Financial Statements
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SKY CITY ENTERTAINMENT GROUP LIMITED ( 1 ) ADDITIONAL INFORMATION 30 June 2002 SUBSIDIARY COMPANIES The changes to subsidiary company directorships during the 12 month period ended 30 June 2002 were as follows. On 13 March 2002, P.J. Mason ceased to be a director of Sky City Adelaide Pty Limited. On 15 March 2002, M.J. McConnell ceased to be a director of Sky City Leisure Limited(1). A.B. Ryan was a director of Sky City Leisure Holdings Limited,(2)Sky City Cinemas Limited,(3)Sky City Metro Limited,(4)Cine-Force Limited, Ab Initio Holdings No.13 Limited and Planet Hollywood (Civic Centre) Limited for the period from 15 February 2002 to 10 March 2002. On 27 June 2002, A.B. Ryan was appointed a director and M. Brunner resigned as a director of Planet Hollywood (Civic Centre) Limited. A.B. Ryan resigned as a director of Planet Hollywood (Civic Centre) Limited on 24 July 2002. The following people held office as directors of subsidiaries of Sky City Entertainment Group Limited as at the end of the 2002 financial year, being 30 June 2002. Sky City Auckland Holdings Limited, Sky City Auckland Limited, Sky City Casino Management Limited Sky City Management (Auckland) Limited, Abdiel Investments Limited, Sky City Construction Limited, Sky Tower Limited, Sky City Wellington Limited, Sky City International Holdings Limited, Sky City International ApS, Sky City Investments Limited, Sky City Action Management Limited, Riverside Fund Limited, Queenstown (Hard Rock) Investments Limited Sky City Australia Pty Limited, Sky City Adelaide Pty Limited Queenstown Casinos Limited Riverside Casino Limited and Riverside Casino Construction Limited Sky City Leisure Limited(1) Sky City Leisure Holdings Limited,(2)Sky City Cinemas Limited,(3)Sky City Metro Limited,(4)Cine-Force Limited, Ab Initio Holdings No.13 Limited Planet Hollywood (Civic Centre) Limited Sky City Cinemas (Fiji) Limited(5) (1)Formerly Force Corporation Limited REMUNERATION OF DIRECTORS Remuneration paid to directors of Sky City Entertainment Group Limited during the year ended 30 June 2002 was:
The Managing Director, E.W. Davies, is not paid directors fees. The amount shown next to his name represents the total of the remuneration and the value of other benefits received by him as an employee of the company. Directors fees, as above, were paid as to $10,000 for non-executive directors and $20,000 for the chairperson by way of options in the company issued in accordance with the Non-Executive Director Share Option Plan as approved at the companys Annual Meeting on 26 October 2000. Remuneration paid to directors, or former directors, of Sky City Leisure Limited(1)during the year ended
Peter Holdaway is not paid directors fees. The amount shown next to his name represents the total of the remuneration and the value of other benefits received by him as an employee of Sky City Leisure Limited(1). Remuneration paid to directors of Queenstown Casinos Limited during the year ended 30 June 2002 was:
Director fees for E.W. Davies and A.B. Ryan were paid to Sky City Entertainment Group Limited and were not received personally by Messrs Davies or Ryan. Apart from the amounts listed above, no remuneration is received by the directors of the Sky City subsidiary companies in their capacity as directors of those companies. No director of the group or parent company has, since the end of the financial year, received or become entitled to receive a benefit other than the reimbursement of expenses incurred in relation to company matters, or as disclosed elsewhere in this Annual Report. (1)Formerly Force Corporation Limited DIRECTORS AND OFFICERS INDEMNITY AND INSURANCE On 30 September 2001 the company effected directors and officers liability insurance coverage through Royal and SunAlliance and American Home Assurance Company (AIG), for the period 30 September 2001 to 30 September 2002, with an aggregate limit of liability of $50 million. On 30 September 2001 the company effected statutory liability insurance through Royal and SunAlliance, for the period 30 September 2001 to 30 September 2002 with an aggregate limit of liability of $5 million. Indemnities have been given to directors and senior managers of the Sky City group to cover acts or omissions of directors or senior managers in their capacity as such. INTERESTS REGISTER Disclosure of Directors Interests Section 140(1) of the 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 as entered in the companys Interests Register as at 30 June 2002 with the notices given by directors during the period ended 30 June 2002 marked with an asterisk.
The following details included in the Interests Register as at 30 June 2001, or entered during the year ended 30 June 2002, have been removed during the year ended 30 June 2002. P.H. Elworthy is no longer chairman of the Alan Duff Charitable Foundation or a trustee of the Link Foundation. P.L. Reddy is no longer a director of New Zealand Opera Limited or an alternate director of Richmond Limited. Disclosure of Directors Interests in Share Transactions Directors disclosed, pursuant to section 148 of the Companies Act 1993 and Rule 10.5.3 of the Listing Rules of the NZSE, the following acquisitions and disposals of relevant interests in Sky City shares during the period to 30 June 2002. Share transactions for the period 1 July 2001 to 16 November 2001 (prior to the share split on 16 November 2001)
(1)The transactions of Messrs Davies, Hartley, Toime and Trotter and Ms Reddy of 5 October 2001 and 5 April 2002 relate to the issue of shares to them in lieu of dividends pursuant to the Sky City Entertainment Group Limited Dividend Reinvestment Plan. (2)The transactions shown relate to the exercise of options granted to directors pursuant to the Non-Executive Director Share Option Plan approved by shareholders at the Annual Meeting of the company held on 26 October 2000. (3)The transaction shown relates to the transfer of shares to the trustees of the Hartley Family Trust in which Mr. Hartley retains a beneficial interest. Disclosure of Directors Interests in Shares, Options and Capital Notes Directors disclosed, pursuant to Rule 10.5.3 of the Listing Rules of the NZSE, the following relevant interests in Sky City shares, options and capital notes as at 30 June 2002.
W.R. Trotter is a trustee of a trust holding 200,000 capital notes. Options issued to Mr. Davies and associated persons of Mr. Davies are issued pursuant to the Executive Share Option Plan approved by shareholders at the Annual Meeting of the company held on 28 October 1999. Options issued to the non-executive directors are issued pursuant to the Non-Executive Director Share Option Plan approved by shareholders at the Annual Meeting of the company held on 26 October 2000. Options are exercisable one year after the date of issue, at the exercise price determined pursuant to the Plan, and lapse if they are not exercised within five years of the date of issue. 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 during the financial year ended 30 June 2002, is listed below:
DONATIONS Donations are referred to in Note 3 of the financial statements. WAIVERS FROM THE NEW ZEALAND STOCK EXCHANGE (NZSE) LISTING RULES The following waivers from the NZSE Listing Rules were effective as at balance date. As part of the companys Executive Share Option Plan, approved by shareholders at the 1999 Annual Meeting, the NZSE granted a waiver from compliance with Listing Rule 7.3.2 in respect of the issue of options to E.W. Davies the Managing Director of the company pursuant to the Plan. Listing Rule 7.3.2 would have required that all issues of options to Mr Davies under the Plan be made within 12 months of the shareholders resolution approving the issue. The waiver enabled the third issue of options specified in the shareholders resolution to be made more than 12 months after the date on which the resolution approving the issue was passed. As part of the Non-Executive Director Share Option Plan, approved by shareholders at the 2000 Annual Meeting, the NZSE granted a waiver from compliance with Listing Rule 7.3.2 enabling the issue of options to be made to each non-executive director under the Plan in the financial years ending on 30 June 2002 and 30 June 2003, being more than six months after the date on which the resolution approving the issue was passed. On 29 August 2001, the NZSE granted a waiver from compliance with Listing Rule 7.3.6 in respect of the participation by Ms. H.R. Shotter in the companys Performance Pay Incentive Plan (PPI) and Executive Share Option Plan referred to above. Under the PPI, salaried employees of the company and its subsidiaries are entitled to bonuses, payable in cash and shares, if relevant financial and personal performance targets are met. Ms. Shotter is married to Mr. Davies, the Managing Director of the company. Accordingly, in the absence of the waiver, issues of shares under the PPI and options under the Executive Share Option Plan would have required shareholder approval. The NZSE granted the waiver on the condition that Ms. Shotters participation in the PPI and the Executive Share Option Plan is determined by an independent committee of the board of directors of the company, and that Mr. Davies does not participate in determining the benefits provided to Ms. Shotter. In addition, on 5 September 2002, the NZSE granted waivers from compliance with Listing Rule 7.3.6 in respect of the participation by Ms. Shotter in the companys proposed new performance pay incentive plan (New PPI) and the proposed new executive share option plan (New Option Plan). As the terms of the New PPI and the New Option Plan are substantially the same as the existing PPI and Executive share Option Plan, in the absence of the waivers, issues of shares under the New PPI and options under the New Option Plan would require shareholder approval. The NZSE granted the waivers on the condition that Ms Shotters participation in the New PPI and the New Option Plan is determined by an independent committee, and that Mr Davies does not participate in determining the benefits provided to Ms. Shotter. The effect of all other waivers granted had ceased as at balance date. EVENTS SUBSEQUENT TO BALANCE DATE The directors are not aware of any matter or circumstance since the end of the financial year, not otherwise dealt with in this report, that has significantly or may significantly affect the operations of Sky City Entertainment Group Limited or any of its subsidiary companies. CORPORATE GOVERNANCE Corporate governance at Sky City encompasses the companys decision-making structures and the mechanisms used to manage the organisation. The board of Sky City has a comprehensive set of corporate governance practices and procedures in place to ensure that these responsibilities are met. Role of the Board The board currently comprises eight directors, including a non-executive chairman, an executive director and six non-executive directors. Director details are set out on page 20 of this Annual Report. Procedures for the operation of the board, including the appointment and removal of directors, are governed by the companys constitution. The board met 11 times during the year to review company performance and consider strategic issues. Code of Business Practice Audit and Risk Committee Governance and Remuneration Committee Governance Charters and Policies The board itself operates under detailed terms of reference which set out the duties and responsibilities of directors. The board delegates authority to management for decision-making under a comprehensive delegated authorities policy, which is formally reviewed on a regular basis. A separate treasury policy covers treasury dealings, most of which relate to interest rate and foreign exchange management, treasury transaction authorities and procedures, and board reporting. Independent Professional Advice |
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