non-GAAP financial information provides useful
information to readers of the financial statements
to assist in the understanding of the Group’s
financial performance and is consistent with
the information used internally to evaluate the
performance of business units.
Definitions of non-GAAP financial information used
in these financial statements are:
•
EBITDA: Earnings before interest, tax,
depreciation and amortisation; and
• EBIT: Earnings before interest and tax
Critical Accounting Estimates and Judgements
The preparation of financial statements requires the
use of certain critical accounting estimates and the
exercise of judgement regarding the application
of accounting policies. The critical estimates and
judgements made in the preparation of these
financial statements relate to the following:
•
•
•
•
goodwill and casino licences that have an
indefinite useful life are impairment tested
annually, which requires the use of key estimates.
Details of the estimates made are provided in
note 24;
the SkyCity Adelaide casino licence, which has a
finite useful life, was impaired in the prior period
and consequently was tested for impairment
in the current period. This impairment testing
required the use of key estimates, which are
discussed in note 24(c);
as reported in the Group’s 30 June 2020
financial statements, in October 2019 there was
a significant fire at the construction site of the
New Zealand International Convention Centre
(NZICC). Accounting for the consequences of the
fire has required the exercise of judgement and
the use of estimates. Details of the judgements
and estimates made are provided in note 6;
investment properties are carried at fair value.
Determining the fair value of properties requires
the use of estimates. Details of estimates made
are provided in note 15; and
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There are inherent uncertainties in both
New Zealand and Australia relating to forecasting
earnings in the COVID-19 environment.
That notwithstanding, due to the capital raise
conducted in the prior year, and the funding
available through the syndicated banking facility,
the directors have determined that there are no
material uncertainties related to SkyCity being
a going concern. Accordingly, the directors have
concluded that it is appropriate that these financial
statements continue to be prepared on a going
concern basis.
(c) Principles of Consolidation
Subsidiaries are all entities (including structured
entities) over which the Group has control.
The Group controls an entity when the Group is
exposed, or has rights, to variable returns from its
involvement with the entity and has the ability
to affect those returns through its power over the
entity. 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.
(d) Foreign Currency Translation
(i) Transactions and Balances
Items included in the financial statements of each
Group entity are measured using that entity’s
functional currency (which is the currency that best
reflects the economic substance of the events and
circumstances relevant to that operation).
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 other comprehensive
income as qualifying cash flow hedges and
qualifying net investment hedges.
•
properties that were transferred from property,
plant and equipment to investment properties
at 30 June 2021 were revalued to fair value
prior to the transfer, which required the use of
key estimates. Details of estimates made are
provided in note 15.
(b) COVID-19
On 11 March 2020, the World Health Organization
declared a global pandemic as a result of the
outbreak and spread of COVID-19. As a result of the
pandemic, SkyCity has faced a number of closures
and other trading restrictions during the 2020 and
2021 financial years.
In the comparative period, SkyCity took a number
of actions to manage the impacts of COVID-19.
Those actions included a rapid restructure of the
New Zealand workforce, the implementation
of cost and capital savings initiatives, an equity
raising, the arrangement of new bank facilities and
securing covenant waivers in relation to lending
facilities. The financial impacts of COVID-19 in
the comparative period included a reduction
in revenue, the receipt of wage subsidies from
the New Zealand and Australian Governments,
increased impairment of accounts receivable,
reductions in the fair value of investment properties
and the impairment of the SkyCity Adelaide casino
licence. Full details of the impacts of COVID-19
on the comparative period are disclosed in the
30 June 2020 financial statements.
During the current year:
•
•
•
•
the SkyCity Auckland site was closed from
12 August to 30 August 2020, 15 February
to 17 February 2021 and 28 February to
6 March 2021 and operated with social
distancing restrictions from 30 August to
8 October 2020, 18 February to 22 February 2021
and 7 March to 11 March 2021;
the SkyCity Adelaide site was closed for three
days from 18 November 2020 and operated
under government social distancing restrictions
for the majority of the remainder of the year;
the Group has continued to receive both the
New Zealand Government wage subsidy and
Australian JobKeeper payments (note 5); and
the SkyCity Board resolved to voluntarily return
a portion of the New Zealand Government wage
subsidy and Australian JobKeeper payments that
it had received (note 5).
Subsequent to the reporting date, the SkyCity
Adelaide site has again been closed due to COVID-19
trading restrictions imposed by the South Australian
Government, and all New Zealand sites have been
closed due to restrictions imposed by the New Zealand
Government (note 39).
Notes to the Financial Statements
173
Translation differences on financial assets and
liabilities carried at fair value through profit or loss
are recognised in the Income Statement as part of
the fair value gain or loss. Translation differences
on non-monetary financial assets such as equity
instruments classified at fair value through other
comprehensive income are included in the
Statement of Comprehensive Income.
(h) Standards, Amendments and Interpretations
to Existing Standards that are not yet
Effective
There are no published new or amended standards
or interpretations that become effective on or after
1 July 2021 that would have a material impact on
the Group’s financial statements.
(ii) 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 as
outlined 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
in other comprehensive income.
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.
(e) Goods and Services Tax (GST)
The Income Statement, Statement of Cash
Flows, Statement of Comprehensive Income
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.
(f) 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.
(g) New Accounting Standards Adopted
in the Year
The accounting policies that materially affect
recognition and measurement in the financial
statements have been applied on a basis consistent
with the prior year.
(i) Future Change in Intangible Assets
Accounting Policy
In March 2021, the IFRS Interpretations Committee
(Committee), which is responsible for interpreting
the application of IFRS, issued an agenda decision
that the costs incurred in configuring and
customising software provided under software as
a service arrangements (SaaS) must be expensed
unless they:
•
•
create an intangible asset, separate from the
software, that the customer controls; or
are paid to the supplier of the cloud-based
software for significant customisation work,
in which case the costs are recorded as a
prepayment for services and amortised over the
expected term of the SaaS arrangement.
The Committee’s agenda decision was ratified by
the International Accounting Standards Board in
April 2021.
Compliance with the Committee’s decision
necessitates a change to SkyCity’s intangible assets
accounting policy, as SkyCity has to date recognised
such costs as intangible assets. Making this change
will require a retrospective restatement of prior
period financial statements in the year in which the
revised accounting policy is adopted. To implement
this change, SkyCity is currently examining all
historically capitalised software configuration and
customisation costs relating to SaaS arrangements
to identify the level of restatement required. Given
the number and complexity of the Group’s software
arrangements, SkyCity has decided to implement
the revised accounting policy in the 30 June 2022
annual financial statements, with full compliance in
the 31 December 2021 interim financial statements.
While the financial impact of the revised
accounting policy is still being quantified, it is likely
to be material for financial reporting purposes. The
change will reduce intangible assets and associated
amortisation, increase operating expenses, and
reclassify the relevant spend from an investing to an
operating cashflow. The change may also result in
the recognition of prepayments.
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Operating segments are reported in a manner consistent with the internal reports that the Chief Executive
Officer (CEO), who is the chief operating decision maker, uses to assess performance and allocate resources.
(a) Primary Reporting Format – Business Segments
2021
Gaming revenue
Online revenue
Non-gaming revenue
Other income
NZICC fire income
Liquidated damages
Total revenue
Expenses
NZICC fire expenses
Depreciation and amortisation
Segment profit/(loss) (EBIT)
Net finance costs
Profit before income tax
SKYCITY
AUCKLAND
OTHER NZ
OPERATIONS
SKYCITY
ADELAIDE
INTERNATIONAL
BUSINESS
CORPORATE
/GROUP
$'000
$'000
$'000
$'000
$'000
345,737
65,360
143,937
24,547
–
81,300
9,640
170,727
39,500
13,140
10,129
1,220
–
–
–
36,359
16,596
–
–
–
35
–
–
–
–
–
–
980
–
–
TOTAL
$'000
579,581
13,140
127,823
28,436
170,727
39,500
646,904
89,849
196,892
24,582
980
959,207
(243,805)
(43,307)
(154,622)
(21,474)
(36,826)
(500,034)
(141,845)
(45,514)
215,740
–
–
(5,887)
(22,794)
–
–
–
(141,845)
(17,218)
(91,413)
40,655
19,476
3,108
(53,064)
225,915
(32,455)
193,460
Segment assets
1,924,219
109,669
597,282
(15,679)
190,335
2,805,826
Net additions to non-current
assets (other than financial
assets and deferred tax)
2020
Gaming revenue
Online revenue
Non-gaming revenue
Other income
NZICC fire income
Sale of Auckland car park
concession
52,660
3,783
149,900
–
12,217
218,560
312,282
51,554
90,995
75,948
–
118,094
20,586
384,500
66,431
4,521
8,738
2,428
–
–
–
18,824
8,327
–
–
–
–
8
–
–
–
–
–
530,779
4,521
145,656
1,144
32,493
–
–
384,500
66,431
Total revenue
901,893
67,241
118,146
75,956
1,144
1,164,380
Shares of net profits/(losses)
of associates
–
(83)
–
–
–
(83)
Expenses
(292,198)
(41,625)
(107,126)
(72,184)
(34,183)
(547,316)
Impairment of goodwill
–
NZICC fire expenses
(108,090)
–
–
(160,600)
–
Depreciation and amortisation
(46,073)
(6,159)
(19,090)
–
–
–
–
–
(160,600)
(108,090)
(15,238)
(86,560)
Segment profit/(loss) (EBIT)
455,532
19,374
(168,670)
3,772
(48,277)
261,731
Net finance costs (including
discontinued operations)
Less: Discontinued operations
before tax
Profit before income tax from
continuing operations
(28,613)
118
(28,495)
Segment assets
1,738,081
100,891
617,139
Net additions to non-current
assets (other than financial
assets and deferred tax)
147,380
9,573
229,369
–
–
333,211
2,789,322
19,692
406,014
175
(b) Secondary Reporting Format – Geographical Segments
New Zealand
Australia
TOTAL REVENUE
NON-CURRENT ASSETS
EXCLUDING FINANCIAL
INSTRUMENTS AND
DEFERRED TAX ASSETS
2021
$'000
2020
$'000
2021
$'000
2020
$'000
745,932
1,021,158
1,931,543
1,951,348
213,275
143,222
581,273
589,026
959,207
1,164,380
2,512,816
2,540,374
(c) Description of Segments
The Group is organised into the following main operating segments:
SkyCity Auckland
This segment consists of the Group’s Auckland operations and includes casino operations, hotels and
conventions (including the NZICC), food and beverage, Sky Tower, investment properties and a number of
other related activities. This segment does not include International Business operations.
Other NZ Operations
This segment consists of the Group's operations at SkyCity Hamilton, SkyCity Queenstown and SkyCity Wharf,
Lets Play Live Media and online gaming. This segment does not include International Business operations.
SkyCity Adelaide
This segment consists of the Group’s Adelaide operations, which comprise casino operations, hotel and food
and beverage. This segment does not include International Business operations.
International Business
This segment comprises gaming operations for international customers, most of whom are from Asia.
The revenue is generated at SkyCity's Auckland, Adelaide, Queenstown and Hamilton locations. The results
of the segment include commission and complimentary play. No assets are allocated to this segment.
Corporate/Group
This segment includes head office functions and funding entities. It is not considered an operating segment.
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Accounting Policy
Gaming revenues represent the net win to the casino from gaming activities, being the difference between
amounts wagered and amounts won by casino patrons. Revenue is recognised at the conclusion of each
game. International Business rebates are accounted for as a reduction in gaming revenue.
The revenue from the online casino is from New Zealand based players using technology developed by
and under a Malta gaming licence held by Gaming Innovation Group Inc (GiG). SkyCity is not the principal
transacting with casino customers. Revenue is reported net of GiG costs allowable under the arrangement.
Non-gaming revenues include revenues arising from hotels and conventions, food and beverage, Sky Tower,
car parking and other sources. These revenues are recognised when the associated goods or services have
been provided.
Gaming
Non-gaming
Online gaming
Total revenue
2021
$'000
572,253
127,823
13,140
713,216
2020
$'000
491,477
145,655
4,521
641,653
The Group provides complimentary hotel accommodation, food and beverage and other goods and services
to certain groups of customers. As the goods and services offered under these arrangements are tailored
to meet the needs of individual customers, it is not practical to allocate total revenue received to all of the
goods and services provided. Consequently, this revenue is all recognised as gaming revenue. The retail
value of complimentary items provided in the current year was $18.9 million (2020: $19.5 million).
Reconciliation to the segment note
Total revenue
Gain on sale of Auckland car park concession
Other income
Government grants
Liquidated damages
NZICC fire income
Total revenue as per Income Statement
International Business rebates
Total revenue as per segment note
4 Auckland Car Park Transaction
Net gain on sale of the Auckland car park concession
NOTES
3
4
5
5
5
6
2021
$'000
713,216
–
1,622
26,814
39,500
170,727
951,879
7,328
959,207
2021
$'000
–
–
2020
$'000
641,653
66,431
3,310
29,183
–
384,500
1,125,077
39,303
1,164,380
2020
$'000
66,431
66,431
Notes to the Financial Statements
177
On 4 April 2019, the Group announced it had
entered into a binding, conditional agreement
to sell a long term concession to 2048 over the
Auckland car parks to Macquarie for $220.0 million,
to be paid upfront in a lump sum on completion.
The agreement:
•
•
•
gives Macquarie the right to undertake
the operations and management of the
approximately 3,200 car parks under the existing
Auckland casino/hotel complex and the NZICC
currently under construction, with all economic
benefit of ownership passed to Macquarie for the
concession period;
provides SkyCity with exclusive access to
450 car parks, which will be used for VIP
customers, to be paid for by SkyCity irrespective
of use (these are known as the “nested car
parks”); and
provides SkyCity with non-exclusive access to
further car parks at agreed rates on a pay per
use basis (these are known as the “unnested car
parks”). These car parks will also be available to
the public.
On 19 August 2019, the Auckland car park
concession transaction was completed and SkyCity
received $220.0 million. Macquarie took over the
main site car park and the initial 600 NZICC car
parks and was to be provided with approximately
650 further NZICC car parks no later than
31 December 2020. However, due to the NZICC fire
(see note 6), that did not occur.
Nested Car Parks
The Group determined that it retains the significant
risks and rewards of ownership of these car parks.
As a result, the Group continued to recognise the
car parks as its property, plant and equipment
and has recognised its obligation to Macquarie
as a financial liability. The liability was initially
recognised at its fair value of $45.8 million.
Main Site and Initial 600 NZICC Unnested
Car Parks
The Group determined, based on an evaluation
of the terms and conditions of the arrangement,
including the proportion of the $220.0 million
concession payment relating to these car parks
amounting to substantially all of the fair value
of these car parks, that substantially all the
significant risks and rewards of ownership of these
unnested car parks passed to the concession
holder on 19 August 2019. Therefore, this part of the
concession payment has been accounted for as a
finance lease (note 12).
As a result of this determination, as at
19 August 2019:
•
•
•
•
•
the carrying value of these car parks of
$96.6 million was derecognised;
a finance lease receivable of $133.2 million for
these car parks was recognised and immediately
settled in cash by the upfront payment;
a finance lease receivable of $9.9 million was
recognised for the residual value of these car
parks (the value beyond the period of the
concession term);
an adjustment to the deferred licence
value liability associated with the NZICC of
$24.2 million was recognised in the Income
Statement; and
a resulting gain of $66.4 million was recognised
in the Income Statement.
In determining the carrying value, judgement
was required to distinguish the value of the
unnested car parks from the value of the Auckland
casino/hotel asset. Judgement was also required
to determine the carrying value of the initial
600 NZICC car parks.
Remaining Approximately 650 Further NZICC
Unnested Car Parks
At 30 June 2020, the Group determined, given
the inability to determine when these car parks
would be provided to Macquarie, that it was likely
that this part of the concession should be treated
as an operating lease and the car parks classified
as investment property. On that basis, in 2020,
$27.1 million of costs associated with these car
parks were transferred from property, plant and
equipment (note 23) to investment properties
(note 15) and the Group treated $39.8 million of the
$220.0 million concession payment as lease income
received in advance.
From January 2021, delay payments to Macquarie
have been deducted from the $39.8 million
allocation of the concession payment for the
purposes of making the lease determination.
As a result, the portion of the concession payment
relating to these car parks would not amount to
substantially all of the fair value of these car parks;
consequently, classification as an operating lease
remained appropriate.
As a result of the updated NZICC damage estimates
(see note 6), a further $2.2 million has been
transferred from property plant and equipment
(note 23) to investment properties (note 15) in the
current year.
178
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Net (loss)/gain on disposal of property, plant and equipment
Dividend income
Rental income from investment properties
Government grants
Liquidated damages
Government Grants
2021
$'000
(528)
2
2,148
26,814
39,500
67,936
2020
$'000
348
9
2,953
29,183
–
32,493
As part of its COVID-19 response, the New Zealand Government introduced a wage subsidy scheme to
enable businesses to retain employees. SkyCity met the eligibility criteria for that scheme and applied for,
and received, $10.2 million of subsidies for the current financial year (30 June 2020: $20.9 million).
The Australian Government also introduced wage subsidies (referred to as JobKeeper payments) as part
of its response to the COVID-19 pandemic. SkyCity met the eligibility criteria for that scheme and applied
for, and received, $16.6 million (A$15.4 million) of JobKeeper payments for the current financial year
(30 June 2020: NZ$8.3 million, A$7.8 million).
Despite having met all of the respective eligibility criteria for the New Zealand wage subsidy scheme
and JobKeeper payments, in June 2021 the SkyCity Board resolved to make a voluntary repayment of
$6.7 million of wage subsidies received from the New Zealand Government and $3.3 million (A$3.1 million)
of JobKeeper payments received from the Australian Government. These amounts are recognised as an
expense (note 7) and as a provision at 30 June 2021 (note 28). The $6.7 million voluntary repayment to the
New Zealand Government was made on 27 July 2021. It is anticipated that the voluntary repayment to the
Australian Government will be made in September 2021 (note 39).
Liquidated Damages
Included within the Fletcher Construction Company Limited (FCC or the Contractor) construction contracts
for the NZICC and Horizon Hotel is the right to liquidated damages if certain milestones are not met.
To 30 June 2020, SkyCity withheld $39.5 million from payments to FCC and disclosed this amount as a
contingent asset for liquidated damages. As part of a settlement agreement signed on 30 November 2020,
FCC agreed to not challenge retention of the amount, and accordingly $39.5 million has been recognised as
other income in the current financial period.
6 NZICC Fire
On 22 October 2019, there was a significant fire at the NZICC construction site. The fire caused extensive
damage to the NZICC and also damaged Horizon Hotel, which is being constructed on the adjacent site.
The Group has appointed an independent expert, Rider Levett Bucknall Auckland Limited (RLB), to assist
with assessing the value of damage from the fire and the cost of remediation. The damage assessment and
reconstruction scope process is still underway by the Contractor.
The NZICC is being built under an agreement between the Group and the Crown. Under that agreement,
the NZICC must be completed by a specified date, referred to as the completion long stop date. Subsequent
to the reporting date, the Crown has agreed to an extension of the completion long stop date – the revised
date is now 15 December 2027 (previously 2 January 2025). SkyCity expects to complete the NZICC before
this date.
Both NZICC and Horizon Hotel are insured, and the insurers have acknowledged the fire event and
confirmed that SkyCity's contract works policy will respond in relation to damage caused by the fire.
Any costs not covered by insurance are expected to be incurred by or sought from FCC who is the contractor
constructing both buildings.
Notes to the Financial Statements
179
In accounting for the impact of the fire, a number of significant judgements and estimates have been made.
The most significant assumptions, and associated risk to the estimates provided, relate to the extent of the
damage to the structural steel and facade of the NZICC building and the uncertain cost to remediate, the
percentage of contingency included in the estimates, and the timeline for remediation. These judgements
and estimates will continue to be reviewed as new information becomes available. It is possible that the
actual financial impacts of the fire will differ from those included in these financial statements and those
differences may be material. Details of further judgements and estimates made are provided throughout
this note.
(a) Income
Other income
Contract works insurance recovery
Other recoveries
Liquidated damages (Nelson Street car park access)
2021
$'000
43,600
127,127
–
170,727
2020
$'000
336,702
37,456
10,342
384,500
Contract Works Insurance Recovery
The accounting treatment of the insurance recovery
for the damage is dependent on the relationship
between SkyCity, the insurers and the Contractor.
Consequently, determining the nature of this
relationship is a key judgement. It is the Group's
view, supported by legal advice, that SkyCity is
the principal in the insurance relationship and
therefore receives, and has control over, all insurance
proceeds. As a result of this relationship, the Group
recognises the expected insurance proceeds for
reconstruction of the fire damage as income and
a receivable. Payments to the Contractor for the
reconstruction are separately capitalised as the
development of the new assets occurs over time.
While the insurers have acknowledged the fire event
and confirmed that SkyCity's contracts works policy
will respond in relation to the damage caused by
the fire to the NZICC and Horizon Hotel, the final
insurance recovery for the reinstatement costs will
be dependent on the final view of the insurer as
the claims are presented. The damage assessment
and reconstruction scope process is still underway
by the Contractor so no complete reconstruction
cost or damage estimates have been confirmed at
this stage. Accordingly, the Group has engaged RLB
to estimate reconstruction costs. These estimates
along with information provided by the Contractor
inform the Group's view of the contracts work
insurance recovery. Adjustments have been made
by the Group to the estimates provided by RLB to
exclude pre-remediation expenses (site preparation
and clearing costs), which are recognised separately
as other recoveries when incurred and to remove
costs for which the recoverability has not been
assessed to be virtually certain at this stage. RLB’s
estimates are based on limited information and
are highly sensitive to the actual extent of damage
and could be further affected by potential market
movements in construction costs. RLB has been
provided with various updates and briefings by the
Contractor, SkyCity and its advisors to assist them in
preparing their estimate.
For the NZICC, the insurance recovery for the
reconstruction costs after taking into account
the above adjustments has been estimated to
be between $365.0 million and $450.0 million
(2020: between $330.0 million and $375.0
million). For Horizon Hotel, the insurance recovery
for the reconstruction costs has been estimated
at between $14.6 million and $21.0 million
(2020: $6.0 million). The Group has assumed
an insurance recovery for both buildings of
$379.6 million (2020: $336.0 million), being the
lower end of the NZICC and Horizon Hotel ranges.
The Group considers recovery of this amount to be
virtually certain.
Given the uncertainty involved in making this
assessment, both amounts include a significant
contingency (the $365.0 million amount includes a
20% contingency, while the $450.0 million amount
includes a 35% contingency).
These estimates are highly sensitive to the actual
extent of damage and the ultimate insurance
recovery may differ, potentially materially, from the
current assessment.
180
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Other Recoveries
In addition to recovery of the expected reconstruction costs, the Group seeks recovery of additional items,
which are recognised as other recoveries when they are incurred and meet the virtual certainty threshold.
These primarily relate to site preparation, demolition and clearing costs on-charged by the Contractor but
also include:
•
•
•
•
•
business interruption costs and lost gross profit while the Auckland precinct was closed or affected by
the fire;
payments required to be made by SkyCity to Macquarie under the Auckland Car Park Concession
Agreement (for lack of access to the NZICC car parks);
costs of professional advisers assisting the Group as a result of the fire;
insurance premiums and other project costs for additional periods due to construction delays; and
additional ongoing costs as a result of the fire.
In the current period, recovery of costs incurred of $127.1 million (2020: $37.5 million) has been assessed to
be virtually certain with the recovery of an additional $14.4 million (2020: $8.9 million) assessed as probable
and therefore disclosed as a contingent asset (note 36). The assessment of recoverability of these costs as
virtually certain or probable is a key judgement and for some of these costs the judgement is supported by
legal advice received by the Group (note 36).
Initial recovery for these additional items will be sought from insurers where appropriate. To the extent
recovery under the Group’s insurance policies is not available, recovery will be sought from the Contractor,
including all insurance excesses.
(b) Expenses
Write-off of NZICC and Horizon Hotel capitalised work-in-progress
Release from deferred licence value liability
NZICC obligation
Site preparation, demolition and other costs
2021
$'000
34,713
(7,536)
(6,551)
121,219
141,845
2020
$'000
193,868
(165,785)
43,047
36,960
108,090
Write-off of NZICC and Horizon Hotel Capitalised
Work-in-Progress
materially once further assessment of the damage
to both buildings has been completed.
The fire is accounted for as the disposal of the
damaged asset and the purchase of new or part
replacement of repaired component parts. As a
result, the carrying value of the damaged/destroyed
parts of the NZICC and Horizon Hotel are expensed.
As the investigation of the extent of damage
continues, more damaged components may be
identified and written off.
Based on updated estimates provided by RLB,
the Group has estimated that approximately
55% (30 June 2020: 52%) of the NZICC and
13% (30 June 2020: 5%) of the Horizon Hotel
construction work to date has been destroyed and
will need to be replaced. As a result, approximately
$228.6 million of costs previously capitalised as work
in progress in property, plant and equipment have
been written off. This is an increase of $34.7 million
in the current financial year (note 23).
This estimate is highly sensitive to the actual extent
of damage and the ultimate write off may differ
Future costs (external and internal) related to the
replacement of the derecognised asset components
will be capitalised as incurred as a new asset.
Release from Deferred Licence Value Liability
In 2016, SkyCity accounted for the granting of the
NZICC Auckland casino licence enhancements
and recognised a deferred licence value liability of
$405.0 million. Based on the Group’s accounting
policy adopted in 2014 (at the time of recognising
the Adelaide casino licence enhancements), this
amount was to be accounted for as a reduction in
the carrying value of the NZICC upon completion.
The deferred licence value would normally be
allocated against each component asset of the
NZICC upon completion, and therefore when
derecognising some components (as detailed
above) there is also a requirement under the
Group’s accounting policy to release a portion of
the deferred licence value liability.
181
The amount of the release has been estimated at $173.3 million (30 June 2020: $165.8 million) based on the
latest estimated percentage of damage to the NZICC. This represents 45.5% (30 June 2020: 43.5%) of the
remaining deferred licence value liability (the NZICC was estimated to be 83% complete prior to the fire).
The updated estimated damage percentage has resulted in a $7.5 million release of the deferred licence
value liability in the current financial period
The ultimate transfer of the deferred licence value liability is highly sensitive to the actual extent of damage
and may differ from this assessment once further assessment of the damage to NZICC has been completed.
As a result, it is possible the amount of the deferred licence value liability transferred may change materially.
Refer to note 17 for details of the deferred licence value liability release.
NZICC Obligation
The Group has recognised a liability to reconstruct the assets associated with the initial 600 NZICC car parks
that are required to be provided to Macquarie (note 4). The Group has estimated this to be $36.5 million
(30 June 2020: $43.0 million), based on an estimate prepared by RLB.
The ultimate cost for reconstructing these assets may differ materially from this assessment once detailed
planning is completed and the actual extent of the damage is known.
Site Preparation, Demolition and Other Costs
These costs primarily relate to site preparation and clearing costs on-charged by the Contractor. These costs
are generally recoverable from the insurers. To the extent that recovery of these costs is considered virtually
certain, a matching amount is included in NZICC fire income above.
(c) Current Assets
Insurance recoveries for damages to the NZICC and Horizon Hotel
Other recoveries
Recovery of liquidated damages
Payments received from the insurers
Reclassification to non-current receivables (refer note below)
These assets relate to:
2021
$'000
380,302
164,583
–
(136,533)
(233,000)
175,352
2020
$'000
336,702
37,456
8,413
(106,000)
(227,000)
49,571
Insurance Recovery for Damage to the NZICC and Horizon Hotel
Insurance recoveries to cover the reinstatement to the pre fire condition include amounts related to
the damage to the NZICC ($365.0 million, 30 June 2020: $330.0 million), Horizon Hotel ($14.6 million;
30 June 2020: $6.0 million) and various ICT equipment ($0.7 million; 30 June 2020 $0.7 million).
Other Recoveries
These recoveries primarily relate to site preparation, demolition and clearing costs incurred and on-charged
by the Contractor (note 6a). The Group believes that recovery of this amount is virtually certain.
Payments Received from the Insurers
To date, the Group has received payment from the insurers of $135.5 million towards site preparation,
clearing costs and the cost of remediation.
The Group has also received an initial $1.0 million payment from insurers towards its business
interruption claim.
182
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Insurance recoveries for damages to the NZICC and Horizon Hotel
2021
$'000
233,000
233,000
2020
$'000
227,000
227,000
The split between current and non-current is based on estimated cash flows associated with the anticipated
timing of the reconstruction.
7 Expenses
Other Expenses
Utilities, insurance and rates
Onerous contract expense (relating to the Wharf Casino lease)
Other property expenses
ICT related expenses
Professional fees
Other items
Government grants repaid (note 5)
Expenses relating to short-term leases and leases of low-value assets
Impairment of receivables
Depreciation and Amortisation (excluding right-of-use assets)
Depreciation
Casino licence amortisation (Adelaide)
Computer software amortisation
Gaming machine entitlements amortisation
Impairment
Impairment of property plant and equipment (note 23)
Impairment of intangible assets (note 24)
Reclassification of Expenses
2021
$'000
22,848
986
17,247
15,835
8,678
32,062
10,006
803
17
108,482
73,151
2,629
13,666
73
89,519
8,834
–
8,834
2020
$'000
21,949
958
13,325
13,796
8,376
26,043
–
1,203
5,682
91,332
67,459
5,507
12,480
–
85,446
–
160,600
160,600
In the current period, a number of expenses have been reclassified to more closely align with internal
reporting. Expenses for the comparative period have also been reclassified to be consistent with the current
year's expense classification. There has been no impact on total expenses or profit.
Notes to the Financial Statements
183
Auditor's Fees
During the year the fees outlined in the table below were incurred for services provided by the Company's
auditor and its related practices.
The Group employs PricewaterhouseCoopers (PwC) on assignments additional to their statutory audit
duties where PwC's expertise and experience with the Group are important and auditor independence is
not impaired. For other work, the Group's External Audit Independence Policy requires advisers other than
PwC to be engaged wherever practicable.
Tax advisory services relates to ad-hoc queries covering a range of tax related matters.
PwC also undertook:
•
agreed-upon procedures in relation to the Group's Community Trust allocation of revenue; assessment
of the application of revenue under the Australian JobKeeper scheme; assessment of the normalisation
of revenue disclosed in the annual report; and scrutineering of the vote count at the Company's annual
meeting; and
•
other assurance engagements in relation to compliance with banking and debt covenants.
2021
$'000
2020
$'000
(a) Assurance and Agreed upon Procedure Services
Audit and review of financial statements
PwC New Zealand
PwC Australia
PwC Hong Kong
PwC Malta
Total audit and review fees
Performed by PwC New Zealand
Other assurance services
Agreed upon procedures
Performed by PwC Australia
Agreed upon procedures
Total remuneration for other assurance services and agreed upon procedures
888
52
24
51
1,015
25
19
9
53
Total remuneration for assurance and agreed upon procedures services
1,068
(b) Other Services
Performed by PwC New Zealand
Tax compliance services
Tax advisory services
Provision of market survey data relating to executive remuneration levels
Provision of software tool for subsidiary statutory financial statement preparation
Performed by PwC Australia
Tax compliance services
Tax advisory services
Performed by PwC Hong Kong
Tax advisory services
Performed by PwC Singapore
Tax advisory services
Total remuneration for other services
Total fees expense
184
–
55
30
–
43
207
17
19
371
1,439
755
74
23
42
894
20
28
–
48
942
1
78
–
12
50
63
26
–
230
1,172
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8 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
9 Dividends
Accounting Policy
2021
Number
2020
Number
759,687,194
664,946,279
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)
2021
$'000
–
–
–
–
–
2020
$'000
66,867
66,421
133,288
10.0
10.0
Subsequent to the reporting date, the directors declared a dividend of 7.0 cents per share for the year
ended 30 June 2021.
Notes to the Financial Statements
185
Subsequent to initial recognition:
• lease liabilities increase as a result of interest charged
at a constant rate on the balance outstanding and are
reduced for lease payments made; and
• right-of-use assets are amortised on a straight-line
basis over the remaining term of the lease (or over
the remaining economic life of the asset if, rarely,
this is judged to be shorter than the lease term).
A small number of immaterial, short-term leases
have not been included in the calculation of lease
liabilities or right-of-use assets. Payments made
in relation to these leases are recognised on a
straight-line basis over the lease term.
The Group has a small number of long term leases.
Lease terms are negotiated on an individual basis
and contain a wide range of different terms and
conditions. The lease agreements do not impose
any covenants other than the security interests
in the leased assets that are held by the lessor.
Leased assets may not be used as security for
borrowing purposes.
Extension and termination options are included
in a number of leases across the Group. These are
used to maximise operational flexibility in terms of
managing the assets used in the Group’s operations.
The majority of extension and termination options
held are exercisable only by the Group and not by
the respective lessor.
10 Leases – SkyCity as the Lessee
Accounting Policy
Assets and liabilities arising from a lease are initially
measured on a present value basis. Lease liabilities
include the net present value of the following lease
payments:
•
•
•
fixed payments (including in-substance fixed
payments), less any lease incentives receivable;
variable lease payments that are based on an
index or a rate; and
payments to be made under reasonably certain
extension options.
The lease payments are discounted using the
interest rate implicit in the lease. If, as is generally
the case, that rate cannot be readily determined,
the Group's incremental borrowing rate is used,
being the rate that the Group would have to pay
to borrow the funds necessary to obtain an asset
of similar value to the right-of-use asset in a similar
economic environment with similar terms, security
and conditions. The incremental borrowing rate is
calculated as follows;
•
•
•
where possible, uses recent third party financing
received by the individual lessee as a starting point,
adjusted to reflect changes in financing conditions
since third party financing was received;
uses a build-up approach that starts with a risk
free interest rate adjusted for credit risk; and
makes adjustments specific to the lease
(eg. term, country, currency and security).
The weighted average incremental borrowing rate
for the Group's leases is 5.3% (with rates ranging
from 3.3% to 6.0%).
Right-of-use assets are measured at cost comprising
the following:
•
•
the amount of the initial measurement of the
lease liability;
any lease payments made at or before the
commencement date;
• any initial direct costs; and
•
restoration costs.
186
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The balance sheet shows the following amounts relating to leases:
Right-of-use assets net book value
SkyCity Auckland – sub soil
SkyCity Auckland – airbridges
SkyCity Queenstown – Stratton House
SkyCity Adelaide – Railway Building and extension
SkyCity Adelaide – car park
Lease liabilities
Current
Non-current
Amounts recognised in the Income Statement are:
Depreciation of right-of-use asset
Interest expense on lease liabilities (part of net finance costs)
11 Net Finance Costs
Finance costs
Foreign exchange gains
Interest income
Debt restructuring costs (note 12)
Capitalised interest (note 23)
Total finance costs
2021
$'000
3,091
3,214
1,930
55,056
63,464
126,755
3,014
115,793
118,807
2021
$'000
1,894
3,566
2021
$'000
41,743
(388)
(1,086)
–
(7,814)
32,455
2020
$'000
3,095
2,318
2,367
44,187
–
51,967
485
52,188
52,673
2020
$'000
1,114
3,088
2020
$'000
45,419
(195)
(1,060)
7,506
(23,057)
28,613
12 Non-current Liabilities – Interest Bearing Liabilities
Accounting Policy
Interest bearing liabilities are initially recognised at fair value, net of transaction costs incurred. They are
subsequently carried at amortised cost and any difference between the proceeds (net of transaction costs)
and the redemption value is recognised in the Income Statement over the period of the borrowings using
the effective interest method. However, the interest margin on US dollar denominated United States private
placement (USPP) notes maturing in March 2025 is accounted for as a fair value hedge and the carrying
value of the borrowings is adjusted for fair value changes attributable to the risk being hedged.
Borrowings are only classified as non-current liabilities if the Group has an unconditional right to defer
settlement of the liability for at least 12 months after the reporting date.
Notes to the Financial Statements
187
The interest margin on US dollar denominated USPP notes maturing in March 2025 is accounted for as a fair
value hedge. The carrying values of the borrowings are adjusted for fair value changes attributable to the risk
being hedged.
Unsecured Interest Bearing Liabilities
Car park concession (main site nested car parks) (note 4)
USPP notes
New Zealand bonds
Deferred funding expenses
Total Non-current Interest Bearing Liabilities
(a) USPP Notes
As at 30 June 2021, SkyCity had outstanding USSP
notes of:
• US$100.0 million maturing 17 March 2025; and
• A$65.4 million maturing 15 March 2028.
Movements in the carrying value of the outstanding
balance in the current year relate to maturity of
US$100 million of notes on 15 March 2021 plus
movements in exchange rates and interest rates.
The US dollar USPP notes have been hedged to NZ
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 32.
Fair value of USPP debt is estimated at
NZ$243.4 million (2020: NZ$429.4 million)
compared to a carrying value of NZ$221.8 million
(2020: NZ$397.0 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 unsecured 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).
2021
$'000
47,167
221,811
175,000
(3,014)
440,964
2020
$'000
42,802
241,420
–
(1,491)
282,731
As at 30 June 2021, SkyCity had in place revolving
credit facilities of:
•
•
•
•
A$280.0 million maturing 31 March 2022
(partially drawn at the reporting date);
NZ$60.0 million maturing 15 June 2022
(undrawn at the reporting date);
NZ$85.0 million maturing 15 June 2023
(undrawn at the reporting date); and
NZ$85.0 million maturing 15 June 2024
(undrawn at the reporting date).
Subsequent to balance date:
In August 2021, the syndicated bank facility was
restructured and extended to the following:
• A$100.0 million maturing 15 June 2023;
• NZ$115.0 million maturing 15 June 2024; and
• NZ$115.0 million maturing 15 June 2025.
(c) New Zealand Bonds
$125 million of unsubordinated, unsecured,
redeemable fixed rate bonds were redeemed on
28 September 2020 at $1.028 per bond, equating to
a total redemption cost of $128.5 million.
$175.0 million of six-year unsubordinated,
unsecured redeemable fixed rate bonds were
issued on 21 May 2021.
The bonds are quoted on the NZDX. As at
30 June 2021, the closing price was $1.038 per
$1 bond. The bonds are carried at amortised cost.
The total fair value is $ 181.7 million and is a level 1
valuation as they are listed securities.
188
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(d) Auckland Car Park Concession
Incorporated in the Auckland car park concession is an interest-bearing liability of $47.2 million relating
to the main site nested car parks. This liability will be amortised to nil over the life of the contract with the
movements recognised in interest income.
(e) Negative Pledge Deeds
A negative pledge deed has been executed in relation to each of the funding facilities – bank facilities,
USPP notes and New Zealand bonds. In each deed there are requirements for minimum guarantee group
participation and financial covenants. All requirements of the negative pledge deeds have been met as at
30 June 2021.
(f) CBA Revolving Credit Facility
In July 2020, a NZ$100.0 million revolving credit facility was established with the Commonwealth Bank of
Australia, maturing 31 December 2021. The facility was cancelled on 29 June 2021.
(g) Weighted Average Interest Rate
Interest bearing liabilities*
5.68%
610,798
6.39%
586,731
*The weighted average debt interest rate includes lease liabilities and the impact of interest rate and foreign currency hedging.
2021
%
$'000
2020
%
$'000
13 Current Liabilities – Interest Bearing Liabilities
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 from the reporting date.
Unsecured Interest Bearing Liabilities
Syndicated bank facility
USPP notes
New Zealand bonds
Car park concession (main site nested car parks)
Total current interest-bearing borrowings
2021
$'000
48,031
–
–
–
48,031
2020
$'000
15,000
155,618
128,500
3,391
302,509
Refer note 12(a) for details concerning the USPP notes, note 12(b) for details concerning the syndicated bank
facility, note 12(c) for details concerning the New Zealand bonds and note 12(d) for details concerning the car
park concession.
All financial covenants were met at 30 June 2021.
Notes to the Financial Statements
189
14 Net Debt Reconciliation
CASH AND
BANK
BALANCES
BORROWINGS
DUE WITHIN
1 YEAR
BORROWINGS
DUE AFTER
1 YEAR
Net debt as at 1 July 2019
Movement in cash and cash equivalents
Recognition of car park concession liability
Revaluation of New Zealand bonds
Revaluation of USPP notes
Repayment of USPP notes
Amortisation of deferred funding expenses
Net movement in bank drawings
Reclassification
Initial recognition of lease liabilities
Increase in lease liabilities
Net debt as at 30 June 2020
Movement in car park concession liability
Movement in New Zealand bonds
Revaluation of USPP notes
Repayment of USPP notes
Amortisation of deferred funding expenses
Net movement in bank drawings
Movement in lease liabilities
Increase in lease liabilities
Net debt as at 30 June 2021
495,913
503,466
–
(12,650)
$'000
(41,574)
(12,650)
–
–
–
–
–
–
–
–
–
$'000
49,127
–
3,391
3,500
6,230
(21,127)
–
(13,000)
$'000
42,802
–
17,716
–
687
–
274,388
(274,388)
485
–
50,336
1,852
TOTAL
$'000
46,193
3,500
23,946
(21,127)
687
(13,000)
–
50,821
1,852
(54,224)
302,994
334,918
583,688
–
(3,391)
–
4,365
4,284
974
(128,500)
175,000
46,500
–
(19,608)
(19,608)
(155,618)
–
(155,618)
–
(1,523)
33,031
2,529
–
–
63,604
–
(1,523)
33,031
66,133
–
–
–
–
–
–
–
–
–
(49,940)
51,045
556,756
557,861
Movement in cash and cash equivalents
4,284
15 Non-current Assets – Investment Properties
Accounting Policy
Investment property, principally comprising freehold office buildings and display space, is held for long
term rental yields.
Completed investment property is carried at fair value, which is based on active market prices, adjusted, if
necessary, for any difference in the nature, location or condition of the specific asset. If this information is
not available, the Group uses alternative valuation methods, such as recent prices in less active markets, or
discounted cash flow projections. Changes in fair value are recorded in the Income Statement.
Investment property under construction is carried at cost if its fair value is unable to be reliably determined
during construction but will be reliably determinable when construction is complete. The NZICC car park is
carried at cost on that basis.
190
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The carrying value of investment property has been calculated as follows:
Balance at the beginning of the year
Acquisitions
Net gain/(loss) from fair value adjustment
Transfer from property, plant and equipment - Levels 4 and 5, 88 Federal Street
Transfer from property, plant and equipment - NZICC car parks (note 4)
Transfer from property, plant and equipment - 86 Federal Street
Transfer from property, plant and equipment - 99 Albert Street
Closing balance at 30 June
(a) Amounts Recognised in Profit and Loss for Investment Property
Rental income
Direct operating expenses from property that generated rental income
Net gain/(loss) from fair value adjustment
2021
$'000
72,400
937
7,386
–
2,245
9,750
31,650
124,368
2021
$'000
2,148
(2,455)
7,386
7,079
2020
$'000
40,660
2,252
(14,055)
16,420
27,123
–
–
72,400
2020
$'000
2,953
(1,594)
(14,055)
(12,696)
(b) Investment Properties held at 30 June 2020
in the valuation were:
With the exception of the NZICC car park (which
is referred to below), investment properties
were valued to fair value on 30 June 2020 by
Bower Valuations Limited and Extensor Advisory
Limited, Registered Valuers and Members of the
New Zealand Institute of Valuers and the Property
Institute of New Zealand.
These properties were revalued to fair value on
30 June 2021 by CBRE, Registered Valuers and
Members of the New Zealand Institute of Valuers
and the Property Institute of New Zealand.
All valuers had recent experience in the location
and category of the property being valued.
At 30 June 2020, the fair value of these investment
properties (other than the NZICC car park) was
$45.3 million. The significant assumptions used in
the valuation were:
•
•
capitalisation rate – range from 5.82% to 7.0%;
and
passing yield (calculated as net rent divided by
fair value) – range from 5.04% to 10.33%.
At 30 June 2021, the fair value of these investment
properties (other than the NZICC car park) was
$53.6 million. The significant assumptions used
•
•
capitalisation rate – range from 4.00% to 5.88%;
and
passing yield (calculated as net rent divided by
fair value) – range from 3.65% to 5.75%.
The 30 June 2020 and 30 June 2021 valuations are
sensitive to movements in estimated capitalisation
rate and passing yield. If the assumed capitalisation
rate increased, or passing yield decreased, fair value
would decrease.
(c) NZICC Car Park
Approximately 650 car parks are due to be provided
to Macquarie as part of the Auckland car park
concession transaction (note 4).
Given the delay in providing these car parks to
Macquarie, this part of the concession has been
treated as an operating lease, and the car parks
have been classified as investment property.
In 2020, $27.1 million of costs associated with
these car parks was transferred from property,
plant and equipment to investment properties.
In 2021, an additional $2.2 million was transferred
from property, plant and equipment to investment
properties, as a result of updated NZICC damage
estimates on the car parks prepared by RLB (note 6).
Notes to the Financial Statements
191
(d) Transfer from Property, Plant and Equipment in 2021
86 Federal Street
99 Albert Street
At 30 June 2020, 86 Federal Street was classified
in its entirety as property, plant and equipment.
At 30 June 2021, seven floors in the building were
either tenanted, or being actively marketed for
rental, and were consequently reclassified as
investment property. The remaining floors of the
building continued to be classified as property,
plant and equipment.
As SkyCity carries its property, plant and equipment
under the cost model, and its investment property
under the revaluation model, for each floor being
transferred from property, plant and equipment
to investment property, the difference between
carrying value under the cost model and fair value
was accounted for as a revaluation of property, plant
and equipment (note 23).
Immediately before reclassification, the building
was revalued on a floor by floor basis by CBRE (who
have recent experience in the location and category
of the property being valued). At 30 June 2021, the
floors of the building that are classified as investment
property are carried at fair value ($9.8 million), which
resulted in an increase of $4.3 million in the asset
revaluation reserve (note 30).
The following were the significant assumptions used
in CBRE's valuation:
• capitalisation rate of 5.88%; and
•
passing yield (calculated as net rent divided by
fair value) – 1.32%.
At 30 June 2020, the portion of 99 Albert Street
owned by SkyCity was classified in its entirety as
property, plant and equipment. At 30 June 2021,
six floors in the building, car parks associated
with those floors, and ground floor retail spaces,
were either tenanted, or being actively marketed
for rental, and were consequently reclassified as
investment property. The remaining floors of the
building, and associated car parks, continued to be
classified as property, plant and equipment.
Immediately before reclassification, the building
was revalued to fair value on a floor by floor basis by
CBRE (who have recent experience in the location
and category of the property being valued). Those
floors being transferred from property, plant and
equipment to investment property were revalued
to their fair value, with the revaluation being
accounted for as a revaluation of property, plant
and equipment. At 30 June 2021, the floors of the
building that are classified as investment property
are carried at fair value ($31.7 million), which resulted
in an impairment of $4.0 million of land and an
increase of $4.4 million in the asset revaluation
reserve in relation to buildings (note 30).
The following were the significant assumptions used
in CBRE's valuation:
• capitalisation rate of 5.88%; and
•
passing yield (calculated as net rent divided by
fair value) – 3.29%.
16 Current Liabilities – Deferred Licence Value
Accounting Policy
Regulatory reforms granted which are specific to the Group are initially recognised at their fair value when
it is probable that the reforms will be received and that the Group will comply with all conditions attached.
Regulatory reforms are recognised as an intangible asset (note 24) 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 completion of the related property, plant and equipment, the value of the regulatory reforms is
accounted for as a deferred licence value.
192
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2021
Opening Balance
Exchange differences
ADELAIDE
$'000
153,165
494
TOTAL
$'000
153,165
494
Transfer to property, plant and equipment (note 23)
(143,323)
(143,323)
Transfer to intangible assets (note 24)
Transfer to right-of-use assets (ROU) (note 10)
Closing balance
2020
Opening balance
Transfer from non-current liabilities (note 17)
Closing balance
(3,067)
(5,306)
1,963
–
153,165
153,165
(3,067)
(5,306)
1,963
–
153,165
153,165
The SkyCity Adelaide deferred licence value liability was initially recognised in 2014 following an
amendment to the Adelaide Approved Licensing Agreement (ALA). The agreement to amend the ALA
required SkyCity Adelaide to agree to undertake a A$350.0 million casino expansion and hotel development
project and the deferred licence value liability relates to this requirement.
In the current year, the majority of the SkyCity Adelaide deferred licence value was transferred to property,
plant and equipment, due to the majority of the construction work having been completed and the casino
being opened to the public. The remaining balance will be transferred to property, plant and equipment
following the completion of the Adelaide expansion.
17 Non-current Liabilities – Deferred Licence Value
2021
Opening balance
Impact of NZICC fire (note 6)
Closing balance
2020
Opening balance
Exchange rate movement
Transferred to current liabilities (note 16)
Adjustment to property, plant and equipment classified as held for sale
Impact of NZICC fire (note 6)
Closing balance
SkyCity Auckland
AUCKLAND
ADELAIDE
$'000
214,972
(7,536)
207,436
$'000
–
–
–
TOTAL
$'000
214,972
(7,536)
207,436
355,179
149,625
504,804
–
–
3,540
3,540
(153,165)
(153,165)
25,578
(165,785)
214,972
–
–
–
25,578
(165,785)
214,972
Following the NZICC fire, the damaged portion of the NZICC was disposed of for financial reporting
purposes (refer note 6). As a result of this disposal and the estimates detailed in note 6, $165.8 million was
released to the Income Statement in the year ended 30 June 2020 and a further $7.5 million was released
in the year ended 30 June 2021.
These amounts are based on the assessment of the damage from the NZICC fire (refer note 6) and may
materially change as further information becomes available.
Notes to the Financial Statements
193
18 Income Tax Expense/(Benefit)
Accounting Policy
The income tax expense for the year is the tax payable on the current year’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.
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/(Benefit)
Current tax
Deferred tax
Income tax (benefit)/expense
(b) Numerical Reconciliation of Income Tax Expense/(Benefit) 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
Differences in overseas tax rates
Assets held for sale
Prior period adjustments
NZICC fire capital (income)/expenses
Auckland car park concession proceeds
Adelaide casino licence impairment
Fair value adjustments
Reinstatement of New Zealand tax building depreciation
Non-taxable settlement amount
Controlled foreign company regime
Other
Income tax expense/(benefit)
2021
$'000
33,053
4,281
37,334
193,460
54,169
1,703
(2,138)
390
(1,502)
(8,385)
–
–
2,138
–
(11,060)
2,108
(89)
37,334
2020
$'000
26,115
(28,267)
(2,152)
233,118
65,273
2,210
(3,402)
(411)
243
(73,955)
(20,062)
48,188
3,955
(24,145)
–
–
(46)
(2,152)
The weighted average applicable tax rate was 19.3% (2020: -0.9%). The weighted average tax rate has been
significantly impacted by:
• NZICC fire capital (income)/expense;
• Auckland car park concession proceeds;
• Adelaide casino licence impairment;
•
fair value adjustments;
•
reinstatement of New Zealand tax building
depreciation; and
• non-taxable settlement amount.
Excluding these items, the weighted average tax
rate would have been 28.7% (2020: 27.4%).
194
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 19 Deferred Tax Assets
The balance comprises temporary differences attributable to:
Provisions and accruals
Depreciation
Foreign exchange variances
Cash flow hedges
Lease accounting
Tax losses
Other
Net deferred tax assets
Movements:
Balance at beginning of the year
Foreign exchange differences
Charged to the Income Statement (note 18)
Tax credited directly to other comprehensive income (note 30)
Closing balance at 30 June
Deferred tax assets relate to the Australian and other foreign operations.
20 Deferred Tax Liabilities
The balance comprises temporary differences attributable to:
Provisions and accruals
Depreciation
Lease accounting
Cash flow hedges
Asset revaluation reserve
Other
Net deferred tax liabilities
Movements:
Balance at beginning of the year
Charged to the Income Statement (note 18)
Tax debited directly to other comprehensive income (note 30)
Closing balance at 30 June
Deferred tax liabilities relate to the New Zealand operations.
S
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M
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2021
$'000
8,112
(11,859)
4
453
(382)
12,441
575
9,344
6,877
17
2,729
(279)
9,344
2021
$'000
(9,388)
68,678
(246)
(4,430)
1,921
496
57,031
45,175
7,010
4,846
57,031
2020
$'000
5,316
(7,723)
166
653
185
8,280
–
6,877
4,843
89
3,157
(1,212)
6,877
2020
$'000
(14,972)
64,702
(28)
(7,355)
–
2,828
45,175
70,160
(25,110)
125
45,175
Notes to the Financial Statements
195
21 Imputation and Franking Credits
Balances available for use in subsequent reporting periods
Imputation credit account (New Zealand)
Franking credit account (Australia) (A$)
2021
$'000
51,601
13,951
2020
$'000
21,347
13,951
As required by relevant tax legislation, the imputation credit account had a credit balance as at 31 March 2021.
22 Non-current Liabilities – Lease Income in Advance
Lease income in advance
2021
$'000
36,310
36,310
2020
$'000
39,815
39,815
As detailed in note 4, the approximately 650 further NZICC car parks to be delivered as part of the Auckland
car park concession transaction have been determined to be an operating lease.
The $220.0 million concession payment was allocated between the 450 nested car parks and the unnested
car parks based on their respective fair values. The payment for the unnested car parks (refer note 6) was
further allocated based on the number of car parks. At 19 August 2019, $39.8 million was allocated to these
approximately 650 further NZICC car parks and was recognised as a lease payment in advance.
23 Property, Plant and Equipment
Accounting Policy
Property, plant and equipment is stated at historical cost less accumulated depreciation and accumulated
impairment losses. 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.
196
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At 1 July 2019
Cost
BUILDINGS
AND
FITOUT
PLANT,
EQUIPMENT
AND MOTOR
VEHICLES
FIXTURES
AND
FITTINGS
CAPITAL
WORK IN
PROGRESS
TOTAL
$'000
$'000
$'000
$'000
$'000
LAND
$'000
210,317
775,739
371,060
123,996
641,849
2,122,961
Accumulated depreciation
–
(324,786)
(272,273)
(89,645)
–
(686,704)
Net book amount
Year Ended 30 June 2020
210,317
450,953
98,787
34,351
641,849
1,436,257
Opening net book amount
210,317
450,953
98,787
34,351
641,849
1,436,257
Exchange differences
Net additions/transfers
Transfer to investment properties
– existing convention centre (note 15)
Transfer to investment properties
– NZICC car parks (note 15)
Reversal of 2019 assets held for sale
NZICC fire disposal (note 6)
Depreciation charge
–
1,421
–
–
–
–
–
959
41,162
(10,484)
–
–
–
421
90
4,123
5,593
25,461
3,681
257,460
329,185
–
–
–
–
–
–
–
–
–
(10,484)
(27,123)
(27,123)
56,801
56,801
(193,868)
(193,868)
(25,126)
(33,017)
(9,316)
–
(67,459)
Closing net book amount
211,738
457,464
91,652
28,806
739,242
1,528,902
At 30 June 2020
Cost
211,738
783,956
391,221
126,345
739,242
2,252,502
Accumulated depreciation
–
(326,492)
(299,569)
(97,539)
–
(723,600)
Net book amount
Year Ended 30 June 2021
211,738
457,464
91,652
28,806
739,242
1,528,902
Opening net book amount
211,738
457,464
91,652
28,806
739,242
1,528,902
Exchange differences
Net additions/transfers
Adelaide expansion
Transfer of Adelaide deferred licence (note 16)
Transfer to investment properties
– 86 Federal Street (note 15)
Transfer to investment properties
– 99 Albert Street (note 15)
(1,674)
(3,765)
(15,262)
(11,944)
Impairment (note 7)
(8,834)
Transfer to investment properties
– NZICC car parks (notes 6 and 15)
Assets held for sale (note 27)
NZICC fire disposal
Depreciation charge
–
–
–
–
–
–
(272)
–
–
–
–
–
159
55
8
1,115
1,337
44,852
36,600
12,642
41,874
135,968
296,760
53,583
35,514
(385,857)
–
(107,113)
(21,956)
(14,254)
–
–
–
–
(262)
–
–
–
–
–
–
–
–
–
–
–
(143,323)
(5,439)
(27,206)
(8,834)
(2,245)
(2,245)
–
(534)
(34,713)
(34,713)
(27,199)
(35,759)
(10,193)
–
(73,151)
Closing net book amount
185,968
648,942
123,913
52,523
359,416
1,370,762
At 30 June 2021
Cost
185,968
1,001,903
445,398
159,320
359,416
2,152,005
Accumulated depreciation
–
(352,961)
(321,485)
(106,797)
–
(781,243)
Net book amount
185,968
648,942
123,913
52,523
359,416
1,370,762
Notes to the Financial Statements
197
(a) Capitalised Borrowing Costs
Borrowing costs of $7.8 million have been
capitalised in the current year relating to capital
projects (2020: $23.1 million) using the Group's
weighted average cost of debt of 5.68% across the
year (2020: 6.36%).
(b) Transfers to Investment Property
86 Federal Street
At 30 June 2020, 86 Federal Street was classified
in its entirety as property, plant and equipment.
As at 30 June 2021, seven floors in the building
were either tenanted, or being actively marketed
for rental, and were consequently reclassified as
investment property. The remaining floors of the
building continued to be classified as property,
plant and equipment (note 15).
The reclassification of the seven floors from
property, plant and equipment carried under
the cost model, to investment property carried
under the fair value model, was accounted for as a
revaluation of property, plant and equipment and
resulted in the recognition of a $4.3 million increase
in the asset revaluation reserve. There was no
change in carrying value of the floors that remained
classified as property, plant and equipment.
99 Albert Street
At 30 June 2020, the portion of 99 Albert Street
owned by SkyCity, was classified in its entirety as
property, plant and equipment. As at 30 June 2021,
six floors in the building, car parks associated
with those floors, and ground floor retail spaces,
were either tenanted, or being actively marketed
for rental, and were consequently reclassified as
investment property. The remaining floors of the
building, and associated car parks, continued to be
classified as property, plant and equipment.
The reclassification of the six floors, associated car
parks, and ground floor retail spaces from property,
plant and equipment carried under the cost model,
to investment property carried under the fair
value model, was accounted for as a revaluation
of property, plant and equipment and resulted in
the recognition of an impairment of $4.0 million
of land and an increase of $4.4 million in the asset
revaluation reserve in relation to buildings.
Where the valuation of a floor that was being
retained as property, plant and equipment was
lower than the carrying value of that floor, the floor
was written down to its revalued amount. This
resulted in the recognition of an impairment of land
of $4.8 million.
(c) Capitalisation of Adelaide Expansion
In the current year, the Adelaide casino expansion
and hotel development was substantially
completed and was opened to the public. As a
result, the capital work in progress was capitalised
in the Group's fixed asset register and allocated to
the appropriate asset categories. This includes an
allocation of the Adelaide deferred licence value
of $151.7 million (A$141.2 million) to the extent the
expansion is complete (note 16).
(d) 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 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 protects 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.
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24 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
at the date of acquisition. Goodwill is included in
intangible assets. Goodwill is not amortised but is
instead 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.
(ii) Acquired Software
Acquired computer software licences are
capitalised at cost (which includes acquisition cost
and any costs incurred in bringing the software
into use). Subsequent to initial recognition they are
carried at cost less accumulated amortisation and
accumulated impairment losses. Amortisation is
calculated on a straight-line basis over the useful
life, which ranges from three to 15 years.
(iii) Gaming Machine Entitlements
Gaming Machine Entitlements (GMEs) are required
to operate gaming machines in South Australia.
Each GME gives the licensee the right to own
and operate a single gaming machine at the
licensee’s venue.
The number of GMEs held by a licensee cannot
exceed the maximum number of gaming
machines which have been approved for the venue.
SkyCity Adelaide currently owns 1,080 GMEs and is
licensed to hold a maximum of 1,500.
GMEs can be purchased or sold during trading
rounds by an eligible person via the South Australian
Government’s approved trading system. Trading
rounds are usually held at least twice a year
at the discretion of the Liquor and Gambling
Commissioner. The trading price of a GME is
determined by a number of factors, including the
number of sellers and buyers and the minimum and
maximum prices offered.
SkyCity Adelaide’s GMEs are treated as intangible
assets. They are carried at cost less accumulated
amortisation and impairment losses. They are
amortised over the term of the exclusivity period,
which is to 30 June 2035.
(iv) Casino Licences and Associated
Regulator Reforms
The Group's casino licences that have:
•
a finite useful life are carried at cost less
accumulated amortisation and accumulated
impairment losses. Amortisation is charged to
profit or loss on a straight-line basis over the legal
licence term; and
•
an indefinite useful life are carried at cost less
accumulated impairment losses.
Determining whether a casino licence has a finite or
indefinite useful life is a key judgement and involves
assessment of the terms and conditions, and in
particular the renewal terms, of the relevant licence.
Regulatory reforms granted by a government that
are specific to the Group are accounted for as
intangible assets arising from a government grant.
Accordingly, the reforms are initially recognised at
their fair value when there is reasonable assurance
that the reforms will be received, and the Group will
comply with all conditions attached to them.
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 completion of the related property,
plant and equipment, the value of the regulatory
reforms is accounted for as deferred licence value.
(v) Impairment of Intangible Assets
Intangible assets, including goodwill, that have
an indefinite useful life are tested for impairment
annually (or more frequently if events or changes
in circumstances indicate that the asset might be
impaired). Goodwill is allocated to cash generating
units for the purpose of impairment testing.
Intangible assets that have a finite useful life are
assessed for indicators of impairment annually and
tested for impairment if an indicator of impairment
is found.
Impairment testing is done by comparing the
carrying value of the asset to its recoverable
amount, which is the higher of value in use and the
fair value less costs of disposal. Any impairment is
recognised immediately as an expense. Impairment
on goodwill is not subsequently reversed, but
impairment on other assets may be reversed.
Notes to the Financial Statements
199
GOODWILL
CASINO
LICENCES
COMPUTER
SOFTWARE
GAMING
MACHINE
ENTITLEMENTS
$'000
$'000
$'000
$'000
At 1 July 2019
Cost
35,786
768,618
127,311
Accumulated amortisation
–
(57,726)
(75,581)
Net book amount
35,786
710,892
51,730
Movements in the Year Ended 30 June 2020
Exchange differences
Additions
Impairment charge
Amortisation charge
–
7,052
68
1,908
–
20,682
–
–
(160,600)
(5,507)
–
(12,480)
60,000
Closing net book amount
37,694
551,837
At 30 June 2020
Cost
37,694
777,118
147,798
Accumulated amortisation
–
(225,281)
(87,798)
Net book amount
37,694
551,837
60,000
Movements in the Year Ended 30 June 2021
Exchange differences
Additions
Adelaide expansion
Transfer of Adelaide deferred licence (note 16)
–
–
–
–
Assets classified as held for sale (note 27)
(1,908)
453
–
–
–
–
9
8,868
5,740
(1,802)
(20)
Amortisation charge
–
(2,629)
(13,666)
TOTAL
$'000
931,715
(133,307)
798,408
7,120
22,590
(160,600)
(17,987)
649,531
962,610
(313,079)
649,531
462
8,868
8,828
(3,067)
(1,928)
(16,368)
–
–
–
–
–
–
–
–
–
–
–
–
–
3,088
(1,265)
–
(73)
Closing net book amount
35,786
549,661
59,129
1,750
646,326
At 30 June 2021
Cost
35,786
778,303
160,551
Accumulated amortisation
–
(228,642)
(101,422)
Net book amount
35,786
549,661
59,129
1,823
(73)
1,750
976,463
(330,137)
646,326
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CASINO LICENCE
CONTRACT TERM
SkyCity Auckland
Casino (indefinite
useful life)
SkyCity Adelaide
(finite useful life)
SkyCity Auckland Limited holds a casino premises licence for the Auckland premises.
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 (NZICC Agreement), the initial term of the
licence was extended to 30 June 2048.
The licence can be renewed for further periods of 15 years pursuant to section 138 of
the Gambling Act 2003 (NZ).
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 NZICC Agreement, the Company has
agreed to construct the NZICC for a total cost of at least $430.0 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 was determined using a discounted cashflow model falling within level 3 of
the fair value hierarchy over the life of the reforms.
The carrying amount of the casino licence is $405.0 million (FY20: $405.0 million).
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.
The casino licence and associated regulatory reforms 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$130.6 million (FY20: A$133.0 million)
(NZ$140.3 million and NZ$142.4 million respectively).
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 the 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 the Queenstown
Wharf 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 acquisition of Otago Casinos Limited is
$4.4 million (FY20: $4.4 million).
Notes to the Financial Statements
201
(a) Impairment Tests for Intangibles with Indefinite Lives
Goodwill and the casino licences of SkyCity Auckland, SkyCity Hamilton and SkyCity Wharf have indefinite
useful lives and consequently are tested annually for impairment.
2021
Goodwill
Casino licence
Total
2020
Goodwill
Casino licence
Total
SKYCITY
AUCKLAND
OTAGO
CASINOS
LIMITED*
SKYCITY
HAMILTON*
$'000
$'000
$'000
TOTAL
$'000
–
–
35,786
35,786
405,000
405,000
4,391
4,391
–
409,391
35,786
445,177
–
–
35,786
35,786
405,000
405,000
4,391
4,391
–
409,391
35,786
445,177
* SkyCity Hamilton and Otago Casinos Limited are included within the "Other NZ Operations" segment in note 2.
Other than Otago Casinos Limited, 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 which
include cash flows in relation to International Business where those cash flows relate to the relevant cash
generating unit. For all of these assets, the calculated value in use significantly exceeds carrying value.
The value of the Wharf (Otago Casinos Limited) casino licence is the potential ability to utilise the licence to
enhance the Group's gaming offering.
Professional judgement has been made to treat the entire Auckland precinct as a single cash generating
unit given the close and interconnected relationship of the cash flows across all of SkyCity’s Auckland
businesses. Impairment testing has also been completed on the Adelaide casino licence (an amortising
asset). Judgement was used to determine the valuation and resulting impairment charge.
(b) Key Assumptions used for Value in Use Calculations of Cash Generating Units
SkyCity Auckland
SkyCity Hamilton
EBITDA MARGIN
2021
2020
40.8%
47.9%
36.0%
41.4%
TERMINAL
GROWTH RATE
PRE-TAX
DISCOUNT RATE
2021
2.0%
2.0%
2020
2.0%
2.0%
2021
11.5%
11.5%
2020
11.0%
11.0%
These assumptions are consistent with past experience adjusted for economic indicators. The discount rates
are pre-tax and reflect specific risks relating to the relevant operating segment. The estimated impacts of
COVID-19 have been factored into these assumptions.
There is sufficient headroom between the value in use calculations and the carrying value of the related cash
generating units' assets that significant changes in the assumptions used would not require an impairment.
(c) Impairment Review of the Adelaide Casino Licence
In the prior year, the Group engaged Deloitte to independently determine the recoverable amount of the
Adelaide cash generating unit, for the purposes of determining whether the SkyCity Adelaide casino licence
was impaired. The recoverable amount was determined using the fair value less costs of disposal approach,
with the fair value measurement being a Level 3 measurement in the fair value hierarchy. A key input into
the assessment was the five year forecast for SkyCity Adelaide, which had been adopted by the Board. As a
result of this assessment, the Adelaide casino licence was impaired by A$150.0 million (NZ$160.6 million).
202
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The 2020 impairment arose as a result of:
•
•
revised expectations regarding the time frame
for Adelaide Casino to achieve its long term
potential earnings following completion of the
expansion project; and
a reduced earnings outlook due to the expected
future impacts of COVID-19, including an
expectation that International Business activity
may take some years to recover.
In the current year, the Group again engaged
Deloitte to independently determine the
recoverable amount of the Adelaide cash
generating unit, for the purposes of determining
whether the SkyCity Adelaide casino licence was
impaired. A key input to Deloitte's assessment was
the updated Board approved five-year forecast for
SkyCity Adelaide. The recoverable amount for the
current year was determined using the fair value
less costs of disposal approach (and the fair value
measurement was again a Level 3 measurement
in the fair value hierarchy). The valuation resulted
in a range – taking the mid point of the range
implies an impairment reversal of A$5.4 million
(NZ$5.7 million) (with the low end of the range
being an increase in impairment of A$15.7 million
(NZ$16.9 million) and the high end of the range
being a reversal in impairment of A$29.0 million
(NZ$31.2 million)). Given the uncertainties associated
with forecasting in a COVID-19 environment,
including the ongoing impact to International
Business, management determined that the current
period valuation did not warrant either an increase
in, or a reversal of, the impairment recognised in the
prior period.
The 2020 and 2021 independent valuations were
based on the following key estimates:
•
compound annual EBITDA growth rate from
FY19 to FY26 = 17.4% (2020: FY19 to FY25 = 21.1%)
– note that the anticipated impacts of COVID-19
have been taken into account;
•
terminal growth rate = 2% (2020: 2%); and
• discount rate = 10.8% (2020: 10.8%).
EBITDA Growth
Determining an appropriate growth rate is made
difficult by the impact of COVID-19 on the current
and prior periods' results and its expected impact
on future years. A significant initial EBITDA uplift
is expected from the opening of the Adelaide
expansion. Further growth is then expected until
the 2026 financial year, with growth expected to
level off from then onwards. Growth estimates
have considered a number of factors, including
an expected increase in gaming machine market
share, an expected increase in premium and VIP
gaming activity, an expected increase in visitors
to the area due to the new hotel and restaurants
and an expected positive impact from recent and
current developments in the surrounding precinct
(including a new car park building).
Discount Rate
The discount rate has been independently
calculated by Deloitte. It reflects the current market
assessment of the risks specific to SkyCity Adelaide,
taking into account the time value of money and
individual risks of the underlying assets, including
those arising from COVID-19, that have not been
incorporated in the cash flow estimates.
The impairment assessment is sensitive to changes
in the discount rate and information on this
sensitivity is provided below.
Valuation Sensitivities
The impact of COVID-19 on the Group has already
been wide-ranging and significant. Given the
unknown future impact of COVID-19, there is a
heightened level of uncertainty at present which
makes accurate forecasts of the future particularly
challenging.
The sensitivities below illustrate the impact on
the impairment assessment of changes in the key
assumptions:
•
•
•
an EBITDA increase of 5% would have resulted
in an impairment reversal of approximately
$31 million, while an EBITDA decrease of 5% would
have increased impairment by approximately
$20 million (2020: an increase/decrease of 5%
would have decreased/increased impairment by
approximately $27 million);
a 0.5% increase in terminal growth rate (to 2.5%)
would have resulted in an impairment reversal
of approximately $24 million, while a decrease
in terminal growth rate of 0.5% (to 1.5%) would
have increased impairment by approximately
$11 million (2020: an increase/decrease of 0.5%
would have decreased/increased impairment by
approximately $20 million); and
a 0.5% increase in the discount rate (to
11.25%) would have increased impairment by
approximately $16 million, while a decrease
in discount rate of 0.5% (to 10.25%) would
have resulted in an impairment reversal of
approximately $29 million (2020: an increase/
decrease of 0.5% would have increased/decreased
impairment by approximately $24 million).
The valuation assumes no repeat of the previous
COVID-19 lockdown in Adelaide, which is a key
judgement and assumption. The actual valuation
impact of a renewed lockdown (if any) would
depend on the length of the lockdown, the nature
of the lockdown restrictions and the Federal and
State Government responses.
Notes to the Financial Statements
203
Annual Impairment Review
The Group will complete an annual impairment review of the SkyCity Adelaide casino licence going forward.
Increases in the fair value less costs of disposal, or reductions in the carrying value of the Adelaide business,
could result in a partial reversal of the impairment charge recognised in the prior period. Decreases in the
fair value less costs of disposal may result in the recognition of an additional impairment charge.
25 Receivables and Prepayments
Accounting Policy
Trade receivables are recognised initially at fair value and subsequently measured at amortised cost less
impairment.
Net trade receivables
Trade receivables (gross)
Impairment
Trade receivables (net)
Sundry receivables
Prepayments
Total receivables and prepayments
2021
$'000
13,606
(6,206)
7,400
1,898
24,107
33,405
Due to the short-term nature of these receivables, their carrying value approximates fair value.
26 Cash and Bank Balances
Cash at bank
Cash in house
Total cash and bank balances
27 Assets Held for Sale
Accounting Policy
2021
$'000
15,537
34,403
49,940
2020
$'000
50,069
(20,509)
29,560
256
12,436
42,252
2020
$'000
26,047
28,177
54,224
Non-current assets are classified as assets held for sale when their carrying amount is to be recovered
principally through a sale transaction and a sale is considered highly probable. They are stated at the lower
of carrying amount and fair value less costs to sell.
Non-current assets are not depreciated or amortised while they are classified as held for sale.
Land
Buildings
Plant and equipment
Intangibles
Total
Assets held for sale consist of the Darwin Little Mindil site and Lets Play Live Media.
204
2021
$'000
8,965
2,359
265
1,928
13,517
2020
$'000
8,936
2,080
3
–
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28 Payables and Provisions
Accounting Policy
Accounts payable are initially recognised at fair value, net of transaction costs, and thereafter carried at
amortised cost.
A provision is recognised when the Group has a present legal or constructive obligation as a result of past
events, it is probable that an outflow of resources will be required to settle the obligation, and the amount
can be reliably estimated. Provisions are measured at the present value of management’s best estimate of
the expenditure required to settle the present obligation at the end of the reporting period. The discount
rate used to determine the present value is a pre-tax rate that reflects current market assessments of the
time value of money and the risks specific to the liability.
Trade payables
Deferred income
Accrued expenses
Employee benefits
NZICC obligation (note 6)
Other provisions
Total payables and provisions
2021
$'000
29,541
13,833
57,341
52,077
36,496
10,877
200,165
2020
$'000
65,680
22,422
49,430
40,405
43,047
858
221,842
Other provisions primarily relate to the repayment of the New Zealand Government wage subsidy and the
Australian JobKeeper payments (note 5).
The carrying amounts of trade and other payables approximates their fair value, due to their short-term nature.
29 Share Capital
Opening balance of ordinary shares issued
739,196,806
672,351,166
1,288,287
1,126,996
2021
Shares
2020
Shares
2021
$'000
2020
$'000
Share rights issued for employee services
Share buy back and cancellation
Net issue of treasury shares
Equity raising
–
–
–
–
3,253
3,698
(5,154,360)
–
(20,003)
21,008,403
72,000,000
–
(2,054)
48,737
436
177,160
760,205,209
739,196,806
1,338,223
1,288,287
All ordinary shares rank equally with one vote attached to each fully-paid ordinary share.
Included within the number of shares is 3,394,058 treasury shares (2020: 5,155,841) 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 33). Treasury shares may be used to issue shares under the Company's employee incentive
plans or upon the exercise of share rights/options.
Equity Raising
The share purchase plan was completed on 9 July 2020 and involved the issue of 21,008,403 new shares
at $2.38 per share raising a total of $50.0 million. Costs associated with the placement of $1.3 million were
deducted from the share proceeds.
Notes to the Financial Statements
205
30 Reserves
Reserves
Asset revaluation reserve
Hedging reserve – cash flow hedges
Foreign currency translation reserve
Cost of hedging reserve
Total reserves
Movements
Asset Revaluation Reserve
Opening balance
Revaluation
Deferred tax
Closing balance
Hedging Reserve - Cash Flow Hedges
Opening balance
Revaluation
Transfer to net profit - finance costs (net)
Deferred tax
Closing balance
Foreign Currency Translation Reserve
Opening balance
Exchange difference on translation of overseas subsidiaries
Closing balance
Cost of Hedging Reserve
Opening balance
Revaluations
Transfer to finance costs
Deferred tax
Closing balance
2021
$'000
12,770
(12,058)
(22,471)
(1,213)
(22,972)
5,936
8,755
(1,921)
12,770
(19,913)
(24,859)
35,790
(3,076)
(12,058)
(17,802)
(4,669)
(22,471)
(1,542)
(6)
463
(128)
(1,213)
2020
$'000
5,936
(19,913)
(17,802)
(1,542)
(33,321)
–
5,936
–
5,936
(22,685)
9,154
(5,143)
(1,239)
(19,913)
(24,087)
6,285
(17,802)
(1,793)
(113)
462
(98)
(1,542)
31 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).
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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.
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 recognised 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.
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.
2021
2020
2021
2020
$'000
Notional
Value
$'000
Notional
Value
$'000
Fair Value
$'000
Fair Value
Current Assets
Cross currency interest rate swaps – cash flow hedges
–
108,220
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
30,826
30,826
142,898
142,898
–
–
–
2,152
110,372
155,618
155,618
133,932
194,223
328,155
Interest rate swaps - cash flow hedges
130,000
210,000
Total non‑current derivative financial instrument liabilities
130,000
210,000
–
156
156
4,109
4,109
–
–
–
7,528
7,528
53,218
70
53,288
23,100
23,100
192
5,921
6,113
24,375
24,375
Total net derivative financial instruments
(3,263)
45,900
*A component of the interest margin in US$100.0 million of these cross currency interest rate swaps is treated as a fair value hedge.
Notes to the Financial Statements
207
32 Financial Risk Management
The Group’s activities expose it to a variety of financial
risks – market risks (including currency and interest
rate risk), 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 currency 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 regularly.
(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, and
intercompany loans to, 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 USPP
notes detailed in note 13) 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 & Poor’s or Moody’s). A
minimum long term rating of A+ (Standard & Poor’s)
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.
The Group has a significant receivable from the
NZICC insurers (note 6). The lead insurer is a
subsidiary of a leading global firm and has an AA-
insurer financial strength rating given by S&P Global
Ratings.
Other than the NZICC fire insurance receivable,
there are no other significant concentrations of
credit risk in the Group.
(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.
208
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Maturities of Committed Funding Facilities
Debt maturities are detailed in note 12.
LESS
THAN 6
MONTHS
6–12
MONTHS
BETWEEN
1 AND 2
YEARS
BETWEEN
2 AND 5
YEARS
OVER
5 YEARS
$'000
$'000
$'000
$'000
$'000
TOTAL
$'000
S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
I
F
I
30 June 2021
Bank facility
USPP notes
New Zealand bonds
Car park concession liability
Lease liabilities
Total committed debt facilities
Total drawn debt
Future contracted interest on drawn debt
Future interest of lease liabilities
Future contracted interest on CCIRS/IRS
–
–
–
–
1,400
1,400
1,400
7,280
1,702
1,101
360,752
85,000
85,000
–
530,752
–
–
–
–
–
–
151,580
70,231
221,811
–
–
175,000
175,000
47,167
47,167
1,615
3,457
11,513
100,822
118,807
362,367
88,457
248,093
393,220
1,093,537
49,645
3,457
163,092
393,221
7,157
1,453
1,083
14,433
36,096
10,769
2,567
1,626
5,557
1,040
329,625
340,904
–
4,850
610,815
75,735
Total drawn debt and derivatives
11,483
59,338
22,083
205,785
733,615
1,032,304
30 June 2020
Bank facility
USPP notes
New Zealand bonds
Car park concession liability
Lease liabilities
–
–
128,500
–
240
120,000
299,786
–
419,786
155,618
–
–
–
–
–
171,414
70,005
397,037
–
–
–
128,500
46,193
50,013
46,193
52,673
245
507
1,668
Total committed debt facilities
128,740
275,863
300,293
173,082
166,211
1,044,189
Total drawn debt
128,740
170,863
507
173,082
166,211
639,403
Future contracted interest on drawn debt
10,829
Future interest of lease liabilities
Future contracted interest on CCIRS/IRS
1,317
3,620
6,589
1,306
2,162
9,635
2,578
4,088
27,145
7,443
7,644
9,579
63,777
301,989
314,633
1,093
18,607
Total drawn debt and derivatives
144,506
180,920
16,808
215,314
478,872
1,036,420
(d) Fair Value Estimation
The financial instruments are measured in the balance sheet, or disclosed in their respective notes, 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); and
inputs for the asset or liability that are not based on observable market data (that is unobservable inputs)
(level 3).
Other than the New Zealand bonds, which are listed on the NZDX and therefore level 1, all SkyCity financial
instruments, which includes cross-currency interest rate swaps, interest rate swaps and forward foreign
currency contracts, are valued using level 2 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.
Investment properties are valued using level 3 in the above fair value measurement hierarchy.
Notes to the Financial Statements
209
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; and
the fair 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 31.
(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 normalised EBITDA and interest coverage (normalised EBITDA
relative to net interest cost).
The primary ratios were as follows at 30 June:
Gearing ratio
Interest cover ratio
33 Share-Based Payments
Accounting Policy
2021
2.3 x
6.2 x
2020
2.7 x
4.5 x
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 Company 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.
Current Plans
Executive Long Term Incentive Plan (LTI Plan)
Under the LTI Plan, executives purchase ordinary SkyCity shares funded by an interest-free loan from the
Group. 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 (three to four 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 relative to other
comparable companies.
At 30 June 2021, the interest free loans relating to the LTI Plan total $7,152,885 (2020: $7,918,365).
210
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 S
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2018 Chief Operating Officer Commencement Shares (COO Plan)
Under the terms of his employment agreement dated 18 November 2017, the former Chief Operating
Officer was issued 35,000 ordinary SkyCity shares on 27 November 2019. There were no performance
targets associated with these shares (other than continued employment during the period from his
commencement date to November 2019) and no right to dividends prior to the issuance of the shares.
2018 SkyCity Restricted Share Rights Plan (2018 RSR Plan)
The 2018 Short Term Incentive Plan was replaced with the 2018 RSR Plan for 116 staff, with restricted share
rights issued to staff after the finalisation of the Group's results. Each right conferred a right to receive one
ordinary SkyCity share, which, unless otherwise agreed by the SkyCity Board, would only vest if the relevant
employee remained continuously employed by SkyCity (or a company within the Group) from the date of
issue until the vesting date on 1 July 2020.
2020 Chief Executive Officer Incentive Shares (CEO Plan)
Under the terms of his employment agreement dated 13 November 2020, the CEO will be issued 166,003
ordinary SkyCity shares on 16 November 2021. There are no performance targets associated with these
shares (other than continued employment during the period from his commencement date to November
2021). The CEO will also receive a cash payment equivalent to the cash dividends declared and paid by
SkyCity on shares during the 12-month period preceding the anniversary of the commencement date.
Performance Incentive Plan (PIP)
The 2018 RSR Plan was replaced in 2019 with the PIP which includes both cash (the short term incentive
scheme component of the PIP) and deferred equity components (the deferred short term incentive
component of the PIP).
The deferred short term incentive scheme under the PIP offers participants, subject to the relevant
performance conditions being met, the opportunity to acquire restricted share rights of an amount
equivalent to between 10% and 50% of their base salary. Restricted share rights (if any) issued to a
participant on a short term incentive cash payment date (Declaration Date) will only vest if that participant
remains an employee up and until:
•
•
the first anniversary of the Declaration Date in respect of 50% of the restricted share rights; and
the second anniversary of the Declaration Date in respect of the remaining 50% of the restricted share
rights.
However, if a participant’s deferred short term incentive entitlement in any financial year is to restricted
share rights having a value of $10,000 or less (calculated using the volume-weighted average sale price of
SkyCity shares used to determine the number of restricted share rights to be issued to the participant), the
restricted share rights will not be split out equally into two separate tranches, but will instead comprise one
tranche and (subject to the vesting criteria being satisfied) vest to the participant on the first anniversary of
the Declaration Date.
These restricted share rights will be issued to staff after the finalisation of the Group’s results.
Notes to the Financial Statements
211
Outstanding Share Rights
Movements in the number of share rights outstanding are as follows:
11/09/18
01/07/20
1,808,708
GRANT DATE
EXPIRY DATE
2021
LTI Plan
24/08/16
24/08/20
23/08/17
23/08/21
22/08/18
22/08/21
28/08/19
28/08/22
17/09/20
17/09/23
CEO Plan
16/11/20
16/11/21
2018 RSR Plan
PIP
06/09/19
06/09/20
10/09/19
10/09/20
06/09/19
06/09/21
10/09/19
10/09/21
Total
2020
LTI Plan
26/08/15
28/08/19
24/08/16
24/08/20
23/08/17
23/08/21
22/08/18
22/08/21
28/08/19
28/08/22
COO Plan
18/11/17
18/11/19
2018 RSR Plan
11/09/18
01/07/20
PIP
06/09/19
06/09/20
10/09/19
10/09/20
06/09/19
06/09/21
10/09/19
10/09/21
Total
BALANCE
AT START
OF THE
YEAR
GRANTED
DURING THE
YEAR
EXERCISED
DURING THE
YEAR
EXPIRED
DURING
THE YEAR
BALANCE
AT END OF
THE YEAR
Number
Number
Number
Number
Number
380,000
850,883
434,035
484,638
–
–
–
–
–
–
642,067
166,003
503,744
23,047
472,291
8,720
–
–
–
–
–
–
(1,808,708)
(503,744)
(23,047)
(380,000)
–
(100,000)
750,883
(58,016)
376,019
(64,220)
420,418
(85,081)
556,986
–
–
–
–
166,003
–
–
–
–
–
(12,964)
459,327
–
8,720
–
–
–
–
–
4,966,066
808,070
(2,335,499)
(700,281)
2,738,356
360,000
395,000
865,883
434,035
–
–
–
–
–
508,207
35,000
1,859,641
–
–
–
–
–
–
508,296
23,047
498,004
8,720
–
–
–
–
–
(360,000)
–
(15,000)
380,000
(15,000)
850,883
–
434,035
(23,569)
484,638
(35,000)
–
–
–
–
–
–
–
(50,933)
1,808,708
(4,552)
503,744
–
23,047
(25,713)
472,291
–
8,720
3,949,559
1,546,274
(35,000)
(494,767)
4,966,066
The weighted average remaining contractual life of rights outstanding at the end of the period was 0.74 years
(2020: 0.65 years).
212
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 S
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Fair Values
Fair Value of Share Rights Granted
The assessed fair value at grant date of the
rights granted on 17 September 2020 was $0.96
(28 August 2019 was $1.14). This was calculated using
the single index model by Ernst & Young Transaction
Advisory Services Limited.
The valuation inputs for the rights granted on
17 September 2020 included:
(a) rights are granted for no consideration;
(b) exercise price: nil (2020: nil); and
(c) share price at grant date: $2.94 (2020: $3.90).
The expected price volatility is derived by analysing
the historic volatility over a recent historical period
similar to the term of the right.
Fair Value of Chief Executive Officer
Incentive Shares
The assessed fair value at grant date of the incentive
shares at 16 November 2020 was $2.62. This was
calculated using the European call option model by
Ernst & Young Transaction Advisory Services Limited.
The valuation inputs for the commencement shares
on 16 November 2020 included:
(a) no consideration;
(b) exercise price: nil; and
(c) share price at grant date: $2.96.
The expected price volatility is derived by analysing
the historic volatility over a recent historical period
similar to the term of the commencement shares.
Fair Value of SkyCity Restricted Share Rights
The assessed fair value of each right was determined
by Ernst & Young Transaction Advisory Services
Limited at $3.02.
Fair Value of SkyCity Deferred Share Rights
No rights were issued in respect of the year ended
30 June 2020. The assessed value of each 2019
right was determined by Ernst & Young Transaction
Advisory Services Limited. Rights vesting one year
after year end were valued at $3.68 and rights
vesting two years after year end were valued at $3.33.
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
34 Related Party Transactions
(a) Key Management Personnel Compensation
2021
$'000
3,253
2020
$'000
3,698
Key management personnel compensation is set out below. The key management personnel are all the
directors of the company, the CEO and the Senior Leadership Team.
2021
2020
SHORT TERM
BENEFITS
TERMINATION
BENEFITS
SHARE-BASED
PAYMENTS
$'000
11,618
7,372
$'000
1,456
–
$'000
1,424
2,045
TOTAL
$'000
14,498
9,417
(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 in the normal course of business.
Certain directors and management hold shares in SkyCity and receive dividends in the normal course of business.
In the current year, consultancy services of $88,855 (2020: nil) were paid to new directors, for the period from
29 March to 7 June 2021 (inclusive), prior to their appointment.
From time to time, certain directors provide additional consultancy services to the Group outside of their
capacity as directors. No additional fees were paid in the current year (2020: $18,900).
(c) Subsidiaries
Interests in subsidiaries are set out in note 35.
213
35 Subsidiaries
The consolidated financial statements incorporate the assets, liabilities and results of the following
significant subsidiaries in accordance with the accounting policy described in note 1(c):
Cashel Asset Management Limited
New Zealand
Ordinary
100%
100%
Horizon Tourism New Zealand Limited
(formerly SkyCity Wellington Limited)
New Zealand
Ordinary
100%
100%
2021
2020
%
%
Lets Play Live Media Limited
New Zealand
Ordinary
New Zealand International Convention Centre Limited
New Zealand
Ordinary
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 Development Limited
SkyCity Enterprises Limited
SkyCity Hamilton Limited
SkyCity Holdings Limited
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
SkyCity International Holdings Limited
New Zealand
Ordinary
SkyCity Investments Australia Limited
New Zealand
Ordinary
SkyCity Investments Queenstown Limited
New Zealand
Ordinary
SkyCity Management Limited
SkyCity Precinct Limited
SkyCity Projects Limited
SkyCity Properties Limited
SkyCity Properties Albert St Limited
SkyCity Properties Victoria St Limited
SkyCity Ventures Limited
TNZ Esports Limited
LPL Media Pty Limited
SkyCity Adelaide Pty Limited
SkyCity Australia Finance Pty Limited
SkyCity Australian Limited Partnership
SkyCity Australia Pty Limited
SkyCity Treasury Australia Pty Limited
Horizon Tourism Limited
SkyCity Investment Holdings Limited
SkyCity Malta Holdings Limited
SkyCity Malta Limited
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
New Zealand
Ordinary
Australia
Ordinary
Australia
Ordinary
Australia
Ordinary
Australia
Ordinary
Australia
Ordinary
Australia
Ordinary
Hong Kong
Ordinary
Hong Kong
Ordinary
Malta
Malta
Ordinary
Ordinary
SkyCity Management (UK) Limited
United Kingdom
Ordinary
All wholly-owned subsidiary companies have balance dates of 30 June.
214
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%
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%
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 S
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36 Contingencies
(a) Contingent Liabilities
The possibility exists for the Group to receive third party claims in respect to the NZICC fire. However, only
minor claims have been received to date. It is the Group’s expectation that any claims received will be
covered by either the insurers or the Contractor (FCC) (30 June 2021 and 30 June 2020: nil).
SkyCity operates in an industry with a complex regulatory framework. During FY21, there was heightened
focus from a range of regulators across New Zealand and, in particular Australia. SkyCity takes its obligations
seriously, and continues to work proactively with its regulators and respond to their inquiries.
On 4 June 2021, SkyCity was notified by AUSTRAC’s Regulatory Operations Team that it had identified
potential serious non-compliance by SkyCity Adelaide Pty Limited (SkyCity Adelaide) with the Australian
Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and Anti-Money Laundering and
Counter-Terrorism Financing Rules Instrument 2007 (No. 1) and it had therefore referred the matter to
AUSTRAC’s Enforcement Team, which had initiated a formal enforcement investigation into the compliance
of SkyCity Adelaide. The potential serious non-compliance includes concerns relating to ongoing
customer due diligence, adopting and maintaining an AML/CTF Program and compliance with Part A of
an AML/CTF Program. These concerns were identified in the course of a compliance assessment which
AUSTRAC commenced in September 2019 focusing on SkyCity Adelaide’s management of customers
identified as high risk and politically exposed persons over the periods from 1 July 2015 - 30 June 2016 and
1 July 2018 – 30 June 2019.
AUSTRAC has made clear that it has not made a decision regarding the appropriate regulatory response
that it may apply to SkyCity Adelaide, including whether or not enforcement action will be taken. AUSTRAC
has indicated that it will request information from SkyCity as part of its investigation. SkyCity will fully
co-operate with AUSTRAC in relation to those inquiries and with the investigation of SkyCity Adelaide.
No provision has been made in relation to this or other regulatory matters in the financial statements, as
these matters do not meet the requirements for recognition as a provision.
(b) Contingent Assets
As detailed in note 6, the Group intends to seek recovery from the Contractor (FCC) for losses associated
with the NZICC fire that are not covered by the insurers. These losses include insurance excesses, payments
to Macquarie under the Auckland Car Park Concession Agreement and other items. To date, the Group
has identified $23.3 million (2020: $8.9 million) of costs where it does not believe that recovery is virtually
certain at this time and therefore no income has been recognised. However, recovery of these costs is
considered probable and they are therefore included as a contingent asset. This is not the full extent of the
expenses and losses that may be claimed from the NZICC or Horizon Hotel Contractor relating to the fire
and construction delays.
There are no other significant contingent assets at year end (2020: nil).
37 Commitments
Capital Commitments
Capital expenditure contracted for at the reporting date but not recognised as liabilities is as set out below.
Property, plant and equipment
2021
$'000
445,269
2020
$'000
440,342
The above commitments include the estimated cost of reinstating the NZICC and Horizon Hotel. The cost of
reinstating the damage to the NZICC and Horizon Hotel arising from the NZICC fire is currently estimated to
be $365.0 million to $450.0 million (2020: $330.0 million to $375.0 million) for the NZICC and $14.6 million
to $21.0 million (2020: $6.0 million) for the Horizon Hotel. The actual costs may be materially different to
these estimates. Further information is included in note 6.
Notes to the Financial Statements
215
38 Reconciliation of Profit after Income Tax to
Net Cash Inflow from Operating Activities
Profit for the year
Depreciation and amortisation (including discontinued operations)
Net finance costs
Current period employee share expense
Gain on sale of fixed assets
Fair value adjustment to investment property
NZICC fire related income
NZICC fire related costs
Asset impairment
Share of profits/(losses) of associates
Change in operating assets and liabilities
Change in receivables and prepayments
Change in inventories
Change in deferred tax asset
Change in current payables
Change in deferred tax liability
Change in tax receivable – current
Change in non-current payables
Change in tax payable – current
Investing and financing items included in working capital movements
Net cash inflow from operating activities
2021
$'000
156,126
91,413
32,455
3,253
528
(7,386)
(170,727)
141,845
8,834
–
8,847
(559)
(2,467)
(21,677)
11,856
1,989
9,748
15,480
8,627
288,185
2020
$'000
235,388
86,559
28,613
3,697
(66,779)
14,055
(384,500)
108,090
160,600
83
7,041
(169)
(2,748)
(6,270)
(24,271)
(1,059)
9,057
(13,877)
(33,344)
120,166
216
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 S
T
N
E
M
E
T
A
T
S
L
A
C
N
A
N
I
F
I
39 Events Occurring after the Balance Sheet Date
(a) Dividend
On 24 August 2021, the directors resolved to provide for a dividend to be paid in respect of the year ended
30 June 2021. The fully imputed, unfranked dividend of 7.0 cents per share will be paid on 24 September 2021 to
all shareholders on the Company's register at the close of business on 17 September 2021.
(b) COVID-19
The SkyCity Adelaide casino and entertainment facilities were closed from midnight (Australian Central
Standard Time) on 19 July 2021 and reopened in a staged manner from 10.00am (Australian Central
Standard Time) on 28 July 2021 in response to the COVID-19 mandated restrictions imposed by the South
Australian Government in connection with a new COVID-19 cluster in South Australia.
On 17 August 2021, the New Zealand Government announced a lockdown of the whole of New Zealand,
following the detection of a COVID-19 case in Auckland. The lockdown came into effect at 11:59pm on
17 August 2021 and required the closure of all non-essential businesses and organisations. All SkyCity
facilities and offices in New Zealand closed on 17 August 2021, with the exception of the Auckland hotels,
which remained open for guests, with food and beverage services available only through delivery to rooms.
At the time of signing these financial statements, the lockdown is still in force and additional COVID-19
cases have been detected in Auckland and Wellington.
(c) Long Stop Date
The NZICC is being built under an agreement between the Group and the Crown. Under that agreement,
the NZICC must be completed by a specified date, referred to as the completion long stop date. Subsequent
to the reporting date, the Crown has agreed to an extension of the completion long stop date – the revised
date is now 15 December 2027 (previously 2 January 2025). SkyCity expects to complete the NZICC before
this date.
(d) Recent Australian Employment Law
In the interim financial statements, the Group disclosed a contingent liability in relation to the potential
change in the treatment of some Australian casual employees that might arise from legal cases that were
in progress. Subsequent to the reporting date, the Australian High Court delivered a judgment that means
the definition of a casual employee will not change. As a result, no contingent liability is disclosed in these
financial statements.
(e) Partial Repayment of the New Zealand Government Wage Subsidy
On 27 July 2021, the Group made a $6.7 million voluntary partial repayment of wage subsidies to the
New Zealand Government (note 5).
(f) Syndicated bank facility
Subsequent to the reporting date, SkyCity’s syndicated bank facility was restructured (note 12).
Notes to the Financial Statements
217
Index to the Notes
to the Financial Statements
NOTE
NOTE
1 Summary of Significant
Accounting Policies
2 Segment Information
3 Revenue
4 Auckland Car Park Transaction
5 Other Income
6 NZICC Fire
(a) Income
(b) Expenses
(c) Current Assets
(d) Non-current Assets
7 Expenses
8 Earnings Per Share
9 Dividends
10 Leases – SkyCity as the Lessee
11 Net Finance Costs
12 Non-current Liabilities – Interest Bearing
Liabilities
13 Current Liabilities – Interest Bearing
Liabilities
14 Net Debt Reconciliation
15 Non-current Assets – Investment
Properties
16 Current Liabilities – Deferred Licence
Value
17 Non-current Liabilities – Deferred
Licence Value
172
175
177
177
179
179
180
181
182
183
183
185
185
186
187
187
189
190
190
192
193
18 Income Tax Expense/(Benefit)
19 Deferred Tax Assets
20 Deferred Tax Liabilities
21 Imputation and Franking Credits
22 Non-current Liabilities – Lease Income
in Advance
23 Property, Plant and Equipment
24 Intangible Assets
25 Receivables and Prepayments
26 Cash and Bank Balances
27 Assets Held for Sale
28 Payables and Provisions
29 Share Capital
30 Reserves
31 Derivative Financial Instruments
32 Financial Risk Management
33 Share-Based Payments
34 Related Party Transactions
35 Subsidiaries
36 Contingencies
37 Commitments
38 Reconciliation of Profit after
Income Tax to Net Cash Inflow
from Operating Activities
39 Events Occurring after the
Balance Sheet Date
194
195
195
196
196
196
199
204
204
204
205
205
206
206
208
210
213
214
215
215
216
217
218
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
Reconciliation of Normalised Results
to Reported Results
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. The intention is to provide
information that:
•
is representative of SkyCity’s underlying performance (as a potential indicator of future performance);
• can be compared across years; and
• can assist with comparison between publicly listed casino companies in New Zealand and Australia.
This objective is achieved by:
•
eliminating inherent volatility (or “luck” factor) from International Business, which has variable turnover
and actual win percentage from period to period;
• eliminating structural differences in the business between periods; and
•
eliminating known different treatments with other New Zealand and Australian publicly listed casino
companies.
SkyCity believes that, by making these adjustments, the users of the financial information will be able to
understand the underlying performance of the Group and form a view on the future performance of the business.
For internal purposes, including budgeting and determination of staff incentives, the normalised results are used.
Non-GAAP information is prepared in accordance with the company’s Non-GAAP Financial Information
Policy, which is reviewed and approved by the SkyCity Board at each reporting period. The Non-GAAP
Financial Information Policy was applied consistently in respect of the financial years ended 30 June 2020
and 30 June 2021.
The differences between the company’s FY21 and FY20 reported and normalised information is summarised
in the table below:
FY21
FY20
Revenue
$m
EBITDA
$m
EBIT
$m
NPAT
$m
Revenue
$m
EBITDA
$m
EBIT
$m
NPAT
$m
Reported
951.9
317.3
225.9
156.1
1,125.0
348.3
261.7
235.4
International Business
revenue adjustment
Gaming GST
International Business at
theoretical win rate
7.3
78.7
–
–
–
–
–
–
(5.3)
(4.9)
(4.9)
(3.6)
39.3
73.4
(7.3)
–
–
–
–
–
–
0.1
0.1
0.2
Gain on sale – Auckland car parks
Revaluation of Auckland properties
–
–
(7.4)
(7.4)
(7.4)
–
–
–
(66.4)
(66.4)
(66.4)
(66.4)
–
–
14.1
–
14.1
–
14.1
–
Liquidated damages
(39.5)
(39.5)
(39.5)
(39.5)
NZICC fire impacts
Labour restructure
Funding plan costs
Deferred tax liability reversal
Asset impairment
Normalised
(170.7)
(22.4)
(22.4)
(24.2)
(384.5)
(269.4)
(269.4)
(268.5)
–
–
–
–
–
–
–
–
–
–
–
–
–
8.8
8.8
8.8
–
–
–
–
13.5
13.5
–
–
–
–
9.7
5.4
(24.1)
160.6
160.6
160.6
822.3
252.0
160.6
90.3
779.5
200.7
114.2
66.3
219
Adjustment
Discussion
Treat International Business
commissions as an expense
rather than reduction in
revenue which reduces both
reported revenue and operating
expenses within International
Business (by $7.3 million in FY21
and $39.3 million in FY20)
Add gaming GST to reported
revenue (by $78.7 million in FY21
and $73.4 million in FY20)
Apply theoretical win rate of
1.35% for International Business
vs actual win rate of 1.67% (FY21)
and 1.47% (FY20)
•
•
•
•
•
•
This adjustment adds back International Business commissions
(treated as a reduction from revenue in the reported results) and
increases both revenue and expenses. This adjustment does not impact
EBITDA, EBIT or NPAT.
This adjustment has been made to maintain the relationship between
turnover and the theoretical win rate of 1.35% when determining
normalised revenue.
Reported revenue included within the financial statements of the
Group excludes GST .
This adjustment adds back GST associated with gaming so that
normalised revenue equals the amount bet by gaming customers.
All publicly listed New Zealand and Australian casino companies
include GST associated with gaming within their revenue results.
Including gaming GST within reported revenue is not consistent with
GAAP and SkyCity therefore does not do so.
However, SkyCity does include gaming GST within its normalised
revenue.
• This adjustment does not impact EBITDA, EBIT or NPAT.
•
•
•
This adjustment recalculates gaming win from International Business to
the theoretical win rate. The vast majority of International Business play
is Baccarat. Statistically, over the long term the casino expects to win
1.35% of all bets taken on Baccarat. However, in any particular reporting
period the actual results of play will vary depending on “luck”.
The 1.35% win rate is used by all publicly listed New Zealand and
Australian casino companies in addition to casino companies in Asia
and the United States.
In order to understand the long term results within International
Business there is the need to eliminate the inherent volatility or “luck”
factor.
220
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 Adjustment
Discussion
Eliminate net gain ($24.2 million
post-tax) arising from impacts
of NZICC fire ($268.5 million in
FY20)
Eliminate benefit ($39.5 million)
arising from liquidated damages
on NZICC/Horizon Hotel
withheld due to late practical
completion
•
•
•
•
•
•
•
•
•
•
•
On 22 October 2019, there was a significant fire at the construction site of
the New Zealand International Convention Centre (NZICC) in Auckland.
This fire has caused extensive damage to the NZICC and damage to the
Horizon Hotel which is being constructed on the adjacent site.
Both buildings are insured and all significant costs associated with the
fire are expected to be covered. Any costs not covered by insurance are
expected to be sought from Fletcher Construction.
The fire has significant implications for the financial statements for the
Group which were recognised in FY20 – these impacts are explained
further on pages 184 – 188 in SkyCity’s FY20 financial statements which
have been released to the NZX and ASX.
The FY20 financial statements included a number of significant
judgements and estimates to determine the appropriate accounting.
These judgements and estimates have continued to be reviewed
as new information has become available – following a revised
damage assessment for the NZICC/Horizon Hotel, the expected
insurance recovery relating to the asset has increased and is required
to be recognised as income as SkyCity is principal in the insurance
relationship. This income has been offset by an increase in costs
relating to demolition and deconstruction of the site post fire that are
required to be expensed as incurred.
The NZICC fire (and associated accounting impact) is a significant,
one-off event that has impacted the comparability of the FY21 result
with the prior year.
SkyCity entered into Building Works Contracts on the NZICC/Horizon
Hotel projects in November 2015.
Under the Building Works Contracts, liquidated damages apply for late
delivery of contractual completion milestones.
Given the significant delays to completion of the NZICC/Horizon Hotel,
SkyCity has claimed and deducted liquidated damages under the
Building Works Contracts of $39.5 million.
Following several pre-fire claims being settled with Fletcher
Construction during 1H21, recovery of the liquidated damages has been
deemed virtually certain and hence the full amount is required to be
accounted for as income in SkyCity’s interim financial statements.
The liquidated damages are a significant, abnormal event – making
this adjustment which eliminates the abnormal gain will enhance the
reader’s understanding as this item does not impact the underlying
operations of the Group.
Reconciliation of Normalised Results to Reported Results
221
Adjustment
Discussion
Reverse impact of revaluation
(increase of $7.4 million) of
Auckland investment properties
(FY20: reduction of $14.1 million)
AA Centre (SkyCity HQ)
impairment ($8.8 million)
SkyCity Adelaide licence
impairment (A$150 million)
(FY20 only)
Eliminate gain ($66.4 million)
arising from Auckland car park
concession sale (completed in
August 2019) (FY20 only)
Labour restructure ($13.5 million)
and funding plan costs ($5.4
million post-tax) (FY20 only)
•
•
•
•
SkyCity has a number of investment properties in Auckland. In
accordance with the appropriate accounting standard, these
investment properties will be revalued by an independent expert
every year and the carrying value adjusted within the Group’s financial
statements.
This adjustment eliminates/reverses the increase/decline in value of
these properties.
The revaluation is non-cash and unrelated to the operations of the Group.
This adjustment will be made each year to determine the Group’s
normalised results.
AA Centre
•
•
In FY21, the Group impaired the AA Centre (SkyCity HQ), majority
owned by SkyCity, by $8.8 million.
The impairment arose due to revised expectations regarding the
carrying value of the asset and the cost of significant improvements
and remediation required to the building over the past year.
• This adjustment eliminates this non-cash expense.
SkyCity Adelaide
•
•
In FY20, the Group impaired the SkyCity Adelaide casino licence by
A$150 million ($160.6 million).
The impairment arose due to revised expectations regarding the
timeframe for SkyCity Adelaide to achieve its long term potential
earnings following completion of the expansion project. The reduced
earnings outlook for SkyCity Adelaide have been exacerbated in the
short-to-medium term by the impacts of COVID-19, including an
expectation that International Business activity may take some years
to recover.
• This adjustment eliminates this non-cash expense.
•
The FY20 reported results included a significant gain relating to the
Auckland car park concession sale which settled in August 2019.
• The adjustment reverses these gains.
•
As part of its response to COVID-19, SkyCity undertook a labour restructure
in New Zealand and implemented a new funding plan in FY20.
• This adjustment eliminates the costs associated with those actions.
Deferred tax liability reversal
($24.1 million) (FY20 only)
•
As part of its response to COVID-19, the New Zealand Government
reinstated tax depreciation for commercial properties, this resulted in a
non-cash accounting reduction in the FY20 tax expense.
• This adjustment eliminates this one-off reduction to tax expense.
222
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 GRI Content Index
General Standard Disclosures
SECTION
Organisational
Profile
ASPECT / GRI
DISCLOSURE
DESCRIPTION
PUBLICATION
PAGE(S) LIMITATIONS
EXTERNAL
ASSURANCE
102-1
Name of organisation
Annual Report 2021:
Company Disclosures
9
102-2
Activities, brands, products
and services
Annual Report 2021:
About SkyCity
34 – 49
102-3
Location of headquarters
102-4
Location of operations
102-5
Ownership and legal form
102-6
Markets served
102-7
Scale of organisation
Annual Report 2021:
About SkyCity
Annual Report 2021:
Directory
34
228
Annual Report 2021:
About SkyCity
34 – 49
Annual Report 2021:
Directory
Annual Report 2021:
Notes to the Financial
Statements
228
172
150 – 152
Annual Report 2021:
Shareholder and
Bondholder
Information
Annual Report 2021:
About SkyCity
34 – 49
i. Total number of
employees
Annual Report 2021:
Diversity Snapshot
24
Yes
Annual Report 2021:
Our People
88 – 89
ii. Total number of
operations
Annual Report 2021:
Creating Value
16 – 17
iii. Net sales
Annual Report 2021:
About SkyCity
Annual Report 2021:
Income Statement
34
166
iv. Total capitalisation
Annual Report 2021:
Balance Sheet
168 – 169
v. Quantity of products
and services provided
Annual Report 2021:
Creating Value
16 – 17
Annual Report 2021:
About SkyCity
34 – 49
Additional information
Annual Report 2021
16 – 25
102-8
Information on employees
and other workers
Annual Report 2021:
Our People
88 – 101 Note 1
Yes
223
SECTION
Organisational
Profile
ASPECT / GRI
DISCLOSURE
DESCRIPTION
PUBLICATION
PAGE(S) LIMITATIONS
EXTERNAL
ASSURANCE
102-9
Supply chain
102-10
Significant changes to the
organisation and its
supply chain
Annual Report 2021:
Our Suppliers
Annual Report 2021:
Chair's Review, Chief
Executive Officer's
Review and
Delivering Our
Group Strategy
102-11
Precautionary principle
or approach
SkyCity Ethical
Sourcing Code
108 – 113
Yes
4 – 7
27 – 33
110
102-12
External initiatives
Strategy
102-14
Statement from senior
decision-maker
Annual Report 2021:
Our Sustainability
70 – 77
Annual Report 2021:
Our People
88 – 101
Annual Report 2021:
Our Environment
116 – 125
Annual Report 2021:
Chair's Review, Chief
Executive Officer's
Review and
Delivering Our
Group Strategy
4 – 7
27 – 33
Yes
Yes
Ethics and
Integrity
102-16
Values, principles, standards
and norms of behaviour
SkyCity Code
of Conduct
www.skycityentertainmentgroup.com
Governance
102-18
Governance structure Annual Report 2021:
64 – 68
Our Senior
Leadership Team
128 – 137
Annual Report 2021:
Corporate Governance
Statement and Other
Disclosures
Stakeholder
Engagement
102-40
List of stakeholder groups
Annual Report 2021:
Our Sustainability
www.skycityentertainmentgroup.com
102-41
102-42
102-43
102-44
102-45
102-46
Collective bargaining
agreements
Annual Report 2021:
Our People
88 – 101
Identifying and selecting
stakeholders
SkyCity Code
of Conduct
www.skycityentertainmentgroup.com
Approach to stakeholder
engagement
SkyCity Code
of Conduct
www.skycityentertainmentgroup.com
Key topics and
concerns raised
Annual Report 2021:
Our Sustainability
70 – 77
Entities included in the
consolidated financial
statements
Annual Report 2021:
Notes to the Financial
Statements
173 / 214
Defining report content and
topic boundaries
Annual Report 2021:
About this Annual
Report
34 – 49
102-47
List of material topics
Annual Report 2021:
Our Sustainability
70 – 77
Annual Report 2021:
Our Sustainability
70 – 77
Reporting
Practice
224
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
SECTION
Reporting
Practice
ASPECT / GRI
DISCLOSURE
102-48
DESCRIPTION
PUBLICATION
PAGE(S) LIMITATIONS
EXTERNAL
ASSURANCE
Restatements of
information
Not applicable
N/A
102-49
Changes in reporting
Annual Report 2021:
Notes to the Financial
Statements
172 – 174
102-50
Reporting period
Annual Report 2021
102-51
Date of most recent report
Annual Report 2021:
About this Annual
Report
102-52
Reporting cycle
Annual Report 2021
Cover
Page
9
Cover
Page
102-53
Contact point for questions
regarding the report
Annual Report 2021:
Our Sustainability
70
Annual Report 2021:
Remuneration Report
138
Annual Report 2021:
Directory
102-54
Claims of reporting in
accordance with the
GRI standards
Annual Report 2021:
About this Annual
Report
228
9
Limitations:
Note 1 – The reporting on GRI 102-8 on employees and other workers does not include ‘activities performed
by workers who are not employees’ and ‘significant variations in numbers reported’.
Specific Standard Disclosures
SECTION
Conserve the
Environment
ASPECT / GRI
DISCLOSURE
GRI 103
DESCRIPTION
PUBLICATION
PAGE(S) LIMITATIONS
EXTERNAL
ASSURANCE
Energy management
approach
Annual Report 2021:
Our Environment
116 – 125
GRI 302-3
Energy intensity
Annual Report 2021:
Our Environment
116 – 125
GRI 103
Emissions management
approach
Annual Report 2021:
Our Environment
116 – 125
GRI 305-4
GHG emissions intensity
Annual Report 2021:
Our Environment
116 – 125
Source Ethically
and Responsibly
GRI 103
Ethical and sustainable
procurement management
approach
Annual Report 2021:
Our Suppliers
108 – 115
GRI Content Index
225
SECTION
Inspire Our
People
ASPECT / GRI
DISCLOSURE
GRI 103
Health and safety
management approach
DESCRIPTION
PUBLICATION
PAGE(S) LIMITATIONS
EXTERNAL
ASSURANCE
GRI 403-2
Types and rates of injury
Annual Report 2021:
Our Risk Profile and
Management
Annual Report 2021:
Health, Safety and
Wellbeing
Annual Report 2021:
Our Risk Profile and
Management
Annual Report 2021:
Health, Safety and
Wellbeing
50 – 59
90 – 91
50 – 59
90 – 91
GRI 103
Employee engagement
management approach
Annual Report 2021:
Our People
88 – 101
GRI 404-2
Employee programmes
GRI 103
Diversity, inclusion and
belonging management
approach
Annual Report 2021:
Our People
88 – 101
Annual Report 2021:
Our People
88 – 101
GRI 405-1
Governance and employee
diversity
Annual Report 2021:
Our People
88 – 101
Yes
SkyCity Diversity and
Inclusion Policy
www.skycityentertainmentgroup.com
Host Responsibly GRI 103
Customer health and safety
management approach
Annual Report 2021:
Our Risk Profile and
Management
50 – 59
Annual Report 2021:
Our Customers
78 – 87
GRI 416-1
Assessment of health and
safety of products and
services
Annual Report 2021:
Our Risk Profile and
Management
50 – 59
78 – 87
78 – 87
Annual Report 2021:
Our Customers
Annual Report 2021:
Our Customers
Annual Report 2021:
Our Customers
78 – 87
Annual Report 2021:
Our Customers
78 – 87
Note 2
GRI 416-2
GRI 103
GRI 419-1
Non-compliance incidents
related to health and safety
of products and services
Socio-economic
compliance management
approach
Non-compliance with
socio-economic laws and
regulations
Limitations:
Note 2 – The reporting of GRI 419-1 on Non-compliance with Socio-Economic Laws and Regulations does
not include economic laws and regulations.
226
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021
Glossary
Casino Win
EBIT
EBITDA
GAAP
the amount lost or spent by players, calculated as Turnover minus amounts
awarded to players
earnings before interest and tax
earnings before interest, tax, depreciation and amortisation
generally accepted accounting principles
Hold or Win Rate
casino win expressed as a percentage of turnover
Normalised EBITDA
earnings before interest, tax, depreciation and amortisation adjusted to take into
account a theoretical win rate of 1.35% on International Business play and other
adjustments and calculated in accordance with SkyCity's Non-GAAP Financial
Information Policy
Normalised NPAT
net profit after tax adjusted to take into account a theoretical win rate of
1.35% on International Business play and other adjustments and calculated in
accordance with SkyCity's Non-GAAP Financial Information Policy
Normalised Revenue
revenue adjusted to take into account a theoretical win rate of 1.35% on
International Business play and other adjustments and calculated in accordance
with SkyCity's Non-GAAP Financial Information Policy
Normalised Win Rate
the expected long term average hold
NPAT
net profit after tax
Reported EBITDA
earnings before interest, tax, depreciation and amortisation calculated in
accordance with GAAP in New Zealand
Reported NPAT
net profit after tax calculated in accordance with GAAP in New Zealand
Reported Revenue
revenue calculated in accordance with GAAP in New Zealand
RevPar
Turnover
revenue per available room
total amount wagered by players
227
Directory
REGISTERED OFFICE
SKYCITY LOCATIONS
SkyCity Entertainment Group Limited
SKYCITY AUCKLAND
NEW ZEALAND
Level 13
99 Albert Street
Auckland
New Zealand
Telephone: +64 9 363 6000
AUSTRALIA
North Terrace
Adelaide
SA 5000
Australia
Telephone: +61 8 8212 2811
Email: sceginfo@skycity.co.nz
www.skycityentertainmentgroup.com
Corner Victoria and Federal Streets
Auckland 1010
New Zealand
Telephone: +64 9 363 6000
SKYCITY HAMILTON
346 Victoria Street
Hamilton 3204
New Zealand
Telephone: +64 7 834 4900
SKYCITY QUEENSTOWN
Level 2, Stratton House
16–24 Beach Street
Queenstown 9300
New Zealand
Telephone: +64 3 441 0400
SKYCITY QUEENSTOWN WHARF
Steamer Wharf
88 Beach Street
Queenstown 9300
New Zealand
Telephone: +64 3 441 1495
SKYCITY ADELAIDE
Railway Building
North Terrace
Adelaide
SA 5000
Australia
Telephone: +61 8 8212 2811
228
SkyCity Entertainment Group Annual Report Year Ended 30 June 2021 AUDITOR
PricewaterhouseCoopers
Level 27
15 Customs Street West
Private Bag 92162
Auckland 1010
SUPERVISOR FOR BONDS
Public Trust
Private Bag 5902
Wellington 6140
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 3
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
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